0
RMHPortfolio and strategy overview
1
RMH is an investment holding company with a proven track record of investing
in disruptive and entrepreneurial financial services businesses
This performance has been achieved by partnering with exceptional
management teams for the long term
RMH positions itself as a value-adding, stable and aspirational shareholder
Context
RMH PORTFOLIO OVERVIEW
34% 100%
2
RMH has a strong track record of delivering value to investors
Source: Datastream, Reuters, Company Reports
Nov 92 May 94 Nov 95 May 97 Nov 98 May 00 Nov 01 May 03 Nov 04 May 06 Nov 07 May 09 Nov 10 May 12 Nov 13 May 15 Nov 16 May 18
Total shareholder return CAGR of 25% per annum since listing in November 1992
RMH listed on JSE
1992
Acquired
Launched
1995
Bought
from
Anglo American to form
1997
Started
1998
• The RMH and RMI group of companies have been investing domestically and internationally for over 40 years
• Out of FirstRand and Momentum, we have created four significant South African financial services businesses
(Discovery, OUTsurance, FirstRand and MMI) that sustain jobs for over 80,000 people
1999
Listed
2010
Momentum merged
with Metropolitan to form
2011
Listed separately
on the JSE
Acquires significant
stake in RMH
2015 2016
Property strategy
launched
First investment for
RMH Property is
partnership with
3
RMH strategy
RMH is the biggest shareholder in FirstRand, South Africa’s largest banking group, holding a 34% stake. RMH is the founding shareholder of FirstRand and
views this as its core asset. RMH is represented on all the relevant strategic and governance forums and provides FirstRand with a responsible and stable
major shareholder.
RMH is defined by its shareholding in FirstRand. This core asset provides RMH with exposure across the universal Southern African financial services sector
and should also deliver a sound balance between capital and dividend returns.
It is RMH’s intention to retain its stake in FirstRand, in its current structure as it holds structuring and financial value. It is recognised that RMH’s market value
may trade at a discount to its underlying value. However, the value of the long-term optionality the structure provides, and has provided over the past decades,
outweighs this. RMH will continue to dynamically evaluate this.
On a selective basis, RMH may consider investments in other business where partnerships with entrepreneurial and industry-disruptive management teams can
add value to RMH and its shareholders. Investments with inter alia the following attributes will be of particular interest:
- banking, property and related industries;
- the ability to form a partnership between the investment, RMH and FirstRand;
- unlisted;
- digitally-oriented;
- the ability of RMH to add value; and
- relevance in terms of size of enterprise and shareholding.
RMH will dynamically assess whether investments, other than FirstRand, are optimally housed in RMH. In the past this assessment has inter alia led to the
listing of Discovery, the merger of Momentum and Metropolitan, the listing of MMI and the unbundling of RMI Holdings. The investment in RMH Property
will be evaluated in a similar way. Currently the business is still in its formative phase and building critical mass as a potentially independent development-
focused property investment group.
4
9,8
10 3,2
12
11,8
40
3,8
96
12,7
00 4,1
65
14,3
60 4,6
30
15 4
26 4 9
55
0
5,000
10,000
15,000
20,000
FirstRand RMH
R'm
FY14
FY15
FY16
FY17
FY18
18,6
63 6,2
37
21,2
86 7,1
58
22,8
55 7
,659
24,4
71 8
,166
26 4
11
8 8
15
0
5,000
10,000
15,000
20,000
25,000
30,000
FirstRand RMH
R'm
FY14
FY15
FY16
FY17
FY18
FY18 Results summary
NORMALISED EARNINGS HISTORY
DIVIDENDS HISTORY
KEY PERFORMANCE INDICATORS
9% 8%
12% 12%
5 year CAGR
Source: Company reports
R’ m Jun-17 Jun-18 % chg.
