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African Rainbow Capital H1'25 income rose R814mn - CNBC Africa

Published 1 month ago2 minute read

African Rainbow Capital Investments (ARC) has reported a tough period in its latest earnings release, showing a 4% increase compared to the previous year. The slight growth was impacted by the sale of part of Time Bank to the Sunlum Group. Despite the challenges, ARC remains focused on the financial services sector, targeting large client groups through technology-driven products. The company aims to offer cost-effective solutions to attract a larger customer base. In the face of a fragile economic environment, ARC's strategy for the financial services sector is centered around offering cheaper and more tailored products using technology. By focusing on a high volume of smaller deals, ARC aims to engage customers regularly across various sectors such as healthcare, asset management, and retirement services. Furthermore, ARC's support for the Crops phosphate mine on the West Coast highlights its commitment to strategic mineral resources in the country. Phosphate, essential for the growth of life, faces price pressures due to global geopolitical issues. However, ARC remains optimistic about the future demand for phosphate and anticipates a turnaround in the mine's operations. ARC's consideration of opportunities for the Cominco phosphate deposit, the largest untapped reserve globally, presents a significant growth prospect for the company. With plans to engage partners for financing and contract mining, ARC aims to commence phosphate production in the Republic of Congo over the next few years, targeting markets in China, India, and the Asia-Pacific region. Notably, ARC has announced a proposal to buy out minority shareholders and redomicile back to South Africa, indicating a shift in its listing structure to address mounting challenges faced in Mauritius. Initially seen as an advantageous listing destination, Mauritius offered tax benefits and foreign investment opportunities. However, changing dynamics, such as a shrinking free float, trading discounts, and unfavorable tax regimes, have prompted ARC to reconsider its listing strategy. Johan Van Zyl, Co-CEO of ARC Investments, highlighted the decision to delist as a strategic move to streamline operations and engage with a smaller group of strategic shareholders based in South Africa. The restructuring aims to enhance agility and decision-making while reducing complexities associated with the current listing structure. Looking ahead, as ARC navigates its delisting process and refocuses on its core business operations, the company remains optimistic about its future prospects in the financial services and strategic mineral sectors. With a clear strategy in place, ARC aims to capitalize on emerging opportunities and drive sustainable growth in the evolving market landscape.

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