Grand Parade Investments Company Overview

Transcription

1 Grand Parade Investments Company Overview [Oct] 2014

2 Contents Introduction Business Overview Group structure Investment Approach Shareholders Funding Recent Deals Lottery prospect Board of Directors 2

3 Introduction to GPI Leading Black owned investment holding company Founded in 1996, listed in 2008 Loyal shareholder base comprising over 10,000 individuals Track record of creating value for shareholders evidenced by share price growth and dividends A strategic investment partner with a long term investment approach 3

4 Business overview GPI is a leading Black owned and controlled investment holding company Introduction Leading BEE investment holding company listed on the JSE since 2008, with a market cap of c.r3.463bn Historical investment focus on Gaming and Hospitality, but increasingly focused on the Quick service Restaurant sector and related food investments Follows the acquisition of the Burger King master franchise for Southern Africa in 2012 and subsequently 10% ownership in Spur Corporation. Other interests include South Africa s only local slot machine and gaming equipment manufacturing business, a catering equipment manufacturer and supplier, and various property interests, aligning with Tellumat acquisition. Recently announced a series of transactions in terms of which GPI will exit the majority of its gaming assets Disposals include stakes in various prominent casinos and GPI Slots, a limited pay out machine operator GPI will realise over R2.5bn in cash as a result of these transactions for deployment into existing operations and new investments Executive Chairman is Hassen Adams; CEO is Alan Keet Cents Share price performance ( 3yrs) GPI Volume GPI Price Alsi (Rebased) Current investments R'mil 4

5 Group structure (post gaming divestments) GPI is an investment holding company focused on high growth opportunities across a diversified portfolio of quality investments Property Food Gaming Manufacturing 100% Various 30% 1 51% 65% 91% 10% Services the Group Burger King SA Spur Corporation Grand Play GPI Slots New initiatives: National lottery On line gaming Grand Tellumat MacBrothers Note: (1) Post conclusion of the 3 tranche sale of GPI Slots to Sun International over 18 months 5

6 Investment approach GPI seeks to be the BEE investment partner of choice, capable of adding meaningful value to investments Investment PHILOSPHY Leverage GPI s strengths to add value to investments that provide a combination of: Long term growth Opportunities for value creation A sustainable yield Investment CHARACTERISTICS Market leading brands Strong management team with a demonstrable track record Clearly defined growth strategy Robust corporate governance Shareholder partners that are aligned Investment OBJECTIVES Diversified portfolio of quality investments (in terms of sector and stage of asset life cycle) Exploit synergies between investments where possible Ability to add meaningful value (capital, relationships, management expertise, empowerment) Minimise investment holding costs by ensuring operational involvement is appropriate to stage of growth of the asset 6

7 Funding GPI is well capitalised with limited debt and substantial cash available to deploy into quality investments Current Oct 14 (post divestments) Cash R30 R1,527m Debt R220m GPI adopts a prudent approach to financing transactions and will consider its debt and equity requirements on a deal by deal basis GPI has a track record of creating value and consequently a supportive shareholder base GPI also has excellent relationships with lenders who are supportive of GPI s growth strategy 7

8 GPI has acquired 51% ownership in Grand Tellumat, a leading electronics contract manufacturer. Leveraging skills Leverage GPI s investment knowledge with Tellumat s engineering and manufacturing skills. Local goods manufacturer Manufacturer of choice for electronic and related technology products. Focus on projects requiring minimum levels of local content to be eligible for procurement by government departments and local infrastructure projects. Supply chain GPI will have access to various manufacturing opportunities as a result of its gaming operations and relationships within the sector. Corporate Social Initiative Governments localisation initiative will create more local manufacturing and in turn lead to job creation. 8

9 Spur Corporation GPI has acquired 10% ownership in Spur Corporation. Business Synergies GPI would leverage off of Spurs expertise in the restaurant and fast food sector. Spur has expanded internationally which would provide Burger king with the know how to expand into Africa. GPI is a investment holding company GPI could increase stake in open market. GPI would have board representation. Quality Cash Asset 19.2% CAGR in dividends over the past 4 years. Dividends would be used to service debt. B BBEE transaction Shares offered at a discount as a result of the nature of the transaction. 9

10 Grand Slots, Sunwest & Worcester, Sibaya GPI has taken a more strategic position in its gaming operations. Growth opportunities GPI would be raising a large amount of cash which would be used to implement the growth plan for Burger King and other future investments. GPI is a investment holding company GPI will be taking a more strategic as opposed to operational position in its gaming investments. Diversification of assets By taking a strategic position in its gaming investments, GPI will be increasing its investment in other sectors and as a result, decreasing its risk exposure in a single sector. Excellent exit point Return required from investment attained. Fair value purchase price received. 10

11 Burger King GPI has acquired 91% ownership in Burger King SA. Global leader GPI has partnered with a global leader to expand its asset base. Expansion GPI expect to open 100 stores by June GPI will look to end all importing by June 2015 and as a result increase margins. Master franchise agreements also owned for Namibia, Botswana, Zambia, Zimbabwe, Mozambique and Mauritius. Diversification of assets GPI has expanded its asset base and as a result has decreased its risk exposure in a single sector. Strong growth asset Burger King has exceeded initial targets and will provide GPI with a strong revenue flow by June

