Failed merger hits Rentsure's results.

Posted On Monday, 14 October 2002 10:01 Published by
Rate this item
(0 votes)
Rentsure Holdings posted a loss of 48,4c a share in the year ended June 30, having been 12,3c in the black a year ago.
Life Assurance player Rentsure Holdings posted a loss of 48,4c a share in the year ended June 30, having been 12,3c in the black a year ago.

This translated into a headline loss of R18,8m from positive earnings of R5,5m the previous year.

The poor figures were mainly as a result of the nonconclusion of a merger between Rentsure and insurance player Assupol, said Joachim Vermooten, chairman of Rentmeester and Rentsure Holdings.

He said Rentsure had wanted to merge with Assupol, but the merger was terminated by Assupol for unknown reasons, at an advanced stage.

The unbundling of the distribution network was the major cause of the loss of sales of new business on the Rentsure side, he said. This had led to the retrenchment of 20% of Rentsure staff, leaving the company with 360 staff members.

The termination of the proposed merger resulted in a material decline in new individual business written by Rentmeester, said Rentsure. The decline was the result of the termination of certain Rentmeester products, the rationalisation of the branch network in anticipation of attaining certain merger benefits and the disruption caused by having to separate certain branches that had been combined with Assupol branches on termination of the proposed merger, and the immediate departure of the Assupol management.

Rentsure said the losses had placed a strain on the capital requirements of the company and the directors were exploring alternatives in order to remedy the situation, which might have a material affect on the price at which Rentsure shares trade on the JSE Securities Exchange SA.

Rentsure said although premium income from group business showed strong growth, the losses were mainly incurred due to the decline in individual new business written during the period and due to a write down in property values of R12,6m due to changed market conditions. Vermooten said he would turn the business around in a year's time. Rentsure is 47% family owned and it is the first time that it has shown a loss since its inception in 1958.

Vermooten said Rentsure was refocusing on new products that had already been developed. One of the products was an all inclusive life policy product, another was an electronic quotation and underwriting system.

Business Day


Publisher: Business Day
Source: Business Day

Most Popular

Should you rent or buy your business premises?

Jun 23, 2022
Malusi Mthuli_FNB
This is a question that most business owners will face at some point in their journey.…

April 2022 Hotel Accommodation Income Statistics continue to show a very weak picture compared to pre-lockdown times.

Jun 23, 2022
Hotels Monthly Income 2022
The StatsSA release of April 2022 preliminary monthly tourism statistics show the Hotel…

South Africa’s inflation exceptionalism: can it last?

Jun 23, 2022
Carmen Nel
South Africa is often seen as a high-beta play, be it regarding financial market risk…

Hyprop continues to reduce debt and reposition its portfolios in SA and EE

Jun 30, 2022
Skopje City Mall Playground
Hyprop, which manages dominant retail centres in mixed-use precincts in key economic…

Vaal Mall rolls up its sleeves for pothole repairs

Jun 30, 2022
Vaal Mall crew busy repairing the various potholes making easier access to the Centre.
Vaal Mall is showing their commitment towards their community by stepping up to repair…

Please publish modules in offcanvas position.