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Anchor Group wants to delist from the JSE
The Anchor Group intends to delist from the Johannesburg Stock Exchange early next year. Anchor has given shareholders two options - either to sell back their shares to the company at R4.25 per share or to retain their shares in the delisted entity. Peter Armitage, CEO of Anchor Capital joins CNBC Africa for more.
Fri, 13 Nov 2020 18:58:49 GMT
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AI Generated Summary
- Anchor Group announces delisting from JSE to navigate economic challenges and stagnant market conditions.
- Company offers shareholders options to sell back shares or retain ownership in delisted entity, aiming for 51% black ownership.
- CEO Peter Armitage expresses confidence in growth prospects, highlighting diversified business model and client-focused strategies amidst COVID-19 uncertainties.
South African financial services firm Anchor Group has announced its decision to delist from the Johannesburg Stock Exchange (JSE) early next year. The move comes amidst challenging economic conditions and a stagnant small-cap sector in the market. Peter Armitage, CEO of Anchor Capital, revealed that the company aims to offer its minority shareholders two options - to sell their shares back to the company at R4.25 per share or to retain their shares in the delisted entity. With the goal of achieving 51% black ownership, Anchor plans to secure funding through borrowing from a rich uncle and a bank, in addition to investments from existing shareholders.
Armitage emphasized that while the decision to delist is not solely driven by the onerous regulations and costs associated with being listed on the JSE, it does offer benefits in terms of corporate governance and financial flexibility. By transitioning to an unlisted environment, the company aims to capitalize on its solid business fundamentals, generate substantial cash flows, and strategically manage its debt levels over the next few years. This strategic move is expected to bolster earnings per share and drive shareholder value in the long run.
Despite the decision to delist, Armitage remains confident in Anchor Group's growth prospects. The company's diversified business model, including a thriving fixed-income segment and offshore investments, provides resilience in earnings during market volatility. Furthermore, its robust marketing strategies and consistent client inflows contribute to a steady and predictable revenue stream. As the company navigates the uncertainties brought about by the COVID-19 pandemic, Armitage sees value in client-focused businesses that offer stable returns and ongoing investment opportunities.
In the current economic landscape, Armitage highlights the importance of industry-specific analysis to identify growth opportunities. While certain sectors may face challenges due to the pandemic, businesses like Anchor Group, which focus on providing quality services and charging fixed fees rather than relying on monthly sales, are better positioned for growth. Armitage points out that the key to success lies in understanding the unique dynamics of each industry and tailoring strategies accordingly.
As Anchor Group prepares to embark on its new journey as a delisted entity, the company's commitment to enhancing shareholder value and driving sustainable growth remains unwavering. By streamlining its operations and capitalizing on its strengths, Anchor Group aims to position itself for long-term success in a rapidly evolving economic landscape.
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