The latest annual report of Hosken Consolidated Investments (HCI), celebrating 20 years since the company ’s formation, is an entertaining read — especially CEO Johnny Copelyn’s fascinating
and enlightening letter to shareholders.  I highly recommend it to investors.

One poignant reminder is that in HC I ’s early years, the group’s investment in a free-to-air television broadcaster was, at one point, a rather daunting prospect. Copelyn notes: “In television, we bid for the first free TV licence and survived two gruelling years in which the company lost a legendary R1m/day until finally it turned and became profitable.”
HCI ’s 5% stake in Vodacom had to be sold, and investment holding company Remgro clambered aboard as a significant minority partner. Whether it would have been better to walk away from and retain the Vodacom stake is an interesting question to debate — albeit merely as an academic exercise.
But what is clear from the annual report is that HCI is finding it a far less arduous task to build its overlooked property division into a real contender.
The property segment was started in typically low-key fashion by HCI in 2013, but at the end of the financial year to end-March, the profit before tax from the real estate endeavours topped R102m, excluding a fair-value gain of R169m.
The property segment chipped in a not-insubstantial R63m to HCI’s headline earnings of R1.3bn — in other words, roughly 4% of the bottom line.
HCI holds some intriguing retail property developments, mostly in and around Cape Town. Copelyn reports that further real estate acquisitions are being negotiated.
However, he doe s concede that the current pipeline will not be bulked up at the pace of previous years, as the political and economic environment dictates a cautious allocation of capital (as well as a move from predominantly retail assets).    Still, I wonder how long it will be before HCI gives serious thought to separately listing its property assets — remembering that subsidiaries such as La Concorde and Deneb Investments are also underpinned by real estate (and not of the retail variety).

Source: Financial Mail – Market Watch – Marc Hasenfuss