● The Sunday Times Top 100 Companies awards acknowledge the listed companies that have generated shareholder returns that outperformed their listed peers.
The results include companies listed on the JSE with a minimum market capitalisation of R5bn as at August 31 2021, and which have a track record of five years of trading from September 1 2016.
Selected companies that meet the aforementioned criteria but are no longer listed on the JSE, or whose share is suspended as at August 31 2021, are excluded from the analysis.
The executive management of Arena have also considered certain subjective qualifying criteria relating to the Top 100 Companies’ perceived compliance with good governance and ethical conduct.
The share performance analysis assumes an initial investment of R10,000 at the closing price on August 31 2016 and held for a period of five years from September 1 2016 to August 31 2021.
The companies are ranked based on the compound annual growth rate over the five-year period.
This analysis assumes that a fraction of a share can be purchased.
The share price performance is adjusted for corporate actions during the review period as follows:
● Ordinary and special dividends: The gross dividend per share is assumed to be reinvested in the company on the dividend payment date at that date’s closing share price.
● Scrip dividends: It is assumed that the cash option was elected and that the gross dividend is reinvested in the company as described above.
● Capitalisation issue: Shares received are held until the end of the review period.
● Unbundling: The shares in “NewCo” received are assumed to be received on the last date to trade and are tracked separately. The compound annual growth rate is calculated based on the basket of shares held at the end of the period as a result of the original R10,000 investment.
● Share split/consolidation: Share price data is adjusted for these corporate events.
● Rights issue: It is assumed that rights are not taken up and lapse, therefore no adjustment is made. Vestra Advisory researched and compiled the results.
Technology and sustainability: a winning combination
The pandemic increased risk, but helped create a better business
By LYNETTE DICEY
● Kumba Iron Ore’s transition in 2018 to a value-focusedbusinesshas paidoff,withthe group reaching the top spot in the Sunday Times Top100 Companies, fromthird place last year.
changingthe waywe mine,” says Kumba CEO Themba Mkhwanazi.
“We’re developing the future of sustainable mining through our FutureSmartMining strategy, whichis focusedon technology, digitalisation and sustainability.”
While the pandemichas led to increasedrisk anduncertainty, Mkhwanazi says it has also provided an opportunity to build a better business for the longer term.
term, and a cost savings programme. The group’s transitionin 2018 included a value-over-volume strategy, marginenhancements and plans to extend its life of mines to 2040.
Since implementingthe strategy in 2018, its earnings before interest, taxes, depreciation and amortisation (ebitda) margin hasgrown from45% to 57%.
Mkhwanazi, CEO of Kumba Iron Ore
Building a better business, he says,includes acontinuedfocuson itsmargin strategy, simplifying and rightsizing its product portfolio, focusing on those products thatcanbescaledto drivevalueforthelong
Itplans toextend thelife ofits Sishen iron ore mine to 2039 by introducing an ultra-high dense mediaseparationunit toprocessandseparate low-grade oreinto ahigher-grade ore,which Themba
Page 6 ➛
will reduce its carbon footprint.
Earlier thisyear, Kumbaannounced it wouldbe developingthe KapstevelSouth project at its Kolomela mine, which will help sustain productionfor theremaining lifeof the mine.
It is also continuingits exploration programmein theNorthernCapeas itlooksto develop its resource pipeline.
Kumba isrecognised as aleading mining company asfar assustainability isconcerned.TheFTSE4Good Index an index which includesa seriesof ethicalinvestment stock marketindices scores itas 4.8out 5, while it is highly ratedfor its strong environmental, socialand corporategovernance practices. Its environmental management effortsare focusedonmovingthe businesstowards carbon neutrality and operating fewer water-intensive mines.
As the iron oremarket embraces the need for decarbonisation,Kumba’s productsare well positioned to help its customers produce steel withless carbonemissions, saysMkhwanazi. “It’s likely that we’ll see an attractive premium for this quality.”
China and other countries with traditional steelmaking furnacesare reducingemissions by usinglump oreinstead offine ore,which significantly reducesoverall emissions.This trend isexpected tobenefit Kumba,given that itsshare oflump oreis muchlarger than itscompetitors andits productshave amuch higher ore content.
Kumba’s focus on sustainability includes supplying cleaned and purified water from its mines to communities aswell as rehabilitating land and wildlife.
“As theworld hasbecome focusedon carbonreduction,so toohaveweadvanced plans todevelop solar powerand ultimately even replace diesel trucks with hydrogenpowered vehicles,” Mkhwanazi says. The companyisaiming tobecarbon-neutralby 2040.
Kumbadelivered arecord first-halfperformance in2021 asit builtmomentum on the back of a strong 2020 despite challenging conditions.Production increased12% tomore than20-million tonneswhile sales increased 3% to 19.5-million tonnes, inspite ofchallenges onthe logistics front. In the third quarter, its production increased 11% to 10.8-million tonnes, reflectingstrong operational performanceand excessplant capacity.
Operational resilience, combined with strong demandfor iron ore, helped the company deliver record ebitda of R44bn in the first half of the year. The boarddeclared a record half-year dividend ofR72.70 a share,
To deliver on our purpose of reimagining mining to improve people’s lives, we are changing the way we mine
Themba Mkhwanazi Kumba CEO
returning more than R23bn to shareholders.
In recent months, steel production cuts in China have weighed heavilyon iron ore prices, whichfell froma record$235.55 a tonne inMay to lessthan half thatin September.However,thishas beenoffsetbyincreased sales to markets outside China.
tiesof ourironoreproducts, includingfor their carbon emission reduction properties in the steelmaking process,” says Mkhwanazi.
Despite the fall iniron ore prices, prices are still favourable from a historical perspectiveand areat muchmore sustainablelevels, he says. “The flightto qualitycontinues to drive demand for high-qualityiron ore, and the transitiontowards acarbon-neutral environmentwill increasethe demandfor premium-quality lump. ”
Kumbahas,however, positioneditselffor lowerironore pricesthroughitsvalue-overvolume strategy which meansthe company receives a premium for its ore, even when prices decline combined with operational efficiencies and cost-savings programmes.
Like manymining companiesin SA, Kumba hasbeen hitby logisticsconstraints at Transnet, which werecompounded by extreme weather that affected port movements. Heavyrainfall hasalso beena problemand thecompany hasrespondedby deployingits shovel fleet at Sishen to drier areas, shorteninghaulageroutes andbringingforwardits scheduled maintenance.
Mkhwanazi, who hasbeen at the helmofthecompany forfiveyears,is particularly proudthat Kumba markedmore thanfiveyears offatality-freeproductionin May2021,a landmarkachievement forthecompany and the local mining industry. He willbe movingto headup Anglo American’s globalbulkcommoditiesbusinessin thenewyear and willbe replaced bymining veteran Mpumi Zikalala,who joins the small group of women CEOs in the mining industry.
Kolomela primary cone crusher. Picture: Kumba
Ahead of curve, but speed bumps ahead
Montauk
’s
success shows investors are backing renewables
By AURELIA MBOKAZI
● Renewable energyis aninvestment inthe future andMontauk Renewableshas been aheadofthe curve,producingcleanenergy for more than three decades.
