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Remgro intrinsic NAVPS trading at 17% discount to share price
Remgro has released its interim results. The investment group which owns stakes in eMedia, FirstRand, MediClinic and Distell said diluted headline earnings per share fell over 3 per cent to 744 cents while dividends grew 5 per cent to 215 cents. CNBC Africa is joined by Neville Williams, CFO, Remgro.
Tue, 19 Mar 2019 15:32:58 GMT
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AI Generated Summary
- Remgro's interim results showed a 2.7% decrease in comparable headline earnings, attributed to challenges in the global economic environment and operational difficulties faced by portfolio companies.
- The group received a cash injection of 4.9 billion rand from the Unilever transaction, bolstering its cash reserves to around 17 billion rand and positioning it for strategic investments.
- Remgro is actively seeking opportunities in the market, both locally and offshore, while also exploring options for self-generation to mitigate the impact of the ongoing power crisis at Eskom.
- Remgro has identified the telecom infrastructure sector, particularly the fibre business, as a potential area for growth and has allocated additional capital to expand its presence in this segment.
Remgro, a prominent investment group with holdings in various key sectors, has recently released its interim results, showing a drop of 2.7% in comparable headline earnings for the six months ending on December 31, 2018. Neville Williams, the Chief Financial Officer of Remgro, highlighted the impact of the global economic turbulence and the challenging operating environment faced by the group's portfolio companies. One significant factor contributing to the decrease in earnings was the reduced contribution from the food platform and operations in total Africa, as well as the absence of results from the Unilever transaction, which was completed in the comparative period. Despite these challenges, Remgro remains optimistic about its position and the opportunities available in the market. The group recently received a significant cash injection of 4.9 billion rand from the Unilever deal, adding to its already substantial cash reserves of around 17 billion rand. With a net cash position of 3 billion rand, Remgro is actively seeking investment opportunities, both locally and offshore. However, Williams noted the importance of finding the right pricing and valuation balance in the current market landscape. The ongoing power crisis at Eskom, South Africa's national electricity provider, poses a significant risk to Remgro and its industry companies. The group is exploring options for self-generation to mitigate the impact of power cuts, but the reliance on Eskom remains a critical issue that requires government intervention. Williams acknowledged that sustained load shedding could have negative consequences for Remgro's operations and its underlying businesses. Looking ahead, Remgro has identified the telecom infrastructure sector, specifically the fibre business, as a potential area for growth and investment. Through its subsidiary CIV Holdings, Remgro has allocated additional capital to DTC Fibre Africa, which recently acquired a 34.9% stake in Vumatel. The synergies between DTC Fibre's network and Vumatel's infrastructure present promising opportunities for expansion and development. By strategically targeting growth sectors and adapting to the challenges in the market, Remgro aims to position itself for long-term success and sustainability.
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