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100COMPANIES
NOVEMBER 12 2017
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made by SAs Top 100
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2 November 12 2017

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Sunday Times Top 100 Companies
Over five years

Recognising SAs top

business leaders.

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November 12 2017
Sunday Times Top 100 Companies
Finbond punches above weight
New kid on financial services block is now being compared to Capitec
By RAY NDLOVU
A dual strategy of growth of its domestic
market in South Africa and expansion into
North America by niche financial services
provider Finbond has fuelled its phenomenal
rise and paid off for the companys sharehold-
ers.
So successful has Finbond been that mar-
ket watchers are entertaining the thought that
the new kid on the block could potentially be
the next Capitec.
CEO Willie van Aardt is confident the group
has what it takes to either match or exceed
Capitecs record.
Even though Finbonds development and
growth is comparable to that of Capitec, our
strategy and business model are different. Our
strategy is to transform Finbond into a focused
multinational business diversified across ge-
ographies, market segments and products.
Currently 53.5% of revenue is in US dollars and
we want to grow our US dollar earnings to
about 80%, Van Aardt said.
Finbond has an eye on market disruption
through tailor-made services. It has rapidly
grown its branch network, offering short-term
unsecured loans, generating high returns for
shareholders.
It has a market capitalisation of R2.4-bil-
lion, counting among its peers Vunani Limit-
ed, Transaction Capital and African Dawn
Capital.
It recently posted a stellar performance. In
the half-year ended August Finbond earnings
rose 87.1% to R92.8-million.
For a company that has been in existence
for less than two decades and which listed on
the JSE three years ago, the view is that Fin-
bond had punched above its weight.
Finbond had come out of nowhere, said
Companies social spend
is key but it must work
Making an impact that matters
By LWAZI BAM and ANDREW LANE
Deloitte is proud to be associated with the
Sunday Times Top 100 Companies, working
with leading businesses that are taking great
strides to make a meaningful difference to our
economy and society. We strive to make an
impact that matters for all stakeholders. We
do this by serving the public interest, seeking
the hardest questions as ours to answer, and
leading the way by forging ideas that bring
clarity and solutions that create tangible value
and innovations that define the future.
It is becoming clear that the business of
business is no longer just business. Business
leaders across the world acknowledge that
business has a role in society, and the single-
minded pursuit of profit for shareholders is no
longer good enough. Governments and soci-
ety expect business to play a role in creating a
just, equitable and sustainable society.
Extractive industries have experienced this
most acutely. Governments of resource-rich
countries wrestle with the right balance of re-
turns from mining to the investor, who
brings skills and capital; to government,
which provides regulatory access; and to the
community, which provides physical access.
This is fraught with emotion, particularly in
postcolonial countries where there is a very
real perception that host communities are be-
Finbond / Sponsors foreword
Finbond CEO Willie van Aardt
Vestact CEO Paul Theron.
Typical of a new player in the small-loans
business, it came off a low base and paid good
interest to its lenders. Its either another
African Bank or a Capitec in the making.
Its just a little concerning that it is grow-
ing so fast and doing so through big acquisi-
tions globally, which brings with it currency
risk and other issues.
ing robbed by big capital, and profits expatri-
ated illicitly.
This is the backdrop against which the dia-
logue in the South African mining industry
needs to be framed. It is for this reason that the
government expects the industry to make
socioeconomic investments. But one thing is
for sure: the vast amounts of money spent by
the industry on social initiatives are not hav-
ing the intended effect. For example, the major
mining companies in the Northern Cape have
spent R1.2-billion on social initiatives over the
past five years, yet the companies still suffer
significant social unrest and a strained rela-
tionship with the government.
There are a number of reasons social in-
vestments often do not work out properly.
Real needs are poorly understood. En-
gagement is not focused on gaining a deep un-
There is a very real
perception that host
communities are being
robbed by big capital
Typical of a
new player, it
came off a low
base and paid
good interest
to its lenders
Van Aardt, however, insists its growth strat-
egy into North America is sustainable. The
$46-billion alternative financial services mar-
ket in the US is significantly bigger than South
Africas, with ample organic growth opportu-
nities, he said.
Outside South Africa where it operates
410 branches, up from 379 in August last year
North America is Finbonds secondary key
market. It has increased its footprint with the
acquisition of 52 short-term unsecured lend-
ing stores, bringing its branch network in the
US to 223 from 91. In July, it acquired a 75%
share in US-based short-term unsecured
lender Blake Enterprises.
Market watcher CapitalCube said Fin-
bonds current share price of R3.11 was neu-
trally valued and was within its estimate
range of between R2.64 and R3.22.
Anthea Gardner, an analyst at Cartesian,
said: With the strong management team,
there is a good chance this could well develop
into a Capitec; however, there is a long way to
go, and near-term headwinds are not in the
companys favour.
Lwazi Bam, Deloitte Africa CEO
derstanding of real needs, issues and aspira-
tions. Admittedly, the stakeholder landscape
is enormously complex. So real engagement is
hard work. And the development plans pre-
sented by municipalities do not always reflect
real needs. It is also easy to default to infras-
tructure projects they are what mining com-
panies are good at:
There is significant inefficiency in deliv-
ery. Most mining companies are doing their
own thing, even though there are several busi-
nesses in the same region. Individual projects
are often too small and are duplicated; and
Most importantly, the industry regards this
as a compliance issue. As a result, mining
companies do not always apply the best plan-
ning and project execution skills to these pro-
jects.
Deloitte subscribes to Michael Porters con-
cept of shared value: loosely defined, this
means we view social investments as real in-
3
Business Times
Top companies:
methodology
The Top 100 Companies awards ac-
knowledge those listed companies that
have created the most wealth and value for
shareholders.
The share price performance of every
company listed on the JSE which forms
the basis of this research is calculated us-
ing a hypothetical initial investment of
R10 000 in each share over five years, from
September 1 2012 to August 31 2017.
The winner is the company that has
earned the most for shareholders over that
period, taking into account normal and
special dividends.
These, along with bonus shares, are
deemed to have been reinvested when de-
clared.
Where there has been an unbundling,
the proceeds from the unbundled compa-
ny are treated as a special dividend.
Apart from being an accurate measure-
ment of shareholder fortunes, the share
price plus income returned to shareholders
indicate a companys operational sound-
ness if you accept that share perfor-
mance is generally an accurate barometer.
We exclude suspended companies (al-
though they may be included in tables and
data), preference shares, loan instruments
and derivatives.
In previous years we excluded compa-
nies that did not meet a threshold of mini-
mum value traded of R10-million a year.
However, since 2011 we have raised the
minimum value to R20-million because of
higher trading volumes over the years and
to exclude distortion from extreme move-
ments in penny stocks.
Calculations were done by IRESS.
Andrew Lane, Deloitte energy and
resources and mining leader
vestments in an ecosystem of which we are al-
so an integral part and a beneficiary.
We talk about balancing returns to share-
holders, with returns to country and citizens.
If we can frame these returns in terms that are
meaningful to each of these constituencies,
and then invest collectively so as to demon-
strate real return against these metrics, along
with an appropriate balance, we may progress
the dialogue into more productive territory.
Deloitte has been an active contributor to
the national dialogue around shared value and
Mining Charter compliance. We are working
