HCI: BYE-BYE JOHNNY, BYE-BYE JOHNNY’S DISCOUNT?
- August 6, 2026
- Posted by: Cheryl
- Category: General
The HCI CEO’s plan to retire during the 2028 financial year, after dealing with unfinished matters, comes amid unusual shareholder interest.
Hosken Consolidated Investments (HCI) without long-serving CEO Johnny Copelyn is almost unimaginable. Such was his presence that some referred to HCI as JCI: Johnny Copelyn Investments.
Copelyn — a former trade union stalwart turned deal-making dynamo — signalled his intention to retire in the just released HCI annual report. The move was not expected, even though Copelyn is in his mid-70s. Interestingly, HCI’s shares traipsed nearly 5% higher, perhaps on speculation that the development is anything but arbitrary — especially considering the recent clamouring for the long-awaited value unlock at the group.
Copelyn, it must be pointed out, intends retiring only “during the course” of the 2028 financial year, which officially begins on April 1 next year and runs until March 31 2028. In the meantime, long-serving HCI director Kevin Govender will serve as joint CEO.
Activist shareholder Chris Logan describes Copelyn as a formidable individual combining razor-sharp intellect, charm and endurance. “It is no wonder that in the early days of HCI Rembrandt partnered with HCI in e.tv and [Johann] Rupert helped HCI acquire a lucrative 5% stake in Vodacom. Under Copelyn, HCI could facilitate deals with its BEE credentials and possessed the rare skill set to develop and run companies well.”
Logan would not be surprised to see Copelyn, before he retires, pull another rabbit out of the hat by possibly unlocking value from HCI’s oil assets. “Frankly, it’s hard to envisage HCI in its current form surviving Copelyn’s retirement … he has been the glue keeping this diverse and ungainly group intact, recently in the face of a concerted activist campaign.”
SmallTalkDaily analyst Anthony Clark says Copelyn is among the last of a generation of dominant JSE leaders. “Govender is a longtime lieutenant who joined HCI alongside Copelyn in 1997. Whether this transition marks a genuine strategic shift or merely continuity will be closely watched.”
Clark says the investment case remains compelling if change follows. “Significant latent value sits within HCI’s portfolio — notably in hospitality and its offshore oil exposure. Potential corporate actions, such as delisting illiquid subsidiaries like Frontier Transport or restructuring the Deneb industrial assets, could begin to close the NAV gap.”
Copelyn tells the FM his decision regarding retirement was “a combination of things”. “Yes, there are some things that are not done and that I would like to see through,” he says. But he adds that he has had a long stretch as CEO and that it was important to give the group time to adjust.
For most shareholders, first prize would be for HCI to unbundle its array of JSE-listed investments, which include dominant stakes in gaming group Tsogo Sun, hotel group Southern Sun, Frontier Transport, broadcast group eMedia and industrial conglomerate Deneb. With debt at more manageable levels there seems little hindrance to unbundling all or some of these listed assets, which are all reassuringly cash generative, well managed, sound of balance sheet and dividend paying.
Of course, shareholders might be wary of developments, bearing in mind how much value was left with the founders when the JSE’s other adventurous investment counter, PSG, unlocked value for shareholders in a series of unbundling exercises. HCI, in fact, has a larger quantum of unlisted assets — particularly its “difficult to value” oil and gas interests — than PSG held when it opted to unlock value and take the leftover group private in 2022.
Aktiv is now asking whether its campaign might have influenced the leadership change at HCI. “Whether this succession was planned well in advance or accelerated by recent events is something only the board knows. However, the context of the [Copelyn retirement] announcement deserves careful consideration.”
Zetler points out that over the past year HCI has faced a level of shareholder scrutiny unlike anything seen in its [recent] history. “We publicly challenged the company’s governance, capital allocation framework and persistent discount to intrinsic value. We questioned whether HCI’s conglomerate structure continued to serve shareholders and argued that management’s long-term capital allocation decisions had destroyed substantial shareholder value.”
At this juncture, HCI’s shares still offer a more than 40% discount to the last stated carrying NAV of R303 a share. That’s a big discount, but probably better than in mid-2025, when HCI’s biggest investment, Tsogo Sun, saw its share price plummet from R12 in November 2024 to R7 in just seven months. HCI’s share price retreated from R195 to R135.
Copelyn notes that this share price fall triggered a hail of criticism from Aktiv. “In short, its view was that the growth projects of the company were complicated, dim and distant while the discount to its known asset value was enormous. Its advice effectively was to abandon the vague upside promised in future years and grab the short-term gains of eliminating the discount.” With HCI dribbling down to R116 in September last year, Aktiv was probably not short of sympathetic ears.
Copelyn points out, though, that HCI bought back as many shares as it could at depressed prices. “Although this was stressful to HCI from a cash point of view.”
Fortunately, HCI was able to offload a slew of properties, which, along with dividend flows from the underlying listed investments, eased gearing markedly. Central debt will be reduced to about R2bn, a level Copelyn feels is a “more realistic figure to carry in the medium term”.
Source: Financial Mail – Marc Hassenfus