Good day, ladies and gentlemen, and welcome to the Remgro Limited Annual Results presentation. All attendees will be in listen-only mode. There will be an opportunity to Ask'd questions when prompted. If you should need assistance during the call, please signal an operator by pressing star and then zero. Please note that this event is being recorded. I would now like to hand the conference over to Mr. Jannie Durand. Please go ahead, sir.
Good morning, everybody. Welcome to our final results presentation for the year ended thirty June, twenty twenty-four. Before we go into the details of the results, as has become more regular practice at Remgro, today's presentation will be a bit longer to give time to actually give more underlying information about our unlisted investments due to the shift in our portfolio from listed to a largely unlisted portfolio. Just to give you an outline of the presentation today on the contents, what will happen? Firstly, I will give an overview of the salient features of our results for the year under review, and I'll give you also then a recap of the strategic priorities that we've discussed at previous meetings, and they remain largely consistent with those communicated at our previous presentations.
Then I'll also do an assessment of how we actually think we fared against these strategic priorities and how we delivered on them. Then I will ask Carel Vosloo, who has oversight of our investments, to go into more detail, especially about things like capital allocation and disinvestment, that you probably will have some questions on that as well. Thirdly, our CFO, Neville Williams, will unpack in more detail our results for this financial year. Then, in keeping with the new format, we will then give some of our underlying investments more exposure, especially Mediclinic, CIVH, RCL Foods. The CEO of Mediclinic, Ronnie, together with Jurgens, will then speak about Mediclinic, the operating context, their results, and the strategic priorities. Thereafter, I will ask Pieter Uys, who's the chairperson of CIVH, to do the same for that company.
Finally, Paul Cruickshank, who's the CEO of RCL, will highlight some of the key results that RCL reported on the second of September. I will then wrap up the presentation by looking at our key areas of the focus going forward, and then we'll open the floor for questions. As you can see, this slide, we talk about a challenging backdrop, but with pockets of improvement. Yes, if you look at the result, Remgro's results, and the drivers hereof, many of which are situation-specific, but it's always important to consider the broader macroeconomic context in which the business operated over the last twelve months. We have always been transparent in highlighting the macroeconomic challenges of the past year and a half and the resulting impact on some of our investee companies. Many of these challenges remained for the year under review.
In some instances, also increased by the volatility experienced in the lead-up to the national elections in May twenty twenty-four. However, we're starting to see some green shoots on the macroeconomic improvement side: lower inflation, fewer incidents of load shedding, and a reduction in fuel prices. This, together with the establishment of the Government of National Unity, has seen an improvement in the global investor sentiment towards South Africa. We can see that on the JSE, especially in the pick up in some of the share prices there. Also, you've probably seen all last night with the cut in interest rates from the Fed, and hopefully South Africa will follow that as well. To be a bit more on the bearish side, also, if you look at...
I'm a bit worried about some of the geopolitical tensions in the world, especially what's happening in Israel and the Gaza Strip there, with pagers getting blown up and walkie-talkies getting blown up. So it's not a great picture to see that and read that in the news. I think if you look especially at the U.S., asset prices are at a near all-time high, so that it can be a concern, but hopefully, the reduction in the interest rates will actually give a support base to some of these asset prices. Let's go then to the results for the year under review. I think. When you recall, when we presented our interim results, I said that those were probably one of the more challenging set that I've delivered in a long time.
While the second half of the year has seen some improvements, we are still delivering an unsatisfactory set of results for the year under review. Headline earnings decreased by 20% from just over ZAR 7 billion to ZAR 5.6 billion, while headline earnings per share decreased by 18.8% from ZAR 12.54 to ZAR 10.18. The difference of 120 basis points in the headline earnings per share measure compared to the headline earnings for the prior year actually just represent the accretive impact of shares repurchased during the 2023 financial year and at the beginning of this year under review.
