RECM AND CALIBRE LIMITED - Results of Annual General Meeting and Chairmans comments

Results of Annual General Meeting and Chairman’s comments

RECM and Calibre Limited
(Incorporated in the Republic of South Africa)
Registration number 2009/012403/06
Preference Share Code: RACP
ISIN: ZAE000145041
("RAC" or "the Company")



RESULTS OF ANNUAL GENERAL MEETING AND CHAIRMAN’S COMMENTS

The Annual General Meeting of RAC ordinary shareholders was held on Wednesday,
20 August 2014. The RAC ordinary shares are not listed on the JSE.


All the ordinary resolutions and the special resolution, as set out in the notice of Annual
General Meeting to ordinary shareholders posted 30 June 2014, were approved by the
requisite majority of shareholders.


At the Chairman’s meeting with preference shareholders, which was held directly after the
Annual General Meeting, the following comments were shared with attendees.              In the
interest of sharing the information equally with all shareholders, the statement is also
published on SENS and on the RAC website www.racltd.co.za.


PORTFOLIO CHANGES SINCE YEAR END

We have invested R42 million into Goldrush (our fast growing alternative gaming business).
Around R40 million will follow shortly, and - depending on certain events – another
R40 million to follow in due course. This will give us an effective 23% stake in the business.
We have agreements in place, which sets the path to increase our shareholding to just
below 50% within the next few years.


The Transhex/Namakwaland Mines transaction seems close to being finalized. Transhex
expects to be operational on the mine by the end of the year. Our 27% stake will cost
R35 million. We have waited 3 years to consummate this transaction, yet some conditions
still remain outstanding.


We have added more Transhex to our investment portfolio, to the value of R25 million.
We have reduced the tail of our investment portfolio further. We have written down
ProtechKuthule (which is in liquidation) to zero, and sold completely out of two others. There
are five investments left in this category, to the value of R50 million. We have an offer on the
table for one of them, which represents the bulk of this exposure.


LATEST NAV PER SHARE (ORDINARY AND PREFERENCE)

-   As at 31 July 2014, the NAV per share came to R12.55, up from R12.32 at year end. The
    NAV per share has not been audited or reviewed. This is on the same, conservative
    valuation methodology as we used at year end, and includes the write-down of Protech.
-   Our valuation methodology is consciously ultra-conservative. Many of our businesses
    are growth assets, which do not produce cash, yet. Others have strong inherent
    optionality, which is path dependent. In both cases, it is hard to put a single number on
    the value with a high degree of confidence.
-   Over time we will provide our shareholders with more information regarding our investee
    businesses.
-   We continue to believe the accounting NAV significantly understates our intrinsic value,
    we just don’t know by exactly how much.


SOME OBSERVATIONS

Our bigger transactions have, on average, done better than our smaller ones.

Our private transactions have, on average, done better than our listed ones. We believe this
is due to:
-   Good acquisition prices, as we are not part of an auction.
-   A good relationship with management, where the will to work together for the benefit of
    the company is much stronger. Incentive structures are also very different and sensible.
-   There is much less noise surrounding business decisions, as markets’ immediate
    reaction, expressed in short term share price volatility, is of no consequence in guiding
    management endeavours.


These conclusions will tend to guide our future actions.


CASH REQUIREMENTS

Although we have almost R200 million still available on the balance sheet, much of it may be
used in the immediate future.


We intend using debt for future acquisitions, unless we can take a transaction to our
shareholders, which is so good that they would be willing to allow us to use our undervalued
paper to fund it.


Any forward looking statements contained in this announcement have not been reviewed nor
reported on by the Company’s auditors.


21 August 2014
Cape Town


Sponsor
Questco (Pty) Ltd

Date: 21/08/2014 08:53:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.