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Condensed unaudited interim financial results for the six months ended 30 September 2022 and trading statement
RMB Holdings Limited (RMH)
(Incorporated in the Republic of South Africa)
Registration number: 1987/005115/06
JSE ordinary share code: RMH
ISIN code: ZAE000024501
Sector: Financials
ICB Sector: Diversified financial services
CONDENSED UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022 AND TRADING STATEMENT
ABOUT RMH
Who we are
RMH is a JSE Limited (JSE) listed investment holding company with a track record of investing in disruptive and entrepreneurial businesses,
complemented by innovative corporate actions.
We seek to instil the values and ethos that have defined the successes of RMH and Rand Merchant Investment Holdings Limited (RMI) to date.
WHERE WE ARE
Since the RMH portfolio restructure, RMH continues to assess options to monetise or liberate the RMH Property business and return maximum
value to RMH shareholders. This strategic intention is reflected in our 24 June 2022 announcement of the agreement RMH and RMH Property
concluded with Brightbridge Real Estate Limited (Brightbridge) in relation to the disposal of our equity interest in Atterbury Europe. The disposal
was implemented successfully on 7 September 2022.
On 9 September 2022, RMH declared a special dividend of R2 billion which was paid after the end of the reporting period, on 10 October 2022.
The payment of the special dividend reduced the net asset value per share from 238.6 cents per share to 98.8 cents per share, a decrease of 59%.
Since December 2020, RMH delivered a shareholders' return of 46.5%. This includes the September 2022 special dividend together with the
April 2021 special dividend of R1.1 billion paid on 10 May 2021. RMH has so far managed to realise 63% of the net asset value as at 30 June 2020
following the unbundling of FirstRand, thereby breaching the halfway mark in its monetisation strategy.
FINANCIAL HIGHLIGHTS
Market capitalisation
R2.8 billion
30 September 2022 Up 33% to R2.8 billion
30 September 2021: R2.1 billion
Net asset value per share*
238.6 cents
30 September 2022 down 10% to 238.6 cents
30 September 2021: 263.9 cents
* Net asset value includes the special dividend of 141.7 cents that was paid on 10 October 2022.
ASSET VALUE MONETISED
Net asset value monetised during the period
R2 000 million
Special dividend
30 September 2022 up 77% to R2 000 million
30 September 2021: R 1 129 million
% of net asset value monetised since 30 June 2020
63%
30 September 2022: 63%
30 September 2021: 23%
FINANCIAL PERFORMANCE
The post-COVID-19 macroeconomic recovery has been slow. Further uncertainty has been introduced by Russia's invasion of Ukraine.
RMH's net asset value decreased by 14% from R3 910 million at 31 March 2022 to R3 368 million at 30 September 2022. It delivered a loss after tax
of R514 million for the six months ended 30 September 2022, compared to a profit of R177 million for the comparative prior period. This was
mainly due to the R585 million accounting loss on the sale of Atterbury Europe. The disposal of Atterbury Europe at 82% of IFRS carrying value on
disposal date delivered a normal rate of return of 23% over the life of the investment.
The cash resources earmarked for ongoing RMH operating expenses and liabilities at 30 September 2022 amounted to R283 million (2021:
R446 million). This decrease was as a result of a decision made by the board to increase the special dividend paid to shareholders by 17.7 cents
per share resulting in a total dividend per share of 141.7 cents per share. The disposal value of Atterbury Europe would have equated to a special
dividend of 124 cents per share only. This is in line with the stated strategy of monetisation and returning maximum value to shareholders while
retaining prudent reserves.
UPDATE ON ATTERBURY GUARANTEE
RMB, a division of FirstRand Bank Limited (the lender) granted a loan to Atterbury in July 2016 in terms of a loan facility agreement. The loan
under the loan facility agreement is maturing on 8 July 2023. On that date, Atterbury is obliged to repay to the lender in full, the outstanding
amount of the loan under the loan facility agreement in the amount of R489 million.
RMH and its wholly owned subsidiary, RMH Asset Holding Company Proprietary Limited (RMHAH) have provided separate guarantees to the
lender as security for Atterbury's obligations under the loan facility agreement. RMHAH has an investment of R489 million in a money market unit
trust which is ceded to the lender as security for the RMHAH guarantee.
In terms of the loan facility agreement, if Atterbury is reasonably of the opinion that it does not have sufficient cash resources to repay the loan on
8 July 2023, it may issue a conversion notice to the lender and may potentially be permitted to repay all or part of the amount due to be repaid to
the lender not in cash but through the issue of ordinary shares (conversion shares) and thereby convert the loan to equity. If Atterbury were to
issue a conversion notice (whether validly as contemplated under the loan facility agreement or invalidly), RMH and RMHAH are of the view that
RMHAH would be in a position to acquire the rights of the lender under the loan facility agreement including the right of the lender to contest the
validity of any conversion notice and/or not to accept any conversion notice. Hence RMHAH would not be obliged to accept conversion shares in
payment of the loan but may be able to insist on repayment of the loan by Atterbury in cash. Atterbury has a different view. The RMH and
Atterbury boards are exploring whether this dispute can be resolved. If these issues are not resolved amicably, they will have to be resolved in a
formal dispute resolution process.
UPDATE ON DISSENTING SHAREHOLDERS
As RMH shareholders are aware, RMH shareholders owning 20 770 019 RMH shares demanded an offer for cash at fair value in terms of section
164(5) to (8) of the Companies Act. Subsequently, shareholders owning 2 000 000 shares withdrew their demand. The remainder have applied to
court in terms of section 164 (14). RMH gave notice of its intention to defend, and its plea was handed in on 6 December 2022. RMH shareholders
will be updated as the matter progresses.
