SAB BBBEE shareholders are in a cushy spot

It is not only investors on the London Stock Exchange (LSE) who pray in the name of ‘inelastic demand’ for beer in South Africa which counteracts the heavy exposure of SABMiller to the struggling European market. It is not only the JSE holders of the SABMiller stock and the Association for Responsible Alcohol Use who worry about the proposed Control of Marketing of Alcohol Bill.

A group of about 40000 people, broad based black economic empowerment (BBBEE) equity partners to the South African Breweries (SAB), appreciate South Africa’s insatiable taste for beer and are jolted by talk of the Control of Marketing of Alcohol Bill.

You get that impression when you look through the latest SAB financial results. In conjunction with the release of SABMiller results today, the subsidiary, SAB, released a statement of results tailored for its BBBEE shareholders. These shareholders are the SAB Zenzele Employee Trust, The SAB Foundation and the SAB Zenzele Holdings Limited who joined the SAB club in 2010 in a BBBEE transaction valued at $988 million back then.

Forget the currency distorted picture you are getting from the LSE. The SAB BBBEE shareholders are in a cushy place. Their stake in SAB which is made up of the beer business, soft drinks division ABI, Appletiser and a 29% stake in Distell, is performing very well.

The SAB statement reported that the company’s BBBEE scheme, Zenzele, benefited from a strong performance during the six months ended September. SAB declared an interim dividend of R48.9 million to its BBBEE shareholders. The company noted that this was the seventh dividend declared since the Zenzele scheme was launched in 2010 bringing the total dividends declared to date to R383.8 million.

The company said it registered good gains in revenue and operating profit in the six months to September 2013. The strong performance, said SAB, was delivered in the face of a challenging trading period with subdued economic growth and continued strong competition.

SAB said its interim group net producer revenue grew 7% organically to R17.9 billion from R16.6 billion previously. Earnings before interest tax and amortisation (EBITA) grew organically by 8% to R3.8 billion.

The company said SAB Zenzele continued to deliver real, tangible benefits for shareholders. The R48.9 million dividends declared during the period under review represents a 6.2% increase from R46 million paid for the same period last year. This dividend is distributed across three groups and in line with the allocation of the 8% of SAB shares held by the Zenzele scheme. The SAB Foundation will receive an interim dividend totalling R8.3 million, bringing to R67million the total in dividends which have been paid to the SAB Foundation since inception.

The SAB Zenzele Holdings Limited which holds shares for the benefit of retailers, will receive an interim dividend of R22.3 million. This group has received a total of R169.2 million in dividends since the scheme was launched in 2010. The company said on receipt of this dividend, retailers who bought the maximum allocation of shares for R14 650 have paid off their initial investment in just three and a half years.

The SAB Zenzele Employee Trust will receive an interim dividend totalling R18.3 million. A total of R147.6 million in dividends have been paid out to the SAB Zenzele Employee Trust since the deal began.


Leave a Reply

Your email address will not be published. Required fields are marked *