Johann Rupert’s investment giant booming

Johann Rupert-owned Remgro expects its headline earnings per share to increase between 33% and 43% year-on-year when it releases its interim results later this month. 

This is a sharp jump considering in the company’s last full-year results, its profit plummeted by more than 70%. 

Remgro had a difficult 2024 financial year, with it focusing heavily on reshaping its business for future growth at the expense of immediate returns. 

This included the sale of Distell to Heineken to form Heineken Beverages – in which Remgro holds an 18.8% stake – and the delisting of Mediclinic. 

“While strong contributions were made by some of Remgro’s investee companies, considerable work still needs to be done to bed down the operational performance of a number of its key investments,” the company said at its 2024 results presentation. 

“Remgro remains committed to the portfolio repositioning and optimisation, enabled by the aforementioned corporate actions, and the ultimate benefits of this journey for the group.” 

“Even as the current unsatisfactory performance overshadows continued progress on some of its key strategic initiatives, Remgro maintains a disciplined and long-term approach in deploying and managing its resources.”

The company’s investment in Heineken Beverages has come under particular pressure, with its core beer brands suffering from its inability to compete in terms of price. 

Remgro CEO Jannie Durand explained that its brand are over-indexed towards the premium end of the market and so lose out to established players such as Black Label at the lower end. 

Heineken Beverages has spent heavily on promotion activity to compete in the challenging environment and launched a new returnable bottle. 

It has also made good progress regarding its plans to unlock cost efficiencies through scale. 

These initiatives appear to be bearing fruit, with Remgro’s management saying a recovery in revenue has become evident. 

The company’s latest trading statement indicates that these improvements have flown through to the bottom line, with it expecting headline earnings per share to be between 645 cents and 694 cents. 

This is an increase of between 33% and 43% compared to the prior period, which ended 31 December 2023. 

The increase in headline earnings is driven by improved operational performances from the majority of Remgro’s investee companies, lower finance costs, and the negative impact of significant corporate actions in the comparative period. 

More details on the increase in headline earnings will be provided in the Remgro results, which are due to be released on SENS on or about 25 March 2025.