COMPANY NEWS IN BRIEF
OUTsurance officially joins the JSEAfter months of anticipation, the OUTsurance Group listed on the Johannesburg Stock Exchange (JSE) on Wednesday with the code OUT.
The Centurion-based insurer officially swapped places with its parent company, Rand Merchant Investment Holdings (RMI), which is no longer listed on the exchange as of 7 December. RMI has been preparing for this since 2021, when it started unbundling its stake in Momentum and Discovery to focus only on its short-term insurance investments. But it later sold its stake in UK tech-based insurer Hastings to concentrate solely on OUTsurance and its Australian sister company, Youi.
With only that investment in its portfolio and the big share price discounts that investment holding companies such as RMI have been battling with in recent years, it made sense to let OUTsurance take the spotlight, since operating companies' share prices have fared better on the JSE.
After Wednesday's listing, the two companies said shareholders would now own a stake in a company with an efficient and well-capitalised corporate structure. Other benefits they will reap from this listing swap include a cost-effective way to complete an initial public offering (IPO), a higher dividend payout ratio, and a phased reduction of the holding company and personnel costs at RMI until March 2023.
OUTsurance CEO, Marthinus Visser, said this represents a new and exciting chapter in OUTsurance's history, and he and his team look forward to life ahead as a public company.
"I am incredibly proud of our team to have reached this milestone and would like to thank RMI/RMB for a brilliant 25-year partnership," he said.-Fin24
Absa warns of looming writedowns
South Africa's fourth most valuable lender Absa says a recovery in its life insurance business and rising interest rates have helped with a double-digit revenue rise so far in its 2022 year, but it's seeing strain on consumers as a result of more difficult conditions, and impairments are rising too.
All its divisions saw "solid" loan growth in the 10 months to end October, Absa said in an update, with pre-provision profits growing by more than a fifth.
"Given higher policy rates and the uncertain macroeconomic outlook, we will maintain strong loan coverage. Our credit impairments are expected to increase year-on-year, resulting in a credit loss ratio in the upper half of our through-the-cycle range and above our first-half charge of 91 basis points," Absa said.
After a 325-basis-point increase in interest rates in the country so far this year. Absa expects vehicle finance and personal loans books' impairments to grow materially, although it expects impairments in its home loans book to "normalise".
Customer deposits rose by high single digits. Its revenue increased by "low teens", and its net interest margin benefited from the rising interest rates, while rate increases also pushed net interest income up by low teens. The group's non-interest income increased by low teens too.-Fin24
Sanlam warns of profit decline
Sanlam's share price fell by more than 3% after the company released its operational update for the 10 months to end-October.
Net operational earnings and headline earnings per share declined by 6%. Its net result (which takes into account premiums, claim payments and insurance liabilities) from general insurance operations - including its 61% stake in Santam – fell by 50%, amid high levels of damage due to electrical power surges and vehicle theft-related claims, combined with the catastrophic floods in KwaZulu-Natal.
Its net result from life insurance increased by 23%, asset management by 21%, and credit and structuring operations by 17%.
Sanlam says the operating environment remained difficult, as higher inflation and the resulting interest rate increases hit investment markets and the ability of its clients to "commit to new insurance and investment products and retain existing arrangements".
Net value of its new life insurance business of R1.8 billion is 14% lower, but margins improved from 2.65% to 2.86%. Its Shiram business in India saw good growth, and new life insurance business volumes from that country rose 22%. Its Malaysian business saw growth of 9%.
The group said that profit from its life insurance business benefitted from lower mortality claims as the impact from Covid-19 faded away.-Fin24
Abu Dhabi may buy 60% stake in Vodacom
The Abu Dhabi carrier is studying the feasibility of an offer for part or all of the UK group Vodafone’s stake in JSE-listed Vodacom, the people said, asking not to be identified because the information is private.
Vodafone owns roughly 60% of the company. Shares of Vodacom jumped more than 7% earlier on Wednesday, its biggest daily gain since March 2020, giving it a market value of about R243 billion. It ended the day around 5% higher. Vodafone shares pared earlier losses and were down 0.1% in London.
Etisalat is also weighing the possibility of combining some of its own African operations with Vodacom or buying Vodacom assets in specific countries, the people said. It’s in the early stages of weighing which path to pursue, and could also consider other forms of cooperation, according to the people.
Any tie-up would bring together the biggest Middle Eastern telecom operator with the second-biggest African carrier by market value. Vodafone has been steadily consolidating its interests on the continent under Vodacom, which provides telecom services in countries including South Africa, Tanzania and the Democratic Republic of Congo.
Etisalat became Vodafone’s largest shareholder earlier this year and is keen to leverage this position as it plots an expansion of its own business in Africa, according to the people.
Deliberations are ongoing and there’s no certainty they’ll lead to any transactions. A spokesperson for Etisalat said the group is scanning the market for opportunities in line with its strategy to grow in part through acquisitions, though there is “no such project in progress at the moment.” –Fin24
Charges filed against Spar execs in court
Fraud charges have been filed against three senior executives of Spar, amid allegations that the grocer falsely claimed in 2019 it was owed money in order to gain control over certain supermarkets.
This is just the latest blow for the JSE-listed retailer, which is also facing off with one of its store owners in Johannesburg amid allegations it inflated the price of a store, though the group strenuously denies wrongdoing. The governance of the company also under scrutiny after Graham O’Connor became Spar chair in March 2021, a month after retiring as CEO, which is at odds with the King Code's recommendation of at least a three-year break.
The civil rights group AfriForum said in a statement its private prosecution unit had helped Chris and Harry Giannacopoulos and their family’s group of companies, the Giannacopoulos Group, file criminal complaints of fraud and perjury against these executives in Gauteng. Further complaints will soon be filed in KwaZulu-Natal, it said.
The Giannacopoulos Group owns a group of 13 companies that operate 45 Spar supermarkets and Tops liquor stores in three provinces. The JSE-listed Spar is a warehousing and distribution business which owns several country licences for the Spar retail brand. The brand is used by a network of independent retailers who trade under its brand and are supplied on a voluntary basis through its distribution centres. As of its 2022 year, the group had a network of just over 2 500 stores in southern Africa, while also operating in Switzerland, Ireland and Poland.
It is alleged that Spar, through its executives, falsely claimed in affidavits in 2019 that companies in the Giannacopoulos Group owed it money in order to convince the courts to grant Spar control over the supermarkets owned by the companies. –Fin24
Union plans to intensify Makro strike
The SA Commercial, Catering, and Allied Workers' Union (Saccawu) said it served the Massmart Group with a seven-day notice of intention to go on strike at six of the company's subsidiaries over its ongoing wage dispute with Makro.
The union said its strike would feature 15 000 workers partaking in industrial action at Game, Builders Warehouse, Rhino, Fruitspot, Shield, and Jumbo in support of the union's members at Makro.
The union has been at loggerheads with Makro management for much of the year over their wage demands. On Black Friday, Saccawu held nationwide marches at various Makro operations, which included a clash with police at Makro's Germiston branch, leaving union members injured.
The union is demanding an across-the-board increase of R900 or 12%, whichever is the greater, a minimum wage of R8 000, an increase in sales commission payments to 20%, a 13th cheque, and a moratorium on retrenchments for the duration of the agreement.
"Saccawu has today issued a seven-day notice to the companies above to join in on the strike at Makro. Makro employees are in a five-month dispute with Makro over the improvement of wages and working conditions," the statement said.
The statement said Saccawu would protest from 15 December through marches and pickets at Massmart operations around the country.-Fin24