We have, however, increased the final dividend by 15%, so if you take it on a full year basis, it's 10% increase in the total dividend, and that is due to better-than-expected cash earnings at the center and much better improved performance over the second six months of our results. A significant driver of the decline in our Headline Earnings for the full year relates to the effect of non-recurring items as a result of the corporate actions implemented in the recent past. This affected the first half performance especially, and was communicated to our market during our interim results presentation in March. The difficult operating environment, which had a significant impact on our results particularly, also contributed to the decline in our Headline Earnings. Overall, when excluding the impact, what I've just mentioned, we saw a muted performance for the full year....
for the full year, with a much better performance in the second six months of the year. Neville will provide more detail around these drivers and the headline earnings numbers in his section later on. The twenty-twenty-four financial year was a challenging period, with a continued focus on concluding an integrated series of transformative corporate actions still impacting our results. While strong contributions were made by some of Remgro's investee companies, a lot of work still needs to be done to bear down the operational performance of a number of our key investments. However, there were some improvements. We are pleased with the following positive achievements. There are strong performances from OUTsurance, TotalEnergies, Air Products, Siqalo, and RCL, as well as Rainbow. Progress on implementing some of the strategic shifts at RCL, including the separate listing of Rainbow, was also done.
Post this milestone, we are excited about the prospects for both of these companies. Measured progress on reducing non-core assets and leverage at the center was done, the details of which will be expanded later in the presentation. There's also some encouraging progress on our new shareholder partnerships in our core assets, laying the foundations for strong future performance. However, we must also acknowledge the negatives. Offsetting this positive momentum was intolerable execution time frames on corporate actions that dilute operational focus. For example, if we take the Vodacom-CIVH deal, it's a perfect example. It's not just the regulatory cost involved, but as well as the opportunity cost as well. Nearly three years since we've actually announced the deal, and we still haven't concluded. It's still sitting in front of the tribunal as we speak, but Pieter will elaborate on that later.
Losses at Heineken, which we need to all work hard to recover, and but I'll unpack that further in much more detail to give you a flavor of where we're standing with the Heineken integration. The enduring, tough operating environment for Hirslanden and Switzerland is also something that bothers us, and intensive and deliberate efforts are underway to improve the operations. As I noted on the previous slide, many of these issues are situation specific, which, while disappointing, means that we are able to identify and implement remedial actions. This is where a large portion of our time is focused, and we will remain committed to the portfolio repositioning and optimization, as you can see, is what we've done in the past year.
Even as the current unsatisfactory performance, especially the first six months, overshadowed continued progress on some of our key strategic initiatives, we are seeing great potential in the portfolio over the longer term. I think the second six months also is already testimony to that. I will now go back and recap on our strategic priorities on the next slide. For the last two result cycles, I talked about our key areas of strategic focus in the medium term. This slide revisits those priorities and outlines what we believe is a candid assessment of our own performance against these priorities. It is important to reemphasize that the execution of these strategic priorities is not a binary target, but an ongoing journey.
Our portfolio optimization efforts, including the execution and embedding of our various transformative corporate actions, has required significant integration work, and we are satisfied with the progress that has been made in this regard, although there were some unforeseen challenges along the way. Good strides have been made in our sustainability journey, with more detailed targets set and greater disclosure, and you will see some of this in our annual report that will be mailed shortly. We are proud of the progress made in our shareholder engagement at a management level as well as at board level. We've been on two governance roadshows in the past year. This affirms our commitment to making sure that there is sufficient disclosure of our unlisted assets. We still consider this to be in progress, as we have yet to achieve the standards we set ourselves.
I've also previously spoken to our focus on driving performance at our investee companies. This is receiving greater attention, with a structured approach in place, especially as some of these companies need detailed attention and turnaround plans. A much more active approach in dealing with our investee companies has been followed. Let's place some attention on embedding some of the transformative corporate actions that are underway in this slide. Firstly, to recap, as previously mentioned, the preceding financial year was characterized by the execution of our various corporate actions. Post-execution, the focus shifted to integration, optimization, and the unlocking of value, depending on the individual needs of the assets. Accordingly, much of our focus has been on meaningfully embedding our newly unlisted assets into the overall portfolio, thereby enabling us to drive performance and generate returns.
