Remgro feels the impact of Covid-19

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Remgro feels the impact of Covid-19

Published Date: 2020-09-29 | Source: Stephen Gunnion | Author: Stephen Gunnion

Remgro feels the impact of Covid-19

The investment holding company says the pandemic impacted the earnings of the companies in its portfolio.

Remgro has a broad portfolio of investments that span the economy, with each of them affected in one way or another by Covid-19. As a result, it has posted a sharp decline in full-year earnings due to the disruption to their underlying operations.

The investment holding company says the pandemic and the resultant lockdown impacted the earnings of the likes of Rand Merchant Investment Holdings, FirstRand, Total South Africa, Kagiso Tiso Holdings, Distell and RCL Foods. It also earned lower interest income as rates were slashed, while booking increased losses from its investment in ICT group Community Investment Ventures as it expanded its fibre network. On top of all that, it made a once-off R500 million donation to The South African SME Relief Trust due to the impact of Covid-19 on the sector.

Remgro's 28.2% investment in RMB Holdings (RMH), which was distributed to shareholders in June, has been treated as a discontinued operation for the period. It unbundled the stake in a coordinated move with RMH, which then distributed its holding in FirstRand to its investors as a dividend in specie.

Total headline earnings per share (HEPS) for the year to end-June fell 61% to 560.6c, with HEPS from continuing operations down 69% at 307.5c. Earnings per share came in 9.1% lower at 1,176.4c. At the end of June, its intrinsic net asset value per share was down 34% at R154.47, reflecting the RMH unbundling and the negative impact of Covid-19 on the value of the companies in its portfolio. It is paying a final dividend of 50c per share, down from 349c last year, taking into account the RMH transaction. That takes its total dividend for the year to 265c, down 53% from last year.

Remgro rose 4.9% to R90.99 yesterday. Its results were released at the close of trade.





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