SALT RIVER-based Rex Trueform’s transformation from a fashion retailer into a more diversified investment company is progressing slowly.
The group’s Queenspark fashion chain still dominates the revenue and profit lines – overshadowing the ventures into property development, water infrastructure and, more recently, specialist media/broadcast company Telemedia. But in its last set of interim results to end December 2020 RexTru’s investment in water appears to have turned on the cash flow taps.
The group reported that its water infrastructure interests chipped in a R2.4 million profits to after tax earnings – including equity accounted earnings of R1.2 million from an associate company. In brief commentary, RexTru chairman and major shareholder Marcel Golding said the underlying subsidiaries in water were “profitable and cash generative”.
RexTru made a rather intricate dive into the business of water several years ago. The investment in water infrastructure is through its subsidiary, Ombrecorp Trading (RF), and includes operational assets like SA Waterworks (SAWW).
Golding said Ombrecorp’s water assets were performing and were successful working examples of private-public partnerships within the water and sanitation sector.
He pointed out that South Africa is classified as a water-stressed country and cannot afford a water crisis. “It is therefore of utmost importance that water security is ensured across the country. SAWW, with its skills and experience, is ready to play a key role in meeting this objective in the sector.”
RexTru should be releasing its full year results shortly, and it will be interesting to see of the water assets have generated additional profits in the second half.
At last count these assets were valued by RexTru at R162 million – which suggests the profit taps need to open further to justify that valuation.
That said Ombrecorp did provide loan funding to SAWW with loan repayments linked to dividends. Ombrecorp has two representatives on the board of SAWW, and RexTru indicated that the performance of these operations was monitored against expected targets.