with our clients in helping them achieve these
objectives. For example, we work with the
mining companies in the Northern Cape to
craft a collective programme to be sustainably
successful. Our clients are aligned in their in-
tent to make a meaningful difference in the
lives of their host communities. Deloitte is
proud to be part of their journey.
4 November 12 2017
Business Times
Sunday Times Top 100 Companies
Business leader of the year: Lesetja Kganyago
Kganyago:
easily our best
civil servant
His numerous accolades aside, Reserve Bank
governor also proves to be a man of the people
By ASHA SPECKMAN
W
hile most public figures
and politicians would
be happy to see
monuments of
themselves, Reserve
Bank governor Lesetja
Kganyago says statues are for the dead.
Kganyago is not keen to be immortalised in
stone and neither is he planning to write an
autobiography in spite of his numerous
achievements his most recent accolade is
an award for central bank governor of the
year for sub-Saharan Africa by the
international publication Global Markets.
He is also the Top 100 business leader of
the year for 2017.
I would not write an autobiography
because you are what people see you to be,
he says. I would rather leave South Africans
to characterise who I am. Lets not talk about
statues, Im still alive. I think statues belong to
people who have passed away.
On his awards, he shrugs and says: The
awards are more about the institution than
they are about me.
They talk about the fact that South Africa
has got solid institutions and that those
institutions are living true to their mandates
as enshrined in the constitution.
Kganyago is speaking in his moderate-
sized office enveloped by glass panels and
overlooking Pretoria.
Cas Coovadia, MD of the Banking
Association South Africa, says Kganyago is
one of the best and brightest state officials.
Since his appointment as governor in late
2014 he has shown the strength of character
required to reconcile the competing demands
of his position and also to defend the office
Kganyago has shown
rare traits courage and
a willingness to fight for
the integrity of the
institution he represents
against attacks on its mandate.
In a period of low growth and recession
Kganyago maintained a firm policy of
monetary discipline, cutting interest rates
where it could drive growth, Coovadia says.
But under the governors watch the Reserve
Banks monetary policy committee had also
resisted cutting rates when it risked fanning
inflation and harming the poor.
Kganyago has shown those rare traits
among civil servants these days courage
and a willingness to fight for the integrity of
the institution he represents, Coovadia says.
Gina Schoeman, South Africa economist at
Citibank, says Kganyago has earned the trust
of domestic and international markets based
on his history as deputy governor under Gill
Marcus and as deputy director of the National
Treasury.
Kganyago, 52, is proud of the Reserve
Banks recent court triumph over the public
protector, who had suggested a review of the
central banks mandate and that a clause in
the constitution giving it independence be
rewritten.
The Reserve Bank argued the public
protector had acted beyond her mandate and
that her powers did not extend to
recommending constitutional changes. At the
time there was speculation that the public
protectors actions might have been part of
attempts to capture the Reserve Bank, state-
owned enterprises and the NPA.
Welcome contestation
Kganyago says: Im glad that the courts ruled
in our favour. Does that mean the contestation
about the mandate of the Reserve Bank or its
independence has gone away? No, it has not
gone away, even after that we were still the
subject of a policy conference of the ruling
party. We were just glad that they [the ANC]
said the independence of the Reserve Bank is
sacrosanct.
Weve got to understand that once the
matter was raised, contestation in society
begins. A conversation like that is always
welcome.
The threat to the Reserve Banks
independence came from people who do not
seem to be understanding constitutionalism.
Its a combination of populism, politics,
ignorance, lack of information and lack of
understanding, he says.
We have been spending a lot of our time
explaining not just the mandate of the
Reserve Bank but the role of central banks in
society.
Kganyago says the Reserve Banks
independence is constitutionally guaranteed
because of concerns that it had not acted
independently before democracy.
But the public protector also wanted the
bank to play a more transformative role in
society, something the bank vehemently
opposed.
The authors of our constitution were very
clear when they were creating institutions
that these institutions have particular
mandates [that] theyve got to live [up] to.
The subject of development is complex
and it needs government and society to be
pulling together. That is why we have a
National Development Plan, which calls for
various arms and institutions in government
to be doing particular things in order to get
development going, Kganyago says.
He is firm that the role of the Reserve Bank
is primarily to keep inflation in check and
protect the value of the currency.
The relationship between fiscal and
monetary policy are also clear. Both are
stabilisation policies and the position in the
economic cycle determines the fiscal posture
or monetary policy posture that must be
pursued.
In the run-up to 2008 we said that we
Reserve Bank governor Lesetja Kganyago. Picture: Alaister Russell
needed tight fiscal and loose monetary policy.
That seems to have served us well getting into
the 2008 crisis and when looking back we
could see maybe fiscal policy should have
been tighter than what it had been and maybe
it would have allowed monetary policy to be
looser.
A consistent manner
In the aftermath of the global financial crisis it
was clear that the Treasury had to embark on
a path of fiscal consolidation, something that
Kganyago says the Treasury is doing in a
manner that is consistent with supporting the
underlying economic recovery.
Three years ago ratings agencies flagged
the vulnerability of monetary policy when
inflation was outside the 3%-6% target. They
were concerned the bank would be unable to
provide monetary stimulus.
We have since come within the target and
our projections were that inflation will
remain within target, which is why in July we
were able to provide some monetary relief to
try to support the economy.
In the cycles for monetary policy to be
loose, fiscal policy must be tighter [but] it
doesnt follow the other way around.
The inflation target has also been a topic of
discussion. Two months ago at a lecture at
Unisa the governor spoke about adjusting this
to bring it in line with South Africas trading
partners.
There were calls from elsewhere not
within the Reserve Bank to say that this
target was adopted in 2000. We must ask the
question: is it still relevant?
The point we were making is we think it
is still relevant, but if there has to be a revision
to the inflation target we think that it cant be
revised higher. It would be revised lower.
Other emerging markets had lower
inflation targets, and South Africa, with
higher inflation, was losing competitiveness.
The review of the target range is the
preserve of the macroeconomic management
committee, made up of officials of the
Treasury and Reserve Bank who advise the
finance minister and governor once the
committee has reached an understanding of
the direction of macroeconomic policy and
inflation. The committee meets every quarter.
This interview comes just a few weeks
short of a sovereign ratings review by S&P
Global Ratings and Moodys this month. Fitch
Ratings is still to confirm its schedule.
South Africas vulnerabilities, such as a
large current account deficit, have diminished
and its foreign debt, especially that held by
corporates, is low factors the ratings
agencies mentioned three years ago, he says.
The country also has a positive net
international investment position, meaning
there are more South African assets outside
the country than there are assets held by
foreigners in South Africa. Which then
means that if there is a reversal of flows,
The future of
this country is
in our hands. We
owe it to the
generations that come
South Africa has that cushion of a net
international investment position, he said.
South Africans are eternal optimists. I
think in the case of ratings agencies the future
of this country will be what South Africans
make of it, he says.
The rating we have in the future is not in
the hands of the ratings agencies. Its in our
hands, its what we do with the credit
concerns that have been raised.
The future of this country is in our hands.
We owe it to the generations that come that
when they ask what we did with this
challenge, wed be able to look back and say
This is what we concretely did.
November 12 2017
Sunday Times Top 100 Companies
Making SA a better place for all