MontaukHoldings delistedfrom theJSE on January 18 2021. Montauk Renewables startedtradingaweek lateronJanuary25, with a primarylisting on the Nasdaqand a secondary inward listing on the JSE. Investors holding oneMontauk Holdingsshare received one share in Montauk Renewables.
WhileMontaukRenewables isaSouth Africanentity, itsoperationsandstaff of115 peopleare inthe US.Headquartered inPittsburgh, thecompany specialises inthe recovery and processing ofbiogas from landfills andother sourcesas analternative tofossil fuels.It operates12renewable naturalgas sites and threerenewable electricity projects across six US states where it captures methane, preventingthis greenhousegas frombeing released into the atmosphere, and converts it into either electricity or natural gas. It providesa fully integratedsolution for the management,recovery andconversion of biogas from wastesources into renewable energy.
This year, Montauk shot to second place in theSundayTimesTop 100Companies,anindication thatinvestors arebacking renewable energy.
“Thislisting isanopportunity forSouth African investors to investin the green fuel space, and help preserve our planet for future generations,” said Valdene Reddy, JSE director ofcapital markets,in astatement when the company listed on the JSE.
Total revenue forthe year ended December 31 2020 declined 5% to $100.4m.
MontaukRenewables CEOSean McClainsaid ina statementaccompanying theannual financialresults in February: “The primarydriver forthis decline related to a16.1% decrease in renewable electricityfrom ourelection to end the contract and exit our Monmouthfacility [inNewJersey], andthe Californiawildfires affectingpower generation at our Bowerman facility.
“We produced 5.7-million MMBtu
The spread of Covid-19 has disrupted certain aspects of our operations
[million Britishthermal units]of renewable natural gas during 2020, a 7.2% increase from the 5.4-million produced in2019. Of this increase, 0.2-million MMBtu of renewable natural gas wasproduced from development sites commissioned during2019,” said McClain.
Butthepandemic haspresentedchallenges. Despite beingconsidered an essential servicescompanyunderthe termsoftheUS Cybersecurityand InfrastructureSecurity Agency,it sufferedlossesbecauseof thereducedneedfor transportfuelsduringlockdowns and adrop in the priceof renewable identification numbers (RINs).
A RIN is a serialnumber assigned to a batch of biofuel totrack its production and use, as well as any trading in it. The US Environmental Protection Agencysets annual quotas for biofuel use, andRINs which are themselves tradableitems are requiredto show these quotas have been met.
“To date,the pandemic hasadversely affected,andisexpected tocontinuetoadversely affect, ourbusiness, financial condition and results of operations. The spreadof Covid-19hasdisrupted certain aspects of our operations, includingourability toexecuteon our business strategy and goals, and complete the development of our projects,” said McClain.
“Commissioning of our development sites wasdelayed by between fourandfive monthsin2020. Delayed commissioning also delays theregistrations andqualifications necessary for EPA pathways which, in turn, delaysrevenue streams from these facilities.”
Montauk Renewables uses methane, a greenhouse gas produced by cattle and natural processes in landfills, to generate renewable energy. Picture: Montauk
Sean McClain Montauk Renewables CEO, above
Committed to building a greener future
Investment in solar and hydrogen drives Amplats energy plan
By LYNETTE DICEY
● Anglo AmericanPlatinum (Amplats)has beenridingthe waveofhigherplatinum groupmetals(PGM)prices duetoaglobal economic recovery as well as automotive and industrial demand.
Amplats is a leading primary producer of PGMs,which areusedto loweremissions from internal combustion engines and to produce hydrogen and fuelcells for electric vehicles. The company ’s mining, smelting andrefining operationsarebased inSA, whereit processesmorethan55% ofthe world’sPGMs.It alsoownsUnkiPlatinum Mine inZimbabwe andhas anumber ofjoint ventures with historically disadvantaged consortiaas partofitscommitment totransforming the mining industry.
Amplatspostedrecord half-yearprofitsin its interim results, published in July, with earnings beforeinterest, tax,depreciation and amortisation up nearly 400%. Its strong financial performance was underpinned by a 29% increase in the PGM rand basket price.
This robust performanceresulted in a large interimdividend forshareholders of R175 pershare, or R46.4bn, anda R16.6bn payment to the fiscusthrough taxes and royalties.Itspurpose to “reimagine mining to improve people’s lives” has beena guiding light duringthe pandemic andprompted the company topay salarieseven when employees were not working.
CEO NataschaViljoen believesthis decision willbenefit Amplatsin the longterm. Evenmoresothan theimpressive resultsthe companyhas delivered, she’sarguably mostproud of the community relationships the businesscontinues towork hardto develop.
“Whilewe acknowledgethey’re not perfect, we’ve made progress with our community relationships, which areimportant becausethese arevaluable stakeholders.I’m firmlyof the
A bulk ore sorter at Amplats’ Mogalakwena mine in Limpopo, where the company is planning to build a 100MW solar photovoltaic plant. Picture: Planet KB
opinion that we areaccountable to the people ofSA, and by maximisingreturns we areabletogive backtothecommunityand society at large.”
Environmental, social andcorporate governance (ESG),sustainability andthe creation ofa greener,healthier futureis apriorityfor Viljoen.Amplatsisranked asthe overall ESG leader in the platinum and precious metals sector by FTSE Russell. Viljoen is cognisant that mining operations have a responsibility to minethe mineralresources entrusted to them in a way that maximises the benefits to stakeholders andminimises theimpact ontheenvironment and host communities.
“Miningcommodities area limitedresource whichbelongs to the whole country. Our skill set is how wemaximise that resourceto enablebroadvalue,” she says.A significant consumer ofboth energy andwater, Amplatshas beenworking on initiatives to reduce usage.
drogen trucks. It plans to be generating its own hydrogen on site by next year.
Viljoen is excited aboutthe potential impact that the development of an active hydrogen drivetrain will have on the hydrogen economy and the infrastructure to support that economy.The companyislooking tolessen its reliance on Eskom,which continues to be one ofits biggest constraints. Itrecently selecteda consortiumconsisting ofPele Green Energy,an independent power producer, and EDF Renewables SA, anexpert in renewable energytechnologies, tobe itspreferred supplierto build a 100MWsolar photovoltaic plant atits Mogalakwena mineinLimpopo. Theplantis expected to be operational by the endof 2023andis partof Amplats’ goal toachievecarbon neutrality by 2040.
This includes transitioning the drivetrain oflarge trucksfromfossilfuels tohydrogen fuel cellelectric vehicles. Thecompany is working onfitting a 300-tonKomatsu truck with ahydrogen fuelcell withthe aimof eventually convertingits entirefleet tohy-
“We’reexcited abouttheprospectofusingsolar energytoproducegreen hydrogen atMogalakwena, ” says Viljoen. “Not only will this reduce our environmental footprint, but these technologies rely on PGMs, whichcould stimulateadditional future demand for PGMs.”
