COMPANY NEWS IN BRIEF
FirstRand pleased with healthy loan bookFirstRand, South Africa’s largest banking group by market value, raised its dividend by double digits after reporting robust annual results on the back of a solid operational performance.
The Johannesburg-headquartered group said normalised earnings attributable to ordinary shareholders rose 12% to R36.7 billion for the year to end June, allowing its board to declare an annual dividend of 384c, a 12% year-on-year increase.
The group, which is valued at R384 billion on the JSE, said its results reflected the quality and resilience of its underlying businesses, which include FNB, RMB, WesBank and Aldermore in the UK.
FirstRand’s overall credit loss ratio of 78 basis points for the period, which though higher than the 56 basis points reported the previous year, remained below the group’s through-the-cycle range. The group’s return on equity (ROE) came in at 21.2%, staying at the upper end of its 18% to 22% target.
FirstRand CEO Pullinger told News24 the group’s relatively contained credit losses, given the tough operating environment, were due to its decision to tighten lending criteria in the wake of Covid-19 by curbing loans to higher risk customers.
“We anchored the thesis on saying that coming out Covid-19 it’s not going to be business as usual. Households and small businesses were damaged, so we knew we had to be super careful,” said Pullinger.-Fin24
Sibanye starts retrenchment talks at Kloof
Sibanye-Stillwater has issued retrenchment notices at its Kloof 4 shaft, which could potentially affect as many as 3 000 workers at the gold mining operation near Carletonville.
Sibanye-Stillwater said it would consult with organised labour in terms of section 189A of the Labour Relations Act regarding the possible restructuring of its SA gold operations. This was due to ongoing losses over an extended period and operational constraints at the Kloof 4 shaft.
"The initiation of S189 consultations follows numerous unsuccessful attempts to address productivity issues and other operational constraints at the Kloof 4 shaft, including seismicity and cooling constraints which together have contributed to sustained losses, even at recent high gold prices," the company said in a statement. This was compounded by the recent incident at the Kloof 4 shaft which occurred during a trial run. The conveyance system caused significant damage to the shaft infrastructure and restricted underground access.
"Together, these factors have resulted in a severe deterioration in productivity and have jeopardised the financial viability of the Kloof 4 shaft," Sibanye said.
The possible restructuring of the Kloof 4 shaft could potentially affect 2 389 employees and 581 contractor employees, Sibanye said. Through the formal S189 consultation process, however, the company and affected stakeholders will together consider measures to avoid and mitigate possible retrenchments and seek alternatives to the potential cessation or downscaling of operations and associated services.-Fin24
ARC Investments boosts portfolio value
African Rainbow Capital Investments (ARC Investments), the empowered investment company backed by Patrice Motsepe, has reported a notable rise in the value of its underlying portfolio.
The JSE-listed investment holding company, the only asset of which is the ARC Fund, said the intrinsic net asset value (INAV) of its portfolio increased by almost 16% to R15.3 billion for the period to end-June 2023, while on a per share basis its intrinsic net asset value per share (INAV) rose just over 13% to R11.41 per share.
ARC Investments portfolio includes stakes in TymeBank and its global arm TymeGlobal as well as mobile communications company Rain and Sanlam’s third-party asset management which bought out Absa’s investment management business in December 2022. Over the past financial year the group disposed of its remaining stake in Afrimat for R486 million as well as its Gemcap unit’s stakes in in Payprop and Humanstate, which injected R486m into the ARC Fund.
The group also disposed of Rand Mutual Holdings (RMH) for R727 million while making an additional investment of R664 million investment into TymeBank and Tyme Global to help fund the acquisition of SME lender Retail Capital. ARC Investments also made an additional R833 million capital injection into phosphate miner Kropz Plc.-Fin24