Billionaire believes the poor and marginalised should also benefit from the success of the private sector
By ADELE SHEVEL
S
outh Africas first black billionaire,
mining magnate Patrice Motsepe,
has been voted by a panel as
Sunday Times lifetime achiever at
the age of 55 and shows no sign
of ending his quest to make his
mark in business and philanthropy.
The panel included business leaders
Wendy Lucas-Bull and Bobby Godsell.
Motsepes story is one of firsts. He became
the first black partner in a top five law firm,
Bowman Gilfillan, in 1994. He later built the
first black-owned mining business, African
Rainbow Minerals. Today Motsepe is
executive chairman of African Rainbow
Minerals, which has investments in ferrous
metals, platinum, base metals and gold.
Through African Rainbow Capital, Motsepe is
launching a new bank, TymeDigital by
Commonwealth Bank South Africa.
He sits on several company boards,
including as nonexecutive chairman of
Harmony Gold and deputy chairman of
Sanlam. He was voted Sunday Times business
leader of the year in 2002, and has topped the
Sunday Times Rich List. In September he was
honoured by Forbes Magazine as one of the
worlds 100 greatest living business minds,
alongside Warren Buffett, Bill Gates, Jeff
Bezos and Mark Zuckerberg.
Motsepes father, Augustine, was an
entrepreneur who owned two grocery stores,
a restaurant, a bottle store and a liquor hall
frequented by mineworkers in Ga-Rankuwa,
outside Pretoria.
The businessman that inspired me most
was my father, said Motsepe. He used to
wake us up, when I was about six years old, at
5am so that we could go to the market in
Pretoria to buy fruit and vegetables for the
grocery store. What I know about business is
primarily what I learnt from my mother and
my father.
Motsepe attended a Catholic boarding
school in Aliwal North in the Eastern Cape for
10 years from the age of five. The school
played an important role in building the
values, ethics and principles that I try to
uphold today. I was privileged when I finished
university and started working and training
as a lawyer; I worked with conservative and
many old-fashioned lawyers in South Africa
and the US and was influenced by their
adherence to good values and ethics.
First family
He is part of the countrys first family. His
sister Brigitte is the wife of Minister in the
Presidency Jeff Radebe. His other sister, Dr
Tshepo Motsepe, is married to Deputy
President Cyril Ramaphosa. Motsepes wife,
Precious Moloi-Motsepe, is a medical doctor
who has promoted local fashion.
Motsepe is surrounded by strong women.
I think the strongest was my mother. Even as
a young boy I had very, very strong sisters and
a very strong mother, and thats beautiful.
Strong people inspire you, they encourage
you, but they also make you respect and
admire their very special qualities.
He credits his family for encouraging
perseverance. I grew up in a very positive
family with encouragement, self-belief,
even when I had failures in life and business. I
am still going to have other failures in the
future, [but] that shouldnt discourage you,
because if you have a very optimistic outlook
you will see opportunities in life. But you
must also work hard and be innovative.
Motsepe has no plans to go into politics.
Some of us have to live a life where you dont
seek the votes of people but focus on uniting
and bringing South Africans of different races
Lifetime Achiever: Patrice Motsepe
Patrice Motsepe. Picture: Getty Images
and languages together.
His passions include business, mining,
financial services and football and he devotes
much of his fortune and time to philanthropy.
He said his ownership of Mamelodi
Sundowns football club is one of his
initiatives to give back.
But ownership of a soccer team is not
something hed recommend as an
investment. Its almost like a bottomless pit.
But for us of course we had a broader
objective. We need to maintain contacts and
relationships between South Africans from
different backgrounds and focus particularly
on the poor sport is a very, very powerful
tool to bring all South Africans together.
Motsepe talks of ethics and values and of
the need to include the poor and
I worked with
old-fashioned lawyers
and was influenced by
their adherence to good
values and ethics
marginalised. He talks of running world-class
companies, of the importance of partnership
between the government, the private sector,
civil society, workers and trade unions.
Motsepe is passionate about the private
sector. He has not done business with the
government directly, apart from the licences
and other rights that his businesses have had
to obtain. That was a deliberate attitude on
my side. We would focus on the private sector,
because that is what we understand better,
and what we find extremely exciting. In the
private sector it is the very best that always
prevail. You dont only have to work hard and
sacrifice, youve got to be innovative and
creative, and theres got to be a competitive
advantage.
Humble contribution
His group is now looking at the renewable
industry through African Rainbow Energy
and Power, which Motsepe formed a few
years ago. The company intends selling
electricity to Eskom, businesses and other
buyers.
In spite of the tough environment, Motsepe
is still passionate about mining and not just
because he believes there is a competitive
future in the sector.
I look at myself as having a long-term
obligation to the mineworkers of this country
on whose backs the South African economy
5
Business Times
I have a long-term
obligation to the
mineworkers on whose
backs the South African
economy was built
was built, and many come from poor villages
in rural areas.
Motsepe studied mining and business law.
I loved law because at that stage as a student
there werent that many entrepreneurial
opportunities for businessmen who were
living in the townships. Our parents were not
allowed to operate businesses in areas where
black people were not allowed to live.
He benefited from BEE laws, but said
building world-class, globally competitive
companies is vital.
All South Africans must benefit from the
growth of the economy, and poor,
unemployed and historically disadvantaged
people must participate and benefit, he said.
Inclusivity is important for long-term
political stability.
You have to encourage the government to
do business with all of its citizens on a
competitive and ethical basis. There should
be zero tolerance of corruption.
What is he most proud of? To see that
many of the businesses we have formed have
really made a significant contribution in the
lives of many people.
Motsepe said ARM saved tens of thousands
of jobs in the gold-mining industry through
the merger of ARMgold and Harmony and has
created thousands of jobs. We and our
partners have invested approximately R70-
billion in the South African mining industry
over the past 12 years and we employ more
than 55 000 employees in South Africa. This
is a significant contribution to our people and
country that is often not recognised.
As for a legacy, it is important to have
made a humble contribution to improving the
living conditions of the poor and unemployed
and to creating opportunities for others.
Obligation to all
How does he feel about South Africas
economic outlook?
You cannot significantly build investor
confidence if theres a perception that theres
corruption in the country and that there isnt
effective action being taken against those
who are corrupt.
The recipe for the growth of an economy
and a country is not a secret those
economies that have grown significantly and
increased the standards of living of the poor
and unemployed, and have also created a
growing middle class, are the economies
where private sector investment was
welcomed, and where the regulatory, the
legal, the socioeconomic environment was . . .
encouraging for investment and growth.
The Motsepe Foundation has granted more
than 1 200 bursaries.
What does he still want to achieve? I
think the key issue now is more in terms of
making this country a better place. Those of
us who have a platform should use that
platform to make South Africa a better place
for all its people. This includes running our
businesses as best we can . . . We also have a
broader obligation to all the people of this
country . . . to make this country the best it
can be for the benefit of all our people.
6 November 12 2017
Business Times
Sunday Times Top 100 Companies
Adapt IT / Fortress Income Fund
Newcomer jumps
up the ranks
Software specialist Adapt IT pursues rapid growth
through acquisitions and targeting overseas markets
By ASHA SPECKMAN
If you had searched for this years runner-
up among the Top 100 companies five years
ago, you would have battled to find it. But in
just 60 months software developer Adapt IT
has blasted through the ranks to become one
of the 2017 Top 100 Companies surprise new-
comers pipping longtime rival EOH, which
for the first time in years has fallen out of the
