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RMB HOLDINGS LIMITED - Condensed unaudited interim financial results announcement and cash dividend declaration for the six months ended 31

Release Date: 14/03/2019 08:00
Code(s): RMH     PDF:  
 
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Condensed unaudited interim financial results announcement and cash dividend declaration for the six months ended 31

RMB HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1987/005115/06
JSE Ordinary share code: RMH
ISIN code: ZAE000024501



Condensed unaudited interim financial results announcement and cash dividend declaration
for the six months ended 31 December 2018



BASIS OF PREPARATION

This report covers the unaudited interim financial results of RMB Holdings Limited (RMH), based on International Financial Reporting Standards (IFRS), for the
six months ended 31 December 2018.

The primary results and accompanying commentary are presented on a normalised basis as we believe this most accurately reflects the group's
underlying economic performance. The normalised earnings were derived from the unaudited, IFRS financial results. A reconciliation of the adjustments
made to derive normalised earnings is presented below.

Normalised earnings presented in these results constitute pro forma financial information. The pro forma financial information is the responsibility of RMH's
board of directors and is presented for illustrative purposes.

Ellen Marais, CA(SA) prepared these financial results under the supervision of Herman Bosman, LLM CFA.



ENDURING VALUE CREATED

INTRINSIC VALUE OF PORTFOLIO: R125.4 billion (June 2018: R121.8 billion) +3%

NET ASSET VALUE: R47.5 billion (June 2018: R44.4 billion) +7%

MARKET CAPITALISATION: R111.3 billion (June 2018: R107.0 billion) +4%

NET INCOME: R5.5 billion (December 2017: R4.2 billion) +31%

HEADLINE EARNINGS: R4.4 billion (December 2017: R4.2 billion) +6%

NORMALISED EARNINGS: R4.4 billion (December 2017: R4.2 billion) +7%

DIVIDEND PER SHARE: 178 cents (December 2017: 168 cents) +6%



ABOUT RMH

RMH positions itself as a value-adding,stable and aspirational shareholder.

RMH is an investment holding company with a proud track record of investing in disruptive and entrepreneurial financial services businesses. This
performance was achieved by partnering with exceptional management teams for the long term.

Since its listing in 1992, RMH has provided shareholders with a vehicle to co-invest with the founders of Rand Merchant Bank (RMB). From humble beginnings
at RMB, the group has produced outstanding businesses such as FirstRand Limited (FirstRand), Discovery and OUTsurance.

RMH prides itself on the role it played in the establishment and growth of these businesses. At the appropriate time, it also provided independence to these
businesses. RMH retained significant shareholdings as the strategic input is valued by the underlying businesses and their management teams. In 2011,
RMH's insurance interests (Discovery, MMI and OUTsurance) were separately listed as Rand Merchant Investment Holdings Limited (RMI).

RMH has since expanded its investment strategy to include a property investment business, comprising scalable entrepreneur-led businesses with proven
track records in managing and building out property partnerships.



Investment portfolio

FIRSTRAND

RMH is the founding and largest shareholder in FirstRand, South Africa's largest banking group, with a 34% stake.

FirstRand is generally regarded as one of Southern Africa's leading financial services groups. It is listed separately and has a market capitalisation of R367.8
billion at 31 December 2018 (2017: R377.2 billion).



RMH PROPERTY

RMH's property investments are housed in a wholly-owned subsidiary, RMH Property Holdings Proprietary Limited (RMH Property), managed by a dedicated
investment team led by Brian Roberts.

During the previous financial year, RMH Property expanded its core partnerships by acquiring a direct interest of 43.9% in Atterbury Europe, a logical
strategic alignment for the business, providing an opportunity for geographic diversification and access to a promising European market.

During the period under review, RMH Property obtained a direct interest of 50% in Atterbury Bucharest B.V. (Atterbury Bucharest) as part of the core
partnerships, solidifying the relationship with Atterbury Europe. It also acquired an 18% direct interest in the Divercity Urban Property Fund Proprietary
Limited (Divercity) and exercised an option to obtain shareholdings in Genesis Properties Proprietary Limited (9%), Genesis Properties One Proprietary
Limited (20%) and an additional 10% in Genesis Properties Three Proprietary Limited, collectively referred to as Genesis Properties. During the six-month
period ending December 2018, the net intrinsic value of RMH Property increased from R722 million (at 30 June 2018) to R971 million.

As communicated to the market in November 2018, the business is adequately capitalised, providing a foundation to enter into a period of consolidation
for future growth. No further investments are contemplated by RMH Property for the foreseeable future.



Investment policy

RMH invests in businesses that can deliver superior and enduring earnings, dividend growth and sustained long-term capital growth. We specifically target
businesses and industries complementary to our current portfolio.



Dividend policy

RMH has a stated policy of returning net dividends (after providing for funding and operational costs incurred at the centre) received in the ordinary
course of business to shareholders.



PERFORMANCE AND OUTLOOK

External environment

The macroeconomic environment within which RMH's investee companies operate has experienced significant turbulence of late. This year is shaping up
to be another challenging year for the South African economy. Headwinds include a slowing global economy, Eskom (and other state-owned entities
(SOE)) challenges, adverse domestic weather conditions in the western maize-growing areas of the country, prolonged strike activity in the gold mining
sector and political uncertainty leading into the national election.