Value, earnings and dividends
Intrinsic value per share (R) 6 306.6 8 632.0 36.9%
Total ordinary dividend per share (cps) 327 351 7.3%
Normalised earnings (R million) 8 166 8 815 7.9%
Diluted normalised earnings per share (cps) 578.5 624.4 7.9%
Dividend cover based on normalised earnings (x) 1.77 1.78 0.6%
Normalised earnings
FNB 12 801 14 877 16.2%
RMB 6 902 7 327 6.2%
WesBank 3 996 3 626 (9.3%)
Aldermore - 276 n/a
Other 756 305 (59.7%)
FirstRand 24 471 26 411 7.9%
Group normalised earnings
RMH portion of FirstRand’s earnings 8 334 8 995 7.9%
RMH Property 8 16 100.0%
RMH’s funding and administrative costs (176) (196) 11.4%
Group normalised earnings 8 166 8 815 7.9%
R’ m Jun-17 Jun-18 % chg
Intrinsic value (R’m)
FirstRand market value 90 077 122 058 35.5%
RMH Property 899 2 067 >100.0%
Net debt (1 945) (2 267) 16.6%
RMH intrinsic value 89 031 121 858 36.9%
INTRINSIC VALUE
5
18,66321,286 22,855 24,471 26,411
0
5,000
10,000
15,000
20,000
25,000
30,000
FY14 FY15 FY16 FY17 FY18
FY18 Results summary
Source: Company reports
NORMALISED EARNINGS (R’m)
LONG-TERM CREDIT IMPAIRMENT CHARGE (%)
FRANCHISE CONTRIBUTION TO EARNINGS (%)
22% 14% 7% 7%
KEY PERFORMANCE INDICATORS
8%R’m Jun-17 Jun-18 % chg.
Net interest income 46,626 51,254 9.9%
Non-interest income 39,268 41,926 6.8%
Fee and commission 25,598 28,250 10.4%
Insurance income 3,967 4,197 5.8%
Fair value income 4,255 4,165 (2.1%)
Investment income 2,178 1,959 (10.1%)
Associates & JVs (after tax) 1,041 914 (12.2%)
Other 2,229 2,441 9.5%
Revenue 85,894 93,180 8.5%
Operating costs (43,773) (47,664) 8.9%
Pre-provision operating profits 42,121 45,516 8.1%
Credit impairments (8,054) (8,567) 6.4%
Indirect taxes (1,081) (1,077) (0.4%)
Profit before tax 32,986 35,872 8.7%
Income tax (6,951) (7,865) 13.1%
Profit after tax 26,035 28,007 7.6%
Attributable to minorities (1,208) (1,130) (9.5%)
Contingent convertible securities - (115) >(100.0%)
Attributable to prefs (356) (351) (1.4%)
Normalised earnings 24,471 26,411 7.9%
Key ratios
Normalised diluted EPS (cps) 436.2 470.1 8.0%
Dividend (cps) 255.0 275 7.8%
Normalised tangible NAV (cps) 1,911.7 1,964.1 2.7%
Net Advances 893,106 1,121,227 25.5%
Normalised ROA (%) 2.1% 1.9%
Normalised ROE (%) 23.4% 23.0%
Common equity tier 1 ratio 14.9% 12.1%
Cost-to-income ratio 51.0% 51.2%
NPLs as a % of performing book 2.4% 2.4%
53% 55% 55% 54% 58%
30% 29% 28% 29% 28%
17% 16% 17% 17% 14%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 FY18
Wesbank
RMB
FNB
1.3
8%
1.8
7%
1.4
2%
0.9
3%
1.0
8%
0.9
9%
0.8
4%
0.7
7%
0.8
6%
0.9
1%
0.9
0%
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
6
The property strategy
In late 2015, RMH announced its intention to launch a property strategy, that is now housed in its
subsidiary RMH Property (‘RMHP’):
• RMHP has an overall NAV target of R10bn, over the next 5-7 years; and
• RMHP has made six investments since the launch of strategy and will continue to grow the portfolio
The principal objectives of RMH’s property strategy are to:
• diversify RMH’s earnings base beyond banking, across the breadth of the property value chain;
• enhance RMH’s total return with a focus on net asset value growth, whilst balancing yield;
• partner with entrepreneurs in line with RMH’s investment ethos, track record and expertise;
• retain a dedicated specialist team that independently identifies and manages property assets;
• neither dilute RMH’s FirstRand focus nor reduce flexibility of RMH’s capital structure; and
• create portfolios that can be listed / monetised.