top 10 over a five year review.
Adapt IT CEO Sbu Shabalala said the com-
panys annual revenue growth, from R300-
million to just over R1-billion over the five
years, was the outcome of consistency, drive
and focus even as the company has received
some criticism in recent months for its growth
through an aggressive acquisition strategy.
Fiercely defensive of this strategy, Shabal-
ala said that early in its history the company
realised that to enter a sector and build a pres-
ence took at least 15 years. It takes even
longer to have the upper hand or to become
the largest player in the software industry.
The type of businesses that Adapt IT has set
its sights on as acquisition targets have typi-
cally operated for 20 to 25 years, and have dif-
ferentiated themselves in the market.
Theyve added substantial customers with
different software, which if we were to build it
would have taken us 20 years, said Shabalala
from the companys headquarters in Durban,
where he now oversees a software group with
a reach into 40 countries on six continents.
Fortress fortified by local and offshore assets
Property group sees happy balance of holdings at home and abroad as its strategy for the foreseeable future
By ALISTAIR ANDERSON
Fortress Income Fund has been a standout
listed property group for several years as it po-
sitioned its portfolio to feature local and off-
shore assets.
In South Africa it invests in shopping cen-
tres near commuter hubs and high-quality in-
dustrial properties. Its offshore investments
are held in the East European giant NEPI
Rockcastle and through Greenbay Properties,
which invests in European real estate and in-
frastructure funds worldwide.
Fortress listed in 2009 with a market capi-
talisation of R1.8-billion, which has since risen
to about R64-billion when combined with its
A and B shares. The A and B shares cater for
investors with different risk appetites and
trade independently on the JSE.
Investors in the A shares have a preferential
claim to the income growth distribution of the
fund and are paid first, but their distribution is
capped at whichever is the lowest: 5% or the
consumer price index. The rest of the distribu-
tion is paid to B shareholders.
If you invested R10 000 in B shares on
September 1 2012, youd have R69 879 at the
end of August 2017. An investment of R10 000
in Fortress A would be worth R17 197.
The group reported in August that it had
grown its B share dividend to 93.41c per share
in the financial year ended June, from 74.69c a
year earlier. The B-share dividend was expect-
ed to grow 15% in the year to June 2018 and at
Adapt IT CEO Sbu Shabalala
In 2003, when the company opened, the
market was not accustomed to a business fo-
cused squarely on selling software. Most com-
panies were offering a mix of hardware com-
ponents and the like.
least 15% in the following year.
At the end of June, Fortress owned 327
properties worth R29.9-billion and its listed
securities portfolio was worth R30.2-billion.
Local and offshore assets were almost
equally split. CEO Mark Stevens said: We are
happy to balance our portfolio with local and
offshore properties. The split is about 50/50,
but we could go up to 60% offshore.
Fortress wants to build 150 new logistics
warehouses in Cape Town, Johannesburg and
Durban. Stevens said Fortresss plan to exit of-
fice properties had progressed well. It had
about 37 office buildings left which it wanted
to dispose of, he said.
Locally, things will be OK. South Africa
has been in a bad cycle, but it will turn. We are
operating in a strong market in South Africa,
When we started we were quite clear that
we are developing a software business, said
Shabalala.
But software is as important and high-
value an item for companies as is infrastruc-
ture, especially in recent times of increased
competition, and this has resulted in high an-
nual receipts for Adapt IT.
Adapt IT services the mining, education, fi-
nancial services, energy and hospitality sec-
tors. Among its South African clients are state-
owned further education and training col-
leges, which operate student registration sys-
tems on Adapt IT software.
Over the past five years the share price of
the JSE-listed company has climbed from
R1.23 to R9 by the end of August this year. That
is a substantial 51% compound annual growth,
although the share price has slipped marginal-
ly since August.
The 2017 Top 100 Companies survey covers
the period from the beginning of September
2012 to the end of August this year.
Industry analysts who had questioned
Adapt ITs acquisition thirst were concerned
about the rate of growth of the existing busi-
ness, said Shabalala.
The rate of growth was driven purely by
sales of existing software to new clients. The frontier for automation.
environment for sales is very low and we are
seeing it now.
Its a function of customers wanting to that is at the forefront of ensuring that our
hang on to cash a little bit longer and not mak-
ing expansion decisions until they understand
Fortress CEO Mark Stevens
You can buy
and sell a
property faster
here than
anywhere else,
for a start
Wed like Adapt
It to be a
business that
exports
intellectual
property
the political environment as well as the confi-
dence in the South African market. So, our
business also suffers in that environment.
This had limited growth and in such a situ-
ation the company had turned to its acquisi-
tion strategy.
In early October, Adapt IT issued a caution-
ary statement to shareholders indicating that
it was in acquisition discussions.
Shabalala declined to reveal the details, ex-
cept to say: Its either going to fall into the cat-
egory of beefing up our existing business or
entering a new sector. Were quite excited to
find it. Wed be looking at both local and inter-
national.
Adapt ITs vision is to grow company rev-
enues to R3-billion by 2020 and diversify rev-
enue streams to 70% local and 30% interna-
tional.
At this point we quite like the Australasian
market. A lot of South Africans are based in
this market, as well as how corporate Aus-
tralia works with corporate South Africa.
We want to continue and improve that re-
lationship.
The company has also established a pres-
ence in Botswana and Kenya as it wants to sell
more to the Africa market, which is the next
Wed like Adapt IT to be the type of busi-
ness that exports intellectual property, and
clients participate in the fourth industrial rev-
olution, said Shabalala.
listed on the JSE, which is highly sophisticat-
ed. You can buy and sell a property faster here
than anywhere else, for a start, he said.
Fayyaz Mottiar, head of listed property at
Absa Asset Management, said the company
could generate at least 15% in dividend growth
for the next three years. In the first 10 months
of this year, Fortresss total return, including
capital and dividend growth, was about 30%.
Fortress has been in the top 10 companies
for three years running. It has a strong local
pipeline. It is developing logistics assets at a
business park which is worth about R3.5-bil-
lion. On completion, Clairwood, formerly a
racecourse in the south of Durban, will be one
of the countrys largest distribution hubs.
The total development pipeline of logistics
warehouses, including Clairwood, is worth
about R8-billion, rolled out over three years.
Stevens and his team are smart, en-
trepreneurial and highly capable, said Mottiar.
This is what separates Fortress from being
a mere collection of properties to that of a
superior business that happens to invest in
property, he said.
Peter Clark at Investec Asset Management
said Fortress had been successful in reducing
its office exposure. The core segments of lo-
gistics and retail continue to display strong
growth, which has been supported by devel-
opment activity. Distribution growth remains
well above the sector, partly thanks to the
leveraged effect of the A and B unit structure,
he said.
November 12 2017
Sunday Times Top 100 Companies
Van Dijk still stays
ahead of the curve
As investors celebrate
phenomenal growth,
Naspers CEO focuses on
fresh acquisitions spree
By RAY NDLOVU
As excitement within the markets over the
performance of e-commerce giant Naspers
continues, CEO Bob van Dijk is unmoved. In-
stead, he is intent on steering the company to
its next growth cycle.
Van Dijk, who has been at the helm of
Naspers for three years, has been on an acqui-
sition spree to strengthen its hand globally.
In September, Naspers increased its stake
in online food business Delivery Hero after it
purchased an additional 13% for $775-million
(about R11-billion), which brought its holding
to 23.6%; it is now the largest shareholder in
one of Europes biggest internet start-ups.
Comair flies
high despite
dark times
Business savvy, family
values hold it together
By ADELE SHEVEL
Comairs standout performance is all the
more pronounced given the dire situation of
SAA and other airlines around the world.
