RMH devalues property investments

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RMH devalues property investments

Published Date: 2020-09-14 | Source: Stephen Gunnion | Author: Stephen Gunnion

RMH devalues property investments

The investment company says Covid-19 has had a big impact on valuations of its property in SA and Europe.

RMB Holdings (RMH) says its full-year earnings will more than triple after it unbundled its stake in FirstRand. However, headline earnings declined as valuations for its property investments came under pressure.

In a trading statement, the investment group said earnings per share (EPS) for the year to end-June would be 220-240% higher than the 706.9c it reported last year. Headline EPS would decline by 30-50% from the 665.2c previously reported.

Following the unbundling of its 34.1% stake in FirstRand, its only asset is in investment company RMH Property, which has a portfolio of development assets spread across South Africa and Europe, in partnership with property development company Atterbury Group. RMH ended its decades old association with the banking group at the end of June in a move aimed at unlocking value for its investors.

FirstRand would be treated as a discontinued operation and equity- accounted for only 11 months of the year. The once-off fair value gain recognised in RMH's earnings for the distribution of the FirstRand interest as a dividend in specie and the profit made on the sale of FirstRand shares by RMH before the unbundling would be excluded from HEPS.

Last week, FirstRand reported a 38% decline in headline EPS after it increased provisions due to the impact on Covid-19 on its credit impairments.

Going forward, RMH said its results would only reflect RMH Property as its remaining asset. For the current period, it said the Covid-19 pandemic had a significant impact on property valuations as anticipated.

RMH's results are scheduled for release on Thursday. Its shares closed 0.8% down at R1.26 on Friday.





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