ST RAT EGY Changing its spots

Describing Remgro as “staid, constant and reliable” is probably a fair reflection of the company’s corporate nature. But investors should not lose sight of the fact that the directors have not hesitated to make changes to enhance and focus shareholder returns.

Indeed Remgro, or rather its corporate predecessor Rembrandt, has undergone a number of structural changes over the years. Parts have been split off, like the luxury goods business Richemont and the tobacco interests under British American Tobacco (BAT). The technology-focused investment company Venfin, which once housed the valuable 15% stake in cellular services operator Vodacom, was unbundled and then reincorporated.

In the 1990s Rembrandt also simplified its hugely complex pyramid holding structure, which involved four separate listings.

Remgro today comprises seven investment platforms: banking (RMB and FirstRand; health care (Mediclinic International); insurance (MMI and RMI); food, liquor & home care (RCL, Unilever and Distell); infrastructure (Grindrod, Dark Fibre Africa and Seacom); industrial (Total SA, Air Products and Kagiso Tiso Holdings); and media (e.tv).

The future focus for investments is unashamedly on SA and the rest of Africa. Remgro CEO Jannie Durand says the company is particularly fond of the opportunities offered in East Africa, but stresses the African push will be meticulously planned so as to not overpay for assets. “We have no particular target set for expansion in Africa, but the push into the continent is part of every one of our investment platforms.”

The sector focus for the immediate future revolves mainly around the quartet of food, liquor & home care (FLH), health care, infrastructure and media.

At the time of writing, Remgro’s health care subsidiary, Mediclinic International — which owns the Hooglanden private hospital network in Switzerland and a small grouping of hospitals and clinics in the United Arab Emirates — had announced the acquisition of two pathology laboratories as part of its Middle East expansion. Mediclinic currently operates in Namibia and it will be interesting to see if Remgro is keen to expand the brand into fast-growing economies such as Angola, Nigeria, Botswana and Kenya.

The infrastructure push is seemingly bewarts