Looking tothe future, Viljoensays the company willcontinue tofocus onits four strategic priorities, which are to:
price, daily (cents)
● Stimulatenew marketsand leveragenew capabilitiesthroughits marketdevelopment activities,as well ascapturing valuefrom adjacent value chains;
● Build resilience across the businesstoincrease itsabilitytohandle major disruptionsand thriveat the same time;
● Maximise value through its core portfolio of mining and processing assets; and
● Buildon pocketsofexcellence to becomea leaderin ESGin the mining sector.
Natascha Viljoen, Amplats CEO
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Exciting changes ahead for Anglo
Cutifani will leave behind a strong legacy, and skilled hands to nurture it
By AURELIA MBOKAZI
● Anglo American is set for a promising new chapter as changes in the group’s leadership will givefurther impetus to itsstrategy and build on the legacy of CEO Mark Cutifani.
Duncan Wanblad,who wasnamed as CEO-designateinNovember, willtakeover asCEO andjoin theboard inApril nextyear. Cutifaniwill stayonuntilJune 30tosupport the transition.
Wanblad isa South African andAnglo insider, with30 years’ experience.As group director for strategy and business, he has workedcloselywith Cutifaniandwaspreviously CEO of Anglo’s base metals business. He is also a nonexecutive director of De Beers and KumbaIron Ore,and chairsthe Anglo American Foundation.
In October,Anglo Americanannounced other changes to its senior leadership.
Seamus French, CEOof bulk commodities,is settoleaveat theendof2021 after14 years atthe company.Themba Mkhwanazi, CEO ofsubsidiary KumbaIron Ore,will replace French, and MpumiZikalala, MD of De BeersManaged Operations,willtake overas Kumba CEO.
Cutifani said Mkhwanaziwill shape the strategy for global iron ore, metallurgical coal and manganese interests. Hewill also take chargeof nurturingpartnerships anddeveloping steelmakingtechnologies suitedto the premium steelmakingingredients thatAnglo American produces,which arebecoming more criticalas the fightagainst climate change accelerates.
Zikalala will work closely with strategic business partners todrive a sustained, safe,world-class performance at Kumba.
“I am delighted that, together with Nolitha Fakudeas chair ofour management board inSA, and Natascha Viljoenas CEOofour PGMs[platinum groupmetals]business, wewillhave three women of such high calibre leading our extensive interestsin SA,” said Cutifani ina statementreleasedbythe company.
Fakude has beenchair of Anglo
American’s SouthAfrican management board sinceSeptember 2019.She brings morethan30years ofexperienceacrossdiverse industriesincluding oil,gas, petrochemicals,financialand retailservices.In May,she waselected thefirst womanpresident ofthe 131-year-old MineralsCouncil SA, formerly the Chamber of Mines.
Anglo American operates across15 countries,including China, Brazil, the UK, Canada, Australia, Botswana and Namibia, but has firm roots in SA. It produces diamonds (through De Beers), copper, nickel, PGMs and premium-qualityiron ore and metallurgical coal for steelmaking.
al decarbonisationimperative aswe electrify transport andharness clean,renewable energy and premiumquality iron ore for greener steelmaking, supported by an improving market fordiamonds, all contributed toa recordhalf-year financialperformance,” said Cutifani.
Strongmarket demandand operational resilience drove up earnings beforeinterest, taxes, depreciation andamortisation inthe six months to June 30 2021 to $12.1bn.
BasicEPS climbed1,000%yearon yearto $4.18.Profitattributable toequityshareholders soared 1,001% to $5.2bn.
An interimdividend of $1.71 ashare was paid along with a special dividend of US80c a share.
“PGMs and copper essential to the glob-
Anglo American isalso constantly working toreduce itsown environmental footprint. Themining giant hassetan ambitioustargetof 2040 to achieve carbon neutrality. This will be achieved by using less water and energy, and cutting greenhouse gas emissions.
The overarching goal of Anglo American’s FutureSmart Mining approachis touse technologyand digitalisation todrive sustainability.
Releasing theClimate Change Report 2021at the endof October, Cutifani said: “Last year, a littlemore than one-thirdofthe electricityAngloAmerican used globallywas drawnfrom renewable sources. Having nowsecured 100% renewableelectricity supplyacross ouroperations inBrazil,Chileand Peru,weexpecttobe drawing56% ofourgridsupply fromrenewables by 2023.”
Cutifanisaid atruck poweredby a2MW hydrogenfuel cellwas beingassembled inSA for testing,with the intentionof replacingdieseltrucks to transport cargo.
Attherelease ofitsinterimresults in July, the diversified miner announcedithad madeaspecialcontribution of$100m tothe Anglo AmericanFoundation tofund health, social and environmental projects.
This year, thecompany was ranked fourth inthe Sunday Times Top 100 Companies, up from 15th place last year.
Mark Cutifani, Anglo American CEO
Anglo American’s Quellaveco copper project in Peru. Picture: Quellaveco
Lifetime Achiever
Business titan and inspirational leader
Self-made businessman, activist and family man, Jabu Mabuza blazed an illustrious trail
By AURELIA MBOKAZI
● Whennewsofthe deathofJabuMabuza broke on June 16,the business fraternity was gutted bythe lossof thisdedicated leaderat the age of 63.
Looking back at his achievements, the gap that his passing leaves across industries and in the development of SA is evident.
In recognitionof hisachievements, Mabuza has beenposthumously honoured
withthelifetime achieverawardinthe Sunday Times Top 100 Companies.
A self-made businessmanand an economic empowerment activist, Mabuza’s enterprising journeybegan asa taxidriver in the mid-1980s.
Alwaysoutspoken, heseizedopportunitiesto advancehimselfand others,ensuring that voices of black business were heard.
President CyrilRamaphosa said ina tweet after Mabuza’s deathfrom Covidcomplica-
tions: “JabuMabuza wasa monumentalfigure on somany terrains of ournational life. He provided inspiration and leadership to many, from Daveyton, where he started his illustriouscareerasa taxidriver,toDavos, wherehemadehis presenceandvaluesfelt in global debates.”
Mabuza put his skill for organising people to gooduse andcontributed tothe formation of business groupings such as the Foundation for African Business and Consumer Services.
His leadership prowessshone during his tenure with Tsogo Sun, where his negotiating skills secured casino licencesfor the JSE-listed group.
Lifetime Achiever of the Year Jabu Mabuza was known for his tenacity, drive and affable nature. Picture: Moeletsi Mabe
Duringhisillustrious career,Mabuzaheld the roleof chair on variousboards, including Telkom, SA Tourism, Unisa Graduate School of BusinessLeadership, ABInBev andSun International, where hewas credited with building shareholder value.
On his death, captains of industry offered heartfelttributes inhonourof Mabuza’s legacyand dedicationto thegrowthof theSouth African economy.
Amonghis manyachievements,Mabuza was bestowedwith a LilizelaTourism Lifetime Achievement award in 2013.
Sipho Maseko, the outgoing Telkom CEO, describedMabuza ashis “boss,a mentorand a friend”
The two worked together closely during Mabuza’stenure aschairof Telkomfrom 2012, wherehe was creditedwith turning around the once-ailing telecom company.