7
The property strategy
Note: 1. Total return and correlation based on period from 30 June 2005 – 1 July 2015; 2. Total return in the chart from 30 June 2005 – 1 June 2018
Source: Company reports; Reuters
BALANCING RETURNS WITH BALANCE SHEET FLEXIBILITY
• In the decade leading up to RMH’s announcement of its property strategy in 2015, the South African property sector offered attractive
returns and strong diversification benefits for RMH
• Over that decade, the South Africa’s listed property sector:
‒ outperformed the JSE All Share Index by 3% p.a.; the JSE Financials index by 4% p.a. (on a total return basis)1; and
‒ had low correlation to listed financials (32% vs. 69% between JSE Financial 15 Index and the JSE All-Share Index1) indicating strong
return and diversification benefits for a banking focused portfolio such as RMH
• This outperformance was partly driven by return profiles of listed property counters that were increasingly enhanced by development profits
• RMH’s strategic rationale for launching the property strategy was to capitalise on this opportunity by focusing on development focused
partnerships, whilst generating sufficient yield over time to contain a potential drag on FirstRand dividends distributed to RMH shareholders
from additional financing costs
• Since 2015, despite some headwinds, the listed property sector continued to perform relative to the listed financials and the market until
early 2018
0%
100%
200%
300%
400%
500%
600%
700%
800%
Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17
JSE Financials JSE Property JSE All Share
CUMULATIVE TOTAL RETURN 2
Before announcement
of property strategy
After
announcement
8
Capacity and value-add framework
DEDICATED MANAGEMENT CAPACITY
• RMH has appointed a dedicated specialist team to execute the RMH property strategy
• RMHP team collectively has over 25 years of property experience as strategic executives, principal investors and lenders
• Brian Roberts (CEO of RMH Property) founded and led Genesis Properties, a mezzanine property finance fund backed by Kirsh Holdings,
Genesis Capital and RMH
• Genesis Properties’ first two funds delivered a pre-tax return to shareholders of 62% and 29%, respectively, at the time RMH invested in Genesis
Properties’ third fund
• Since RMH invested in Genesis Properties’ third fund in 2016, RMH has earned a pre-tax return in excess of 25%
Brian Roberts, CEO: RMH Property
• Founder & former CEO of Genesis Properties
• Former Head of Nedbank Corporate Property
Finance
• Former Managing Director of Zenprop
• Over 20 years of property experience
• BComm. (Hons.)
Ekerete Umoetok,
Investment Executive: RMH Property
• Property finance and principal investment experience
at Standard Bank and Phatisa
• Part of the team that invested R10bn for RMI & RMH
• 7 years of property experience
• MComm.; BSc. (Hons.); BComm; CFA
VALUE-ADD FRAMEWORK
RMH PROPERTY TEAM
Strategic oversight
• Drive strategic decision
making at board level
• Reinforce good governance
and processes
Deal making insights
• Craft key transactions with
management
• Provide funding support,
where necessary
Asset management oversight
• Strategically allocate
resources to drive returns at
asset level
• Encourage industry best
practices
9
RMH Property strategy
CREATE A DIVERSIFIED PROPERTY PORTFOLIO OF ENTREPRENEURIAL, DEVELOPMENT FOCUSED PARTNERSHIPS
• Best-of-breed management team
• Scalable development operation diversified across traditional property
asset categories (office, retail, industrial)
• Sizeable capital base in an unlisted vehicle providing scope and
opportunity to increase development potential of the portfolio
• Liquid vehicle to potentially monetise property interest in the future
• Ability to partner with best-of-breed specialist developers on a portfolio
and/or asset specific basis in key niches of the property market
• Allows for diversification of RMHP’s portfolio