  Continued weak          Given disappointing fixed investment, a lack of policy visibility and a strained government fiscus, the 2019 real GDP growth
  GDP growth              forecast has been reduced to 1.4% from 1.5%. Growth is still expected to accelerate towards 1.6% during 2020. The improved
                          inflation prospects, weak domestic growth outlook and less pressure to follow the global interest rate cycle higher suggest
                          that the SA Reserve Bank may keep the repo rate unchanged in the foreseeable future.

                          Although the Rand has at times traded stronger-than-expected in 2019 to date, both global and domestic factors have the
                          potential to weigh on the currency.

  Ongoing SOE             In his recent State of the Nation Address, President Ramaphosa announced that Eskom will be divided into three separate
  challenges              SOEs dealing with generation, distribution and transmission under a state holding company in order to more easily access
                          financing. The state will provide financial support to the ailing parastatal in a manner which will not burden the fiscus with
                          "unmanageable debt".

                          President Ramaphosa also announced the establishment of an independent investigating directorate, to be housed within
                          the National Prosecuting Authority, which will focus on evidence that has emerged at the State Capture Commission.

  Brexit                  In the UK, policymakers at the Bank of England voted to keep the benchmark policy interest rate unchanged at 0.75%. The
                          Monetary Policy Committee expressed its concern regarding the impact of Brexit and a slowdown in global growth on the
                          outlook for the UK economy. As such, the Committee lowered its growth forecast for the UK economy in 2019 from 1.7% to
                          1.2% – the weakest level since the recession of 2009 – and lowered its inflation forecast to just below the target of 2%.

  USA-China trade         Concerns about the negative impact of an escalation of the USA-China trade war on global growth have returned. In
  war                     addition, investor sentiment was negatively impacted by the European Union and Bank of England making significant
                          downward adjustments to their real GDP growth forecasts.




FNB SA economic forecast

                                                                                   2015        2016       2017      2018F      2019F      2020F

% Real GDP growth                                                                   1.3         0.6        1.3        0.7        1.4        1.6

% Gross fixed capital formation growth                                              3.4        (4.1)       0.4       (0.2)       0.8        1.5

% CPI average                                                                       4.6         6.3        5.3        4.6        5.0        5.5

Rand/Dollar average                                                                12.8        14.7       13.3       13.3       14.2       15.0


Enduring value created

Despite the macroeconomic challenges and other pressures during the second half of 2018, RMH, on the back of a resilient performance by FirstRand,
produced satisfactory results.

Normalised earnings increased 7% to R4.4 billion (2017: R4.2 billion). Normalised earnings per share amounted to 314.9 cents per share (2017: 295.2 cents
per share).

RMH's core investment, FirstRand, produced a solid performance despite the challenging economic climate, increasing normalised earnings by 7% (2017:
7%) and delivering a return on equity (ROE) of 22.3% (2017: 22.5%). FirstRand franchises, FNB, RMB and newly acquired Aldermore produced good
operating results, with WesBank adversely affected by the macroeconomic climate.

RMH Property increased its net intrinsic value from R722 million to R971 million. It delivered normalised profit of R15 million (2017: loss of R15 million).

Market capitalisation decreased slightly from R111.8 billion to R111.4 billion and dividend for the period distributed to shareholders increased by 6% to
178 cents (2017: 168 cents).



Sources of income

FirstRand's well-diversified income stream provides a universal set of transactional, lending, investment and insurance products and services. RMH's
normalised earnings are made up as follows:

                                                                                   For the six months ended
                                                                                          31 December                                  For the
                                                                                                                                    year ended
R million                                                                              2018            2017        % change       30 June 2018

FNB                                                                                   8 665           7 668              13             15 865
RMB                                                                                   3 321           3 154               5              7 353
WesBank                                                                                 957             952               1              1 854
Aldermore                                                                             1 037               –                                276
Other*                                                                                 (638)            687           (>100)             1 063

FIRSTRAND NORMALISED EARNINGS                                                        13 342          12 461               7             26 411

Attributable to RMH                                                                   4 544           4 243               7              8 995
RMH Property                                                                             15             (15)           >100                 16
Centre costs                                                                           (112)            (60)            (87)              (196)

RMH NORMALISED EARNINGS                                                               4 447           4 168               7              8 815

* Other is the total of FCC including Group Treasury, preference dividend paid on perpetual preference shares issued by FirstRand and the dividend on
  the contingent convertible securities. It further includes capital endowment, the impact of accounting mismatches, interest rate management, foreign
  currency liquidity management and MotoNovo.

A reconciliation of the adjustments made to derive normalised earnings is presented below.



Underlying intrinsic value

At 31 December 2018, RMH's market capitalisation was R111.4 billion (2017 R111.8 billion) at 7 980 cents (2017: 7 917 cents) per share. This equates to an
11.2% discount (2017: 12.3% discount) to RMH's underlying intrinsic value. Net asset value per share increased 11% to 3 363.7 cents (2017: 3 022.4 cents) per
share.