While the national carrier continues to re-
ceive billion-rand bailouts, Comair has deliv-
ered sterling shareholder returns over the past
five years no small feat given the challenging
environment the industry operates in.
The company has focused on non-aviation
drivers to grow the business and has en-
hanced productivity with technology.
Naspers CEO Bob van Dijk
The company has come a long way from
when it listed on the JSE in September 1994 at
an opening price of R17.50. It is now Africas
most valuable company, worth about R1.5-
trillion. The Naspers share price has grown to
around R3 400 and shows no sign of slowing
down. Its stock single-handedly accounts for
about 20% of the entire JSEs valuation.
So how does CEO Erik Venter see the dif-
ference between Comair and other airlines?
Ultimately it comes down to corporate
culture. Anyone can acquire aircraft and sys-
tems, but to take the right decision and do it
efficiently requires the right people and right
experience. You need the right culture to at-
tract and retain those people, he said.
Venter said there was an enormous amount
of institutional memory in Comair, helped by
a low staff turnover rate. About half of the em-
ployees have more than 10 years service.
Even people who have left have come
Naspers / Comair
In the past year the share price has grown
48.27%, says Bloomberg data, while growth of
the share price over five years is 505.50%. The
share price in 2012 was around R562.
The rise of Naspers is in part explained by
the rise in Tencents stock, which has in-
creased by 70% so far this year. In 2001,
Naspers bought a 34% stake in Tencent for
$32-million and its value is now $128-billion.
Van Dijk points to Nasperss underlying
business strategy as being at the heart of its
phenomenal growth. The company has been
good at reinventing itself and not being afraid
to go into new things, he says.
But while Nasperss growth has left many
analysts awestruck, the company is digging in
to deal with the dents it has suffered.
These include batting off repeated calls to
To take the right
decision and
do it efficiently
requires the right
people and right
experience
back quite rapidly. They like the environment,
its collaborative and not status driven.
Non-aviation business expansion is cur- and effectively implement new technologies.
rently the real driver of growth for the compa-
ny, as there is no growth in the domestic avia-
tion market in this economic climate. In
order to still deliver growth weve had to look
at other avenues, he said.
Currently about 20% of profits are derived
from non-airline sources, and the plan is to
grow that to 50% over the next two years.
The biggest challenges have been the
downturn in the economy and the pace of
7
Business Times
The company
has been good
at reinventing
itself and not
afraid to go into
new things
sell its 34% stake in Tencent, which is worth
more than Naspers. Van Dijk insists the Ten-
cent shareholding is here to stay.
Economic headwinds in sub-Saharan
Africa and increased competition have also hit
its pay-TV business, MultiChoice Africa.
The continent has suffered in the last two
years and we have been hit by that. But we
have also responded well. [We have] in some
cases reduced or kept prices below inflation to
get the business back on its feet, he says.
But what of reports that Naspers might sell
MultiChoice Africa to mobile operator MTN?
The company does not discuss mergers
and acquisitions, but let me say we are not
selling MultiChoice Africa. We are open to
partnerships with any mobile operators but
there are no sale plans, says Van Dijk.
Comair CEO Erik Venter
technological change. Ultimately the biggest
impact on us has been adoption of the tech-
nology and pace of adoption and structures
weve had to put in place to accommodate
this. Its becoming quite a meaningful com-
petitive advantage, the flexibility to rapidly
The 2017 financial year saw a return to prof-
it. The company reported a 54% increase in
profit to R297-million and a 28% increase in
cash generated by operations for the financial
year ended June.
Comair also won about R1.16-billion in
damages from SAA arising from anticompeti-
tive conduct. SAA is appealing.
Bidvest owns 27% of the company, but Ven-
ter said it was very arms length.
8 November 12 2017
Business Times
Seeing the end of
paper trail long
before the rest
Mondi is sitting
pretty now thanks
to realising early
that digitisation
would change its
business
By ROXANNE HENDERSON
As some companies in the paper
and packaging industry scramble to
strategise for the production of sus-
tainable alternatives, Mondi finds it-
self comfortably ahead of the curve.
About 15 years ago the dual-list-
ed company began insulating itself
from the shocks of a digital world in
which the demand for graphic pa-
per was declining.
When its rivals found themselves
hit by currency fluctuations and
limited access to raw materials,
Capitec outperforms
expectations again
Challenger the
only bank
to get double-digit
bottom-line
growth
By ROXANNE HENDERSON
After African Bank collapsed un-
der the weight of its nonperforming
loans in 2014, many believed
Capitec would follow suit. But the
challenger bank has instead shown
its mettle, emerging as a trusted
brand rivalling the household
names that have dominated the
banking industry for decades.
Jaap Meijer, a banking analyst at
Arqaam Capital, said that unlike
African Bank, Capitec was always
Capitec was
always adding
a substantial
cushion on
performing
loans
Sunday Times Top 100 Companies
Mondi Plc / Capitec
Mondi CEO Peter Oswald
Mondi was able to double its operat-
ing profit in 10 years.
Overall, Mondi is well posi-
tioned to withstand these chal-
lenges because of the markets we
have chosen to operate in, and the
diverse nature of our products, re-
gions and customer base, said new
CEO Peter Oswald.
Wade Napier, an analyst at Avior
Capital Markets, said Mondi foresaw
adding a substantial cushion on per-
forming loans and was funded
through deposits.
In the last reporting period, it
was the only South African bank to
achieve double-digit bottom-line
growth. Meijer said it did this by im-
proving its loan offerings thus ex-
panding its client base without
impacting its return on equity.
CEO Gerrie Fourie credits its suc-
cess to careful brand building. We
always said it would take us be-
tween 10 and 15 years for people to
understand and trust the brand.
Were [now] a brand for all people
and not only lower-income people.
Unlike its rivals, Capitec does not
differentiate its products based on
customer incomes. To appeal to the
middle and upper-middle classes, it
offers convenience with a large
branch network and longer working
hours, Sundays included.
This industry
has been
guilty of
pursuing
growth for
growths sake
the digitisation of its industry long time and again, been guilty of pur- has held firm, or where production
before many of its peers. It divested suing growth for growths sake, not costs have been squeezed to the
from several operations in the to create shareholder value, but just point that they are likely to be the
2000s that it believed could become to invest because we were in good last mills standing if demand disap-
redundant, he said. This included times. Thats not Mondis game. pears entirely.
many of its graphic paper opera- The graphic paper mills it still Mondi is ranked sixth in the Top
tions, once its core business.
Instead, Mondi focused on mak-
owns are either in emerging mar-
kets, where the demand for paper
100 companies and seventh in the
JSE blue chip top 40 companies.
ing packaging for industrial purpos-
es, such as cement bags; container
boards used for corrugated boxing;
and flexible packaging such as pa-
per, film and foil.
They did this through numerous
acquisitions over the past five years,
but most notably Nordenia, said
Napier. Although Nordenias success
is debatable, Mondi has seen the
performance of these businesses se-
quentially improve year over year,
Napier said.
Last year Mondi made four ac-
quisitions totalling 185-million to
expand its packaging operations,
and made another this year.
Said Oswald: This industry has,
Capitec CEO Gerrie Fourie
It ranks seventh in the Top 100
companies and fifth in the JSE top
40 index for its performance over
the past five years. It launched in
2001, listed in 2002, and is the only
bank to feature in the Top 100 com-
panies top 30.
While Capitec remains focused
on South Africa, it is in training for
its international debut. We dont
yet know where we will go, said
Fourie. He was referring to Capitecs
21-million investment
in Polish-based fintech
Cream Finance earlier
this year.
We made the acqui-
sition because that gives
us the first step in un-
derstanding internation-
al markets.
Whether Capitec ex-
tended its reach beyond
South Africas borders or
remained a home-
grown bank, its focus
would remain its clients
needs, Fourie said.
November 12 2017 9