During our interim results, we spoke in detail on what the post-transaction execution process for Heineken Beverages entailed. I will give an update in the next slide on where we are on this. As I sit on the Heineken board, I'm probably the best placed to explain the strategic thinking behind the deal and the way forward. After that, Ronnie will speak about Mediclinic's journey and their progress, and Jurgens will touch on the financial performance of the company. He will also give a high-level update on the outlook for each division for the remainder part of the year. Later on, Paul will talk to the implementation of the strategy at RCL. These three investments remain significant contributors to Remgro's portfolio and their respective strategies and have continued to be a collaborative effort between us, our partners, and the management teams.
This collaborative approach harnesses the power of our partnerships, and we remain excited about the potential of all of these three companies. As I mentioned earlier, the CIVH Vodacom transaction is still in process and subject to regulatory approval. Peter will speak to the specifics on the process later in the presentation. Let me then go on to the Heineken, and where we're standing on the Heineken Beverages transaction and the performance of the company. As previously reported, the underlying performance of Heineken Beverages for the year under review was severely impacted by the highly disruptive period of integration inherent to a merger of this nature and extent. This integration phase is, however, now largely completed, and the business is well-positioned to capture new growth opportunities in South Africa and the relevant markets in Africa.
The synergies extraction is on track, and we are starting to see some green shoots on the beer performance as well. If you look at the slide, where we are now is in phase three. We've completed really phase one and phase two, and which is critical in delivering our investment thesis. We need to drive growth and to make sure that we don't score own goals as we have done more in the recent past. This company is poised for growth, and we believe, really, in the growth going forward, although it's a very competitive environment. If we reassess on the next slide, the performance of Heineken and over the last twelve months. During the first six months, it was actually severely impacted by low industry growth, in general, a constrained consumer environment, load shedding, which has significantly affected trading hours for the main market outlets.
This has driven demand to retail, where there's increased competitor activity because of the volume shift. There has also been a shift from premium to mainstream beer due to affordability issues that impacted Heineken's... the Heineken portfolio due to its portfolio being over-indexed in premium, in the premium sector. In addition to this, we also scored some own goals. Heineken also, they implemented pricing ahead of the industry, resulting in a negative impact on volumes and market share. In addition to the above, margins were also negatively impacted by non-recurring expenses relating to the integration and supply chain, as well as import that increased the margin contractions. Importing beer at a loss is never a good strategy, as I've said in the first six months.
If we look at the first half performance to December 2023, that we discussed previously in our previous results presentation, most of the issues that has been resolved is this once-off expenses were once-off, and they didn't occur again. The majority of these expenses, I've explained, were incurred in the six months ended 31 December 2023, and these operational issues have now been resolved. I think the unresolved issue, and one issue that probably will never be unresolved, is that it's always going to be a challenging, competitive environment. If you compete against the big gorillas in this industry, it will always be competitive. As mentioned, Heineken's portfolio always still remains over-indexed in the premium beer sector. Management focus on portfolio optimization is, however, gaining momentum, and good work is currently being performed in this space.
If we look at the second half performance to June 2024, the non-beer portfolio has really outperformed the market. Both Savanna and Bernini continued their strong momentum, while Fourth Street and J.C. Le Roux continue to provide strong growth support for the rest of the portfolio. The beer portfolio, however, remains under pressure until at the end of June. Heineken has implemented various measures to restore both market share and margins. As I explained, during the interim results presentation, the Heineken 650 ml returnable bottle was launched in 2024, quarter one, and this provides a much more affordable, yet cost-effective consumer proposition. This initiative is critical in securing the presence of the brand in key channels where the brand was previously underrepresented. Although this comes with a substantial capital requirement, it will vastly improve the profitability of Heineken due to margins when compared to non-returnable bottles.
