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RECM AND CALIBRE LIMITED - Prepared comments from RAC shareholders meeting

Release Date: 31/07/2019 12:30
Code(s): RACP     PDF:  
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Prepared comments from RAC shareholders meeting

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")


At a directors meeting with participating preference shareholders, which was held directly after
the Annual General Meeting on 31 July 2019, the following prepared 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

Updated NAV – R27.76

As at close of business, on 19 July 2019, the Company’s Net Asset Value (“NAV”) per share was
R27.76 compared to a year-end NAV per share of R26.92, representing an increase of 3.1% over
this period. This NAV is calculated with updated market prices for listed investments, and only
accounts for completed transactions described below. Our unlisted businesses have not been
revalued since our financial year-end.

Portfolio transactions

Subsequent to our financial year-end, RAC purchased a further 7.8% interest in Goldrush for
R132.6 mil in two separate, unrelated transactions. Goldrush also bought back some of its own
shares. Collectively these transactions increased RAC’s ownership of Goldrush to 58.8%.

RAC entered into a transaction to sell SA College of Home Studies, the Technical and Vocational
Education and Training College inside the education division, to a third party. This transaction is
still in progress and expected to close in the next month. The business was sold for a valuation
similar to its valuation at our financial year-end.

Goldrush - 67% of assets

Goldrush continues to trade well. Since our financial year-end, Goldrush opened a further bingo
property in Margate, Kwazulu Natal, bringing to total number of operational bingo properties to 29
out of the total number of licences of 35. All existing bingo operations experienced continued
growth since our financial year-end.

The LPM business is rolling out machines at a steady pace, with the number of live LPMs now
exceeding 2 000 for the first time, which is still less than half the company’s total available capacity
of 4 200 machines.

The retail sports betting business is bedding down its operations after a very aggressive roll-out
over the last year.

Goldrush management’s main focus is to complete the opening of the remaining bingo properties
as soon as possible.
Outdoor Investment Holdings – 5% of assets

Outdoor Investment Holdings has started to experience the slowdown in general retail activity in
the trading period since year-end, but is still up year-on-year. The opening of the second Family
Pet Centre is scheduled for September 2019.

Unicorn Capital Partners 4% - of assets

All businesses excluding Nkomati anthracite mine are trading fairly well. Mobile crane hire has
maintained momentum. Restructuring benefits are starting to materialise in drilling and blasting.
Exploration drilling in South Africa and Mozambique are performing in line with expectations while
we are facing unexpected operational challenges in Botswana. The mine development at Nkomati
is substantially completed and the mine is in aggressive ramp-up phase. The disposal process
announced last year is still in progress.

Astoria Investments - 4% of assets

Subsequent to our financial year-end, Astoria shareholders received a capital distribution of R12.82
per share. This left Astoria with about $23 mil of assets, most of which are invested in, or committed
to be invested in private equity funds. The company has reduced some of the operating expenses
by reducing the number of board members and executives. RAC currently owns 29.4% of Astoria.

ISA Carstens – 3% of assets

The nature of ISA Carstens’ business model means that most of the first six months of the year is
spent on educating our students, and on securing students for the following academic year. On
both counts, ISA Carstens is doing well, with the number of deposit-paying student enrolments for
the next year already exceeding our intake for this year.

College SA – 2% of assets

College SA has experienced a period of unexpected positive trading in the first half of the year,
while IASeminars also experienced improved trading in the first half of the year.

Trans Hex – 2% of assets

Trans Hex announced the intention to make an offer to all its shareholders except RAC and two
others, to buy back its shares at R1 per share and to delist the business. The process around the
proposed transaction is progressing well.

Cash – 7% of assets

As at the reporting date, RAC held Cash and cash equivalents of R136 mil. RAC has issued
preference shares to ABSA with a face value of R350 mil and accrued dividends due of R14.4 mil.
This leaves our net debt position at R228.4 mil with which we are comfortable.

Cape Town
31 July 2019

Questco Corporate Advisory Proprietary Limited

Date: 31/07/2019 12:30:00
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