Dear Shareholder

The Board has pleasure in reporting on the activities and financial results for the year under review.

Nature of activities

The Company is an investment holding company. Cash income is derived mainly from dividends and interest. The consolidated Annual Financial Statements of the Company and its subsidiaries also incorporate the equity accounted attributable income of associates and joint ventures.

The Group’s interests consist mainly of investments in banking; healthcare; consumer products; insurance; industrial; infrastructure as well as media and sport.


Year ended  30 June 
30 June 
Headline earnings (R million)  8 195  8 573 
– per share (cents)  1 448.9  1 512.6 
– diluted (cents)  1 445.9  1 504.5 
Headline earnings, excluding option remeasurement (R million)  8 083  8 312 
– per share (cents)  1 429.1  1 466.5 
– diluted (cents)  1 426.1  1 458.4 
Earnings – net profit for the year
(R million) 
7 319  8 943 
– per share (cents)  1 294.0  1 577.9 
– diluted (cents)  1 292.0  1 567.5 
Dividends (R million)  3 205  3 023 
– ordinary – per share (cents)  564.00  532.00 
* A final dividend of 349 cents (2018: 328 cents) per share was declared after the year-end and was therefore not provided for in the Annual Financial Statements. The final dividend is subject to dividend tax.


The most important investment activities during the year under review were as follows:


On 2 July 2018 Unilever acquired Remgro’s 25.75% shareholding in Unilever in exchange for Unilever’s Spreads business in Southern Africa, as well as a cash consideration of R4 900 million, representing a total transaction value of R11 900 million. This transaction valued the Unilever Spreads business at R7 000 million. The Unilever Spreads business was transferred to Siqalo Foods Proprietary Limited (Siqalo Foods), which became a wholly owned subsidiary of Remgro on 2 July 2018.

Remgro’s investment in Unilever was previously classified as an associate and accounted for using the equity method. With effect from 2 July 2018, Remgro consolidated Siqalo Foods at 100.0%, while the investment in Unilever, with a carrying value of R3 582 million, was disposed of for a consideration of R11 900 million, realising an accounting profit on the disposal of investment of R8 318 million.

In terms of IFRS 3: Business Combinations the purchase price of Siqalo Foods was R7 000 million. The fair value of the underlying assets acquired and liabilities assumed at the effective date were: intangible assets of R1 687 million, property, plant and equipment of R493 million, and other net liabilities of R388 million. The balance of R5 208 million, being the difference between the purchase price and Siqalo Foods’ identifiable net assets, was allocated to goodwill.

The fair value adjustment to Siqalo Foods’ statement of financial position relates mainly to the recognition of brands (inter alia Rama, Stork and Flora) and non-contractual customer relationships. The amortisation of these additional assets will result in an annual after-tax expense of R80 million included in headline earnings.

Community Investment Ventures Holdings Proprietary Limited (CIVH)

During July 2018, CIVH repurchased 6.3% of its shares from a shareholder, which increased Remgro’s interest in CIVH to 54.4% (30 June 2018: 51.0%).

During the year under review, Remgro invested a further R2 855 million in CIVH, in terms of CIVH rights issues. These share subscriptions did not alter Remgro’s interest in CIVH. The rights issue proceeds were mainly used to partly fund the Vumatel Proprietary Limited acquisition, as well as to fund Dark Fibre Africa Proprietary Limited’s growth strategy. Remgro earned underwriting fees of R58 million in respect of one of the CIVH rights issues.

On 14 December 2018 Remgro advanced a loan amounting to R100 million to CIVH. The loan, including accrued interest, and the outstanding amount of the underwriting fees will be converted into CIVH shares subsequent to 30 June 2019, which will marginally increase Remgro’s interest in CIVH to 54.7%.

Prescient China Equity Fund (Prescient)

During October 2018, Remgro invested $50 million in Prescient. Prescient was launched during October 2018 and Remgro and Reinet Investments S.C.A. provided the seed capital. Prescient, which uses a systematic, quantitative approach to seek long term capital growth, invests in listed stocks in the Chinese market and is benchmarked to the Shanghai Shenzhen CSI 300 index.