Neville will also elaborate in more detail later on in Heineken's performance for the six months ended 30 June 2024. In terms of the management team of the company, they have now settled well and is currently gearing up for the upcoming festive peak season. This is obviously a very important part of the year for the business, as the majority of the profits in the liquor industry is traditionally earned in the latter part of the calendar year. This will be the first peak season after the full integration of the business, and it will be all hands on deck, and the things look quite promising at this stage. Together with Heineken, we firmly believe that the transaction was and remains a good capital allocation decision.
Clearly, we did not plan for some of the challenges that we have seen since the transaction was concluded, but even considering that, the investment thesis remain as strong as it was at inception. Heineken, with its multi-category portfolio of strong brands for all consumer occasions, combined with the scale to unlock efficiency, present a very strong platform for sustainable future growth. We can already see the benefits of that in the rest of Africa, and hopefully South Africa will follow soon. What I will do now is I'll hand over to Carel to go into more detail on some of the thinking on capital allocation framework and what progress has been made in delivering against this framework in this financial year.
Thank you, Jannie, and good morning, everyone. Jannie has mentioned on the strategic priorities that, capital allocation is one of our most critical functions in our business, so I hope to shed a bit more light on how we think about the sources and uses of capital. We are, on the left-hand side, going to unpack the sources of capital almost in the order of how we think about the first port of call to the last port of call, if you like, so it starts with investment income. This absolutely needs to be the engine room of our capital allocation process. This is the regenerative part of our capital base.
So, we really need, through growing earnings and growing dividends, for that part to be the flywheel that drives the compound returns to our shareholders. You would have heard from Jannie, and you will hear through the rest of the presentation, that we're not, you know, entirely pleased with the earnings and dividends that's coming out of parts of our portfolio. That's the area of intense focus for us with our management teams. Neville will also later, when he talks about the results, he will point to some of the earnings yields and dividend yields, and you'll see that some of our bigger investments are not delivering what we're currently expecting. So that's a big area of focus. The second component of our sources of capital is divestments.
As much as we think of ourselves as long-term investors, we believe that some velocity in the portfolio is healthy. And we're not only talking about the portfolio assets, which we've always indicated is you know the component that we would consider sort of dry powder. We even think in the rest of the portfolio, some velocity is healthy, and we will always consider where there's an opportunity to recycle or have assets or divest of assets that are potentially valuable, more valuable to other people than it is to us. I've got a slide on this later on, and I'll go into a bit more detail. The third component is to use debt or to increase debt.
Clearly, we've got a very meaningful amount of gearing capacity at the center, and there's the opportunity to sort of stretch our balance sheet with gearing. We will say that conceptually, we believe in optimizing the gearing at the operating company level, where it's closest to the cash flows and can be most effectively and efficiently deployed. So we do not believe in using aggressive levels of gearing at the top co and layering gearing on top of gearing at the investee companies. Occasionally, and typically around M&A situations, when there are lumpy cash flows that we need to cover, we will use gearing, and then we will obviously prioritize the repayment of that in following years. The last and most expensive source of capital is equity.
Again, typically something that we would access for larger, lumpy opportunities such as M&A transactions. But we are very mindful that equity is expensive, particularly when your share price is trading at a discount, what we consider the value of the underlying portfolio is. So we will think long and hard before we come to shareholders for equity with our current rating. If we turn then to the uses of capital, and here, the order is somewhat more random and sort of depends on the priorities in the year how we would allocate. But having said that, I will say that the first one, the first component being dividends, is something that we consider a meaningful priority in our sort of waterfall of capital allocation.
We don't set out our stall to be a high dividend-paying company, but we do believe that a sustainable and remotely predictable dividend is something that's important to our shareholders and is something that we prioritize. The second bucket there is investments. It's tempting to say that for an investment firm, the most important use of capital is to make investments. Of course, that's only half true. It's probably even more important to manage those investments and make sure that you generate the returns for your shareholders. So we've got no predefined targets of an amount of capital that we want to deploy every year. We are entirely guided by the quality of the opportunities that we see and the terms at which those are available to us.
