Remgro sees turnaround after worst results in 2020, says CFO Neville Williams


The holding group’s portfolio companies have outperformed the prior year, returning to pre-Covid-19 levels.

In 2020, amidst the breakout of Covid-19, Remgro reported its worst results on record. However, the investment holding company has since seen a turnaround in its results, reporting a 66 percent increase in its headline earnings from continuing operations to R2.8 billion for the year ended 30 June 2021.

According to Remgro, the companies in its stable have outperformed the prior year, including Distell, RMI and RCL Foods. Mediclinic, which is Remgro’s largest constituent and has been especially hard-hit by the impact of Covid-19, also improved on its results and operations.

“Since April, with the gradual lifting of restrictions, Mediclinic has improved on its results and operations,” CFO Neville Williams told BizNews. “So in South Africa, they were severely hit in the first few months of the Covid lockdown. But the other divisions, like in Switzerland and the Middle East, were actually not that severely hit. They are already recovering back to pre-Covid levels where they actually can institute a non-elective surgery.”

Growth opportunities
RMI Holdings has announced that it will be unbundling its Discovery and Momentum Metropolitan assets, which will see the group’s 25 percent stake in each company pushed into the hands of shareholders – one of these being Remgro.

The unbundling will see Discovery and Momentum added to the Remgro portfolio, adding new opportunities for growth within the holdings group. “We support the RMI strategy going full forward after the unbundling of the long term insurance assets,” Neville said.

However, Neville explained that the most exciting avenue of growth for Remgro going forward comes from its R2 billion investment to grow the CIVH group, which holds Dark Fibre Africa and Vumatel.

As part of Remgro’s new strategy, the company will be focusing on turnaround assets in growth companies like CIVH, as well as cash generating assets for sources of capital. “This is part of the rebalancing of our portfolio,” Neville said. “If you look at the underlying companies, they were very resilient during the last year.”

He added that Vumatel has seen a 50 percent increase in revenue over the last year and the operating profit increased 60 percent. “That’s because of accumulated subscriber growth uptake as well as further net network expansion. There’s economies of scale.”

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