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WINNERS – SA’S SECOND-MOST EMPOWERED COMPANY – A SOLID FOUNDATION IS PAYING OFF

02 Apr General

Sector: Financial services. Revenue: R8,9bn (Dec 08); Total BEE score: 84,63%; Ownership score: 23; Pref proc: 11,29

The rise of Hosken Consolidated Investments (HCI) should read like a fairy tale to many. Headed by two former trade unionists, executive chairman Marcel Golding and CE Johnny Copelyn, the investment firm has risen to become the second-most empowered company on the JSE. That is according to the FM’s Top Empowerment Companies (TEC) 2009 survey. HCI is also crowned as the most empowered financial services company on the JSE for the third consecutive year.

According to TEC, HCI scored 84,63% this year, up from 70%. It is flanked by Adcorp, which took the top spot with a total BEE score of 88,71%, and Nedbank in third place, with a score of 82,45%.

HCI’s performance was again impressive across all categories. It scored 15 out of 20 points for enterprise development and full marks (5) for socioeconomic development.

Of course, the group’s empowerment credentials can be attributed to the company’s most significant shareholder – the SA Clothing & Textile Workers’ Union (Sactwu), which owns 40% of the company. Golding owns 7,2% and Copelyn 4,4%.

Sactwu purchased a majority stake of HCI in 1997 for the benefit of the union’s members and their families. To carry out the mission, it deployed its former leader Copelyn, who was joined by Golding, the former leader of the National Union of Mineworkers.

Judging by HCI’s growth, the two comrades have not disappointed. HCI has increased the number of pies in which it has its fingers and has handsomely benefited its shareholders. The union has also benefited from HCI’s extensive corporate social investment programme. The group also facilitated the establishment of the HCI Foundation, which owns about 7% of its shares.

HCI’s business empire is now spread across sectors that include industrial, mining, transport, services, media and entertainment. It has a controlling stake in free-to-air television channel e.tv and another controlling stake in entertainment and gambling giant Tsogo Sun Group.

Other operations include 80% of HCI Khusela Coal, 91% of Montauk Energy Capital, 45% each of Clover and Golden Arrow Services, 40% of Business Systems Group, 55% of Syntell, 58,9% of Limtech and 100% in Vukani Gaming Corp.

For the 2007/2008 financial year, HCI posted group revenue earnings of R8,9bn, up from R4,2bn. Most of its investments performed well during the period under review. Clover, for example, contributed R64,3m to HCI’s headline earnings, up from R28,8m, while Gallagher’s attributable headline profit rose 85% to R33m from R18m.

HCI’s mining subsidiary, HCI Khusela Coal’s two mines, Palesa (formerly Loopspruit) and Mbali (formerly Klippoortjie), were granted licences by the department of minerals & energy. Palesa has domestic contracts with Eskom Holdings and Mbali’s purpose will be to produce different grades of coal with the intention of securing local and export contracts. The company has committed to invest about R300m in the development of the two new mines.

HCI’s market capitalisation at the time of going to print was R5,6bn.

Source: Financial Mail – Matebello Motloung