When we do look at investments, we have a preference, as you know, for unlisted above listeds. We look for situations where we've got meaningful influence or control. We like things that can scale or are already at scale. There are certain sectors we understand better than others, and while we might expand those, we will certainly look for sectors where we think we've got value to add. Geographically, we have a strong preference for South Africa, the rest of the continent, through our investee companies, and then further afield, very selectively and typically with partners. We also have a preference for where we can organic growth, deploying capital through our investee companies and not paying for other people's goodwill if we can generate it ourselves.
But of course, you know, we are open for types of growth, organic or inorganic. The third bucket, I've mostly spoken about reducing debt and explained our philosophy there. You will see this year there was a relatively meaningful feature of our capital allocation. And then moving on to the last one there, share repurchases. This is typically a topic of interesting debate with our investors. Also, you'll be happy to hear lots of debate always about it internally. And we will certainly say that we think share repurchases are a very useful tool to amplify returns to shareholders. So we completely get that the math is compelling when you're trading at a sufficiently deep discount to your intrinsic value to repurchase shares....
But there's one important caveat to this, and that is that we cannot achieve with repurchases what the portfolio is not achieving organically. So to say that differently, when the portfolio is not delivering the growth and the earnings and dividends that we're expecting, or alternatively, when there are uncertainties in the portfolio around corporate actions such as we have with CIVH and the Vodacom transaction, then we will be more cautious, and we will preserve capacity to cater for unforeseen adversity. Of course, this is frustrating when these uncertainties take longer to resolve. We understand that it causes a drag on our returns, but it is consistent with how we think about the long-term custodianship of our balance sheet.
Turning over to how this sort of translated into decisions in the last year. We allocated roughly ZAR 9.4 billion of capital in the year. The graph on the left-hand side there shows you that roughly 40% of that, ZAR 3.8 billion, came from the underlying portfolio in the form of investment returns. As I mentioned, we think that that could be higher, ZAR 3.8 billion for a ZAR 140 billion portfolio. You know, we certainly think there's meaningful scope to improve that. The second component comes from investments realized, so that's 36%, ZAR 3.4 billion. The biggest contributor to that was, of course, the placement of our Momentum stake just before the year-end, after the elections.
And then also there was a great realization by our investment team of an asset called Dynamic Foods. Lastly, the roughly quarter that's left was ZAR 2.2 billion of cash resources that we deployed. And if you combine that, the 2.2, with the assets that we disposed, the 3.4 odd, then almost all of that excess capital, if you like, we utilized to deleverage the balance sheet. So in total, we repaid preference shares of 4.8, 4 point... Sorry, 5.8. 5.4 of that was capital, and the remainder was pref dividends.
If you stand back, as Jannie mentioned, a relatively meaningful degrossing of the balance sheet, and hopefully a more sort of streamlined outcome at the end of the year. The other parts that we allocated capital to was dividends of roughly 1.3 billion. There were taxes, meaningful CGT, other taxes, and some costs of around 1.1, and then a very modest allocation to new business this year or to new investments. That was only 300 odd million. And then Jannie mentioned the completion of the share repurchase that we spoke about last year. So that's not a new repurchase, but we completed that 1 billion rand repurchase at the beginning of the year, and that was around 700 million rand.
So if you stand back and then say, well, where does that leave the sort of portfolio composition at the, at the end of the year? It's tempting to say, and we showed you the same picture last year. It's tempting to say that not a lot had changed. Last year, we had 83% of the value in our core or managed assets, if you like. Now that's down to 81%. Cash, we had 1%. That's now 3%. Portfolio investments was 11, now it's 10. So it feels like not a lot had changed, but it's the direction of some of those moves that are not pleasing. We certainly...