• Satellite partnerships may achieve higher yields / faster NAV growth
than the more traditional core partnership
• Flexibility to partner with developers on single assets or entire portfolio
Rationale for Core Partnership Rationale for Satellite Partnerships
International
Domestic
International
Domestic
CORE PARTNERSHIP: Target NAV R5-10bn1 SATELLITE PARTNERSHIPS: Target NAV R1-5bn1
• Atterbury Property Holdings
is RMHP’s core domestic
partner
• RMHP has and will continue
to invest in Atterbury-led
initiatives such as Divercity
Urban Property Fund
• Atterbury Europe is RMHP’s
core partner in Europe
(initial investment via
Brightbridge)
• RMHP has and will support
Atterbury-led initiatives in
Europe
• RMHP has satellite partners with specific focus
areas which include:
• RMHP continues to actively seek international
partners to add further geographic diversification
beyond the current Atterbury Europe footprint
Note: 1. Target collective value of RMHP’s stakes in domestic and international partnerships
10Note: 1. Direct stake only 2. Direct stake only: subject to Competition Commission approval
Source: Company reports
Progress to date
• RMHP has deployed c. R1.3bn in equity capital (excl. committed pipeline)
• Further to the equity capital, c. R1.5bn of 3-5 year funding support/guarantees have been allocated to portfolio companies
‒ Funding support is intended to catalyse medium-term growth in RMHP investees by supporting development initiatives
‒ Guarantee capacity utilised for the benefit of investees typically earns RMHP a guarantee fee (fee income in excess of
RMH’s cost of funding)
RMH HAS MADE PROGRESS ON ITS PROPERTY STRATEGY
CORE PARNERSHIP SATELLITE PARTNERSHIPS
27.5% stake 43.9%1 stake40.0% stake
49.9% stake18.4%2 stake
Three
11
Core domestic partner | Atterbury Property Holdings
Source: Company reports
OVERVIEW KEY PEOPLE
SELECT DEVELOPMENTS
• Die Klubhuis
• 5,200m2 offices in Pretoria
• Newtown Junction
• 52,089m2 retail centre in Newtown
• Mall of Africa
• 131,000m2 retail centre in Waterfall
• Atterbury Property Holdings (‘Atterbury’) has significant experience in
property development, having developed more than two million m2 of
commercial, retail, and residential property since its establishment in
1994
• Atterbury has property development, fund management, corporate
services and asset management divisions
• One of Atterbury’s most notable projects began in 2005, where Attacq
was formed and acquired 1,75 million m2 of commercial development
rights at Waterfall City, Midrand from the Islamic Institute. Attacq was
later listed on the main board of the JSE
• Atterbury developed the Waterfall precinct, that now includes the
flagship Mall of Africa and regional head office of PWC
Louis van der Watt (Co-founder and Group CEO)
• Louis co-founded Atterbury in 1994, after completing his articles at
Deloitte
• He also co-founded Attfund, subsequently acquired by Hyprop and
Attacq Limited
James Ehlers (MD Atterbury Property Developments)
• James has successfully run the property development division of
Atterbury since 2002 and was previously Group COO
• He established and operated a successful independent construction
business prior to joining Atterbury
Lucille Louw (MD Atterbury Asset Management)
• Lucille is a seasoned property executive and has led Atterbury’s
Asset Management division since 2005
• Her team manages Atterbury-owned and 3rd party assets valued at
over R15bn
12
Core European partner | Atterbury Europe
Source: Company reports
OVERVIEW KEY PEOPLE
SELECT DEVELOPMENTS
• Mall of Cyprus
• 24,779m2 retail centre in Nicosia
• Usce
• 41,172m2 retail centre in Belgrade
• Openville
• 115,000m2 mixed-use development in Timișoara
• Atterbury Europe B.V. (‘Atterbury Europe’) was founded in 2014,
when Atterbury Property Holdings co-invested with a consortium of
private investors to form a European focused property company
