COMPANY NEWS IN BRIEF

SAB confirms R5.8 billion investment

South African Breweries (SAB) has confirmed that its R5.8 billion investment commitment has been utilised to increase capacity at two of its plants, the Department of Trade, Industry and Competition (dtic) said on Thursday.

The company says that the investment was for civil works and new equipment to allow for increased local production for new product innovations, the dtic said in a statement.

SAB announced this investment at the South African Investment Conference 2023. Two of SAB’s plants were identified for these capacity upgrades: Prospecton Brewery in Durban, and Ibhayi Brewery in Gqeberha in the Eastern Cape.

The South African Investment Conference was launched in 2018 by President Cyril Ramaphosa as a way to boost economic activity, setting a target to mobilise approximately R2 trillion in new investments over another five-year period, which begins next year.

"We are dedicated to sustainable investments and economic growth," SAB's CEO Richard Rivett-Carnac said in the statement.-Fin24

Mr Price hit by excess stock

Mr Price has reported that interim earnings fell almost 10% as comparable store sales went backwards amid a struggling consumer environment and intense power interruptions.

The retailer's gross profit margins also came under pressure after it found itself with excess inventory that forced it to mark down stock in order to clear it.

Group revenue rose 26.4% to R16.8 billion in the six months to end September, but headline earnings fell 9.3% to about R1.16 billion. The group cut its interim dividend 9.3% to 283.5c, with its gross profit margin falling 1.7 percentage points to 38.6%.

But Mr Price also noted most of the pain experienced was in the first quarter of the period, with a far better environment experienced in the second quarter.

At a topline level, its recent acquisition of retail chain Studio 88, effective from 4 October 2022, provided a significant boost, with revenue growth increasing.

Stripping this out, revenue growth was a more muted 3.5%, bringing the total to R13.7bn. Comparable store sales, however, experienced an overall decline of 0.8%, with Mr Price pointing out they fell some 3.8% in the first quarter, with growth of 2.6% reported in the second.-Fin24

Nedbank appoints Absa exec as its new CEO

Nedbank's new CEO is Jason Quinn, 49, currently the financial director of Absa. Quinn will assume the role of CEO following Mike Brown’s retirement in May next year. He resigned from his position at Absa with immediate effect on Wednesday afternoon.

Quinn has been Absa's financial director since 2016, and was also its interim CEO for almost a year following the shock resignation of Daniel Mminele in April 2021. Mminele has since been appointed as Nedbank's chair. Arrie Rautenbach took over as Absa CEO in March 2022.

Prior to joining Absa in 2008, Quinn was a partner at Ernst & Young from 2005.

"The board is delighted to have secured the services of an experienced leader of the calibre of Jason with a proven track record in banking in South Africa and other parts of the African continent to build upon Mike’s legacy," Mminele said in a statement.

"The boards thank Jason for his very significant contribution to Absa since 2008 and wish him well in his future endeavours," Absa said.

Chris Snyman will become Absa's interim financial with immediate effect, subject to regulatory approval. Snyman joined Absa in 2008 and is Head of Financial Decision Support, a role he has held for the last 10 years.-Fin24

Old Mutual extends CFO contract

Old Mutual has extended the contract of its chief financial officer (CFO), Casper Troskie, by a year to help with the group's ongoing adoption of new global accounting standards and to provide continuity as it builds out a new banking offering.

Troskie, who was appointed Old Mutual's CFO in March 2018, is set to reach the company's normal retirement age of 61 in April 2024.

Nevertheless, Old Mutual said it has commenced a process to appoint a suitable candidate as a successor.

"There are major strategic group initiatives that are ongoing, such as the implementation of IFRS17 as well as our bank build, which need to be delivered in the next year," Langa Manqele, Old Mutual's head of investor relations, told News24. "We believe that continuity is important for the delivery of these initiatives. We will also be finalising the CFO succession plan in this time."

International Financial Reporting Standards (IFRS) 17 impact the measurement of insurance contracts by requiring stricter and more timely estimates and assumptions on cash flow and uncertainties related to insurance companies' financial position and risk.-Fin24

Reunert ups dividend

Engineering and electronics group Reunert has upped its 2023 dividend by 11% after robust demand for defence products helped offset higher interest rates, as well as some pressure on clients as a result of load shedding.

Revenue rose 24% to about R13.8 billion in the year to end September and profit 14% to R959 million, it said on Wednesday, a result achieved despite a more than doubling of finance charges to R120 million.

Reunert upped its dividend 11% to R3.32 per share, equivalent to about a R615 million payout, and also expressed optimism about its 2024 year.

Valued at about R11.5 billion on the JSE, Reunert has a portfolio of businesses in electrical engineering, ICT and applied electronics.

The group said defence revenue reached a multiyear high, and the demand for the segment’s renewable energy products and solutions remained positive, helping operating profit in its applied electronics business to surge 163% to R432 million.-Fin24