                                                                                               As at
                                                                                           31 December
                                                                                                                                          As at
R million                                                                               2018            2017        % change       30 June 2018

Market value of listed interest (FirstRand)                                          125 314         128 601              (3)           122 058
Net intrinsic value of RMH Property                                                      971            (170)           >100                722

Gross value                                                                            3 641             799                              2 430
Attributable funding                                                                  (2 670)           (969)                            (1 708)

Other funding                                                                           (897)           (963)              7               (922)

TOTAL INTRINSIC VALUE                                                                125 388         127 468              (2)           121 858

INTRINSIC VALUE PER SHARE (CENTS)                                                    8 882.0         9 029.4              (2)           8 632.0

NET ASSET VALUE PER SHARE (CENTS)                                                    3 363.7         3 022.4              11            3 281.4


Interim dividend payment

The board of RMH has resolved to declare a gross interim dividend of 178.0 cents per share (2017: 168.0 cents). The dividend is covered 1.8 times (2017: 1.8
times) by normalised earnings per share and represents a year-on-year increase of 6% (2017: 10%).



Update on RMH's strategy

Management will focus on the following during the balance of the financial year:

Diversify
DIVERSIFICATION OF INCOME STREAM AND                  On a selective basis, RMH may consider investments in businesses where partnerships with
DISTRIBUTION OF ASSETS                                entrepreneurial and industry-disruptive management teams can add value to RMH and its
                                                      shareholders.

                                                      Investments with the following attributes will be of particular interest:

                                                      - Banking and related industries;
                                                      - The ability to form a partnership between the investment, RMH and FirstRand;
                                                      - Unlisted;
                                                      - Digitally-oriented;
                                                      - The ability and possibility of RMH to add value; and
                                                      - Relevance in terms of the size of the enterprise and its shareholding.

Optimise
OPTIMISATION OF OUR ESTABLISHED INVESTMENTS           We continuously focus on the strategic value we add to our investee companies in order to optimise
                                                      the enduring value we aim to create for our shareholders. For example, RMH facilitated discussions
                                                      between FirstRand and Discovery in relation to Discovery Bank.

                                                      As previously communicated, RMH Property will focus on the maximisation of the existing partnerships
                                                      with no further investments contemplated for the foreseeable future.

                                                      In addition, we will dynamically assess which investments are optimally housed in RMH. In the past,
                                                      similar assessments have led to the listing of Discovery, the merger of Momentum and Metropolitan, the
                                                      listing of MMI and the unbundling of RMI.

Modernise
MODERNISATION                                         RMH will continue to support its investee companies in being or becoming future-ready.

We remain confident that our strategy, in conjunction with a solid investment portfolio, underpinned by unwavering values, will allow RMH to continue
delivering enduring value for shareholders.

For and on behalf of the board

JJ Durand                        HL Bosman
Chairman                         Chief executive

Sandton
14 March 2019



INTERIM DIVIDEND DECLARATION

Notice is hereby given that a gross interim dividend of 178 cents per share, payable out of income reserves, was declared on 14 March 2019 in respect of
the six months ended 31 December 2018.

The dividend will be subject to Dividend Withholding Tax at a rate of 20%, which will result in a net dividend of 142.4 cents per share for those shareholders
who are not exempt. The company's tax reference number is 9950/098/71/6.

RMH's issued share capital at the declaration date comprises 1 411 703 218 ordinary shares and 11 800 redeemable preference shares.
Shareholders' attention is drawn to the following important dates:

Last day to trade in order to participate in this dividend     Tuesday, 2 April 2019
Shares commence trading ex-dividend on                         Wednesday, 3 April 2019
The record date for the dividend payment will be               Friday, 5 April 2019
Dividend payment date                                          Monday, 8 April 2019

No dematerialisation or rematerialisation of share certificates may be done between Wednesday, 3 April 2019 and Friday, 5 April 2019 (both days inclusive).

By order of the board



(Ms) EJ Marais
Company secretary

14 March 2019


FINANCIAL REVIEW

The dominant part of RMH's income is its share in the after-tax profits of FirstRand, amounting to R5 359 million (2017: R4 342 million).



Condensed consolidated income statement

                                                                                 
                                                                                For the six months ended                                     
                                                                                       31 December                            For the year
                                                                                                                                     ended
R million                                                                              2018           2017        % change    30 June 2018

Revenue                                                                                  18             11                              26
Share of after-tax profit of associates                                               5 564          4 183                           8 812
Fee income                                                                                1              3                              18
Net fair value (loss)/gain on financial assets and liabilities                          (42)            17                             (45)

Net income                                                                            5 541          4 214              31           8 811
Administration expenses                                                                 (78)           (25)           >100             (56)

Income from operations                                                                5 463          4 189              30           8 755
Finance costs                                                                          (109)           (80)             36            (173)

Profit before tax                                                                     5 354          4 109              30           8 582
Income tax expense                                                                        1            (12)          >(100)            (22)

PROFIT FOR THE PERIOD                                                                 5 355          4 097              31           8 560

Attributable to:
Equity holders of the company                                                         5 355          4 097              31           8 560

PROFIT FOR THE PERIOD                                                                 5 355          4 097              31           8 560



Condensed consolidated statement of comprehensive income

                                                                                 
                                                                                   For the six months ended                 
                                                                                         31 December                           For the year
                                                                                                                                      ended
R million                                                                              2018            2017        % change    30 June 2018

Profit for the period                                                                 5 355           4 097              31           8 560

Other comprehensive income, after tax:
Items that may be reclassified to profit or loss
Share of other comprehensive income of associates after tax and
non-controlling interests                                                               150            (332)                            250
Available-for-sale financial assets:                                                      -              23                              21