• Today, Atterbury Europe’s €500m+ property portfolio includes
significant stakes in retail and office developments in Cyprus,
Romania and Serbia. The retail portfolio that makes up the majority of
Atterbury Europe’s assets is primarily comprised of dominant retail
centres in prime locations
• Atterbury Europe partners with leading developers in each market
and contributes world class development and asset management
skills to their partnerships with support from Atterbury
• RMH initially gained indirect exposure to Atterbury Europe via an
investment in Atterbury’s international SPV, Brightbridge Investments
Louis van der Watt (Founder)
• Louis co-founded Atterbury Europe
• He continues to provide strategic direction to this and
other key entities in the Atterbury Group
Henk Deist (Group CEO)
• Since joining as CFO in 2014, Henk has been
instrumental in building the portfolio Atterbury Europe
manages today
• Henk is a seasoned deal maker having spent 11 years at
Rand Merchant Bank, including a tenure as Head of
Resource Finance
• Henk holds a Master’s in Tax and is a qualified CA(SA)
13
• The renowned Atterbury Property group brings significant expertise and
assets to Divercity
• Atterbury Property fund is also seeding Divercity with assets from its
partnership with Talis Property Fund
• Ithemba Property, established in 1998, has its roots in Berea and is a
subsidiary of the Circlevest Property Group
• They provide property and asset management services, including lettings,
collections, property management, marketing and redevelopments of
buildings located in Berea, Hillbrow, Doornfontein, Marshallstown, Kempton
Park and Midrand
• In total, Ithemba’s portfolio consists of over 3,500 residential units and
18,000m2 of retail space
Core partnership initiative | Divercity Urban Property Fund(1)
Note: (1) RMHP investment is subject to Competition Tribunal approval
Source: Company reports
SELECT DEVELOPMENTS
OVERVIEW KEY SEED PARTNERS
• Divercity is an urban property fund focused on investing in and
renewing dense urban precincts rather than individual buildings on, a
collaborative basis with its seed partners
• Divercity has a preferred offtake arrangement on the seed partners’
completed developments, and enhances its yields by participating in
the development profits of these large-scale, mixed-use and mixed
income urban renewal projects
• Atterbury, Ithemba Group, Genesis Properties and Propertuity as
Divercity’s seed partners have collectively seeded the portfolio with c.
R1.7bn of gross assets
• Atterbury and Ithemba are the largest seed partners each with an
interest of at least 25% in Divercity and will collectively manage all of
Divercity’s assets
• Dual City
• 40,659m2 mixed-used development in Maboneng
• Urban 8
• 175 unit residential building in Maboneng
• Turbine Hall
• 20,761m2 commercial building in Newtown
14
Satellite partner | Genesis Properties Three
Source: Company reports
SELECT DEVELOPMENTS
• SSD Head Office
• 3,000m2 office building in Randburg
• Devil’s Peak Brewery
• 21,100m2 mixed-use building in Cape Town
• Valley View Retail Centre
• 16,000m2 retail centre in Krugersdorp
Darren Shur (Director, MD Genesis Capital Partners)
• Founded Genesis Capital Partners in partnership with
Genesis Group in 2006
• Former director at Peregrine Investment Banking focused
on their private equity portfolio
• Darren is a qualified CA(SA) having served articles at
Fisher Hoffman Sithole
Brain Roberts (Director & Founder)
• Founder & former CEO of Genesis Properties
• Former Head of Nedbank Corporate Property Finance
• Former Managing Director of Zenprop
• Over 20 years of property experience
• Brian holds a BComm. (Hons.) from the University of
Westville
OVERVIEW KEY PEOPLE
• Genesis Properties was formed in 2010 as a partnership between
Genesis Capital Partners, Kirsh Group and Brian Roberts
