Wrap Text
Condensed unaudited interim financial results announcement for the six months ended 31 December 2020
RMB HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1987/005115/06
JSE ordinary share code: RMH
ISIN code: ZAE000024501
(RMH or the company)
Condensed unaudited interim financial results announcement for the six months ended 31 December 2020
RMH is a JSE Limited (JSE) listed investment holding company focused on investments in property and property-related companies.
Since its inception, RMH has a track record of investing in disruptive and entrepreneurial businesses. RMH provides start-up or growth capital together with
a partnership ethos, empowered owner-manager culture, a set of enduring values with the aim of developing its investee companies into significant
standalone businesses. This, in combination with innovative corporate actions, has led to significant value being created for shareholders since its listing in
1992.
RMH has played a significant role in the establishment and growth of some of South Africa's most iconic financial services businesses, including FirstRand,
Discovery and OUTsurance. In 2011, RMH's insurance interests (Discovery, Momentum Metropolitan and OUTsurance) were separately listed as Rand
Merchant Investment Holdings Proprietary Limited (RMI).
In 2016, RMH expanded its investment strategy to include a property investment business (RMH Property). RMH Property partners with entrepreneurial
management teams with proven track records in developing and managing unlisted property and seeks to instil the values and ethos that have defined
the successes of RMH and RMI to date.
Financial highlights
COVID-19, continued lockdowns and the resultant muted macro-economic growth in the countries in which RMH operates through the RMH Property
portfolio companies continued to be factors in the financial results for the six months ended 31 December 2020.
RMH's net asset value has been resilient, decreasing by 4% from R4 960 million at 30 June 2020 to R4 757 million at 31 December 2020. This decrease is
driven by the strengthening of the Rand over the period to the Euro exchange rate. The operating performance of the underlying RMH Property investees
is pleasing in the context of the current environment.
The loss after tax from the continuing operation improved 74% from a loss of a R176 million for the six months to 31 December 2019 to a loss of R45 million
for the six months to 31 December 2020. The biggest contributor to this performance was the elimination of funding costs (2019: R139 million) as all debt
was settled as part of the RMH Unbundling.
Despite a significant decline in interest rates and the increase in the loan provided to Integer Properties, the cash endowment established at the time of
the RMH Unbundling to cater for the ongoing operating expenses of RMH has been maintained at R650 million (30 June 2020: R747 million).
The gross value of RMH Property decreased by 4% from R3 761 million at 30 June 2020 to R3 599 million at 31 December 2020.
Update on the Bucharest Opportunity
In November 2018, RMH Property entered into a partnership opportunity with Atterbury Europe and the Iulius Group to develop a new hub for business,
entertainment, retail and residential living in Bucharest. RMH Property capped its participation in the Bucharest opportunity to Euro50 million. This commitment
is currently held by Atterbury Europe on deposit in cash and remains under the control of RMH Property until the fulfilment of certain land ownership
conditions precedent.
Shareholders are advised that these conditions, which had to be fulfilled by a long stop date of 31 March 2021 and that would have resulted in the loan
to Atterbury Europe being converted to share capital, will not be fulfilled by this date. As a result thereof, the Euro50 million will be returned to RMH Property
by 31 March 2021. In line with its previously communicated undertaking, RMH will in turn distribute this amount to its shareholders in the form of a special
dividend. A further announcement setting out the details of this distribution will be made in due course.
While the Bucharest development was an important part of the Atterbury Europe strategy, there remain other compelling growth opportunities for the
business.
Dividend policy
Given the structure and stage of development of the RMH Property portfolio companies and its approach to capital management, RMH will not be
declaring any dividends in the medium term. RMH Property only expects to start receiving dividends once the capital structures of its portfolio companies
are sufficiently de-leveraged over the next three to five years, at which point an appropriate dividend policy will be formulated by RMH.
Outlook
All the countries where RMH Property has a presence are at various stages of emerging from lockdowns and restrictions introduced as a result of
continuing waves of the COVID-19 pandemic. The possibility of subsequent waves remains high.
Good progress has been made with vaccine roll-out programmes in Serbia, Romania and Cyprus, which will assist the recovery and outlook for medium-
term performance. It is anticipated that Central and Eastern European economies will recover sooner than other European economies as their
unemployment rates remain low and their GDP contracted less.
The pace of the vaccine roll-out for South Africa and emerging markets will be slower than that of the developed markets and, although some economic
recovery has been experienced in Southern Africa, market sentiment remains negative and we expect this to delay the recovery of the Southern African
property sector to pre-COVID-19 levels.
The listed property sector in South Africa continues to be under pressure with the REITs generally trading at significant discounts to their net asset values. As
a result of this negative sentiment, the loan-to-value ratios are above normal comfort levels and a number of the listed entities have focused on
deleveraging their balance sheets by selling assets. This has led to an oversupply of property stock, which, when combined with the lack of liquidity in the
market, will impact the timing of the RMH monetisation strategy.
Financial information
For the six months For the
ended year
31 December ended
30 June
% 2020
R million 2020 2019 change Audited
Continuing and discontinued operations
Revenue 48 286 (83) (111)
(Loss)/earnings attributable to equity holders (45) 4 566 (100+) 32 596
Headline (loss)/earnings attributable to equity holders (5) 4 583 (100+) 5 377
Net asset value 4 757 50 899 (91) 4 960
(Loss)/earnings per share (cents) (3.2) 323.4 (100+) 2 309.0
Headline (loss)/earnings per share (cents) (0.4) 324.6 (100+) 380.9
Net asset value per share (cents) 337.0 3 605.5 (91) 351.4
Continuing operations
Revenue 48 286 (83) (111)
Loss attributable to equity holders (45) (176) (74) (365)
Headline loss (5) (180) (97) (262)
Loss per share (cents) (3.2) (12.5) (74) (25.9)
Headline loss (cents) (0.4) (12.8) (97) (18.6)
This short-form announcement is the responsibility of the directors and is only a summary of the information in the full announcement and does not
contain full or complete details. The full announcement was released on the JSE's Stock Exchange News Service (SENS) on 19 March 2021 and can be
found on the Company's website at www.rmh.co.za or at
https://senspdf.jse.co.za/documents/2021/jse/isse/RMH/interims21.pdf The full announcement is available for inspection at the Company's registered
office and copies may also be requested at the company's registered office and from the company secretary at company.secretary@rmbh.co.za, at no
charge, during office hours. Any investment decision should be based on the full announcement published on SENS and on the company's website.
For and on behalf of the board
Sonja De Bruyn Herman Bosman
Chairperson Chief executive officer
Rosebank
19 March 2021
Directors
SEN De Bruyn (chairman), HL Bosman (CEO and FD), (Ms) A Kekana, P Lagerstrom, UH Lucht, (Ms) MM Mahlare, MM Morobe and JA Teeger
Alternate directors: O Phetwe
Secretary and registered office
(Ms) EJ Marais
Physical address: 12th floor, The Bank, Corner Cradock and Tyrwhitt Avenue, Rosebank, Johannesburg 2196
Postal address: Private bag X1000, Saxonwold 2132
Telephone: +27 10 753 2420
Sponsor
(in terms of JSE Limited Listings Requirements)
Rand Merchant Bank (a division of FirstRand Bank Limited)
Physical address: 1 Merchant Place, Corner of Fredman Drive and Rivonia Road, Sandton, 2196
Transfer secretaries
Computershare Investor Services Proprietary Limited
Physical address: Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
Postal address: Private Bag X9000, Saxonwold, 2132
Telephone: +27 11 370 5000
Date: 19-03-2021 08:00:00
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