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Cape Town – Stellenbosch-based conglomerate Remgro [JSE:REM] – which has started a process of tidying up its sprawling portfolio - has grown the intrinsic value of its portfolio by 23% to R121.64c/share as at the year to end-March 2010.
Remgro, which released its results on Monday afternoon, indicated its latest intrinsic value – as at last Friday – was R120.21/share.
That means - at the last traded share price on Monday - Remgro’s discount to intrinsic value had narrowed markedly to around 19%.
Last year Remgro carried a discount of over 30% to its intrinsic value.
The narrowed discount might stem from the market expecting value-unlocking corporate action from Remgro.
Remgro CEO Thys Visser said he was satisfied with the performance of the company’s continuing investments. The company paid a 125c/share final divided, hiking the full year payout 10% to 209c/share.
Visser said where necessary Remgro had taken action to either increase or exit its interest in certain new or existing investments.
Perhaps the most significant development in this regard was Remgro’s decision to unbundle its major stake in diamond mining group Trans Hex Group [JSE:TSX].
Remgro also sold its stake in technology group Xiacom for a nominal amount after only recently making a total investment of $36m (R270m) in the business.
Further investments were made in glass group PGSI, small business financier Business Partners, Kagiso Infrastructure Empowerment Fund as well as in Dark Fibre Africa.
Remgro also invested another R19m in CapeVin Holdings, pushing its stake in liquor group Distell to 33.4%.
The composition of Remgro’s intrinsic value shows the company’s strategic stakes in financial services giants RMB Holdings [JSE:RMH] and FirstRand [JSE:FSR] to be its biggest single holding (R19.5bn).
But the biggest chunk of Remgro’s R64bn intrinsic value lies in its industrial portfolio, which is collectively worth R28bn. The industrial portfolio includes investments like Unilever, Medi-Clinic Corporation [JSE:MDC], Distell Group [JSE:DST], Rainbow Chicken [JSE:RBW] and TSB Sugar.
Remgro’s cash at the centre was a hefty R4.7bn – the bulk of which (R4.2bn) is held offshore. The exchange rate loss on Remgro’s offshore cash holding was almost R1.2bn.
Cash generated by Remgro’s operations was around R1bn for the year.
- Fin24.com