• RMH is invested in Genesis Properties’ 3rd fund (‘Genesis Properties
Three’) alongside Genesis Capital Partners
• There is a funding gap in the property market created by banks
providing only 70-80% of funding for new property developments
• Genesis Properties addresses this market gap by providing
mezzanine funding to developers in exchange for equity stakes in the
underlying developments in a prudent and disciplined manner
• This partnership model with seasoned developers is in line with
RMH’s investment ethos, and provides RMHP access to lucrative
property developments with market leading developers
• To date, Genesis Properties has invested in properties with a gross
property cost of R2.6bn
15
Satellite partner | Propertuity Development
Source: Company reports
SELECT DEVELOPMENTS
OVERVIEW KEY PEOPLE
• Propertuity is a leader in urban renewal, having led the development
of the flagship mixed-use Maboneng precinct that has attracted
tourists, artists, residents and developers alike to join the Maboneng
project
• A decade after establishing the Maboneng precinct, Propertuity
embarked upon a consolidation phase, to strengthen the business
and adapt to challenging property sector headwinds
• Propertuity has repositioned itself as a residential developer focused
on bringing people to Maboneng, and continues to develop and
manage its increasingly focused portfolio of residential units
• Propertuity is committed to Maboneng and will work with the
community, developers and residents to keep the precinct vibrant
Reanne van der Merwe (CEO)
• 20 years' experience and 10+ years of in property
• Former CFO of Pareto Limited, a R30bn property group
with flagship investments in regional retail centres such as
Sandton City, Menlyn Park & Cresta
• Former CFO of Mangwanani Group
• Reanne is a qualified CA(SA)
David Beattie (Asset management partner)
• Founder of Chorus Letting, a leading residential property
rental agency managing 2,000 properties across Cape
Town and Johannesburg
• Chorus Letting has been appointed to manage
Propertuity’s completed assets with their trademark
efficiency
• David is the renowned author of ‘The Expert Landlord’
• Hallmark House
• 109 unit residential building in Maboneng
• Craftsmen’s Ship
• 193 unit residential building in Maboneng
• Arts on Main
• 1,545m2 mixed-use building in Maboneng
16Source: Company reports
FY18 results
INTRINSIC VALUE NORMALISED EARNINGS
R’m 2018 2017 % change
Core portfolio 2 192 610 >100%
Satellite portfolio 23 289 (92%)
Holding company net assets (148) - 100%
RMH Property
intrinsic value2 067 899 >100%
R’m 2018 2017 % change
Core portfolio 152 (1) >100%
Satellite portfolio (124) 9 (>100%)
Holding company costs (12) - (>100%)
RMH Property
normalised earnings16 8 >100%
• The core partnership (Atterbury) performed well, particularly in terms of intrinsic value growth, RMH Property’s primary
performance metric. The increase in the core portfolio’s intrinsic value is primarily a result of Atterbury Europe’s balance sheet
restructure, in addition to a strong performance from the underlying businesses
• The satellite portfolio underperformed due to a full impairment of the equity investment in Propertuity, partly offset by strong
performance from Genesis Properties
• Propertuity has materially underperformed against expectations due to various factors including: overly optimistic asset selection
and unrealistic valuation expectations by Propertuity’s management team, limited management capacity, excessive gearing and
operational challenges
• Propertuity’s shareholders have taken significant measures to reduce losses herein including changes to strategy and
management, a rationalisation of the portfolio, and the introduction of seasoned property developers and managers
• This asset is not expected to materially impact RMH Property’s future earnings and has been impaired with adequate provisions
