The lead-up to Saturday’s encounter with Meadowridge tennis club could not have been worse.
My low confidence ebbed lower after losing most of my midweek practice sets. Come Saturday morning — after a lively evening of tapas and too many wine pairings — I was praying the storm front would reach Cape Town sooner than predicted. It’s always a little disconcerting, especially when slightly under the weather, to stroll onto the court against opposition half your age and body weight. It’s even worse when the opposing duo’s stretch routine makes you wince.
Still, we had a rollicking start. Early in the first set my redoubtable partner, the King, was unceremoniously dethroned. I heard a resigned grunt, and saw a towering top spin curling across court. His highness raced valiantly to reach the shot — which, to his eternal credit, he retrieved just centimetres from the wall of the adjoining squash court.
But charging back into play, the King also found the solitary wet slick on the court. As I watched the rescue shot floating back, I also heard a racket skittling across the court ... followed by an alarmingly audible expletive. It was an unnatural sight, almost as disturbing as the upending of the natural order in Macbeth. There was the King in an undignified face-down sprawl, uttering what might be described as a rather crude comment on the maintenance of his court. Predictably there was intense cramping in the royal calf. But the undignified fall brought the noble temperament to the fore. Victory in a vapour trail of Deep Heat could not have been sweeter.
Debt comes into finer focus during the persistent pestering about value unlocking at HCI and Brimstone
Speaking of rubbing sore spots, the recent AGMs of enduring empowerment investment firms Brimstone Investment Corp and Hosken Consolidated Investments (HCI) were quite engaging. I am, for my sins, a shareholder in both groups and have lately been a little wary of significant debt-at-the-centre. The debt comes into finer focus during the persistent pestering about value unlocking at HCI and Brimstone.
I’d imagine this narrative does irritate the respective executives — remembering that their original goal (set in the mid-1990s) was to empower previously disadvantaged constituents over the long term. Both groups have amply rewarded their original BEE base, and it’s no stretch to say that those calling for value unlock are investors who have more recently bought opportunistically into the discount.
Brimstone is in the rather invidious position of having 91% of its portfolio represented by listed shares. Its listed fishing assets, Sea Harvest and Oceana, represent about 70% of the total portfolio value. One could argue that Brimstone, which trades at a discount of about 50% to its last stated net intrinsic value, offers a cheap entry into both listed fishing groups. But you could just as convincingly argue that it’s better to hold the direct investments in Sea Harvest or Oceana.
I think you will soon see a different Brimstone
— Fred Robertson
A pertinent question was raised around Brimstone selling off assets and then using the cash proceeds to buy back its heavily discounted shares. Co-founder and executive director Fred Robertson conceded this was “a raging debate” at board level. He added, intriguingly: “I think you will soon see a different Brimstone”.
At HCI, CEO Johnny Copelyn might have been a little envious when he spoke of investment holding companies sitting on great heaps of cash (Remgro comes to mind). Copelyn referred to the “vulture concept”, with these cash-flush companies able to wait for an opportunity on which to pick (or peck). He noted that at the height of the Covid pandemic HCI “could have taken 100% of gaming group Tsogo Sun at 200c a share ... if we had a couple of billion rand”.
In terms of value unlock, Copelyn recognised this was an obsession with some investors to release the discount in the share price. “This, however, is not my obsession. Shareholders have done well with the increase in HCI’s share price. We’ve done some good investments, and we are careful with our money.”
My two cents’ worth? HCI holds stakes of more than 80% in Frontier Transport, broadcast group eMedia and industrial hub Deneb — all decent businesses with modest market ratings. If HCI does manage to cash out some or all of its stake in the much-vaunted Venus oil and gas deposit in Namibia, then I hope that once debt is culled the group would look to buy out minority shareholders in these three small-cap listings.
Like PSG, Remgro and indeed Brimstone, HCI has too many listed entry points to its portfolio.
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