COMPANY NEWS IN BRIEF

Discovery declares first dividend since Covid-19

Discovery has declared its first ordinary dividend since the onset of the Covid-19 pandemic in 2020, even as the group’s latest annual results showed profit remained under pressure.

The health-focused insurance group declared a final gross dividend of 110c per ordinary share for the year to end-June, signalling the likely end of a deliberate strategy of withholding distributions to ordinary shareholders since the advent of Covid-19.

The dividend came even as the Discovery’s net profit slipped 2.9% to R5.3 billion, with its two key insurance markets of South Africa and the UK under pressure amid a steep rise in interest rates. Nevertheless, Discovery said its three main business composites - South Africa, the UK and Vitality Global – all delivered robust performances despite a backdrop of significant macroeconomic uncertainty. Normalised headline earnings increased 32% to R7.68 billion while core new business annualised premium income (API) increased 12% to about R22.8 billion.

"The period saw prolonged inflationary pressures, rising interest rates, a remarkably strong US dollar, increasing consumer pressure, and a cost-of-living crisis in many regions," Discovery said in its results announcement.

"The headline earnings volatility caused by economic assumption changes is the rationale behind Discovery’s stated policy of normalising for the impact of long-term interest rate movements in the presentation of normalised headline earnings. Although the interest rate changes impact headline earnings, they have no impact on the operations of the group, with little impact on the group’s liquidity, cash flows, and solvency."-Fin24

Remgro sees worst conditions in decades

Remgro, the diversified investment holding company whose stakes include energy, food producers and industrial companies, says businesses are operating in the most difficult trading environment since its reconfiguration 23 years ago.

Releasing its results for the year to end-June last week, Remgro said this challenging business environment is brought about by the confluence of global factors of high interest rates and inflation, foreign exchange volatility, geopolitical tensions as well as the lack of electricity. Adding to the mix is concerning crime levels and corruption as well as the erosion of foreign investment confidence in SA.

"With low levels of expected economic growth – combined with the breakdown in state infrastructure relating to energy, transport and logistics, and the slow pace of economic reforms to date – the urgency to address these issues cannot be overstated."

Initially listed on the JSE in 1956 as the Rembrandt Group, Remgro was founded in 1948 by Anton Rupert as tobacco company Voorbrand, and has seen many business cycles since then. Jannie Durand is CEO and Johann Rupert is the current chairperson.

Through all the current headwinds South Africa has to navigate, Remgro said it remains confident about the resilience of its portfolio to maintain positive earnings growth momentum.-Fin24

Investec appoints directors to board of UK

Investec, the niche private bank and wealth manager, has completed a deal to merge its UK wealth and investment unit with Rathbones, giving it the right to appoint two non-executive directors to the combined entity.

Investec nominated Ruth Leas, CEO of Investec Bank, and group non-executive director Henrietta Baldock as its representatives on the Rathbones board, subject to regulatory approval.

The deal was first announced in April, and involves an all-share combination of Investec Wealth & Investment UK and Rathbones, that leaves Investec holding 41.25% in the enlarged Rathbones business. However, it only has 29.9% of voting rights.

Investec had previously said Ciaran Whelan would be one of its nominees to the Rathbones board. Whelan is expected to be part of the integration committee of Rathbones until his retirement in 2025.

"Ciaran will continue to play a senior role in the integration process, utilising his extensive experience to help secure the ongoing success of this transaction," Investec said in a statement.-Fin24

Hyprop reports jump in earnings

Hyprop Investments, whose interests include Canal Walk, Hyde Park Corner and Rosebank Mall has reported a climb in distributable income of almost a quarter in its year to end-June, with activity picking up in its SA centres, but growing by double digits in Eastern Europe.

Distributable income rose 24% to R1.45 billion to end-June, though distributable income per share rose only 18% given increased shares related to its 2022 dividend, at a 75% payout ratio.

Valued at R12 billion on the JSE, Hyprop has a portfolio worth more than R43 billion and manages retail and office investment properties in South Africa, Eastern Europe and Sub-Saharan Africa. The group has eight centres in SA, with the country making up 60% of the group’s assets and 62% of distributable income. The SA portfolio includes super regional centre Canal Walk, large regional centres Clearwater, The Glen, Woodlands, CapeGate, Somerset Mall and Rosebank Mall, and small regional centre Hyde Park Corner.

It also owns 4 assets in Eastern Europe, two in Zagreb in Croatia, one in North Macedonia, and one in Sofia, Bulgaria. In 2023, the Eastern European portfolio had been consolidated for the entire year, compared to 3 months in 2022.

The rest of Africa portfolio comprises interests in four shopping centres in Nigeria and Ghana, held through Hyprop Mauritius, a wholly owned subsidiary, and AttAfrica, a joint venture.-Fin24

Bidvest scoops up another cleaning business

Industrial giant Bidvest said it has agreed to buy hygiene business Consolidated Property Services (CPS), a move which will double its facilities management footprint in Australia.

Established in 1977, CPS is a leading Australian provider of integrated property services to more than 145 sites across Victoria, New South Wales and South Australia, the group said.

Headquartered in Melbourne, CPS employs almost 3 500 people and the vast majority of its revenue is generated from direct contracts with building owners and tenants, with many of these relationships spanning in excess of 10 years.

Bidvest did not provide a price for the acquisition in its voluntary update, meaning it is less than 5% of its about R93 billion market value, or less than about R4.65 billion.

Founded in 1988, Bidvest is a leading industrial group with over 250 individual businesses as of 2022 when it employed over 125 000 people in South Africa, the UK, Ireland, Spain and Australia.

The group operates in a range of industries, from facilities management to motoring, hygiene, tourism and healthcare, while its portfolio also includes car retailer Bidvest McCarthy and pharmaceutical company Adcock Ingram.-Fin24

Southern Sun reports boost from Netball World Cup

Hotel operator Southern Sun has reported a double-digit increase in group occupancies, saying it has seen particular improvement in the Western Cape, which has enjoyed several events such as the recent Netball World Cup.

Group occupancies for the five months to end-August rose about 11 percentage points to just over 55%, the group said in an update to accompany its AGM, while it is also saying revenue for its half year could improve by over a third, and its operating profits almost by three quarters.

Valued at about R7.1 billion on the JSE, the group operates a number of brands and hotels, including 54 on Bath, the Sandton Convention Centre, Sandton Towers and Beverly Hills Hotel.

Trading volumes in South Africa have continued to improve, having been hit in the prior year by Covid-19 restrictions, with the group saying it has seen more normalised demand from local and international travellers and strong demand for international conferencing and events.

Group occupancies are now only about 2 percentage points below pre-Covid-19 levels, it said while the average room rate - a measure of average charges - is up by 26% when compared to pre-Covid-19 levels.-Fin24