In order to understand Remgro’s cash generation process, one first needs to understand its reported results.

Remgro’s statutory reported net profit consists primarily of the following:

  • Consolidated results of its operating subsidiaries, i.e. Distell, RCL Foods, Wispeco and Siqalo Foods;
  • Equity accounted results of its investments in associates and joint ventures, e.g. Mediclinic, RMI, CIVH, Air Products and TotalEnergies;
  • Profit/loss on the realisation of invest­ments;
  • Net impairment of investments;
  • Dividends received from investee companies not classified as subsidiaries, associates and joint ventures, e.g. FirstRand, Discovery and Momentum Metro politan (both investm ents unbundled by RMI), the Milestone China Funds and the Pembani Remgro Infrastructure Fund;
  • Interest received;
  • Interest paid;
  • Net corporate costs, including remuneration and other benefits paid to employees; and
  • Taxation.

Capital allocation – Remgro’s most critical function

Capital is expensive and not infinite. As we deal with an uncertain future, exacerbated by current global economic and geopolitical pressures, and inevitably base capital allocation decisions on certain assumptions about the future, we need to be prudent and have a margin of safety built into these investment decisions.

We need to be disciplined in our allocation of capital and, if we are wrong, we should act quickly and decisively. A large part of Remgro’s successful track record of value creation is attributable to being able to maintain a good balance of young growth companies, network assets and more established cash-generating companies to ensure superior returns to shareholders by way of sustainable dividends and capital growth.

As a key part of its purpose, Remgro has increased its focus on how it manages its assets and pursues investments in businesses with the aim to contribute to measurable positive social and environmental impact, alongside financial returns. To this end, Remgro’s investment framework now provides clear guidelines for capital allocation decisions in line with its Environmental, Social and Governance (ESG) ambitions.


Remgro strives to enable investee companies to achieve their growth strategies and targets. The support we provide, irrespective of our level of influence, includes:

  • Strategic input
  • Capital allocation
    • Patient financial capital to support growth strategies
    • Manufactured capital
    • Human capital in management support
    • Relationship capital in identification of opportunities
    • Intellectual capital
    • ESG risks, considerations and opportunities
  • Dealmaking ability (environment for corporate transactions)
  • Decentralised management approach
  • Treasury services (as required)
  • Internal audit and risk services (as required)
  • Formal and informal associations, providing our investee companies with opportunities to benefit from a wider network


The value and performance of the underlying investments, rather than the activities at holding company level, will determine to a large extent the value created for an investment holding company’s shareholders, although dealmaking at holding company level can also add significant value.

The best approximation of Remgro’s profit at holding company level (at the centre) comprises:

Given its nature as an investment holding company and the substantial amount of cash held and managed, the control of treasury risks is regarded as very important, which is covered in the Chief Financial Officer’s (CFO) Report.

Distributions to shareholders

Cash distributions are funded from dividend income and interest received at the centre. Our normal dividend objective is to provide shareholders with a consistent annual dividend flow that at least protects them against inflationary pressures. As in the past, Remgro consistently evaluates the appropriateness of other distributions in the form of special dividends, share buy-backs or the unbundling of investments to shareholders.


Remgro further measures its performance in terms of the increase in its intrinsic net asset value. This measures the growth in the value of the various underlying investee companies, measured by listed market value or, in the case of unlisted investments, applying the principles of IFRS 13: Fair Value Measurement. Refer to the Chief Executive Officer’s Report for a detailed analysis of Remgro’s intrinsic net asset value, briefly citing the differences between an IFRS 13 valuation and a transactional valuation.