It's not the strategy for us to increase or to decrease the contribution of our core portfolio, but that, as I mentioned, had gone down very slightly. And that is mostly because we reduced the INAV of two of our meaningful investments by almost ZAR 12 billion in total. That's Mediclinic and HeinBev. So Neville will talk about the valuations later. So clearly, directionally, we would have expected that to go in a different direction. And the reason for that is the blocks that you see there on the side. We showed you this last year.
It's not an exact science, but we've had requests from the past to try and give an indication of how much of our portfolio do we think sits in a sort of mature cash-generating bucket, how much sits in a growth bucket, and then how much in sort of turnaround or recovery. And you can see there, the recovery piece increased during the year. It was 27%. This year, we sort of have it up at 30%. And the growth bucket has meaningfully reduced from a third to roughly a quarter.
So the biggest reason for that is that, CIVH, which is the asset that we've got high conviction on, we think is a trophy asset, but in the last year, it didn't show us the growth that we expect from it. So we've moved that into recovery, and Peter will talk a bit later about the initiatives that we have underway there, and also the challenges that they experienced. But we are confident that they won't be there for too long. We are also very pleased with the performance of Rainbow and the turnaround by Marthinus and the team of that asset, and also confident they will help us to chip away at that 30% and, hopefully bring down that number very meaningfully in future.
The last slide I have is just to touch on, our thinking. Again, Jannie mentioned under strategic priorities, the third one there was unlocking value through, through divestments. You would have heard Jannie in previous years talk about shortening the tail or cutting the tail. So we thought probably a good place to start is just to define a little bit, you know, how do we think about the tail? Or what defines our, our thinking. And the, the first point I would make is to say that, we consider what an asset contributes to our investment thesis. Is it something that, that generates cash? Does it generate growth? Does it generate scarcity? So if it, if it doesn't none of those things for us, we, we would have to question if it, if it really has a, a part to play.
The second point is in a way related to that, but we acknowledge that size does matter. There's a sort of very amplified Pareto effect on our portfolio. If you consider the managed assets, then fewer than 20% of them contribute more than 80% of the value. So of course, mind space is limited, so we need to make sure that we spend our efforts on the things that can move the needle. So we are mindful of size. Thirdly, important for us that we own assets where we think we can make a difference, and we can help unlock value or create value.
And then lastly, it might be that an asset ticks all those boxes, but the reality is that it's worth more to someone else than it is to us, and then we need to be able to have a dispassionate look at that as a candidate to divest. Of course, having sort of a conceptual framework for how you think about these things is different to either concluding anything. So maybe just to mention the things that drive timing. For listing investments, relatively easy, you just need to align sort of market conditions and liquidity requirements with your own price and value expectations, as we did for Momentum during the year. But in the unlisted space, it's a lot more complicated.
Not only do you need to consider the sort of readiness of the asset and the readiness of the buyer universe, but also the regulatory implementation is typically a lot more complicated, and it takes more time. Lastly, I will just say that none of this is black and white. I think we can all acknowledge that some big investments would have also started as small investments, so there will always be a place in Remgro for things that start small, and we nurture and hopefully build into something big, and we'll always have time and mind space to dedicate to those opportunities. It's also true that some small investments offer really good return on effort, and ultimately, that's an important metric for us.
So it's not again, it's not that there's no place for smaller exposures. And lastly, to remind people that, of course, you know, our communication on divestments can't front run the execution. So if it sometimes feels like there's not a lot happening, then, yeah, please bear that in mind. So I will stop there and then hand over to Neville to talk about the results.
Thank you, Carel, and good morning, everyone. As Jannie has already mentioned, if you look at the salient features of our results for the year end 30 June 2024, Remgro's headline earnings for the year under review decreased by 20% to ZAR 5.6 billion, while the headline earnings per share decreased by 18.8% to ZAR 10.18. The decrease in headline earnings can be summarized in two broad themes, as you see on the graph. Firstly, the negative impact of significant corporate actions implemented throughout the year and throughout the group amounting to ZAR 766 million. Last year, there was a positive impact included in the 2023 number of ZAR 581 million.
