JOHANNESBURG - Investment holding company Remgro released a trading update in which it expected headline earnings per share (Heps) to increase up to 35% for the year to the end of June.
The group said Heps would be between 1466.7cents and 1511.5c a share higher, an increase of between 31% and 35% compared with last year. The group has attributed the expected increase to a positive fair value adjustment of R687million, relating to the decrease in value of the bondholders’ exchange option of the exchangeable bonds.
The group said last year’s results were effected by a negative option re-measurement of R730m, as well as once-off transaction costs of R788m that related to Mediclinic International’s rights issue and Al Noor Hospitals Group transaction. Remgro has a 44.6% stake in Mediclinic International. The private hospital group acquired United Arab Emirates’ Al Noor Hospitals Group for about $2.2billion (R28.39bn) in 2015.
The move gave Mediclinic an upper hand on its rival, NMC Health, in a tussle for expansion in the fast-growing Gulf region. In October last year, Remgro completed a rights issue whereby 48110637 new Remgro ordinary shares and 3550635 B ordinary shares were issued at a subscription price of R192.50 a share for a total consideration of R9.94bn.
For the six months to the end of December, Remgro reported impressive results in which headline earnings increased 29.7percent to R4.69bn, while Heps increased 25.9percent to 867.7c.
Remgro’s results are expected to be released on September 20. Remgro initially was a tobacco company that was formed by Dr Anton Rupert in the 1940s, now it includes investment in different sectors like food, liquor and home care, banking, healthcare, insurance, industrial, infrastructure, media and sport.
Remgro prides itself by investing in businesses that can deliver superior earnings, cash flow generation and dividend growth over the long term. Other investments are a 28.2percent stake in RMB Holdings (RMH). In the results last week RMH reported a 7% increase in normalised earnings to R8.2bn for the year to the end of June.
Remgro shares rose 0.15% to close at R215.57 on the JSE yesterday.