Profit/(loss) arising during the period                                                   -              29                              27
Deferred income tax                                                                       -              (6)                             (6)

Cash flow hedges:

Profit arising during the period                                                         90               -                               -

Exchange difference on translating foreign operations                                    40               -                              94

Items that may not subsequently be reclassified to profit or loss
Share of other comprehensive income of associates after tax and
non-controlling interests                                                               (11)            (15)                             13

OTHER COMPREHENSIVE INCOME FOR THE PERIOD                                               269            (324)          >(100)            378

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD                                             5 624           3 773              49           8 938


Computation of headline earnings

                                                                            
                                                                              For the six months ended                                       
                                                                                  31 December                         For the year
                                                                                                                             ended
R million                                                                        2018           2017       % change   30 June 2018

Earnings attributable to equity holders                                         5 355          4 097             31          8 560
Adjusted for:
RMH's share of adjustments made by FirstRand:
  Gain on disposal of investment securities and other investments of
  capital nature                                                                 (657)           (11)                          (10)
  (Gain)/loss on disposal of available-for-sale assets                              -             (7)                           31
  Transfer to foreign currency translation reserve                                  -              -                            37
  Gain on disposal of investments in non-private equity associates               (369)             -                             -
  Gain on disposal of investments in subsidiaries                                   -            (33)                          (33)
  Gain on disposal of property and equipment                                      (24)            (9)                          (21)
  Fair value movement on investment properties                                      -             (1)                          (10)
  Impairment of goodwill                                                            -              -                             4
  Impairment of assets in terms of IAS 36                                           -              -                            14
  Gain from bargain purchase                                                        -              -                           (14)
  Other                                                                             -            (10)                          (10)
  Tax effects of adjustments                                                      236              4                             -
  Non-controlling interests adjustments                                             -              7                             -
RMH's share of adjustments made by RMH property associates:
  Fair value movement on investment properties                                   (146)             -                             -
RMH's own adjustments:
  Profit on deemed sale of associate due to change in effective
  shareholding                                                                     (1)            (4)                           (5)
  Impairment of assets in terms of IAS 36                                           7             24                            61
  Impairment of associates                                                         47            150                           247

HEADLINE EARNINGS ATTRIBUTABLE TO EQUITY HOLDERS                                4 448          4 207              6          8 851




Computation of normalised earnings

RMH regards normalised earnings as the appropriate basis to evaluate business performance as it eliminates the impact of non-recurring items.

                                                                            
                                                                            For the six months ended                                          
                                                                                  31 December                         For the year
                                                                                                                             ended
R million                                                                        2018           2017       % change   30 June 2018

Headline earnings attributable to equity holders                                4 448          4 207              6          8 851
RMH's share of adjustments made by FirstRand:
 TRS and IFRS 2 liability remeasurement                                            22            (47)                          (18)
 Treasury shares                                                                   (5)             3                             6
 IAS 19 adjustment                                                                (18)           (19)                          (37)
 Private equity subsidiary realisations                                             -             25                            16
Adjusted for:
 Group treasury shares                                                              -             (1)                           (3)

NORMALISED EARNINGS FOR THE PERIOD                                              4 447          4 168              7          8 815




Computation of per share information

                                                                           
                                                                             For the six months ended                                     
                                                                                  31 December                       For the year
                                                                                                                           ended
R million                                                                         2018          2017     % change   30 June 2018

Earnings attributable to equity holders                                          5 355         4 097           31          8 560
Headline earnings attributable to equity holders                                 4 448         4 207            6          8 851
Normalised earnings attributable to equity holders                               4 447         4 168            7          8 815
Net asset value                                                                 47 495        42 676           11         44 455
Number of shares in issue (millions)                                             1 412         1 412            -          1 412
Weighted average number of shares in issue (millions)                            1 411         1 411            -          1 411
Diluted weighted average number of shares in issue(millions)                     1 411         1 411            -          1 411
Weighted average number of shares in issue (millions) for normalised
earnings                                                                         1 412         1 412            -          1 412
Earnings per share (cents)                                                       379.5         290.4           31          606.5
Diluted earnings per share (cents)                                               379.5         290.4           31          606.5
Headline earnings per share (cents)                                              315.2         298.2            6          627.1
Diluted headline earnings per share (cents)                                      315.2         298.2            6          627.1
Normalised earnings per share (cents)                                            314.9         295.2            7          624.4
Diluted normalised earnings per share (cents)                                    314.9         295.2            7          624.4
Net asset value per share (cents)                                              3 363.7       3 022.4           11        3 149.0


Dividend per share

                                                                            
                                                                           For the six months ended                                               
                                                                                   31 December                          For the year
                                                                                                                               ended
Cents                                                                             2018            2017      % change    30 June 2018

Dividend per share
  Interim                                                                        178.0           168.0             6           168.0
  Final                                                                                                                        183.0

TOTAL                                                                            178.0           168.0             6           351.0

Dividend cover (relative to headline earnings)                                     1.8             1.8             -             1.8
Dividend cover (relative to normalised earnings)                                   1.8             1.8             -             1.8




Condensed consolidated statement of financial position

The investment in associates increased with RMH's share of after-tax comprehensive income of R5 703 million (2017: R4 446 million) and RMH's share of
associates' other reserves of (R1 million) (2017: R832 million). This was offset by dividends received of R2 770 million (2017: R2 598 million).

