South Africa: Remgro 'Happy' With BAT Listing on JSE

Source from:  Business Day (Johannesburg) 11/27/2008

REMGRO, the investment holding company that recently spun off and listed British American Tobacco (BAT) in SA, yesterday released interim results to September which showed net profit rose more than 40% to R5,4bn but headline earnings fell 2,5%. Remgro CE Thys Visser said yesterday that under the circumstances the company was "pretty happy" with the outcome of the BAT listing on the JSE. The share opened at the end of last month and has fallen about 6% since then. Visser said he did not think market volatility would subside any time soon, but he was determined to preserve Remgro's cash flows and look for investments on behalf of shareholders. He said Remgro had almost R6bn in cash. "I still think things are pretty turbulent. Thankfully we haven't been too active on the investment front," Visser said. For the six months to September, Remgro announced a dividend of 80c. This was down from the 180c declared last year. Visser said dividends were down because BAT shareholders would receive dividends directly from the tobacco company. Remgro was continuing with its smoothed dividend policy and aimed not to cut back even if earnings were stable or down, Visser said. It was still a substantial shareholder in FirstRand and Impala Platinum (Implats). While banking stocks had per formed better than resource stocks in the past six months, he said contributions from the FirstRand group were down almost 26% in the interim period. There were strong dividends coming from Implats, but the fall in the platinum price had hurt the share. Remgro was going to remain invested in both companies, Visser said. Contrary to the broader market, Remgro's share price has been climbing, gaining 26% since the beginning of October. It has outperformed the JSE all share index and the financial indices. Visser said the company had been trading at a large discount of more than 30% but he thought there had been a slight re-rating of the share, which he now estimated to be at a 25% discount. Remgro closed R1 firmer yesterday at R74. Enditem