“Being theamicable man that hewas, he restored Telkom’srelationships withhumility and humour.He broughta morecollaborative spirit,and awillingnessto negotiate,to Telkom’s stakeholderinteractions an about-turn fora company thathad previously been considered combative.
“He instilled the philosophyof ‘treat your internal businesslike you wouldyour external competitors’.He wassincere andauthentic andnever afraidtostepin, takeresponsibility andmake adifference. Heheldthe linefearlessly andgave everything hisbest. Hewill be sorely missed,” Maseko wrote.
Away fromthe spotlight,Mabuza expressedhis loveopenly, sayshis son,Lwazi Mabuza. “Dad’s No 1 principle was to celebrate hisfamily, celebrate hischildren’s differenttraits, andall ourrelationships withhim were personal.He made time forhis family andloved andtreasured us.More thananything, he taught us real love from how he loved our mother,” says Lwazi.
He instilled strong leadershipvalues in his threechildren, hopingtheywould followin his footsteps as doyens of black business.
One of Lwazi’s abiding memories of his father was the emphasis he placed on punctuality and relationships asthe cornerstones of success.
“Hedescribedhis jobasgeneratingshareholder value andcreating relationships. He saidin businessyouworkwith peopleyou don’tlike andyou don’thave tolike them,but you haveto respectthem. ‘IfI seta timewith you,ifyouare nottherefiveminutesbefore the agreed time for themeeting, you are late. Respectmytimeand I’ll also respect your time’ , ” says Lwazi.
Mabuza, who had to abandon his law studiesat theUniversityofLimpopo inthe1980s dueto lackofmoney, wentoutofhis wayto support initiatives toprovide education for
What they said Being the amicable man that he was, he restored Telkom’s relationships with humility and humour
Sipho Maseko Outgoing Telkom CEO
Dad’s number one principle was to celebrate his family, celebrate his children’s different traits, and all our relationships with him were personal
Lwazi Mabuza
Jabu Mabuza’ s son
underprivileged youth.
One suchinitiative wasthe NationalEducationCrisisForum, amultidisciplinarycommitteeof eldersconvenedby formerdeputy chief justice DikgangMoseneke in response to the#FeesMustFall crisis in2016. While Mabuza wasnot one ofthe officialnine conveners, hewas alwaysready tohelp inany way possible.
Obtaining auniversity degreewas anonnegotiable goalhe and his wifeSiphiwe set for Lwaziand their otherchildren, Sakhiwo and Mbali.
“WhenI failedeconometrics atUKZN [University of KwaZulu-Natal]for the third time in my third year ofvarsity in 2009, I was ready to quit. I didn’t knowwhat to do and I didnotwant topursuethedegree anymore.I hadfailedforthe thirdtime.Myfatherwas supportive andpatiently listened tome declarethat Iwasnotgoing backtouniversity. Hecalmly remindedmethathe wassuccessful despite not havingan education, but emphasised thatI was notgoing tomake it without a degree.
“He told meto get a part-timejob so I could self-fund my degreeand, through his networks, he helpedme get a jobas Johann Rupert’s personal assistant.He pushed me every day to finish my degree through Unisa. I was studying on planes while travelling and alsoin betweenmeetings,makingsure thatI succeeded,as heexpected. However,Johann didnot mincehiswords. HesaidifI faileda single course, he was going to fire me, ” recalls Lwazi.
Bonang Mohale, formerCEO of Business Leadership SA, who served alongside Mabuza inthebusiness organisation,praisedhis tenacity and drive and his dedication to the development of SA.
Inamoving tribute,Mohalewrote: “Thank you forbeing a testament thathaving witnessed boththe economic strugglesof our forebears and the birth pangs of a new nation, there is truly real value in building our South African nationhood,for it givesexpression to a fundamental truth in our national life.
“I will forever be gratefulto you for being such a great teacher, amazing and good, qualityhumanbeing. Teachingme,andmany more,that ifwe waitfor someoneelse tofix things, weare doomedto furtherdespair. Thank youfor touchingmy lifein sucha meaningful way and impactful manner.”
At the timeof his death, Mabuzawas lead independentnonexecutive directoronthe board ofMultiChoice, as well asbeing responsible for the overallstrategy of his family’s businesses.
Always a mentor tohis children, he took hisrole asa grandfatherjustas seriouslyas his boardroles, and particularlyenjoyed goingshoppingandon ice-creamdateswithhis two grandchildren.
Business Leader of the Year
Profound purpose, positive mindset
Gore credits his award to Discovery’s achievements in the past 18 months
By LYNETTE DICEY
● Leading change, forging partnerships and setting the standard for business are some of thequalities ofSunday TimesTop 100Companies’ Business Leader ofthe Year, Adrian Gore.
The Business Leader ofthe Year award is based on nominations and votes by business leaders. Gorewas previouslyawarded the Sunday Times Lifetime Achiever in 2010.
Under Gore’s leadership,Discovery Group has become a local and global leader in behavioural change, successfully integrating incentives and insurance.
Locally,the groupincludesDiscovery Health,which dominatesthe openmedical scheme industry with a 57% share of the market, DiscoveryLife, DiscoveryInsure, Discovery Invest and Discovery Bank.
His ambition is for thegroup to become a leading financial services group globally.
Gore says he ishonoured and humbled by the award.
“Itmeansa lotthatitisvoted onbymy peers. While I may be receiving the award personally, thereis no doubtin mymind that it has been awarded based on what Discovery as an organisation has achievedin the past 18 months. We’velived ourpurpose andvalues
To Page 14 ➛
DECARBONISING FOR A BETTER FUTURE FOR ALL
www.exxaro.com
Guided by our purpose to power better lives in Africa and beyond, our Sustainable Growth and Impact Strategy plays a fundamental role in ensuring that we are resilient to the risk of climate change. Through our efforts to reduce our carbon emissions, we aim to responsibly optimise our coal business, reposition our business to capture transition opportunities and to prioritise the Just Transition for workers and communities in and around our operations.
CEO of Discovery Group Adrian Gore.
Picture: Freddy Mavunda
in ourresponse to theCovid-19 pandemic. I’m particularly proud ofthe role our people have playedand what they haveachieved in the frontline of the vaccination rollout.”
He describes himselfas a consensus builder rather than a decisiveleader. “I like to get allthe information on thetable, consider every conceivable risk, and debate things rigorously before making a decision,” he says.
Where he is unequivocal is having a deep conviction about what is right and wrong and aprofoundbelief inDiscovery’s purpose and shared-value business model.
Effectiveleaders, hesays, arepositive, providingtheirpeoplewith asenseofoptimism aboutthe future. Headds thata noble purpose often brings out good leadership rather than vice versa.
The pandemic createdan environment characterised bya sense of loss.During this period, there has been a huge burden on leaders to be moresensitive and empathetic, and hebelieves businessleaders haverisen tothe challenge.
Gore haspreviously calledfor positive leadership toliberate SA’spotential, andreceived criticismfor his so-callednaiveté. He stands bythese comments, sayingnow more than ever theenvironment requires positive leadership.