Milestone Capital Strategic Holdings Limited (MCSH)

Remgro previously invested $43 million in MCSH, consisting of an interest-bearing loan of $38 million and an investment of $5 million. During August 2018 MCSH repaid the loan and interest amounting to $42 million and Remgro disposed of its investment in MCSH for a total purchase consideration of $28 million. The purchase consideration was settled with cash amounting to $6 million, 10 714 310 Li Ning Company Limited (Li Ning) shares valued at $12 million and JHL Biotech, Inc. bonds (JHL bonds) valued at $10 million.

During December 2018 and January 2019, Remgro disposed of the 10 714 310 Li Ning shares for $12 million. The JHL bonds are held in escrow and will be utilised as Remgro’s first contribution towards Milestone China Opportunities Fund IV (Milestone IV). Remgro committed up to a maximum amount of $100 million to Milestone IV during the year under review.


On 11 September 2018 RMI declared its final dividend for the year ended 30 June 2018, which included an alternative to the cash dividend of either receiving a scrip distribution or reinvesting the cash dividend by subscribing for new RMI ordinary shares. Remgro elected to reinvest its cash dividend amounting to R300 million, and received 7 894 998 new RMI ordinary shares at R38.00 per share.


During December 2018 Remgro acquired a further 7 042 924 RCL Foods shares for a total amount of R115 million. This transaction marginally increased Remgro’s effective interest in RCL Foods to 77.5% (30 June 2018: 77.0%).


During the year under review, Remgro invested a further $3 million in Milestone III and received distributions of $9 million, thereby increasing its cumulative investment to $98 million and cumulative distributions received to $25 million. As at 30 June 2019 the fair value of Remgro’s investment in Milestone III amounted to $113 million and the remaining commitment amounted to $2 million.


During the year under review Invenfin (a wholly owned subsidiary of Remgro) invested a further R79 million in Bos Brands Proprietary Limited (Bos Brands), thereby increasing its cumulative investment in Bos Brands to R323 million.

Premier Team Holdings Limited (PTH) and Saracens Copthall LLP (Copthall)

On 24 October 2018, Remgro entered into an agreement in terms of which it disposed of its 50.0% interest in PTH (the entity that owns the Saracens rugby club) for a nominal amount with the right to sell its 49.5% interest in Copthall (the entity that houses the Saracens club’s stadium, Allianz Park) after three years for £8 million. The combined transaction gave Remgro the ability to completely exit the Saracens Group.

Remgro’s investments in PTH and Copthall were previously classified as associates and accounted for using the equity method. With effect from 24 October 2018, Remgro disposed of its investment in PTH and derecognised its associated investment in Copthall. The right to sell Copthall is classified as a financial instrument with fair value movements accounted for through profit and loss.


Other smaller investments amounted to R228 million.

Events after year-end

Other than the above-mentioned transactions, there were no other significant transactions subsequent to 30 June 2019.


During the 2016 financial year Remgro (through its wholly owned subsidiary Remgro Healthcare Holdings Proprietary Limited (RHH)) issued Class A preference shares of R3.5 billion (four-year tenure and fixed dividend rate of 7.7%) and Class B preference shares of R4.4 billion (five-year tenure and a fixed dividend rate of 8.3%).

During March 2019 Remgro entered into agreements to refinance its preference shares. The maturity date of the Class A preference shares was extended to 15 January 2024 at a fixed dividend rate of 7.5% effective from 16 June 2019. A breakage fee of R18 million was rolled into the amended preference share dividend rate. The Class B preference shares, with an original maturity date of 15 March 2021, was extended to 17 March 2025 at a fixed dividend rate of 7.8% effective from 16 March 2021.


The Company’s cash resources at 30 June 2019 were as follows:

   30 June 2019  30 June 
R million  Local  Offshore  Total 
Per consolidated statement of financial position  5 274  7 388  12 662  12 169 
Investment in money market funds  5 095  80  5 175  3 996 
Less: Cash of operating subsidiaries  (1 337) (773) (2 110) (2 461)
Cash at the centre  9 032  6 695  15 727  13 704 

On 30 June 2019, approximately 30% (R4 760 million) of the available cash at the centre was invested in money market funds which are not classified as cash and cash equivalents on the statement of financial position. Refer to note 5 of the Annual Financial Statements for further details.

group financial review


During the year under review, Remgro adopted IFRS 9: Financial Instruments and IFRS 15: Revenue from Contracts with Customers, which impacted the Group’s financial statements.

