R3.3 billion payday for South Africa’s richest man

 ·17 May 2024

South Africa’s richest person, Johann Rupert, is set for a multi-billion rand payout thanks to his significant shareholding in Richemont.

Compagnie Financière Richemont SA was founded by Rupert in 1988 through the separation of the international assets owned by Rembrandt Group Limited of South Africa (Remgro Limited today), founded by his father Anton in the 1940s.

The group is now the second largest luxury goods company in the world, trailing only LVMH Moët Hennessy Louis Vuitton, owned by one of the wealthiest people in the world, Bernard Arnault.

For the financial year ended 31 March 2024, Richemont sales were up by 3% at actual exchange rates and 8% at constant exchange rates to EUR R20.6 billion (R407 billion), driven by Jewellery Maisons and retail, each representing 69% of Group sales.

The sales increase was led by Asia Pacific (+4% at actual exchange rates; +10% at constant exchange rates) in value terms and by Japan (+8% at actual exchange rates; +20% at constant exchange rates) in percentage terms. However, the US is now the largest individual market for the group.

Acknowledging South African investors’ interest in Richemont, the group set out the below figures using the average euro/rand exchange rate prevailing during the year ended 31 March 2024, which stood at 20.311—far higher than the 17.688 during the comparative year.

Using this exchange rate, the group’s revenue jumped by 19% to R418 billion, while operating profit increased by 9% to R97 billion.

The headline earnings per A-share increased by 11% to R129 per share.

The A-shares have their primary listing on the Swiss Exchange and a secondary listing on the JSE.

However, the group also has unlisted B-shares, which typically have stronger voting rights and are held by Compagnie Financière Rupert, which is controlled and principally owned by Rupert.

Using the current rand and Swiss franc exchange rate, the proposed dividend per A-share and 10 B-shares was R55.16—up 10% from last year.

Financials31 March 202331 March 2024Change
Revenue (Rm)352 929418 732+19%
Operating profit (Rm)88 98897 371+9%
Earnings per Richemont ‘A’ Share (R) 9.604682.8079+762%
Headline earnings per Richemont ‘A’ share (R)116.7585129.2795+11%
Proposed dividend per ‘A’ share/10 ‘B’ sharesCHF 2.50 (R50.14)CHF 2.75 (R55.16)+10%

According to Richemont’s website, as of 31 March 2024, Compagnie Financière Rupert, which is controlled and principally owned by Rupert, is the only significant shareholder (with 3% or more of the voting rights), with 6,418,850 Richemont A shares and 537,582,089 Richemont B shares.

This means that Rupert’s company holds 10% of the company’s equity and controls 51% of the company’s voting rights.

Using this data, Rupert will receive roughly R354 million for his A shares and R2.96 billion for his B shares through the proposed dividend payments, totalling about R3.32 billion.

That said, Forbes estimates Rupert’s wealth, which is primarily linked to his shareholding in Richemont, at R11.2 billion (R203.70 billion payout), meaning that the payout only works out to roughly 1.62% of his total wealth.

Rupert is, however, giving up some control at the company, with new CEO Nicolas Bos taking over some of Rupert’s management duties.

Bos, who currently heads jewellery maker Van Cleef & Arpels, will become CEO on June 1.

With reporting from Bloomberg

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