PRESENTATION BRIEF FABSA = Family Business Association of South Africa Hoofsaaklik Engels 40-45 min Tema vir hierdie werkwinkel is: "Thriving in Challenging Economic Times". Spesifiek: After many lessons I only invest in companies I understand, whose management I know and whose character and culture I like. Three questions kept me busy for a long time: 1. How does one make a company grow? 2. When are people happy? 3. What's the key to making a success of a company? 1
THRIVING IN CHALLENGING ECONOMIC TIMES FABASA JANNIE MOUTON 7 JUNE 2012
Three questions 1. How does one make a company grow? 2. When are people happy? 3. What's the key to making a success of a company?..
Story of PSG Started Build it out How it changed my life My personal philosophies What I have learned it might inspire somebody PSG is my life 4
3/8/1995 Changed my life I was fired Lost my company and my friends 48 years old and unemployed I lost my confidence Defining moment of my life 5
For the unemployed: Get a office Get a soundboard(s) Know yourself (SWOT analysis) Formulate your dream, your vision and write it down - my dream in 1995 was my focus and still applicable Formulate your action plans small steps Read read think and scheme 6
My dream in 1995 Listed company or big stake in it (control) Financial services sector focus Raise Capital for strong base Management style decentralised and delegated Smart people Move to Stellenbosch Small head office, relaxed environment Think more and do less 7
Lessons learnt Make decisions and take risk Involve and inspire your family (PSG...) Colleagues - Team better than individual but someone responsible - Make them shareholders Be positive! (reactive vs proactive) 8
Lessons learnt Communication Leaders are only as powerful as the ideas they can communicate. They inspire their followers to higher levels of achievement by showing them how their work contributes to worthwhile ends. It is an emotional appeal to one of the most fundamental of human needs the need to be important, to make a difference, to feel useful and to be part of a successful and worthwhile enterprise Warren Bennis and Burt Nanus 9
GREAT TRANSACTIONS IN THE PAST
PAG 1995 defining moment in my life Dream: listed financial services business Action: Acquired a listed business that was easy to understand Personnel placement agency Principle: already making tea 1 year: R7m to R107m
Servgro Principle: create solid foundation There will be lean times (1998, 2002 & 2008) PSG traded at a very high PE Reverse into Servgro cash shell NAV from 147cps to 617cps in the year
JSE Read and think: - Global trend - Stock exchanges were changing from seats / rights to listed entities Action: - 4 years we bought rights - Cost R50m - 15% stake Sale: - R679m!!!! Yes - we do sometimes sell Obvious opportunity?
Capitec Opportunity: - Micro lending - Fragmented - No strong players Action: - Acquire various companies (300 branches) - Recruit top management team 1998-2012 Change: - Banking model - TBB banking licence + R300m tax loss - New age banking system Focus Focus Focus Focus PAT: R30m Share to price: greater R1 to than R220 R1bn Market cap: R50m to R20bn
Arch Equity / Thembeka Issue: BEE Change issue to opportunity: - Read, think, scheme - Understand regulations Action: - Execute quickly - Acquired 20% in both PSG and Capitec in less than 2 years Arch Equity share price: R1 to R8 (2.5 years) Thembeka value: R1 to R1,100,000,000 (5.5 years)
Schooling in SA is failing!!! Strikes Dropping standards Unsafe Over crowding Discipline 16
Curro vision Initial dream: 7 schools Key: Management 2009 : 3 schools 2012 : 21 schools PSG involvement: 15 schools Listing: 40 schools in 2020 Today: 80 schools in 2022? R1bn profit after tax?
PSG Konsult Opportunity: - My original dream - SMK skills Hurdles: - Industry changed - Struggled to make profits Change: - Willem Theron - Revenue sharing model Trusted brand
We are proud! PSG Online rated SA s top retail stockbroker Business Day Investors Monthly Stockbroker of the Year award PSG Asset Management Raging Bull awards PSG Flexible Fund PSG Equity Fund PSG Konsult Moderate Fund of Funds won the Morningstar award for Moderate allocations PSG Konsult voted National Broker of the Year: Commercial lines and Agriculture by Santam 19
PSG Group investments CHECKLIST Exceptional management Easily understood Significant growth potential Strong market position Focused High barriers to entry Good corporate governance (integrity)
Lesse van Warren Buffett Besoek Omaha 2012 35,000 mense - 6 ure vrae Waardasie teenoor prys (begin maatskappye) Betroubare & talentvolle bestuur Korporatiewe beheer / Integriteit 39 jaar, 25% per jaar Stroom-op Verstaan maatskappy Grag Kompiterende Voorkeer
PSG Group structure - today 32.5% 71.3% 42.4% 100% R10.7bn market cap 39 underlying companies 39,000 people 63.1% 49% 100% 22
Brands across the group
Our business philosophy Charter for Extraordinary Achievement The soul of PSG Ultimate Empowerment ULTIMATE GOAL CREATE WEALTH FOR SHAREHOLDERS He will win whose army is motivated by the same goal ~ Sun Tzu 24
Framework for success CHARTER FOR EXTRAORDINARY ACHIEVEMENT We have a ten-point charter, which includes: vision & desire strategy and targets positive mind assertiveness & decisiveness communication The general who does not think ahead and takes his adversaries lightly will end up being their captive. ~ Sun Tzu 25
Soul of PSG (VALUES AND CULTURE) It embraces the following key qualities ethos and values enthusiasm transparency (internally / externally) fairness empowerment For what is a man profited, if he shall gain the whole world, and lose his own soul? ~ Matthew 16:26 26
Ultimate Empowerment (STYLE AND STRATEGY) develop strategic thinking independent and own board of directors delegate authority and responsibility create responsible managers and MD s share the well-being of the company with everyone All employees and stakeholders should benefit and be involved Controlling a large force involves the same principles as controlling a small one. Just divide their numbers. ~ Sun 27 Tzu
Ultimate Empowerment corporate governance The PSG way of life audit committee chaired by independent non-executive remuneration committee chaired by independent non-executive Integrity of results and management information employ competent people and empower them through trust LIST THE COMPANY 28
VICTORY PURPOSE & FREEDOM for EVERYONE AT PSG and CREATION OF WEALTH for STAKEHOLDERS The wise general... Rewards his soldiers with the spoils of victory. ~ Sun Tzu 29
Wealth creation Men had always though of wealth as a static quantity to be seized, begged, inherited, shared, loathed or obtained as a favour Americans were the first to understand that wealth needs to be created Ayn Rand Wealth cannot be distributed until it is created, what intervenes with the creation intervenes with the distribution WR Hearst 30
Wealth Creation On the other hand, if you take the wealth you confiscated from one person and give it to someone else, are you encouraging the recipient to build his or her own wealth? Stephan Mulholland 31
Who creates wealth? The entrepreneur provides employment takes calculated risks pays taxes, build houses & hospitals supports the arts and charitable causes does not expect handouts and grants, but rather provides investment opportunities spends time and money on innovation has to think and scheme 32
Making a contribution A profitable company makes a contribution in society employs people provides training makes donations and other contributions pays taxes PSG Group of companies Donations > R34m Bursaries > R13m Salaries > R7.6bn Taxes > R4.5bn Akkerdoppies 33
QUESTIONS?