Sunday Times Top 100 Companies Business Times

Afrimat / Trustco

Looking past Africa for growth

Fast-growing construction materials supplier is on the lookout for opportunities across the world
By LUTHO MTONGANA
Making it into the top 10 companies,
Afrimat CEO Andries van Heerden said the
group was seeking expansion of its business
outside the continent as conditions in Africa
continued to make business difficult for the
industrial sector.
Were continuously looking at other coun-
tries in other continents. We have lost our ap-
petite a bit on Africa. Africa is extremely diffi-
cult to do business in in our industry, so we are
looking at other opportunities. Van Heerden
said it was too soon to say which continents
the company was looking at.
The medium-tier construction materials
supplier has grown its business in the past 11
years by diversifying its portfolio. Entering the
quarrying of limestone and iron ore has
helped it to outperform its first-tier peers such
as PPC and AfriSam, with 317% growth in its
share price in the past five years.
However, not even Afrimat could with-
stand the tough business conditions in South
Africa and Africa.
Van Heerden said the company was look-
ing for business outside of the continent,
because Africa was corrupt and had a chal-
lenging legal system, and having to repatriate
your profits out of the countries was chal-
lenging.
Currently the company mostly operates in
South Africa with a few quarrying businesses
in Mozambique. It has put growth opportuni-
ties in Mozambique on hold, where it was go-
ing to take part in some natural gas projects.
Some of these projects still needed to be ap-
proved by the Mozambican government, Van
Heerden said, adding that once the projects
started, Mozambique would bring in lucrative
projects for the company.
Despite the challenging business environ-
ment, especially in South Africa after con-
struction companies were charged with collu-
sion in the 2010 World Cup, Afrimat, which
did not take part in the collusion, adapted to
the difficult environment.
Van Heerden said the companys ability to
change, pick up trends and adapt quickly in an
environment where the government was no
longer taking up major projects and was in-
stead focusing on smaller projects, was one of
the reasons the business had been resilient in
the past five years.
Since its inception 11 years ago, the compa-
ny has made 11 acquisitions, growing from a
construction equipment supplier to an indus-
trial minerals business.
The latest thing that we did, that hasnt re-
ally contributed yet, is our entry into bulk
commodities with iron ore and manganese,
Van Heerden said, adding that the Diro Re-
sources manganese and iron ore business,
which was acquired in the past year for R276-
million after it was placed in business rescue,
was going to start yielding results early next Afrimat CEO Andries van Heerden
year.
Van Heerden said industrials still had a
weak outlook in the next year but the compa-
nys ability to react timeously and pick up
trends quickly would continue to help the
business.
The companys client base had changed in We have lost
the past five years. Where it used to take on big
supplying projects from big construction com-
our appetite a
panies, it now dealt with a variety of small and bit on Africa. It
medium-sized clients. There is a big incen-
tive from a government perspective to carry is extremely
on this route because there are things that
they do get right. Firstly you do create more
difficult to do
jobs in this way than having one big project business in
which [requires] more specialised [skills].

