On Friday we had two trading updates which I feel are interesting enough to cover. The first one was a good one from Remgro, the second was a not so good one from Basil Reed. Let's look at the Remgro one first. "Shareholders are advised that Remgro's reported headline earnings per share ("HEPS") for the six months ended 31 December 2011 is expected to be between 18% and 22% higher than the HEPS of the comparative six months ended 30 September 2010." They changed their financial year end, as you can see.
So what do we make of this? In their last financial report the financial services division which included a 4% stake in First Rand, a 34.9% stake in RMI Holdings and a 31.5% stake in RMBH, made up 51% of the groups profits. We have already seen the results from RMB and First Rand which did well so you'd guess this trading update would be expected.
From a valuations perspective we are going to have to wait for the actual results to come out because the comparative period has not been reported on in the past. As a company we are not big fans of investment holding companies because they charge big fees to do what we feel we can do just as efficiently at cheaper rates. None the less the management have a good track record and a respected reputation which I'm sure many investors are happy to trust. It's just not our cup of tea.