Our opinion on the current state of RECM

RECM and Calibre (RACP) is an investment holding company which has listed its preference shares on the JSE since June 2010. The company is controlled by Theunis de Bruyn, Piet Viljoen and Jan van Niekerk through the unlisted ordinary shares held by them. Coronation owns 7,3% of the preference shares. Roughly 66% of RACP's assets are in a Bingo company called Goldrush. It has 35 bingo licences and 4200 limited payout machines and does sports betting. It has increased its investment in listed company, Astoria, to 78,45%. RACP will now have to make an offer to the remaining minorities at 240c per share. Astoria was an international investment company, listed in Mauritius, on the JSE's ALT-X and on the Namibian stock exchange with investments in listed companies in Europe and the US. Astoria has sold most of its share holdings and now has a net asset value (NAV) of around 260c. Astoria has recently acquired CNA from Edcon's liquidators. The balance of RACP's investments are small investments with none representing more than 6% of the company's total assets. In its results for the year to 31st March 2020 the company reported net asset value (NAV) per share down by 24% to 2692c and a headline loss of 659c compared to a loss of 85c in the previous period. In a voluntary update on 15th April 2021 the company reported Astoria's NAV at 31st December 2020 as 683c per Astoria share. 90,1% of Astoria's shares held by RACP are being unbundled into the hands of RACP shareholders at 1 Astoria share for every RACP share held. In a trading statement for the six months to 30th September 2021 the company estimated that the net asset value (NAV) per share would be between 25,1% and 25,6% lower than in the previous period. The company said, "The main contributor to the reduction in the NAV per share during this period was a reduction of R6.79/share which resulted from the distribution of Astoria Investments Ltd. shares to RAC shareholders in April 2021". In a trading statement for the six months to 30th September 2022 the company estimated that its NAV will increase by between 22,4% and 25,7% from the 1422c reported in the previous period. From a private investor's perspective, this investment company appears to lack focus and trades well below its NAV. In its financials it admits that over the past ten years it has under-performed the JSE ALSI. In a trading statement for the six months to 30th September 2023 the company estimated that its NAV would be between 30% and 32% lower. It is also relatively thinly traded which makes it unattractive even to private investors. Its control structure is another problem where the only way in is through a preference share.