BOARD CHANGES
Following the restructure of the RMI portfolio, Herman Bosman stepped down as CEO and financial director of both RMI and RMH effective
30 November 2022. Herman will remain on the RMH board as a non-executive director.
Herman's continuous forward-thinking and innovative solutions to complex corporate challenges, in a manner that empowered the management
teams of the underlying portfolio companies, resulted in the creation of significant shareholder value. The board thanks Herman for a job well
done over the past eight years and wishes him every success in his future endeavours.
Brian Roberts, the current CEO of RMH Property, succeeded Herman as CEO with effect from 1 December 2022. Ellen Marais, the previous
company secretary and financial manager, relinquished those positions and assumed the responsibility with effect from 1 December 2022 as
executive financial director. The board congratulates Brian and Ellen on their executive appointments and wishes them well in their new roles.
IKB Company Secretaries (Pty) Limited has been appointed as the company secretary of RMH with effect from 1 December 2022.
TRADING STATEMENT
Pursuant to paragraph 3.4(b) of the JSE Listings Requirements, RMH is required to advise shareholders as soon as it is reasonably certain that its
benchmark in terms of section 3.4 (b)(vi), net asset value, will differ by more than 20% from the previous corresponding period.
Accordingly, following the special dividend payment of 141.7 cents per share (59% of net asset value as at 30 September 2022) by RMH on
10 October 2022, RMH provides the following guidance to its shareholders:
Expected at As at
31 March 31 March Range
Cents 2023 2022 % change
Net asset value 77.5 - 116.3 277.0 (58) - (72)
The financial information on which this trading statement is based has not been reviewed and reported on by RMH's external auditor.
OUTLOOK
The period under review has been a challenging one. The South African economy was impacted by the following:
- Continued uncertainty as a result of COVID-19 with the State of Emergency only being lifted in April 2022;
- Changing weather patterns led to unusual rainfall and, in April 2022, floods hit the province of KwaZulu-Natal, resulting in an estimated 400
lives lost and R10 billion in damage to infrastructure;
- The struggling electricity grid led to record load shedding in 2022;
- High unemployment;
- Rising interest rates; and
- Rising fuel, wheat, corn and sunflower oil prices as a result of the invasion of Ukraine by Russia.
All these factors had a negative impact on economic recovery in South Africa and did not leave the property sector unscathed.
The board remains committed to the monetisation strategy of the balance of the RMH Property, taking into account prevailing trading conditions,
which may have an impact on the timing of the execution of the strategy.
For and on behalf of the board
Sonja De Bruyn
Chairman
Herman Bosman
Outgoing CEO
Brian Roberts
Incoming CEO
FINANCIAL INFORMATION
For the six months ended
Year ended
30 September 30 September 31 March
R million 2022 2021 % change 2022
Revenue 125 176 629
(Loss)/earnings attributable to equity holders (514) 177 >(100) 611
Headline earnings attributable to equity holders 53 187 (72) 56
Net asset value 3 368 3 725 (10) 3 910
Net asset value excluding cash earmarked for special dividend 1 395 3 725 (63) 3 910
Cents
(Loss)/earnings per share (37.0) 12.7 >(100) 43.9
Diluted (loss)/earnings per share (37.0) 12.7 >(100) 43.9
Headline earnings per share 3.8 13.4 (72) 4.0
Diluted headline earnings per share 3.8 13.4 (72) 4.0
Net asset value per share 238.6 263.9 (10) 277.0
ADMINISTRATION
Directors
(Ms) SEN De Bruyn (chairman), BM Roberts (CEO), HL Bosman, P Lagerstrom, UH Lucht, (Ms) MM Mahlare, (Ms) EJ Marais (FD), MM Morobe and
JA Teeger
Secretary and registered office
IKB Company Secretaries (Proprietary) Limited
Physical address: Zero 01 Solution House,
42 Gazelle Avenue,
Corporate Park South,
Midrand, 1685
Postal address: Private Bag X1000,
Saxonwold, 2132
Telephone: 010 753 2420
Website: http://www.rmh.co.za
Sponsor
(in terms of the JSE Limited Listings Requirements)
Rand Merchant Bank
(a division of FirstRand Bank Limited)
Physical address: 1 Merchant Place,
Corner of Fredman Drive and Rivonia Road,
Sandton, 2196
Transfer secretaries
Computershare Investor Services Proprietary Limited
Physical address: Rosebank Towers,
15 Biermann Avenue,
Rosebank, 2196
Postal address: Private Bag X9000, Saxonwold, 2132
Telephone: +27 11 370 5000
Telefax: +27 11 688 5221
Short-form announcement
This short-form announcement is the responsibility of the directors and is only a summary of the information in the full announcement and does
not contain full or complete details. The full announcement was released on the JSE's Stock Exchange News Service (SENS) on 13 December 2022
and can be found on the company's website at https://rmh.co.za/downloads/2023/RMH_Interim_results_announcement_2023.pdf or at
https://senspdf.jse.co.za/documents/2022/jse/isse/RMH/Interim23.pdf
The full announcement is available for inspection at the company's registered office and copies may also be requested from the company.
secretary@rmbh.co.za and at the offices of the sponsor, at no charge, during office hours. Any investment decision should be based on the full
announcement published on SENS and on the company's website.
Sandton
13 December 2022
Date: 13-12-2022 08:00:00
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