Trustco manages to retain Trustco goes where opportunity takes us,

said deputy CEO Quinton Z van Rooyen, the
son of CEO Quinton van Rooyen.
Southern Africa region, Van Rooyen warned
that Africa must be cognisant that political
uncertainty, undue restrictive legislation and

investors and top 10 spot
Political uncertainty is not lethal to business if
companies have strong leadership and values
By LUTHO MTONGANA
Despite sliding from third place since last
year, Trustco, the investment and insurance
company based in Namibia, still secured a
spot in the top 10 of this years Top 100 compa-
nies.
The company is in ninth place.
Trustco has been on an aggressive acquisi-
tion drive, in line with its Africa expansion
plans.
After acquiring the Meya Mining green-
fields diamond miner in Sierra Leone last year,
the company said it was still looking for other
opportunities.
The group expects Meya Minings first rev-
enue contribution to be in the 2018 financial
year.
The acquisition of Meya Mining and Huso
a diamond-mining, -cutting and -polishing
company also based in Sierra Leone and ac-
quired in 2015 is meant to help realise hard
foreign currency earnings for the group.
While the group may have specific targets
in mind, our experience has shown that with-
out a lucrative opportunity already identified,
any undue attempt to enter established mar-
kets are fraught with risk.
In the past year the companys share price
has increased 42.45% while in the past five
years it has jumped 346.4%, propelled by
strong earnings growth despite political un-
certainty.
Van Rooyen said that although the compa-
ny had not had investors that wanted to take
their capital elsewhere, the political uncer-
tainty had a negative impact on capital rais-
ing.
While this uncertainty has certainly im-
pacted the region, the group still firmly be-
lieves that the opportunities presented far
outweigh the risks, he said.
Our . . . investors have confidence that
management will weather the current envi-
ronment and continue to provide the growth
expected of us.
Trustco said the risks were lower than re-
turns in Namibia, which still made the country
investable.
Speaking of South Africa and the rest of the
Trustco CEO Quinton van Rooyen
labour uncertainty reduce the competitive-
ness of Southern Africa against the rest of the
world.
He said political uncertainties that could be
detrimental to growth had to be addressed for
Southern Africa to remain an investment op-
portunity.
With a bit of sound political leadership
and will, these issues can and will be re-
solved, Van Rooyen said.
While political uncertainty persisted, lead-
ership and values in a business would be what
attracted investors.
Trustco had a strong leadership base, in-
tegrity, transparency and a board and man-
agement team culture that was committed to
not only maintaining the growth of the past
five years but was also committed to improv-
ing it, he added.
The groups market capitalisation has
grown from R806-million five years ago to
about R4-billion this year.
Investors have
confidence that
management
will weather
the
environment
10 November 12 2017

Business Times
Sunday Times Top 100 Companies
PSG

Making baby The economy

firms grow big will turn at

some point
and you dont

is PSGs gift
want to miss
the boat

Energy, retirement homes and higher education are
next big bets for group that grew Curro and Capitec
By PERICLES ANETOS
PSG, which has shown a considerable
knack for backing fledgling businesses and
turning them into huge successes, isnt going
to stop using tried-and-tested methods. Ener-
gy, retirement homes and higher education
are its next big bets.
Started by Jannie Mouton in 1998, the
group has made investments that have pro-
duced Curro and Capitec.
Piet Mouton, PSG CEO, said the company
his father built had done a couple of things
right, but had also benefited from some luck
over the past two decades, a period he de-
scribed as exceptional.
The groups market capitalisation has in-
creased from just under R10-billion in 2012 to
more than R61-billion this year.
It is perhaps the way our business model
is set up and this is maybe where we differen-
tiate ourselves from other investment holding
companies. We do early-stage investing, said
Mouton.
Capitec was able to build on 300 mi-
crolending branches into a full-fledged retail
bank that has disrupted a sector dominated by
grand old dames.
When PSG invested in Curro it had three
schools now it has 127 and the group is set to
expand further.
Investments such as Curro and Capitec
have certainly paid off. PSGs net revenue
grew from R1.8-billion in 2012 to more than
R21-billion currently, according to the groups
financial results to end-February. Over the
same period its share price has increased by
50% to R588.
Stellar growth
The difficulties facing the economy have
not deterred the group from continuing to in-
vest in South Africa. Mouton said the economy
would turn at some stage and if people
stopped investing they would miss the boat.
The key was to be an early-stage investor in
industries with big growth potential and a big
market, according to Mouton.
But those were not the only factors playing a
role.
Inefficiencies in the sector concerned of-
fered a competitive advantage to businesses
that could deliver quality products to cus-
tomers at a good price.
He said such investments offered signifi-
cantly above-average returns in the long run if
they were driven by exceptional manage-
ment.
It is hard work to go through early-stage
investment you push revenue rather than
returns in the early stages, he said.
The groups investment approach was re-
engineered between 2005 and 2010. Mouton
said the group had looked at what worked
well in the past and built a new approach. The
groups latest move is into the energy sector block for Stadio, but it was another invest-
and the retirement-living business. This is in
addition to a more focused approach in higher
education.
Group subsidiary Energy Partners recently
changed from an energy consulting business
to an energy-ownership business. The busi-
ness would also be looking at opportunities in
water desalination. The group has also made a
bet on the retirement living sector via a 50%
stake in retirement-village developer Ever-
I N C O M E F U N D
green Lifestyle. The investment still needs to
be approved by the Competition Commission.
There are currently 500 units and PSG
wants to build 3 000 in the next three years,
further increasing this to 10 000 units.
The other sector the group is hedging its bets
on for the next five years is higher education
through its recently listed Stadio offering.
Mouton said the listing was just the starting
ment with promise.
All these investments had the potential to
contribute significantly to the group. He said
it was going to take a lot of effort to ensure
these companies reached their full potential.
We have dealt our cards now we have
massive opportunity, so the scope is some-
what limited for new investments. If we can
just make our current new investments work,
the next five years should be great, he said.
L I M I T E D

Developing premium logistics

real estate, for the future, today.

