South Africa: Remgro Reaps 132 Percent Higher Contribution From Mining

Source from:  Business Day (Johannesburg) 27 November 2007 11/28/2007

INVESTMENT company Remgro lifted first-half headline earnings 24%, buoyed by its interests in banking, spirits and wine, tobacco and food, CEO Thys Visser said yesterday. Headline earnings for the six months to September increased from R3,232bn to R4,016bn, while headline earnings per share rose 25,5% from 678,1c per share to 851,0c as a result of the favourable effect of the share repurchase programme. Remgro repurchased 8554019, or 1,9%, of its own shares during the period under review. The company's net profit rose to R4,4bn from R3,2bn as sales rose to R4,6bn from R3,7bn a year earlier, Visser said. Remgro declared an interim dividend of 180c per share, reflecting an increase of 17,6% on the previous year. The group's share price fell 0,5% to R193 at the close in thin trade on the JSE yesterday as analysts described the results as good. Visser said tobacco interests contributed 24%, or R1,839bn, to headline earnings, from R1,483bn a year earlier. Remgro owns a 10,6% interest in British American Tobacco. The contribution of financial services interests rose 38%, due mainly to FirstRand and Rand Merchant Bank Holding reporting good results following solid performances in the retail, corporate and investment banking segments. The contribution of industrial interests to Remgro's headline earnings increased 16,6% to R850m from R729m, mainly from strong performances by Medi-Clinic, Nampak, Distell, Rainbow and Unilever Bestfoods Robertsons (UBR). "UBR's increased contribution is mainly due to turnover growth and the resultant higher gross profit. "The increased turnover was partially offset by investment in pricing, advertising, promotions and raw material cost inflation. Sales growth of 10,9% in the SA retail operations was achieved due to a combination of volume and price growth," he said. Remgro and Unilever agreed last month that the former would divest from its 41% stake in UBR in exchange for a 25,75% interest in the total South African Unilever operations. Mining interests' contribution to headline earnings increased 131,6% to R176m from R76m, mainly as a result of dividends received from Implats amounting to R187m. Headline earnings at the central treasury division fell from R196m to R100m due to nonrecurrence of foreign currency profit totalling R74m. This related to outstanding intergroup balances accounted for a year earlier as well as lower average cash balances. Remgro made a number of acquisitions during the period under review, including 30,2-million shares in Rainbow Chicken, which it did not own, for R44,4m and a 24,5% stake in PG Group for R719,5m. Enditem