Remgro dividend up 60%, despite ‘most difficult business environment since inception’

Remgro – the investment holding giant chaired by billionaire Johann Rupert – increased its full-year dividend payout by 60%, despite describing the year to the end of June 2023 as “one of the most difficult business environments to operate in since its inception”.

The group, which is a major shareholder in listed companies such as OUTsurance, RCL Foods and Discovery, reported an 8.9% increase in Headline earnings per share (Heps), to 1 254 cents for FY2023.

Read: OUTsurance sees earnings surge

It declared a final gross dividend of 160 cents per share (2022: 100 cents) out of income reserves to ordinary shareholders in its latest financial results. The group paid out an interim dividend of 80cps, bringing its total dividend for FY2023 to 240cps – representing a 60% surge compared to the prior financial year.

Remgro highlighted that its intrinsic net asset value per share as at 30 June 2023 was up 16.6% to R248.47.

However, the group lamented “the challenging operating business environment” including “the confluence of load shedding, high inflation, high interest rates, sharp increases in electricity prices, foreign exchange volatility, ongoing geopolitical tensions, the erosion of foreign investment confidence in the country, as well as concerning levels of crime and corruption”.

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“All of these features, compounded together, have created what is probably one of the most difficult business environments to operate in since Remgro’s inception.”

“With low levels of expected economic growth – combined with the breakdown of state infrastructure relating to energy, transport and logistics, and the slow pace of economic reforms to date – the urgency to address these issues cannot be overstated,” added Remgro.

“Against this backdrop, it is pleasing to note the group’s ability to maintain positive earnings momentum. Remgro also successfully completed the Mediclinic and Distell/Heineken transformative corporate actions, both of which were implemented during the year under review,” it said.

“Amidst all the headwinds South Africa is currently facing, Remgro remains confident about the resilience of its portfolio,” it declared.

The group’s share price was marginally down on Thursday following the release of its latest results; however, the stock is up around 17% year-to-date.

Remgro’s share price