recognised for related contingencies
A strong performance from the core portfolio, both in terms of earnings and intrinsic value growth, more
than offsets the satellite portfolio disappointing results
17Note: 1. Eastern Europe excl. Russia 2. Year-on-year real retail sales growth
Source: IMF; Trading Economics; Company reports
Prospects to expand the RMH Property portfolio
RMHP PLANS TO DIVERSIFY THE PORTFOLIO DOMESTICALLY AND INTERNATIONALLY
EXPECTED CAPITAL DEPLOYMENTS
New medium-term assets
Equity capital
R3bn-R5bn • In the medium-term, RMHP plans to make further investments of R3-5bn
(inclusive of the committed pipeline)
• Further investments will be made domestically and internationally to support
our core partnership with Atterbury and broaden satellite partnerships, with a
bias towards European investments
• Although South Africa’s property sector has strong prospects over the long-term it continues to face significant headwinds at this stage of the
cycle. Further diversification beyond our existing international earnings stream is warranted
• There are significant opportunities for RMHP in Europe and other jurisdictions that offer access to dynamic markets and robust rand-hedged
returns particularly in Eastern European Retail, where Atterbury Europe operates
REAL GDP GROWTH OUTLOOK(1)
0.6%
1.3% 1.5%
1.7% 1.8% 1.9% 1.8% 1.6% 1.5% 1.6%
2.0%
2.7% 2.5% 2.1%
1.8%
3.2%
5.8%
4.3%
3.7% 3.3%
2016 2017 2018 2019 2020
South Africa UK EU Eastern Europe
RETAIL SALES GROWTH(1) (2)
(3.3%)
0.3%
(0.9%)
(2.8%)
(1.8%)
(1.0%)
0.3% 0.7% 0.8%
0.3%
1.1% 0.7%
3.8% 4.2%
3.1%
1.6%
2017 2018 2019 2020
South Africa UK EU Eastern Europe
18Note: Figures in millions of rands; 1. Net of RMH Property related debt; 2. Normalised earnings excl. revaluation gains
Source: Company reports; RMH analysis
Financial metrics for RMH Property
• RMHP’s investment strategy primarily focuses on development focused businesses with returns driven by capital growth (measured by intrinsic value)
• This contrasts with most JSE-listed property companies that have portfolios primarily skewed towards more mature yielding assets with predictable cash
flows and consistent dividends
• In the medium-term, RMHP will target an 15-20% p.a. gross equity return on a portfolio wide basis driven by:
‒ Development profits and other capital growth (majority of return)
‒ Stable yields on completed assets (minority of return)
RMHP GROSS INTRINSIC VALUE RMHP NORMALISED EARNINGS 2RMHP NET INTRINSIC VALUE 1
(62)
668
FY17 FY18
FOCUS ON CAPITAL GROWTH
610
2,192
289
23 -
(148)
899
2,067
FY17 FY18
Core Satellite Other RMH Property
(1)
152
9
(124)
-
(12)
8 16
FY17 FY18
Core Satellite Other RMH Property
19
FY17 FY18
Market cap net of debt Total debt
FY17 FY18
RMH excl. RMH Property RMH Property
FY17 FY18
RMH excl. RMH Property RMH Property
0.2%
Note: 1. RMHP intrinsic value net of RMHP related debt 2. Only RMH Property related debt service costs
Source: Company reports; Reuters consensus forecasts for FirstRand; RMH analysis
Financial impact of RMH Property on RMH
• RMH funds RMHP’s investments by raising preference shares under RMH’s medium-term debt programme
• These investments should not have a material impact on RMH’s intrinsic value, earnings, dividends in the medium term
RMHP GROSS CONTRIBUTION TO INTRINSIC VALUE RMHP CONTRIBUTION TO EARNINGS
RMH DEBT-TO-MARKET CAP % DIVIDENDS APPLIED TO DEBT SERVICE2
1.0%
% of intrinsic value
1.7%
% of earnings
0.1%
2.3%
Debt-to-market cap
2.4% 1.4%
% of RMH’s FSR dividends
1.6%
RMHP NET CONTRIBUTION TO INTRINSIC VALUE1
RMHP RELATED DEBT AS % OF TOTAL RMH DEBT
(0.1%) 0.6%
RMHP related debt %
49.4% 59.3%
% of intrinsic value
FY17 FY18
RMH excl. RMH Property RMH Property
FY17 FY18
RMH excl. RMH Property RMH Property
OPTIONALITY CREATED FOR RMH WITHOUT COMPROMISING DIVIDENDS DISTRIBUTIONS
FY17 FY18
Dividends applied to debt service
Residual FirstRand dividend
20
Questions