| Thu 24 Feb 2005, 10:39 | | Where does executive board take Lazarus Zim? |
|
Where does executive board take Lazarus Zim?
--------------------------------------------------------------------------------
E-Mail article Print-Friendly
WHAT does one make of the announcement yesterday that Anglo American’s CE of South African operations, Lazarus Zim, is to join Anglo’s new executive board, but is not to be made an executive director of Ango American plc?
Certainly, Zim was seated at the top table at Anglo’s annual results presentation yesterday, and was asked to handle an empowerment question posed by a London analyst. But while his status in the resources group is reflected in his appointment to the executive board, it is not the same as an Anglo American board seat.
Anglo CE Tony Trahar did say there were constraints on the number of executive directors. But where does this leave Zim?
Discussions in the corridors after the Anglo results presentation yesterday centred on sentiment that the establishment of the executive board, which will replace the executive committee, is a way of giving Zim a profile at senior company level.
It means Zim will be present at all the important operational meetings, but not at strategic meetings, and is thus still outside the Anglo inner circle.
That is unlike David Hawthorn and Tony Redman, who are being proposed as executive directors of Anglo. Hawthorn heads Anglo subsidiary Mondi and Redman is the head of base metals, chairs Anglo Coal and is Anglo’s group technical director.
Concern, justified or otherwise, about tokenism will ensure that Zim’s career will be closely followed in government, where there is a desire to see more black faces at the top of one of SA’s oldest mining houses.
Santam leads the pack
SANTAM is leading the pack in the short-term insurance industry with an underwriting margin of 15,1%, eclipsing even the strong 10% to which rival Mutual & Federal has risen. Other insurers, including unlisted ones, also appear to be doing well.
Returns from the industry for last year show a 22,4% increase in net premiums to more than R24bn. Underwriting profit more than doubled to R2,9bn, while claims as a percentage of premiums fell from 67% to 59%.
Underwriting margin for the industry has risen to 12%, from 7% in 2003 and 2% in 2002. The industry reported an underwriting loss in 1999 and 2000, though a change in how it does business may prevent it recurring.
Santam CE Steffen Gilbert says while insurers were chasing volumes a few years ago, often disregarding quality of the business, the market is now driven by capital. This is one reason that gross written premium business has been relatively flat.
While the buoyant economy, strong investment markets and the low number of claims have played in insurers’ favour this year, Gilbert says there has also been an element of luck.
Although good luck cannot last forever, Santam and Mutual & Federal, the two biggest industry players, appear confident that any deterioration will be gradual and less drastic than previously.
AECI’s noncore star
AECI’s property division, Heartland Properties, served as a handy piggy bank last year, topping up group profit while times were tough at almost all of the chemical group’s core businesses.
The noncore Heartland is the smallest of AECI’s five divisions by sales, but was the star performer last year.
Its contribution to trading profit rose from 5,5% to 17,5%. Its trading profit was R130m last year, and exceeded the contribution from Dulux, at R59m.
It compared well with the contribution by the group’s largest division, Chemserve, which posted R380m in trading profit. Imara SP Reid says much of the group’s improved operational cash flow came from property’s net cash flow of R270m.
The revaluation of the group’s property also accounted for most of the rise in net asset value from 2305c to 2381c.
Revenue from the division was up 70% to R352m after the sale of residential, commercial and light industrial land at Modderfontein, Somerset West and Umbogintwini.
And the good news is that there is a lot more to come — 2600ha to be exact. The group has sold 1100ha of its 3700ha excess land to date. Last year’s good performance came from the sale of only 350ha.
Shoprite’s capex plan
SHOPRITE Holdings is showing more than treble the amount of capital commitments at the end of December, at R388m, than the R108,9m of a year ago.
Shoprite CEO Whitey Basson says that some of the biggest items are R140m for refurbishment of stores and R153m for the opening of new stores.
The smaller items include R38m on information technology and R57m for replacements.
The group refurbishes stores about once every seven years to keep them looking modern and fresh, while the decision to open new stores is based on an assessment of whether they can make a better return than from cash.
In the six months to December, the group added a net 11 new stores in SA, bringing the total number of stores to 1016.
It opened a total of 55 new stores and closed 44, mainly in the OK franchise division, where 38 stores were closed.
The group made substantial write-offs in the franchised store division last year, but it said that the division was now “back on an even keel and performing satisfactorily”.
In the 18 months to December this year, the Shoprite group plans to open 147 new stores locally and internationally.
It will open five more Usave stores in Angola, to bring the total to eight; as well as another Shoprite, two stores in Madagascar, and three more stores in Mozambique, where the group also sees some potential for the Usave stores.
Neels Blom edits The Bottom
Line. E-mail to: bottomline@
bdfm.co.za
Sponsored links
Residential Property
Commerical Property
Loc@te Me
Market Research
Financial Services
Telecoms
Wine
Business Directory