“The narrative right nowis very negative, withso muchmisinformation.I’m notdiscountingthe factthat thecountry faceschallenges,the mostsignificantof whichare poverty, inequality and unemployment.
“However, whatis often overlookedis that South Africanshave anamazing capacityto solveproblemsand areremarkablyresilient. Our problemsare not intractable.Right now, what weneed is more positivityand confidencethat wecanaddressour challenges.We need to better understand our potential. For starters, businessleadership inthis country needs to provide apositive narrative about our potential as a country.”
A recent success story, he says, is SA’s Covid-19 vaccine rollout.
“Though we were late to procure vaccines, the publicand privatesectors collaboratedto roll thevaccination process outquickly and efficiently. I’m particularly proud of the role Discovery hasplayed inthis process.Thousands of our people have been at the frontline of this successful public-private partnership, illustrating how effectively we can work together.Whocouldhave guessedatthebeginning ofthe yearthat ourbiggest challenge now would be vaccine hesitancy, rather than vaccine supply and the capacity to vaccinate?” Bridges havebeen built, he says,and both the governmentand the privatesector now needto putthe lessonslearned duringthe
South Africans have an amazing capacity to solve problems and are remarkably resilient
Adrian Gore CEO of Discovery Group
vaccine rollout into practice on other collaborations.
As difficult as the past year has been and Gore pulls no punches whenhe says it’s been a year characterised by tragedy and loss the pandemic has putDiscovery’s purpose of making people healthier front and centre.
“As a company, we’re more focused on this purpose than ever before. In a particularly challengingyear,our businessmodelhas really matured and accelerated,” he says.
Despite expectations thatmedical scheme members wouldallow theirmembership to lapse dueto affordability,he saysthat lapse ratesactually fellaspeople prioritisedprivate healthcare cover.
Mandatory vaccinations
Discovery recently announced a mandatory vaccination policy for allits staff members,
which will come intoeffect on January 1 2022.Gore saysthedecisionwas nottaken lightly andwas debatedat lengthby Discovery’s board.
Thedecision tomandate vaccinationsfor its employees is one that is consistent with the organisation’s purpose, he says.
“Discoveryisan organisationthatmakes people healthier. Wehave a considerable amountofdata available,provingthevaccine’sefficacy andsafety.Thedata isunequivocal:latestdataanalysis showsamorethan 90%reduction inmortalityrisk14 daysafter you have had your second jab.
“Notonlyis thevaccineincrediblyeffective,but therearevirtuallyno sideeffectsand transmission risk is significantly lower in environmentswhere thereis universalvaccination.”
His advice toaspiring young business leadersand entrepreneursis tohave apurpose; dreamand setgoals; havethe rightattitude;act withintegrityandhonesty; acturgently; and be optimistic.
“If you plan to build a business, you have to be optimistic,” he says. “I believe SA offers opportunities. Myadvice toaspiring entrepreneurs is torecognise that entrepreneurship is hardand starting a businessis not easy. Follow the road less travelled and look for opportunitiesthat othershave missed. There areopportunities indifficult times whenassetsare undervalued.It’s in difficult timesthat goodentrepreneurs makeheadway.”
Discovery played a big role in the country’s Covid-19 vaccine rollout, which CEO Adrian Gore calls ‘an SA success story’ . Picture: Papi Morake/Gallo Images
At Anglo American, our people are at the heart of everything we do. Our people are our business.
Together, we create and deliver sustainable value by working towards common goals while empowering individuals to realise their full potential.
Anchored by our values and culture, our people are valued for their contribution towards helping us live our purpose of ‘Re-imagining mining to improve people’s lives’. This is how we continue to nurture relationships with our host communities, government, suppliers, customers and partners.
Thank you, Sunday Times, for recognising Anglo American, Kumba Iron Ore and Anglo American Platinum in the 2021 Top 100 companies.
Sun on its back and wind in its sails
Exxaro cashes in on high coal prices, but Transnet holds it back
By LYNETTE DICEY
● In themidst ofa globalmove awayfrom fossil fuels,Exxaro Resources, oneof the largest black-empowered diversified mining companiesinSA, continuestoresponsibly manage itscoal operationsand reapthe benefits of higher coal prices.
The company ’sportfolio includescoal operations and investments in iron ore and zinc, and wind energy through its renewable energy business, Cennergi.
Overallsalesareup 5%yearonyearfor 2020, with 12.2-million tonnes of coal exported tomarkets suchas India, Pakistan, otherparts ofAfrica and, to a lesser extent, Europe.
Core earningsbefore interest,taxes, depreciationand amortisation is up25%, mainly dueto highercoal pricesand the consolidation of Cennergi. Combinedwith acontribution from Exxaro’s equity-accounted ironore investment,SishenIron OreCompany, coreheadlineearningsper shareincreased 26%to R29.73 per share.
alale, whichaims to lower theemissions for its Limpopo-based Grootgeluk operations. Two smaller plants are planned for Exxaro’s two coal mines at Makhazeni (formerly Belfast) and Matla.
Exxaro,which togetherwith Seriti Resources contributes about 80%of Eskom’s coal supply, recently signed a memorandum ofunderstanding with the power utilityandSeriti todeveloprenewable solutions to reduce carbon emissionsat Seriti’s and Exxaro’s cost-plus mines, providinga significantcostand carbon savingthat willbenefit the country.
sources by 2030. The plan includes commercialising Cennergi to offer decarbonisation solutions to independent third parties.
The biggest challengefacing the business right now, says Mgojo, is Transnet Freight Rail which,as aresultofcable theftandpoor maintenance,has constrainedabout2-million tonnesof coaldestined forexport through Richards Bay.
“Thisis holdingthecompany backand hindering our efforts to take full advantage of the current high prices of coal,” says Mgojo.
Thecompanyis engagingwithTransnet through the Minerals Council to address the issues of equipment maintenance, the supply of spares and cable theft.
In Exxaro’sfavouris thatdemandforcoal remains high.
Sustainability has long been a fundamentalpart ofExxaro’s businessandhas beenintegrated intoits strategyvia Cennergi,environmental stewardship and social impact.
“We’reintenton transformingourbusiness portfolio andtransitioning towards a low-carbon future,” says CEO Mxolisi Mgojo.
“Thestrategyplaces anemphasisonintegrating growth and impactfor a just transition that acknowledges the remainingsignificance ofthe coalbusiness in SA’ssocioeconomic settingand aimsto empowercommunities tobe economicallyand sociallyresilient during the transition.”
Over the past18 months, Exxaro hasgrownits renewableenergybusiness tosupport itsdecarbonisation goals. Cennergi is one of SA’s largest, locally ownedrenewables developers. Itsportfolio includestwo wind farms producing229MW and nine solar facilities producing 2MW.
The company hascommitted to building a70MW solar parkin Leph-
“Cennergiplans toreduce Exxaro’s CO2 emissions by up to 70% at its Matla coal mine, initially through the construction of solar photovoltaic facilities and further phases that may include wind and storage,” says Mgojo.