                                                                                         As at
                                                                                     31 December                                          As at

                                                                                                                              1 July            30 June
R million                                                                         2018           2017       % change            2018               2018

ASSETS
Cash and cash equivalents                                                           76             81                             43                 43
Loans and receivables                                                              763             94                             57                 57
Investment securities                                                              527            401                            523                523
Taxation receivable                                                                  -              1                              4                  4
Derivative financial instruments                                                   138             42                             55                 55
Investment in associates                                                        49 874         44 346                         46 722             48 590

TOTAL ASSETS                                                                    51 378         44 965             14          47 404             49 272

EQUITY
Share capital and premium                                                        8 825          8 825                          8 825              8 825
Reserves                                                                        38 670         33 851                         35 630             37 498

TOTAL EQUITY                                                                    47 495         42 676             11          44 455             46 323

LIABILITIES
Trade and other payables                                                            99            103                            232                232
Provisions                                                                          47              -                              -                  -
Taxation payable                                                                     1              -                              -                  -
Financial liabilities                                                            3 716          2 138                          2 692              2 692
Derivative financial instruments                                                     -             25                              -                  -
Long-term liabilities                                                                -              1                              -                  -
Deferred tax liability                                                              20             22                             25                 25

TOTAL LIABILITIES                                                                3 883          2 289             70           2 949              2 949

TOTAL EQUITY AND LIABILITIES                                                    51 378         44 965             14          47 404             49 272




Condensed consolidated statement of cash flows

                                                                             For the six months ended
                                                                                   31 December                         For the year
                                                                                                                              ended
R million                                                                         2018           2017      % change    30 June 2018

Cash flow from operating activities
Cash generated from operations                                                   2 070          2 525           (18)          5 201
Income tax paid                                                                     (1)             -                            (8)

NET CASH GENERATED FROM OPERATING ACTIVITIES                                     2 069          2 525           (18)          5 193

Cash flow from investing activities
Investment in associates                                                          (374)             -                          (397)
Additions to investments securities                                                  -              -                          (157)
Additions to derivatives                                                             -            (11)                          (11)

NET CASH OUTFLOW IN INVESTMENT ACTIVITIES                                         (374)           (11)        >(100)           (565)

Cash flow from financing activities
Preference shares issued                                                           150              -                           372
Borrowings withdrawn                                                               870             56                             5
Interest paid                                                                       (7)            (1)                           (5)
Dividends paid on preference shares in issue                                       (92)           (71)                         (168)
Dividends paid to equity holders                                                (2 583)        (2 456)                       (4 828)

NET CASH OUTFLOW IN FINANCING ACTIVITIES                                        (1 662)        (2 472)           33          (4 624)

Net decrease in cash and cash equivalents                                           33             42                             4
Cash and cash equivalents at the beginning of the period                            43             39                            39

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD                                  76             81            (6)             43


Condensed consolidated statement of changes in equity

                                                                                           Foreign
                                                  Share         Equity    Available-      currency    Cash flow
                                            capital and      accounted      for-sale   translation        hedge     Other    Retained      Total
R million                                       premium       reserves       reserve       reserve      reserve  reserves    earnings     equity

Balance as at 1 July 2017                         8 825         29 359           (14)            -            -       333       2 878     41 381
Total comprehensive income                            -           (347)           23             -            -         -       4 097      3 773
Dividends paid                                        -              -             -             -            -         -      (2 456)    (2 456)
Income of associates retained                         -          1 239             -             -            -         -      (1 239)         -
Reserve movements of associates                       -            (22)            -             -            -         -           -        (22)

BALANCE AS AT 31 DECEMBER 2017                    8 825         30 229             9             -            -       333       3 280     42 676

Balance as at 1 July 2017                         8 825         29 359           (14)            -            -       333       2 878     41 381
Total comprehensive income                            -            263            21            94            -         -       8 560      8 938
Dividends paid                                        -              -             -             -            -         -      (4 828)    (4 828)
Income of associates retained                         -          3 971             -             -            -         -      (3 971)         -
Reserve movements of associates                       -            832             -             -            -         -           -        832

BALANCE AS AT 30 JUNE 2018                        8 825         34 425             7            94            -       333       2 639     46 323

Balance as at 1 July 2018                         8 825         34 425             7            94            -       333       2 639     46 323
Restatements (Refer page 23)                          -         (1 868)           (7)            -            -         -           7     (1 868)

Restated balance as at 1 July 2018                8 825         32 557             -            94            -       333       2 646     44 455
Total comprehensive income                            -            139             -            40           90         -       5 355      5 624
Dividends paid                                        -              -             -             -            -         -      (2 583)    (2 583)
Income of associates retained                         -          2 936             -             -            -         -      (2 936)         -
Reserve movements of associates                       -             (1)            -             -            -         -           -         (1)

BALANCE AS AT 31 DECEMBER 2018                    8 825         35 631             -           134           90       333       2 482     47 495



BASIS OF PRESENTATION OF RESULTS

The report is prepared in accordance with:

The framework concepts and the recognition and measurement requirements of International Reporting Standards (IFRS), including interpretations issued
- by the IFRS Interpretations Committee;
- Financial Reporting Pronouncements as issued by Financial Reporting Standards Council;
- SAICA Financial Reporting Guide as issued by the Accounting Practices Committee;
- As a minimum, the information required by IAS 34: Interim Financial Reporting; and
- The requirements of the South African Companies Act, 71 of 2008, applicable to summary financial statements.