12 National Lottery GPI has submitted a bid for the National Lottery. Bid status GPI is one of four final bidders. Bid term The National Lottery is operated on behalf of the government for a term of 5 8 years. Revenue and Expense Research indicates that the Lotto is operating at 50% capacity and GPI looks to expand into online and mobile platforms. An estimated capex cost of R720m will be required. PWC gambling Outlook for states that R1.72bn was paid out to the National Lottery Distribution Trust Fund (NLDTF), providing R635m for the operator. Synergies GPI s acquisition of manufacturing investments as well as its new online sports betting would provide a great opportunity for a lucrative supply chain. 12

13 Board of Directors Experienced team with proven deal making ability and a track record of unlocking value Directors and key executives Hassen Adams, Executive Chairman Hassen has been instrumental in establishing a number of successful businesses, the most high profile of these being GPI, which he co founded Hassen is also non executive chairman of the board of SunWest and chairman of GPI's Investment Committee, and serves on the Board's Social and Ethics Committee in an executive capacity He holds directorships in diverse industry sectors including construction, gaming, shipping, entertainment and leisure, and has extensive experience in corporate finance. Hassen was also voted EY s South African Exceptional Entrepreneur for 2014 at their annual World Entrepreneur Awards in early November 2013 Hassen is a qualified Engineer Alan Keet, CEO Alan is a Chartered Accountant by profession. He joined the group in April 2012 as CEO, prior to which he was the CEO of Nolands (Cape Town and South Africa), where he served his articles and subsequently became a partner in 1998 During this time he served on several boards gaining experience in varied industries from property funds to insurance underwriters and various service industries Alan was appointed as a director of GPI in 2012 and serves on all the Board Committees in an executive capacity Dylan Pienaar, Interim Financial Director Dylan, a qualified chartered accountant, joined GPI in 2008 as part of the GPI Slots finance team and has since held various key roles within the group finance team, including group financial manager and interim financial director, before being appointed as the GPI Finance Executive in July His current role as finance executive requires him to focus on corporate finance, special finance projects and group financial strategy. Although not a board member, Dylan plays a critical role in both deal origination and execution, and reports directly to the group CEO and board 13

14 Board of Directors (cont d) Directors Alexander Abercrombie, Executive Director Alex is an attorney and until his recent retirement from public practice, was a director at DLA Cliffe Dekker Hofmeyr. He has been a NED of the Board since GPI's inception, and is responsible for the implementation of strategy in the Slots group. In 2012 Alex was appointed as an executive director responsible for the group's gaming operations in their entirety. Alex is also a member of the Board's Investment Committee and Social and Ethics Committee and serves on the Remuneration and Nomination Committee in an executive capacity Anthony Bedford (non executive) Tony has extensive local and international experience in general management, HR management and marketing. He serves as a NED on the main boards of a number of local companies and is involved in various personal enterprises with interests in property, motor repairs, commodity trading and gaming. He is chairman of the Board's Remuneration and Nomination Committee Professor Walter Geach (independent non executive) Walter is a chartered accountant, an admitted advocate of the High Court of South Africa and a Professor in the Department of Accounting at the University of the Western Cape where he is also the subject head of Taxation. He has authored/co authored over 14 published books on various subjects, including company law, corporate governance, and financial accounting. Walter serves as a NED on the boards of Grindrod Ltd and Grindrod Bank and is a member of the audit committee of both companies. He is also a NED of QDOS (Pty) Ltd and CareCross Health (Pty) Ltd Doctor Norman Victor Maharaj (independent non executive) Norman is a qualified medical doctor and former member of the Public Service Commission. He has extensive public service and trade union movement experience, as well as analytical and decision making skills. He has filled the roleof Lead Independent Director since February 2011, when Hassen Adams was appointed as Executive Chairman, and is alsoa member of the Board's Audit and Risk Committee and the Social and Ethics Committee Nombeko Mlambo (non executive) Nombeko has served on the GPI Board since inception. In 1982 she co founded the Council for Black Education and Research Trust, an educational NGO, and currently chairs the Western Cape Women Investment Forum. She is a member of the Board's Remuneration and Nomination Committeeand serves on the boards of the operating Slots companies Colin Priem (independent non executive) Colin has a Bachelor's degree in Commerce, with Honours in Business Administration, and is currently reading for his Master's degree in Commerce. He is apart time lecturer at the University of the Western Cape where he lectures on financial management. Colin has comprehensive experience in the finance, investment and strategic management fields gained as an academic and through active involvement in business. He also has some 20 years' experience in the landscape design, construction and maintenance fields and is currently the General Manager of a large landscape design and construction business. He is chairman of our Board Audit and Risk Committee 14

15 Corporate information Registered address and office 33 on Heerengracht, Foreshore, Cape Town, 8005 Registration number 1997/003548/06 Website Corporate Advisor Leaf Capital Sponsor PSG Capital Attorneys Bernadt, Vukic, Potash and Getz Attorneys Auditors Ernst & Young 15