Good news for Johann Rupert’s South African company

Remgro, the company founded by South Africa’s richest man Johann Rupert, is expecting a massive increase in headline earnings.

Remgro is an asset manager with shareholdings in several important South African companies, such as OUTsurance, CIVH, Heineken Beverages, FirstRand and the Blue Bulls.

Rupert and his family own roughly 2.8% of the company’s A shares. However, he is also the only shareholder of the 39,056,987 B shares, giving him about 45% of the company’s voting rights.

Rupert is the chairman and founder of Remgro, which dates back to the origins of his father’s company Rembrandt.

While Remgro focuses on South African assets, Rupert-founded Richement holds international assets and owns luxury goods like Cartier and Mont Blanc.

Despite being far smaller than Richemont (market caps of R17 trillion to R89 billion), Remgro expects a large increase in earnings.

In a trading statement for the six months ended 31 December 2024, the group expects its headline earnings per share to increase by between 33% and 43%.

This would see headline earnings increase to between 645 cents and 694 cents compared to a restated HEPS of 485 cents for the comparative six months.

The group said that the increase in headline earnings is driven by improved operational performances from most of Remgro’s investee companies.

The improvement is also due to lower finance costs and the negative impact of significant corporate actions in the prior period.

More details will be in Remgro’s results, due to be released on SENS on or about 25 March 2025.

The jump in headline earnings also comes after the group’s headline earnings for the prior period were restated upwards.

The group said there was an error while finalising TotalEnergies Marketing South Africa Proprietary Limited’s annual financial results for the year ended 31 December 2023.

It was determined that the fair value of its disposal group, mainly its investment in Natref, was initially incorrectly accounted for.

This led to a higher write-down of TotalEnergies’s affected net assets relating to its portion of Natref’s stock for the six months ended 31 December 2023 and, consequently, Remgro’s results.

TotalEnergies’ contribution to Remgro’s earnings for the comparative period was thus understated by Remgro’s portion of the incorrect write-down.

The adjustment has thus seen Remgro’s HEPS for the comparative period increase from the reported 381 cents per share to a restated 485 cents per share.