Sunday Times company of the year 2015

Sunday Times company of the year runner up 2016

Contact us on: 011 612 7500

Logistics@fortressfund.co.za
www.fortressfund.co.za

PSG CEO Piet Mouton Picture: Hetty Zantman

November 12 2017
Sunday Times Top 100 Companies
Niche performers steal
a march on big brothers
No one sector rules the roost among top performers as commodities save the day
By PERICLES ANETOS
This years leading companies are a varied
bunch, from software to construction, but no
sector seems to have established clear domi-
nance among the top 10 JSE-listed groups.
Patrice Rassou, head of equities at Sanlam
Investment Management, said the best-per-
forming companies were those that had se-
cured a place in niche sectors and dominated
in such areas despite poor economic growth.
Rassou pointed to companies like Finbond
and Adapt IT as successful examples of this
strategy.
If you are very niche and you dominate
your area, you can extract a lot of growth, he
said.
Finbond, for example, achieved compound
annual growth over the past five years of
110.34%, while Adapt IT posted an increase of
51.06%.
Property fund Fortress led the way in its
sector with growth of 47.53%, followed by Re-
silient Reit (26.21%) and Fairvest Property
Holdings (21.99%).
Among the two paper and pulp producers
on the JSE, Mondi showed a strong return of
39.77%, mainly due to the strength of its Euro-
pean division, while Sappi grew by a less
spectacular 30.43%.
Afrimat led the construction sector, show-
ing an annual return of 36.4%.
Among the six major banks, Capitec pro-
duced a return of 37.42%, followed by
FirstRand (19.48%), Investec (18.25%) and
Standard Bank (12.85%).
Insurance provider Trustco produced an
annual return of 34.65% while Clientle Life
Phoenixs surprise podium rise
African Banks offspring gains over 30% in debut year despite analyst doubts
By PALESA VUYOLWETHU TSHANDU
The offspring of beleaguered African Bank,
known as African Phoenix Investments, made
its debut as the third-best performing compa-
ny for 2017, following a listing on the JSE earli-
er this year.
The surprise entrant recorded a return of
112.9% in the past year. Since listing in Febru-
ary, African Phoenix Investments share price
has gained about 25%, compared with an
11.73% rise in the All Share index.
But some analysts have said it was not an
accurate analysis since the comparison was
based on African Banks share price of 31c
when its listing was suspended.
African Phoenix Investments is not the
same as the prior entity, because the major op-
erating entity of the listed company is not in
the listed entity anymore, said an analyst,
who did not want to be named.
African Phoenixs share price, at 66c, has
been driven by speculation of what will hap-
pen to it; at the moment it is effectively a cash
shell, the analyst said.
He added that African Phoenix Investments
had a large amount of cash and a small operat-
ing entity in terms of Stangen, the entity it
bought as a result of African Banks dissolu-
Biggest movers and worst performers
operating on local soil were struggling.
Looking after the finer details is key.
achieved growth of 13.25% and MMI yielded
7.34%
The JSE All Share index returned 17.44% for
the year to date.
Casparus Treurnicht, an analyst at
Gryphon Asset Management, said the return
on the All Share index might seem like a very
good number.
However, only 40.85% of the JSEs counters
had positive returns, which was less than en-
couraging, he suggested.
tion. Value Capital Partners has taken a sub-
stantial stake in African Phoenix and the
speculation is that they will play some role in
terms of getting involved in the company. The
market is waiting to see how they will get in-
volved in African Phoenix operations.
But as African Phoenix Investments share
price gains momentum, many shareholders
are playing a wait-and-see game.
In the year to end-August lithium develop-
er Tawana Resources took top spot, with an
annual return to the end of August of 214.1%.
According to Bloomberg data, over the past
year Tawana Resources share price has
gained about 184.14%. This is not the first time
the resource firm has been recognised. It was
named a top performer by the Deloitte WA In-
group had a number of underperforming busi-
As the share price
gains momentum, many
shareholders are playing
a wait-and-see game
Our economy, and the
index return, were saved
from collapse by rising
commodity prices
Only 22% of shares made a return greater
than the index, making it clear that companies
ed R2.1-billion of the debt owed by eXtract
Total returns for the small- and mid-cap
indexes are standing at -1.42% and -1.62% for
the year to date.
These segments of the market have very
little foreign earnings. Our economy, and the
index return, were saved from collapse by ris-
ing commodity prices, said Treurnicht
The resource index returned 16.93% with
good performances by Kumba (67.65%) and
Exxaro (61.87%).
Anglo also proved to be a great investment,
with a return of 33.53%.
If commodity prices stay where they are
we will not be surprised to see our economy
picking up second- and third-round effects
take a bit longer to filter through to the rest of
the economy, he commented.
Offshore heavyweights like Naspers and
Richemont were the real force behind the All
Share index, with returns at 62.6% and 36.2%
respectively.
Combined, the two heavyweights make up
27.48% of the All Share index.
dex Top 100, in terms of market capitalisation
growth, for the year ended June 30.
Tawana Resources, which has a dual listing
on the JSE and the Australian Stock Exchange,
has increased its footprint in Western Aus-
tralia by acquiring the Lake Cowan lithium
project from fellow-listed Metalicity.
Earlier this month, MD Mark Calderwood
told shareholders the company would benefit
from the demand for electric vehicles, as the
raw materials required for lithium-ion and
other next-generation batteries had been a
critical focus of the automotive industry.
Allied Electronics Corporation (Altron)
recorded an annual return of 125.3%, making it
the second-best performer over one year to
end-August. The electronics company recent-
ly restructured and appointed former MTN
CEO Mteto Nyati as its CEO.
Matthew Zunckel, an analyst at Mvunonala
Asset Managers, said a few years ago the
nesses: Its been an entire repositioning of the
portfolio in terms of selling off those poor as-
sets, getting the cash in, reducing the debt on
the balance sheet and focusing on the core of
the group.
Zunckel said they had repositioned the
group as a telecommunications company.
11
Business Times
And now
for the very
bottom of
the list
By PALESA VUYOLWETHU TSHANDU
In the past year most stocks in the min-
ing industry have weighed down the JSE,
led by losses from mining services compa-
ny eXtract Group, that saw investors lose
97.69% over the past year.
According to Top 100 company data,
eXtract is the worst-performing company
on the JSE in the year to the end of August.
Shareholders in eXtract received enX
shares when the company unbundled in
November last year.
As part of the transaction, enX convert-
subsidiary MCC into 5.2 billion new shares
in eXtract.
These shares along with the existing
eXtract shares held by enX were unbun-
dled to enX shareholders. Each enX share
was worth 29.5 eXtract shares.
Mark Hodgson of Avior Capital Markets
said: You got a certain number of shares in
the process which you would still have. So
youd need to take into account the num-
ber of enX shares as an eXtract shareholder
and at least factor that in. It probably is still
pretty bad but not quite as bad as it looks
on the numbers.
He said the real faultlines at eXtract
were its debt finance and its exposure to
the struggling mining sector. So its a tough
space and shareholders take on a lot of
risk.
Another company in the doldrums is
Lonmin, with shareholders losing 64.51%
in the year to the end of August.
Sibonginkosi Nyanga, an analyst at Mo-
mentum Securities, said part of the reason
Lonmin is at the bottom of the barrel is that
people believe the company is bankrupt.
Even if you look at the recent share
price movement, it was due to the revision
of its bank covenants. Its got too much
debt and the platinum price at the moment
is working against whatever management
is trying to do.
It doesnt have money and at some
point Lonmin was going to breach its debt
covenant with the banks, Nyanga said.
Since last month Lonmins share price
has gained 32.5%.
But on whether the company will return
to profitability, Nyanga said: I think cur-
rently management is doing whatever pos-
sible for Lonmin to remain afloat.
A rise in the platinum price is key if
Lonmin is to make a profit again.
Nyanga said management had done ev-
erything it could, restructuring and re-
trenching.
We have seen some small improve-
ments, but the biggest driving factor will
be the improvement in the platinum
price.
Lonmin CEO Ben Magara has done a
very good job, Nyanga said. It [Lonmin] is
at the wrong side of the cost curve which is
the reason why they are trying by all
means to restructure their operations.
Like Lonmin and the eXtract Group,
Sibanye Gold was also lagging: its share-
holders lost 63.05% in the year to the end
of August.
Other mining companies that made
losses last year included Harmony Gold,
AngloGold Ashanti and DRDGOLD.
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