Remgro is becoming a rare breed among investment holding firms

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The company has nine platforms and, unlike many, is not planning to change its focus

The company, which operates on nine platforms, is not planning to change its focus — unlike many of its peersInvestment holding companies are on the extinction list. PSG is planning to disappear from the JSE, and RMI is becoming a focused play on Outsurance. There are other examples in the market of “value unlocks” — a term used in eulogies for such companies.

Returns in Remgro will be driven primarily by the movement in intrinsic NAV and the capital allocation strategy, with dividends from portfolio companies. Importantly, the share price performance hasn’t bucked the JSE trend in recent years. If you bought in the past year, you’ve made good money. If you bought three to five years ago, you’ll feel very unhappy.

Remgro is now running well ahead of pre-Covid levels based on headline earnings. Mediclinic was the biggest detractor from Remgro’s headline earnings during the pandemic and has led the subsequent recovery, alongside strong contributions from the likes of Grindrod Shipping , TotalEnergies and FirstRand.

Moving on to group strategy, one of the priorities is to “reshape the portfolio” towards a greater unlisted asset contribution, which the group hopes would help address structural inefficiencies. In simple language, Remgro acknowledges that its life as an investment holding company is justifiable only based on unlisted assets that investors can’t otherwise access.

 

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