RMBH rides on FirstRand’s growth


RMBH rides on FirstRand’s growth


Published Date: 2019-03-15 | Source: Stephen Gunnion | Author: Stephen Gunnion

RMBH rides on FirstRand’s growth

The investment holding company has narrowed the discount to its underlying intrinsic value to 11.2%.

RMB Holdings has reported a strong start to its financial year thanks to its investment in banking group FirstRand, while its fledgling property investment company begins to gain scale.

On Tuesday, FirstRand reported a 7% rise in normalised earnings for the six months to end-December and raised its dividend by the same margin to 139c per share. FirstRand franchises, FNB, RMB and newly-acquired Aldermore produced good operating results, with WesBank adversely affected by the macroeconomic climate.

RMBH has a 34% stake in FirstRand and also owns property investment business RMB Property.

During the previous year, RMB Property expanded its core partnerships by acquiring a 43.9% direct interest in Atterbury Europe, which it said provided an opportunity for geographical diversification and access to a promising European market. This year it has followed up with a 50% interest in Atterbury Bucharest and an 18% interest in the Diversity Urban Property Fund. It also exercised an option to obtain shareholdings in a number of Genesis Properties' businesses. This saw the net intrinsic value of the division increasing R971 million from R722 million in June.

RMBH reported net income of R5.5 billion for the six-month period, an increase of 31%, while normalised earnings rose 7% to R4.4 billion. It's increased its interim dividend by 6% to 178c per share.

The intrinsic value of its portfolio rose 3% to R125.4 billion and its net asset value increased by 7% to R47.5 billion. Its net asset value per share rose 11% to 3,363.7c. At the end of December, its shares traded at an 11.2% discount to its underlying intrinsic value, down from 12.3% a year earlier.

Its shares fell 2.3% to R75.91 yesterday.


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