IFRS 9 replaces the provisions of IAS 39 that relate to the recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge accounting. IFRS 9 was adopted without restating comparative information in accordance with the transitional provisions. The adjustments arising from the new standard are therefore not reflected in the statement of financial position as at 30 June 2018, but are recognised in the opening statement of financial position on 1 July 2018.

In accordance with the transition provisions in IFRS 15, the Group has applied the modified retrospective application option, and certain adjustments are therefore recognised in the opening statement of financial position on 1 July 2018.

Refer to note 17 to the Annual Financial Statements for the full impact of the adoption.

Statement of financial position

The analysis of ”Equity employed” and ”Source of headline earnings” below reflects the sectors into which the Group’s investments have been classified. No adjustment has been made where investments are active mainly in one sector but also have interests in other sectors.

   30 June 2019 30 June 2018
   R million  R per share  R million  R per share 
Equity employed          
Attributable to equity holders  101 097  178.95  98 098  173.04 
Employment of equity            
Banking  22 070  39.07  20 871  36.82 
Healthcare  24 019  42.52  29 373  51.81 
Consumer products  23 187  41.04  20 826  36.74 
Insurance  9 335  16.52  8 479  14.96 
Industrial  6 318  11.18  6 563  11.58 
Infrastructure  6 664  11.80  5 157  9.10 
Media and sport  1 042  1.84  1 089  1.92 
Other investments  4 620  8.18  4 060  7.16 
Central treasury              
– Cash at the centre  15 727  27.84  13 704  24.17 
– Debt at the centre  (13 919) (24.64) (14 097) (24.87)
Other net corporate assets  2 034  3.60  2 073  3.65 
   101 097  178.95  98 098  173.04 


   30 June 2019 30 June 2018
   R million  R million 
Source of headline earnings             
Banking  3 737  46  3 525  41 
Healthcare  1 693  21  1 556  18 
Consumer products  918  11  1 605  19 
Insurance  1 161  14  1 228  14 
Industrial  944  12  971  11 
Infrastructure  (174) (2) 57 
Media and sport  20  –  (47) (1)
Other investments  39  –  66 
Central treasury             
– Finance income  755  524 
– Finance costs  (823) (10) (891) (10)
– Option remeasurement  112  261 
Other net corporate costs  (187) (2) (282) (3)
   8 195  100  8 573  100 
R million  30 June 
30 June 
Composition of headline earnings       
Subsidiaries  763  454 
Profits  1 612  1 302 
Losses  (849) (848)
Associates and joint ventures  7 432  8 119 
Profits  7 835  8 269 
Losses  (403) (150)
   8 195  8 573 

Share incentive schemeS

Remgro currently has three long-term incentive plans, i.e. the old Remgro Equity Settled Share Appreciation Right Scheme (SAR Scheme), the Remgro Share Appreciation Rights Plan (SAR Plan) and the Remgro Equity Settled Conditional Share Plan (CSP).

In terms of the SAR Scheme and SAR Plan, participants are offered Remgro ordinary shares to the value of the appreciation of their rights to a specified number of Remgro ordinary shares that can be exercised at different intervals but before the expiry of seven years from date of grant. The earliest intervals at which the share appreciation rights vest and are exercisable are as follows:

  • One-third after the third anniversary of the grant date
  • An additional third after the fourth anniversary of the grant date
  • The remainder after the fifth anniversary of the grant date

In terms of the CSP, participants are awarded Remgro ordinary shares that will vest as follows:

  • One-third after the third anniversary of the grant date
  • An additional third after the fourth anniversary of the grant date
  • The remainder after the fifth anniversary of the grant date

Vesting on both schemes are conditional on fulfilment of the employment period and achievement of performance conditions (where applicable).

Refer to note 8 to the Annual Financial Statements for further details on both schemes.


At 30 June 2018, 1 389 033 Remgro ordinary shares (0.3%) were held as treasury shares by a wholly owned subsidiary of Remgro. As previously reported, these shares were acquired for the purpose of hedging Remgro’s share schemes.

During the year under review Remgro repurchased a further 2 000 000 Remgro ordinary shares at an average price of R198.07 per share for a total amount of R396 million, while 54 097 Remgro ordinary shares were utilised to settle Remgro’s obligation towards scheme participants.

At 30 June 2019, 3 334 936 Remgro ordinary shares (0.6%) were held as treasury shares.