The condensed consolidated interim results for the six months ended 31 December 2018 have not been audited or independently reviewed by the
external auditor.

This announcement does not include the information required pursuant to paragraph 16 A (j) of IAS 34. The full interim report is available on www.rmh.co.za
and at the registered office upon request.



Accounting policies

These condensed results incorporate accounting policies that are consistent with those used in preparing the financial results for the year ended 30 June
2018, except for the adoption of certain IFRS that became effective in the current year.

These results are prepared in accordance with the going concern principle under the historical cost basis as modified by the fair value accounting of
certain assets and liabilities where required or permitted by IFRS.

IFRS 9: Financial Instruments (IFRS 9) and IFRS 15: Revenue from Contracts with Clients (IFRS 15) became effective in the current year. IFRS 9, which replaces
IAS 39: Financial Instruments: Recognition and Measurement (IAS 39), had the most significant impact on the group. IFRS 9 introduced a principle-based
approach for classifying financial assets based on the entity's business model and changed the way impairments are calculated on financial assets at
amortised cost from the incurred loss model to the expected loss model.

IFRS 15, which contains a single model that is applied when accounting for contracts with clients, replaced revenue recognition guidance previously
included IAS 18: Revenue (IAS 18) and IFRIC 13: Customer Loyalty Programmes (IFRIC 13).

The adoption of IFRS 9 and IFRS 15 impacted the group's results on the date of initial adoption, being 1 July 2018. The most significant impact was the
flow-through of FirstRand's results on the equity accounting of FirstRand. FirstRand prepared an IFRS 9 Transitional Report, on which a reasonable assurance
audit report was provided by its external auditors.

No other new or amended IFRS become effective for the six months ended 31 December 2018 that impacted the group's reported earnings, financial
position or reserves, or the accounting policies.



Normalised results

RMH believes normalised earnings more accurately reflect operational performance. Headline earnings are adjusted to take into account the following
non-operational and accounting anomalies:
- RMH's portion of normalised adjustment made by its associate, FirstRand Limited, which have a financial impact:
  - The Total Return Swap, which is an economic hedge against the cash-settled share-based payment;
  - FirstRand shares held for client trading activities;
  - IAS 19 measurement of plan asset; and
  - The consolidation of private equity subsidiaries, which is excluded from the Rule 1 exemption of Circular 4/2018, Headline Earnings per Share.
- RMH shares held for client trading activities by FirstRand's addition, in terms of IAS 28: Investments in Associates, upstream and downstream profits are
  eliminated when equity accounting is applied, and, in terms of IAS 32, profits or losses cannot be recognised on an entity's own equity instruments. For
  the income statement, the RMH's portion of the fair value change in RMH shares by FirstRand is, therefore, deducted from equity accounted earnings
  and the investment recognised using the equity accounted method.
- Adjustment to reflect earnings impact based on actual RMH shareholding in FirstRand based on actual number of shares issued by FirstRand.

The pro forma financial information, which is the responsibility of the directors, has been prepared for illustrative purposes to more accurately reflect
financial performance and because of its nature may not fairly present, in terms of IFRS, the group's financial position, changes in equity and results of
operations or cash flows.



IMPACT OF REVISED IFRS

RMH adopted IFRS 9 and IFRS 15 during the current period. The group, as permitted by these standards, elected not to restate any comparative
information. Accordingly, the impact of adopting the revised requirements has been applied retrospectively with an adjustment to RMH's 1 July 2018
opening reserves. Reported information in the prior interim period and the financial year 30 June 2018 were unaffected by the application of IFRS 9 and
IFRS 15.

                                                                                          As           IFRS 9         IFRS 15          IFRS 9
                                                                                 reported at      adjustments      adjustment     adjustments       Restated
                                                                                30 June 2018           Note 1          Note 2          Note 3    1 July 2018

ASSETS
Cash and cash equivalents                                                                 43                -               -               -             43
Loans and receivables                                                                     57                -               -               -             57
Investment securities                                                                    523                -               -               -            523
Taxation receivable                                                                        4                -               -               -              4
Derivative financial instruments                                                          55                -               -               -             55
Investment in associates                                                              48 590           (1 843)            (25)              -         46 722

TOTAL ASSETS                                                                          49 272           (1 843)            (25)              -         47 404

EQUITY
Share capital and premium                                                              8 825                -               -               -          8 825
Reserves                                                                              37 498           (1 843)            (25)              -         35 630

Equity accounted reserves                                                             34 425           (1 843)            (25)              -         32 557
Available-for-sale reserve                                                                 7                -               -              (7)             -
Foreign currency translation reserve                                                      94                -               -               -             94
Other reserves                                                                           333                -               -               -            333
Retained earnings                                                                      2 639                -               -               7          2 646

TOTAL EQUITY                                                                          46 323           (1 843)            (25)              -         44 455

LIABILITIES
Trade and other payables                                                                 232                -               -               -            232
Financial liabilities                                                                  2 692                -               -               -          2 692
Deferred tax liability                                                                    25                -               -               -             25

TOTAL LIABILITIES                                                                      2 949                -               -               -          2 949

TOTAL EQUITY AND LIABILITIES                                                          49 272                -               -               -         47 404




 Note     Requirement                                                          Description of change               Impact


 1        IFRS 9 impact on FirstRand

 1.1      IFRS 9 introduced a principle-based approach for the                 This led to the reclassification    This led to an increase of R305 million in
          classification of financial assets based on the business model of    and remeasurement of                equity accounted reserves and
          the entity.                                                          certain advances, deposits,         investment in associates.
                                                                               investment securities and net
                                                                               interest in the post-retirement
                                                                               employee liability.