The company plans to invest R45bn in renewableenergyprojects by2030,whichwill result in about 3,000MWof renewable energy. It has developed a team to provide green energy solutions, with a goal of ensuring that 70%of itsearningswillbe fromnon-coal
“It’s a dynamic market, both on the supply anddemand sides,” saysMgojo. “Given the increasingmomentumto respondtoclimate changeand reducefossil-fuel emissions,coal supply hasbeen reducingas agrowing number of countries pivot towards renewables.
“However, demandhas not abated.In fact, lower temperatures inthe northern hemisphere and an energy crisis in China have resultedinan increaseindemand,causing deficits. Whileit isuncertain howlong these higherlevels ofdemand willpersist, weexpectthat coalpriceswillpotentiallycontinue toface upwardpressure for the first half of 2022.”
September 2016: R10,000 August 2021: R46,026
He saysthat inthe run-upto COP26,the globalcommunityreduced coal production unsustainably in thehope ofaccelerating emission reductions.
Exxaro has increased its productioncapacity througha R17bnexpansionprogramme whichisnearing completion, withits Grootgeluk6 projectbeing commissionedbythe end of the year.
Exxaro’s Grootegeluk coal mine in Limpopo. Picture: Supplied
Exxaro CEO Mxolisi Mgojo
Diversified portfolio pays off handsomely
Higher iron ore and PGM prices more than offset stronger rand
By AURELIA MBOKAZI
● African Rainbow Minerals (ARM) stayedtrue toits custom of balancinggrowth andrewarding shareholders when it paida total dividend of R30 per sharefor theyear to June 30 2021. The dividend was up150% from R12per share the previous year. Spurredon by its diversified portfolio ofcommodities, ARM reported a 136%surge inheadline earnings to just over R13bnor R66.88 per share, while earnings before interest, taxes, depreciation and amortisation grew 121%to R24.3bn from R11bn last year.
Ironore pricessoared,sending ARM Ferrousheadline earningsup77% toR7.927bn.Underpinnedby dollarpricesfor PGMs, rhodium in particular, ARM Platinum headline earnings rocketed to R4.666bn from R1.142bn in 2020.
With theglobal economic recovery, thermal coal prices increased dueto asurgein demand. However, challenges at state-owned logistics company Transnet restrained ARM’s ability to ride the wave ofhigh prices.This gave rise to stockpiles which,in turn, ledto increased on-mine unit production costs.
The mining and minerals company, founded andchaired by billionairePatrice Motsepe, boastsoperationsin SAand Malaysia. ARM minesand beneficiates iron ore,manganese ore, chrome ore,platinum group metals (PGMs), nickel and coal, and has a strategic investment in gold through Harmony Gold.
Rainbow Minerals CEO Mike Schmidt.
CEO Mike Schmidt saidat the results announcementthat heexpects thechallenges with Transnet, along with watersupply problemsin the Northern Cape, to continue plaguingARM inthe comingfinancialyear, affectingvolumes and costs.
“
“Our diversified portfolio stoodusin goodstead,with higher iron ore and PGM prices more thanoffsetting theimpact of a stronger randvs the US dollar exchange rate,” Motsepe said when announcing the results in September.
“We continueto engageand work with the government, Transnet, theSedibeng Water Board and other stakeholders to find sustainablesolutions that willbenefit theminingindustry and thecountry asa whole,” he
Dunne,
African
African Rainbow Minerals founder Patrice Motsepe.
says. The health and wellbeing of employees is a priority, especially during the pandemic, as is safety as a performance indicator. But, sadly, two employeesdied atModikwa mine in the first half of 2021.
“Remedial actions,as agreed with the departmentof mineral resources& energy,wereimplemented.These wereaugmented byinitiativesacross ouroperationsto ensure that safety training continues and standardsare strictly upheld,” says Schmidt.
TOP 100 COMPANIES
African Rainbow Minerals
While cognisant of the loss of life, the company said there were also safety achievementsworth noting.Theseincluded 12fatality-freeconsecutive yearsat BlackRock Mine;18consecutive fatality-freeyearsat Beeshoek Mine;and 1-millionfatality-free completed shifts at Two Rivers Mine.
Despite havingsafety measuresin place, including healthscreening, testingand vaccination sites,ARM was not sparedthe rav-
September 2016: R10,000
August 2021: R43,360
ages of Covid-19.
“Sadly, we lost 34colleagues to Covid-19in the2021financial year,” said Motsepe duringthe resultsannouncement.
Motsepe saidthe relationship between miningcompanies andhost communitieswasstrained, asthepoor and marginalised continueto make demands forcompanies to createjobs and ease poverty.
This was more evident in developing countries where governments have fallen behind onservice delivery and job creation. “We continue to work with communityforums, municipalities,thedepartmentand otherlocal andinternational stakeholders tofind solutionsfor thepoverty and unemployment challenges facing our host communities.”
Themining companyhada staffcomplement of 21,000 in the2021 financial year. It invested R239m (R225m in2020) in skills training across its operations. At year-end, 68% ofmanagement atall levelscomprised historically disadvantaged individuals.
Strategic repositioning brings rewards
Improved performance and pricing windfall a boon for stakeholders
By LYNETTE DICEY
● Impala Platinum(Implats) harnessedthe benefits of improvedoperational performance and elevated rand metal pricing for its primary products to deliver a record financial performance for the 2021 financial year.
It endedthe yearwith astrong balance sheetand posteda 125%increase inheadline earnings to R36.4bn.
Implats CEONico Muller saysthis was achieveddespitethe challengespresentedby Covid-19 andthe erraticprovision ofessentialservicesrequired tooperatethegroup’s globally diverse suite ofmining and processing assets.
“The group’sperformance istestament to theprogress madeover recentyears tostrategicallyreposition thebusiness, whichallowed us to not only leverage the windfall on pricing, but alsostrengthen the business, care for employeesand neighbouring communities, reward investors and secure the future growth and sustainability of the group.”
The unpredictableprovision ofessential
services principally electricity toits SAoperations, andthe associated above-inflation costescalation forsupport services,remain achallenge, he says.In response, Implats implementeda comprehensive energy strategy.
“At its core,our strategy envisagesmore efficientuse ofscarce naturalresources, investing in securing more sustainablegreensources ofenergyand leveraging theuse ofour metalsto accelerate and grow the use ofhydrogen as a future green energy source,” says Muller.
mining, mineralprocessing andrefiningoperations, hesays. However, Eskom and the ZimbabweElectricity DistributionCompany have capacity constraints which affect supply in both countries, resulting in load-shedding and load curtailments.
“Watermanagement isacritical concernas Implats’ Southern African sites are in water-scarce areas.Assured securityofwater supply inSA at ourBojanala and Rustenburg sites,and for theZimplats operations, remains a risk,” says Muller.
Water and electricity are critical inputs for
To manage the group’saccess to essential services,Implatsis developingalow-carbon transition strategy,and positioningthe business in the new energy value chain, including bankable feasibilitystudies onalternative energy sources.
Zimplats and Impala Canada are supplied largelyfromhydropower schemes,whichinclude about 100% and 50% renewable electricity, respectively, and havethe lowest carbon footprints across Implats.
