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CSG to gain strategic BEE shareholder

23rd November 2016

By: Anine Kilian

Contributing Editor Online

  

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AfriGem Investments a wholly owned subsidiary of Patrice Motsepe’s African Rainbow Capital (ARC), will subscribe for 8.3%, or 41-million, of JSE-listed CSG Holding’s shares, the companies announced Wednesday.
 
AfriGem has a 99% broad-based black ownership, including church groups, trade unions and women’s groups, and will pay R1.18 a share for a total consideration of R48.3-million. 

The issue price is equal to CSG’s 30-day volume-weighted average trading for the 30 trading day period that ended October 6, less a 15% discount.

This transaction will result in CSG having a black economic empowerment (BEE) shareholding in excess of 30%.
 
“This cash injection will bolster our reserves to allow the group to continue its strategy of expanding acquisitively into a well recognised leading brand in all of our chosen specialist outsourcing sectors, without diluting our BEE shareholding. AfriGem has indicated that its intention is to be a long-term investor,” says CEO Pieter Dry.
  
He added that CSG would maintain its focus on the management of people and employee-intensive outsource solutions, incorporating technology in industries the company knows well. 

CSG Group reported a 43% improvement in revenue to R832.8-million in the six months to September 30, as well as  an operating profit of R61.3-million, which showed a 32% increase. 

The improvement in revenue and operating profit was achieved through organic and acquisitive growth.

The group’s gross profit margin increased to 21.6%, up from 19.2% in the comparative period, while headline earnings a share and earnings a share decreased by 2%.

Cash generated from operating activities before working capital changes increased to R65.8-million.

Net cash generated from operating activities improved to R53.8-million, up from R9.4-million in the comparative period.  

The cash conversion ratio of the group improved to 107% for the six-month period.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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