 1.2      IFRS 9 introduced the principle of an expected credit loss ratio     This led to the reclassification    This led to a decrease of R2 295 million
          (ECL) which includes the incorporation of forward-looking            of certain assets as well as        in equity accounted reserves and
          information for impairment of financial assets.                      the measurement of                  investment in associates.
                                                                               underlying financial assets.

 1.3      In terms of IAS 39, interest in suspense (ISP) was not capitalised   This led to gross-up, of            This led to an increase of R147 million in
          to advances and interest suspended was tracked and                   advances but also the               equity accounted reserves and
          managed separately off-balance sheet. Under IFRS 9, interest         remeasurement of ISP on,            investment in associates.
          revenue is calculated by applying the effective interest rate to     certain advances reclassified
          the amortised cost of financial assets classified in stage 3 (A      to amortised cost.
          financial asset is classified at stage 3, when it becomes credit
          impaired since initial recognition with ECL measured on a
          lifetime basis). The difference between the contractual interest
          and the interest recognised in line with IFRS 9 is therefore
          suspended. This suspended interest is capitalised to the
          advance and immediately impaired.

 2        IFRS 15 impact on FirstRand

          IFRS 15 contains a single model that is applied when                 The transition to IFRS 15           This led to a decrease of R25 million in
          accounting for contracts with clients. The model specifies that      resulted in the deferral of         equity accounted reserves and
          revenue is recognised as and when control of goods or                revenue relating to value           investment in associates.
          services is transferred to a client and that revenue is              added products and services
          recognised at the amount that an entity expects to receive.          provided to clients by
          Depending on certain criteria, revenue is recognised at a point      WesBank.
          in time or over time.

 3        IFRS 9 impact on RMH Property

          IFRS 9 introduced a principle-based approach for the                 Certain equity securities were      This led to a decrease of R7 million in
          classification of financial assets based on the business model of    previously designated as            the available-for-sale reserve and an
          the entity.                                                          available-for-sale under IAS        increase in retained earnings.
                                                                               39. As the underlying nature
                                                                               of the equity securities
                                                                               changed, management
                                                                               believes a reclassification as
                                                                               fair value through profit and
                                                                               loss to be more appropriate.




Contingencies and commitments


                                                                                       As at 31 December
                                                                                                                       As at
R million                                                                              2018            2017     30 June 2018

Guarantees                                                                            3 852           1 603            2 823
BALANCE AT THE END OF THE PERIOD                                                      3 852           1 603            2 823


As at 31 December 2018, RMH had issued guarantees in respect of debt funding raised in terms of the debt programme to the value of R2 481 million
(2017: R958 million). R1 371 million of the total guarantees in issue (2017: R645 million) relates to funding facilities provided to RMH Property associates.
Events subsequent to reporting period



Events subsequent to reporting period

The directors are not aware of any material events that occurred between the date of the statement of financial position and the date of this report.
Segmental report

                                                                                       FCC and                     RMH
R million                                          FNB     RMB   WesBank  Aldermore      other    FirstRand   Property     Other       RMH

Six months ended 31 December 2018
Revenue                                              -       -         -          -          -            -         13         5        18
Share of after-tax profit of associates          2 952   1 159       326        353        570        5 360        197         7     5 564
Fee income                                           -       -         -          -          -            -          -         1         1
Net fair value (loss)/gain on financial assets
and liabilities                                      -       -         -          -          -            -        (49)        7       (42)

Net income                                       2 952   1 159       326        353        570        5 360        161        20     5 541
Administration expenses                              -       -         -          -          -            -        (56)      (22)      (78)

Income/(loss) from operations                    2 952   1 159       326        353        570        5 360        105        (2)    5 463
Finance costs                                        -       -         -          -          -            -         (3)     (106)     (109)

Profit/(loss) before tax                         2 952   1 159       326        353        570        5 360        102      (108)    5 354
Income tax expense                                   -       -         -          -          -            -          5        (4)        1

PROFIT/(LOSS) FOR THE PERIOD                     2 952   1 159       326        353        570        5 360        107      (112)    5 355

Headline earnings/(loss)                         2 952   1 131       326        353       (217)       4 545         15      (112)    4 448
Normalised earnings/(loss)                       2 951   1 131       326        353       (217)       4 544         15      (112)    4 447
As at 31 December 2017
Assets                                               -       -         -          -          -            -      1 188       316     1 504
Investment in associates                             -       -         -          -          -       47 421      2 453         -    49 874

TOTAL ASSETS                                         -       -         -          -          -       47 421      3 641       316    51 378

TOTAL LIABILITIES                                    -       -         -          -          -            -      1 315     2 568     3 883

Six months ended 31 December 2017
Revenue                                              -       -         -          -          -            -          5         6        11
Share of after-tax profit of associates          2 612   1 074       324          -        332        4 342       (164)        5     4 183
Fee income                                           -       -         -          -          -            -          -         3         3
Net fair value (loss)/gain on financial assets
and liabilities                                      -       -         -          -          -            -        (24)       41        17