Principal shareholder

Rupert Beleggings Proprietary Limited (Rupert Beleggings) holds all the issued unlisted B ordinary shares of the Company and is entitled to 42.62% (2018: 42.53%) of the total votes.

An analysis of the shareholders appears here.

Subsidiaries and investments

Particulars of subsidiaries and equity accounted investments are disclosed in note 14 of the Annual Financial Statements.


The names of the directors appear here.

Mr A E Rupert has been appointed as a non-executive director of Remgro with effect from 29 November 2018, which directors’ appointment will in terms of the Company’s Memorandum of Incorporation have to be confirmed by the shareholders at the next Annual General Meeting. The Board wishes to welcome Mr A E Rupert as a director to the Company.

In terms of the provision of the Memorandum of Incorporation, Messrs J J Durand, N P Mageza, J Malherbe, P J Moleketi and F Robertson retire from the Board by rotation. These directors are eligible and offer themselves for re-election.

Directors’ interests

At 30 June 2019 the aggregate of the direct and indirect interests of the directors and their associates in the issued ordinary share capital of the Company amounted to 2.53% (2018: 2.51%).

Mr J P Rupert is a director of Rupert Beleggings which owns all the issued unlisted B ordinary shares.

An analysis of directors’ interests in the issued capital of the Company appears here.

directors’ emoluments

The total directors’ fees for services rendered as directors during the past financial year amounted to R5.5 million (2018: R5.5 million).

Acquisition of shares of the Company

It is recommended that a general authority be granted to the Board to acquire, should circumstances warrant it, the Company’s own shares and to approve the acquisition of shares in the Company by any of its subsidiaries, subject to the provisions of the Companies Act (No. 71 of 2008), as amended, and the Listings Requirements of the JSE Limited.

A special resolution to grant this general authority to the Board is incorporated in the notice of the Annual General Meeting that appears here.


It is recommended that a general authority be granted to the Board to allot and issue ordinary shares, subject to the provisions of the Companies Act (No. 71 of 2008), as amended, the Memorandum of Incorporation and the Listings Requirements of the exchange operated by JSE Limited, provided that the aggregate number of ordinary shares to be allotted and issued is limited to 5% of the number of the unissued ordinary shares in the authorised share capital of the Company (being 23 539 150 ordinary shares). This authority cannot be used to issue shares for cash.

An ordinary resolution to grant this general authority to the Board is incorporated in the notice of the Annual General Meeting that appears here.

declaration of cash Dividend

Declaration of CASH Dividend No. 38

Notice is hereby given that a final gross dividend of 349 cents (2018: 328 cents) per share has been declared out of income reserves in respect of both the ordinary shares of no par value and the unlisted B ordinary shares of no par value, for the year ended 30 June 2019.

A dividend withholding tax of 20% or 69.8 cents per share will be applicable, resulting in a net dividend of 279.2 cents per share, unless the shareholder concerned is exempt from paying dividend withholding tax or is entitled to a reduced rate in terms of an applicable double-tax agreement.

The total gross dividend per share for the year ended 30 June 2019 therefore amounts to 564 cents, compared to 532 cents for the year ended 30 June 2018.

The issued share capital at the declaration date is 529 217 007 ordinary shares and 39 056 987 B ordinary shares. The income tax number of the Company is 9500-124-71-5.


The final dividend is payable on Monday, 18 November 2019, to shareholders of the Company registered at the close of business on Friday, 15 November 2019.

Share certificates may not be dematerialised or rematerialised between Wednesday, 13 November 2019, and Friday, 15 November 2019, both days inclusive.

In terms of the Company’s Memorandum of Incorpora­tion, dividends will only be transferred electronically to the bank accounts of shareholders, while dividend cheques are no longer issued. In the instance where shareholders do not provide the Transfer Secretaries with their banking details, the dividend will not be forfeited but will be marked as “unclaimed” in the share register until the shareholder provides the Transfer Secretaries with the relevant banking details for payout.


The name and address of the Company Secretary appears here in the Integrated Annual Report.


The comprehensive Annual Financial Statements published on the Company’s website, as well as the summary Annual Financial Statements set out here have been approved by the Board.

Signed on behalf of the Board of Directors.

Johann Rupert

19 September 2019
Jannie Durand
Chief Executive Officer