Remgro, chaired by South Africa’s richest man, billionaire Johann Rupert, has upped its dividend substantially – despite a challenging economic environment.
Originally established by Rupert’s father, Anton, in 1940, Remgro is an investment holding company with significant holdings in Mediclinic, the OUTsurance Group, Vumatel, Discovery and more.
The group decided to up its dividend by 60% from 150 cents per share in 2022 to 240 cents in 2023.
Rupert, through Rupert Beleggings Proprietary Ltd, owns all 39 million unlisted B-shares in Remgro, while also holding approximately 7.5 million ordinary shares in the group (FY 2022 figures).
Thus, the billionaire stands to gain a dividend payout of around R110 million before tax.
In its audited summary of consolidated results for the year ended 30 June 2023, the group said that the operating business environment was incredibly challenging due to load shedding, high inflation, geopolitical tensions, the decline in foreign investment confidence and more.
“The current economic environment is troubling; the disruption in business operations directly impacts consumers and runs the risk of increased social instability due to the undoing of livelihoods and rise in poverty levels,” the group said.
“With low levels of expected economic growth – combined with the breakdown of 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.”
With this in mind, the group said that it was pleased to continue its positive earnings momentum as the group completed the takeover of Mediclinic Group Limited (Mediclinic) and Distell Group Holdings Limited (Distell)/Heineken International B.V. (Heineken) transformative corporate actions.
Overall, the group’s headline earnings increased by 8.7%, which it says is due to greater contributions from the Outsurance Group, Mediclinic, the Pembani Remgro Infrastructure Fund (PRIF), KTH and FirstRand.
It also linked this increase to the higher interest income and foreign exchange gain realised with respect to the acquisition of an additional 5.4% indirect interest in Mediclinic.
However, this profit growth was slightly offset by lower contributions from TotalEnergies, RCL Foods and Grindrod (due to its unbundling) and the costs of the Mediclinic acquisition and the Distell/Heineken transaction.
The group noted that the comparative year also had contributions from Grindrod Shipping (which was disposed of) and the discontinued operations of OUTsurance Group (it unbundled its investments in Discovery and Momentum Metropolitan and disposed of its investment in Hastings).
These impacted the comparability of the group’s headline earnings over the last two years. Excluding the impact on headline earnings of these actions, the group said that headline earnings increased by roughly 27%.