Net income/(loss)                                2 612   1 074       324          -        332        4 342       (183)       55     4 214
Administration expenses                              -       -         -          -          -            -         (3)      (22)      (25)

Income/(loss) from operations                    2 612   1 074       324          -        332        4 342       (186)       33     4 189
Finance costs                                        -       -         -          -          -            -         (3)      (77)      (80)

Profit/(loss) before tax                         2 612   1 074       324          -        332        4 342       (189)      (44)    4 109
Income tax expense                                   -       -         -          -          -            -          -       (12)      (12)

PROFIT/(LOSS) FOR THE YEAR                       2 612   1 074       324          -        332        4 342       (189)      (56)    4 097

Headline earnings/(loss)                         2 612   1 074       324          -        272        4 282        (15)      (60)    4 207
Normalised earnings/(loss)                       2 612   1 074       324          -        233        4 243        (15)      (60)    4 168
As at 31 December 2017
Assets                                               -       -         -          -          -            -        262       357       619
Investment in associates                             -       -         -          -          -       43 809        537         -    44 346

TOTAL ASSETS                                         -       -         -          -          -       43 809        799       357    44 965

TOTAL LIABILITIES                                    -       -         -          -          -            -         56     2 233     2 289

Year ended 30 June 2018
Revenue                                              -       -         -          -          -            -         18         8        26
Share of after-tax profit of associates          5 404   2 505       632         94        408        9 043       (236)        5     8 812
Fee income                                           -       -         -          -          -            -          -        18        18
Net fair value (loss)/gain on financial assets
and liabilities                                      -       -         -          -          -            -        (53)        8       (45)

Net income/(loss)                                5 404   2 505       632         94        408        9 043       (271)       39     8 811
Administration expenses                              -       -         -          -          -            -        (10)      (46)      (56)

Income/(loss) from operations                    5 404   2 505       632         94        408        9 043       (281)       (7)    8 755
Finance costs                                        -       -         -          -          -            -         (5)     (168)     (173)

Profit/(loss) before tax                         5 404   2 505       632         94        408        9 043       (286)     (175)    8 582
Income tax expense                                   -       -         -          -          -            -         (6)      (16)      (22)

PROFIT/(LOSS) FOR THE YEAR                       5 404   2 505       632         94        408        9 043       (292)     (191)    8 560

Headline earnings/(loss)                         5 404   2 505       632         94        395        9 030         16      (195)    8 851
Normalised earnings/(loss)                       5 403   2 504       631         94        363        8 995         16      (196)    8 815
As at 30 June 2018
Assets                                               -       -         -          -          -            -        397       285       682
Investment in associates                             -       -         -          -          -       46 557      2 033         -    48 590

TOTAL ASSETS                                         -       -         -          -          -       46 557      2 430       285    49 272

TOTAL LIABILITIES                                    -       -         -          -          -            -        363     2 586     2 949


Geographical segments

                                                                                                        United
R million                                                                     South Africa             Kingdom        Europe               RMH

Six months ended 31 December 2018
Share of after-tax profit of associates                                              5 047                 353           164             5 564
Profit for the year                                                                  4 838                 353           164             5 355
As at 31 December 2018
Investment in associates                                                            43 239               5 022         1 613            49 874

Six months ended 31 December 2017
Share of after-tax profit of associates                                              4 183                   -             -             4 183
Profit for the year                                                                  4 097                   -             -             4 097
As at 31 December 2017
Investment in associates                                                            44 346                   -             -            44 346

Year ended 30 June 2018
Share of after-tax profit of associates                                              8 674                  94            44             8 812
Profit for the year                                                                  8 422                  94            44             8 560
As at 30 June 2018
Investment in associates                                                            47 182                   -         1 408            48 590




ADMINISTRATION



DIRECTORS
JJ Durand (Chairman), HL Bosman (CE), JP Burger, P Cooper, (Ms) SEN De Bruyn, LL Dippenaar, PK Harris, (Ms) A Kekana, P Lagerström, MM Mahlare,
MM Morobe, R Mupita and JA Teeger
Alternate directors: DA Frankel, F Knoetze and O Phetwe



SECRETARY AND REGISTERED OFFICE
(Ms) EJ Marais

Physical address:       3rd Floor, 2 Merchant Place, Corner of Fredman Drive and Rivonia Road, Sandton, 2196
Postal address:         PO Box 786273, Sandton, 2146
Telephone:              +27 11 282 8000
Telefax:                +27 11 282 4210
Web address:            www.rmh.co.za



SPONSOR
(in terms of JSE Listings Requirements)
Rand Merchant Bank (a division of FirstRand Bank Limited)
Physical address:         1 Merchant Place, Corner of Fredman Drive and Rivonia Road, Sandton, 2196



TRANSFER SECRETARIES
Computershare Investor Services Proprietary Limited
Physical address:    First floor, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
Postal address:      PO Box 61051, Marshalltown, 2107
Telephone:           +27 11 370 5000
Telefax:             +27 11 688 5221



INVESTOR CALL
Please register at http://www.diamondpass.net/5691366
The call is scheduled for 9:00 on Friday, 15 March 2019



Sandton

Thursday, 14 March 2019



SPONSOR
Rand Merchant Bank (a division of FirstRand Bank Limited)

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