Zimplats is also exploring a large-scale solar power project to further ensure security of supply.
In SA,a newenergy policywill providea similar opportunity to augment energy sup-
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Graphic: Ruby-Gay Martin
Nico Muller, CEO of Impala Platinum.
Impala Platinum’s Rustenburg operation, where security of water supply remains a risk. Picture: Supplied
ARM Platinum Two Rivers. Picture: ARM
ply in the future,and further support the business’s decarbonisation efforts.
“Futureclean energyprojectswill reduce thegroup’s carbonfootprint and itsreliance on currentsupply, and ensurecosts aremorestable andcompetitive,” says Muller.
Impala Platinum
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“The benefits of PGMs in cleaning the environment and supporting life in generalis welldocumented. PGMsare easilyrecyclable,enabling themtobe used and re-used in most applications. This means that the recycling contribution develops and growsfor each application over time, which ultimatelyreduces the requirement for primary supply, and can affect pricing for the metal, ” says Muller.
As a consequence, Implats and the industry need to supportexisting demand applications andsimultaneously developnew, future applications for the metals.
“The current high prices for our metals willaccelerate growthinPGM recyclingas well as efforts byexisting customers to use
TOP 100 COMPANIES
September 2016: R10,000
August 2021: R43,090
less metal in their products, which will affect future demand and pricing. ”
Implats has increasedits investment in market development to ensure a sustainable supply-and-demand balanceis maintained into the future.
This includes leveragingand integrating its relationshipwith APVentures regarding the group’s hydrogen strategy, and a partnership with BASF on a tri-metal catalyst. Portfolio optimisation, says Muller, has resulted in
a competitive collectionof highquality, long-life andefficient assets, whichhave the abilityto sustainably generatereturns throughoutthe expectedstagesof the PGM cycle.
Covid-19, he says,poses serious challenges to the business and mining industry, shiftingfrom a primaryhealthhazard toabusiness sustainability risk owingto the accumulatedimpact ontheglobal economy and supplychains, macroeconomic uncertainty and heightened social instability. In particular, availability andattendance of labour dueto quarantineand isolationrequirements, and increased absenteeism and sick leave, continue to be a challenge.
He says sustainability or environment, social and corporate governance (ESG) represents asignificant opportunityfor longterm value creation.
“Weaimtogo ‘beyond compliance’ in our response to thejustifiably increasing global focus on ESG practices and performance.”
Growth strategy creates many jobs
‘We believe in the inherent value and long-term demand
for
PGMs’
By AURELIA MBOKAZI
● Northam Platinum has moved up the ranks of theSunday Times Top100 Companies from 10th in 2020 to eighth this year.
The platinum groupmetals (PGMs) miner hit all the right noteswith its financial results in the year to June 30.
Revenueshot up83%to R32.6bnand earningsbefore interest,taxes,depreciationand amortisationspiked 176% to R16.7bn.
Northam’stax billfor2021 was R3.7bn, while its employees contributedR1.1bn tothe state’s coffers.
CEO Paul Dunne credits the stellarperformance tothe growth strategythey havebeen pursuing,whichhe saysisinformed bya belief inthe inherent value and long-term demand forthescarce metalstheypro-
duce, particularly in acleaner and greener world.
“Northam’s strongperformance canbeattributed toourunfolding strategyof sustainableproductiongrowth downthecost curve. Weembarked onthis strategy during the depressed commodity marketof 2015, employing countercyclical investment in acquisitiveand organic growth, positioning the companyfor strongfinancial performancewhile alsoderiskingour operationsagainstsub-
dued orvolatile commoditymarkets, ” he says.
Dunne says commodities are fundamental to the economy.
“But the markets for commodities are cyclical andthe last decade sawa protracted bear marketfor most metals.The realisation that the world needs commodities, particularly PGMs, isonce more coming tothe fore; we believe that this will support pricing over the remainder of this decade,” he says.
Despiteimpressive earnings,Northamdid not declare adividendbutopted tofast-track the maturity and wind-up of the Zambezi BEE transaction.
The companybought back70% ofthe preference sharesfrom an entity linkedto its former chair, Lazarus Zim, in 2020.
“The objective ofaccelerating the maturityandwind-upof theZambeziBEEtransaction wasto permanently secure,unlock and transferunencumbered valuecreatedwithin Zambezi and, in so doing, remove maturation riskforboth NorthamandZambeziordinary shareholders,” says Dunne.
The transaction was two-staged, with the
Paul Dunne, CEO of Northam Platinum.
Picture: Russell Roberts
Ruby-Gay Martin
Northam Platinum Zondereinde smelter.
Picture: Northam Platinum
buybackrepresenting thefirst stage.The secondrelated toexpandingownership in Northam byhistorically disadvantaged people,in particularemployees, andhost andaffected communitiesfora further15 years.The extendedempowerment transactionalso optimisedcompliance with the miningcharter by bringing equity ownership by employees, and host and affected communities up to 23%.
Northam is serious about positively affectingcommunities arounditsZondereinde, Booysendal and Eland mines.
“Since theinception ofour growth strategy, wehave created morethan 8,000 sustainable,directjobsin someoftheleast economically developed areas of our country. This year alone wehave added 2,300 jobs and thisagainst thebackdrop ofa struggling national economy.The majorityof newemployees are previouslyunskilled members of thecommunities localtoour operations.We hire, train and upskillthem with transferable competencies, ” says Dunne.
Northam Platinum TOP 100 COMPANIES
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Hesays miningisaprimary industryand the multipliereffect ofthe company’s growth stimulateslocal economies,creatingsignificant numbers of indirect jobs as well.
Mine 2021,PwC’s 18th annualreview of the top40 mining companies,found that miningcompanies withhighenvironmental, socialand corporategovernance ratingsoutperformed the market during the peak of the Covid-19 crisis.
According toDunne, Northamis acutely
aware of the impact of its operations on the natural environment. Itstrives tomitigate thisthrough careful planning, operational efficiencies, environmental rehabilitation, and the establishment and conservation of biodiversity offset areas where necessary.
The group established the Buttonshope ConservancyTrust in 2011 tomanage itsconservation effortson morethan8,500ha close to the Booysendal mine.
“The structure of the trust and the work that it performs are considered the benchmarkfor biodiversity offset arrangements,” says Dunne.
AllNortham operationsrecycle morethan 80% ofthe processwater theyuse, andthere are controls in place to prevent the contamination of natural water resources, he says.
Northam’s energy strategy not only focuses on energy efficiency but also on efforts toincreaseenergy obtainedfromrenewable sources. Thecompany is building15MW of solar power at its operations.
Resilient, agile and revving to go
Innovation and agility means group can weather any storm
By LYNETTE DICEY
● Transaction Capital and its highly regarded managementteam, operatingstrongbusinesseswitha trackrecordofearnings growth,hasbecome somethingofamarket favourite.
The business’s operationsconsist ofSA Taxi, the country’s largest minibus taxi financier,andTransaction CapitalRiskServices (TCRS), which isfocused on non-performing loan portfolio collections, customer management andtransaction processing.
