Cape Town – HomeChoice Holdings, the holding company of South Africa’s leading home shopping retailer, is currently being restructured and plans to list a new holding company on the main board of the JSE on 4 December. The new holding company, HomeChoice International, will be based in Malta.
The purpose of the listing is to facilitate expansion outside of South Africa. The listing is subject to regulatory approvals and consent from existing HomeChoice Holdings shareholders on the restructuring of the group.
Shirley Maltz, CEO of HomeChoice Holdings, said that while the group did not plan to raise capital through the listing, access to the public markets provides an additional source of funding to the internal and external sources currently being utilised.
“Expansion into the rest of Africa presents a major growth opportunity for our business in the medium to long-term. Creating an international holding company will enable faster and more efficient allocation of capital to accelerate our growth in Africa.”
She said Malta has been selected as the base as it is home to the group’s largest shareholder and is a European Union member country, with no restrictions on capital flows.
In terms of the proposed restructuring, existing shareholders are being offered one share in HomeChoice International for each HomeChoice Holdings share. This will allow the current shareholding structure of HomeChoice Holdings to be maintained and enable all shareholders to participate in the potential benefits of expansion into Africa.
HomeChoice trades in the neighbouring African countries of Botswana, Lesotho, Namibia and Swaziland, and more recently expanded into Zambia. At June 2014, customers in these African countries accounted for 11.8% of HomeChoice’s retail sales.
The announcement of the group’s listing follows solid interim results in which the group increased revenue by 13% to R861 million in the six months to June 2014 and reported headline earnings per share growth of 11.6% to 157.1 cents. An interim dividend of 61 cents per share was declared, an increase of 39% on the previous interim dividend.
Group EBITDA increased by 15.5% to R240 million and group operating profit increased 14.0% to R230 million as the operating margin improved by 30 basis points to 26.7%. The group also reported a much-improved credit performance following the tightening of credit policies over the past two years.
For further information, kindly contact
Shirley Maltz CEO HomeChoice Holdings Tel (021) 680 1057
About the HomeChoice Group The HomeChoice Group is a leading home shopping retailer selling homeware merchandise and financial services products to the rapidly expanding urban middle-income mass market in southern Africa. Established in Cape Town in 1985, the group has developed into an omni-channel home shopping retailer offering products through mail order (catalogue), electronic channels (Internet and mobile phone) and telemarketing (call centres). The business operates in South Africa and in the neighbouring countries of Botswana, Lesotho, Namibia, Swaziland and Zambia. In the financial year to December 2013 the group generated revenue of R1.6 billion and EBITDA of R450 million.