DURBAN – Investment holding firm RMB Holdings (RMH), which boosted its headline earnings by 7 percent to R4.45 billion for the six months to end December, is eyeing potential investments in entrepreneurial and industry-disruptive financial services companies in the year ahead as it contends with continued muted growth in the country.
It said that its management would consider unlisted businesses and digitally-oriented firms that could add value to RMH and its shareholders.
“This year is shaping up to be another challenging year for the South African economy. Headwinds include a slowing global economy, Eskom (and other state-owned entities) challenges, adverse domestic weather conditions in the western maize-growing areas of the country, prolonged strike activity in the gold mining sector and political uncertainty leading into the national election,” it said yesterday.
RMH said that given disappointing fixed investment, a lack of policy visibility and a strained government fiscus, the 2019 real gross domestic product growth forecast had been reduced to 1.4 percent from 1.5 percent.
Its core investment, FirstRand, in which its owns a 34 percent stake, produced a solid performance during the period despite the challenging economic climate by increasing normalised earnings by 7 percent and delivering a return on equity of 22.3 percent.
The dominant part of RMH’s income is its share in the after-tax profits of FirstRand, which amounted to R5.35 billion in the reporting period from R4.3bn in the previous corresponding period. RMH reported a net income of R5.54bn, up by 31 percent compared to last year’s R4.21bn.
Profit after tax also increased by 31 percent to R5.36bn, up from R4.1bn, while diluted headline earnings per share increased by 6 percent to 315.2 cents a share, up from 298.2c compared to last year.
Shares in RMB Holdings closed 2.25percent lower at R75.91 on the JSE on Thursday.