Earlierthis year,Transaction Capitalincreased its stake in WeBuyCars from 49.9% to 74.9%.
The group specialises in identifying, investingin and operating businesses in markets where historically low levelsof clientserviceand stakeholder trust provide op-
portunities for disruption.
In thefirst six monthsof its financial year toMarch 31 2021, thegroup achieved coreheadline earningsof R437m, up 56%from the previous year.
“The trading environment in the second halfof the 2021 financial year has been challenging,” says CEO David Hurwitz.
David Hurwitz, CEO of Transaction Capital.
“Thedisruption ofpublic transport services related to the prolonged thirdwave ofCovid19infections, thetighteningof lockdown restrictions, and the 10 days of civil unrest inKwaZulu-Natal, strainedan already fragile economy and hampered minibus taxi
activity.Despite thesechallenges,SA Taxiis ontracktopost anoperational,credit andfinancialrecovery,with earningsnearing2019 levels,while TCRSandWeBuyCarscontinueto performinline with orabove expectations,” he says.
“WeBuyCars has a leading position in adefensive market segment and continued to trade throughout the pandemic.As disposable income comes under pressure and new vehicle prices rise,moreconsumers arebuyingusedrather than new vehicles, which is driving growth in the used vehicle market,” he says.
Hurwitz says WeBuyCarshas applied its digital capabilities to respond to shifting buying patterns, with significantly higher e-commerceadoption andonlinetrading. Inthe medium term, itscredible e-commerce platform will support more efficient stock turn and even higher growth.
Spending on minibus taxi transport is largely non-discretionary, which ensures the industryisdefensive intougheconomicconditions.
tion itwell to serveclients alongthe full minibus taxi value chain,” says Hurwitz.
As far as TCRS is concerned, he says itsbusiness modelcontinues togain relevanceasthe protractedeffectsof Covid-19 drive up indebtedness.
“Given that this will leave consumerfacing entities with significantly larger non-performingloan (NPL)portfolios to manage,and as theirbalance sheets come underpressure, webelieve their appetite to sell NPLportfolios will increase significantly.
“TCRS’ssignificant andproven abilityto price NPLportfolios forprevailing market conditions, together with its extensive collections infrastructure, position it strongly to accelerate theacquisition of NPLportfolios to becollectedasprincipal andtowinagency collection mandates over the medium term.”
Hurwitz sayseach division hasshown remarkableresilience intheir agileresponses to the volatile dynamics accompanying the pandemic, andtheir operational,financial and strategicflexibility allowedthem to
“A prudent capitalmanagement approach and a deeply embedded culture of entrepreneurship,innovation andintegrity meansthe group iswell placedto weatherdifficult conditions ahead and grow,” says Hurwitz.
He says the business has performed largely in line with expectations for the 2021 financialyear,and hasresumeddividend
payments this year. Its strong performance has beensupported by organic growthfrom SATaxiandTCRS, aswell as high-growth earnings from WeBuyCars.
Transaction Capital’s businessmodelhas arguablybecomeeven morerelevant during the pandemicand this is reflected in their results.
Hurwitz expectsheadline earnings per sharefor theyear endingSeptember302021to exceed2019levelsby mid-teen percentagesand saysthe business expects to pay a dividend.
A key elementof Transaction Capital’s successis itsstrong ownershipculture and materiallyinvested management teams.
“Weregard theindividual andcollective intellectual acuity, education, experience and industry knowledge of ourmost senior leadersandtalentpoolas acorecapabilityanda sourceof competitiveadvantage,” says Hurwitz. The group’sagile responsestothestrategic,financial andoperationalimplications ofthepandemichave shownthecalibreof the management teams and their ability to navigate volatile dynamics.
Despite industry challenges, Transaction Capital’ s SA Taxi is on track to post an operational, credit and financial recovery, with earnings nearing 2019 levels. Picture: Supplied
Without SA investment, Sirius wouldn’t exist
Strategy to invest at the edge of large German cities has paid off
By AURELIA MBOKAZI
● Covid drastically changed the world of work in2020, fast-trackingremote working acrossthe globe,butoverthe pastyearproperty company Sirius Real Estate has demonstrated resilience and delivered growth.
The companyowns and operates business andindustrial parksand storagefacilities across Germany.
Earningsbefore interest,taxes,depreciationandamortisation grew6.4%to €70.2m in the year to March 31 2021, from €63.9m the year before.
This year, Sirius RealEstate makes it into thetop 10inthe SundayTimesTop 100Companies, from 18th place in 2020.
CEOAndrew Coombscredits SouthAfrican investors for keeping the business alive.
“WhenI cameto Siriusatthe beginningof 2010,the companywasonits kneesandrunning outof cash.The firstthing Idid wasto arrange for the founders,who were running theoperations,to beboughtout,because there wasa misalignmentbetween theexternal management.
“Nobodyelsewould investinus:they didn’t wantto take therisk. It wasthe entrepreneurialspirit ofSouth Africaninvestors who were willing to make aninvestment ina deeplydiscounted recovery story that enabled us to gaina foothold in SA. Without theSouth African investment, Sirius would not exist today,” says Coombs.
After listing on the JSE in 2014, the companybegan an acquisitionsprogramme thatisn ’t over yet.
and Frankfurt.
These include 1930s buildings, modern buildingsfromthe 1990s,heavymanufacturing sites and storage and logistics/industrial space.
Tenantsrange fromindividuals whowant to rent aflexi-office or a self-storagebox, to organisations that require 36,000m2 on a 10-year lease.
Real Estate CEO Andrew Coombs.
In 2017, it movedto the main market ofboth theJSE andLondonStockExchange. Italsooperates a €325m jointventure with AXA IM Alts,one oftheworld’s largestinvestment managers.
Storageand logisticsspace makesupabout 36%ofthe overall stock,followed byoffices at 30%, and heavy manufacturing facilitiesmaking up about 25%.
Each site hasan anchor tenant that accounts for up to 50% of occupancy.
The company’s strategyto invest in propertieson the periphery oflarge citiesis informed by changing workplace trends in Germany. Its marketingteams conducted researchonjobstrends incitiessuchasBerlin anddiscoveredthat therewasanincreased demand for office spaceon the edges, as companies left the CBD to operate from small towns.
Thusfar,says Coombs,thestrategyhas paid off the officesare80% fullandSirius collects 98% of all revenues.
“As a company, we’vealways invested in the edges of towns. Ten years ago when I startedhere Ilooked atthemap [ofoperations] and itseemed like someonehad takena 12boreshotgun andfired sporadically.We neededto havea strategyand buildcritical mass to have operational efficiency.
“Over thepast six-sevenyears we’ve been buying strategically around the edge of the seven key cities, where we believe there is future value. In January 2015, we bought a property that nobody else wanted for €18m outside easternBerlin. Todayit isworth €50m andthe sitenext to itwas soldto a Korean PensionFund lastyear forsubstantially more, ” he says.
With Germany’seconomy withstanding the impact of Covid,Sirius’s strategy to continue to invest in the country has paid off.