This impact actually distorts the comparability of the underlying operational performance of our portfolio year on year. Details of which I will disclose, when I present the results per platform. Secondly, excluding the impact of these, corporate actions in 2023 and 2024 financial years, and that's the two outer blocks. Remgro's muted headline earnings performance year on year resulted from mixed operational performances from investee companies, of which the most important are, firstly, increased contributions due to improved operational performances from RCL Foods, and that's including Rainbow, Total Energies, Outsurance Group, Siqalo Foods, and, Air Products.
These positive performances were offset by an increase in the loss contributed by HeinBev, and that's excluding the Heineken IFRS 3 impact of ZAR 297 million, partly offset by a higher contribution from Cape Wine of ZAR 65 million, compared to Distell's contribution of ZAR 751 million. That number excludes the transaction cost accounted for last year in the comparative year, as well as a lower contribution from CIVH, mainly due to higher finance costs, resulting from increased interest rates and higher security and maintenance costs to ensure high network uptime. Also, lower contribution net finance income, mainly due to lower average cash balances year on year. We will provide more detail on these operational results during the presentation.
The other important KPI is our INAV, and this graph provides an important overview of the significant changes in the valuation outcome of our unlisted investments, as well as the movement in the market values of our listed investments. You'll see the two main detractors impacting negatively on the growth in INAV are the valuations of Mediclinic, down 13.8%, and HeinBev, down 43.2%. But just bearing in mind that this decrease in HeinBev's valuation was substantially accounted for at the interim stage. Then the full interest in Momentum Group was disposed during June 2024, by way of an accelerated book build. This negative impact was offset by steep increases in the listed investments market values, especially OUTsurance Group, up by 37%, and RCL Foods, including Rainbow, up by 47%.
And this increase mainly represents the value unlock of the Rainbow unbundling at one July 2024. The net cash increased by ZAR 3 billion, mainly due to the redemption of the preference debt, amounting to ZAR 5.4 billion during the year under review. Then, the difference in increase between the INAV, up 0.4%, and INAV per share, up 1%, is the accretive impact of the shares repurchased in July 2023. This table we've included starting last year and even in December. This table provides a snapshot of the valuation outcomes of the valuation process conducted for the year ended 30 June 2024, and also disclosing the principal valuation methodology followed, as well as an indication of discount ranges applied to the individual investments.
This information is intended to provide investors with additional insight and comfort around the veracity and governance processes informing this critical, important process that is conducted twice a year. So maybe just some comments around the governance process. The valuation subcommittee assists the audit and risk committee in gaining assurance on the valuation of unlisted investments. The audit and risk committee then recommend that valuations to the board. This subcommittee is now well-established in interrogating the valuation assumptions used in the DCF models, as presented by our corporate finance team, thereby contributing to the robustness of Remgro's INAV. The year-end valuations at 30 June 2024 were reviewed by our auditors, Ernst & Young valuation specialist, in compliance with the requirements of IFRS 13.
This INAV table is also included in the segmental report of our consolidated annual financial statements, on which the auditors have issued an unqualified audit opinion. On a next slide, this graph depicts the top five unlisted investment valuations since 30 June 2023. These investments contribute approximately 55% to Remgro's INAV. For Mediclinic, the independent valuation was performed by Deloitte on a similar basis as compared to the 30 June 2023 valuation. This valuation was done on a sum of the parts methodology, with the three main components being Southern Africa, Hirslanden, and Middle East, valued on a DCF basis, and the 29.7% interest in Spire, valued at its closing share price. Mediclinic's board-approved five-year plan was used as a basis for this DCF.
That plan numbers were subsequent to a detailed review of Mediclinic's business operations per country. The Deloitte valuation range came in at $5.34-$6.64 per share, with a midpoint of $5.99 per share being accepted for this valuation. The decrease in valuation mainly results from a more conservative view adopted in relation to the action plans being implemented at Hirslanden and the Middle East. The valuation decreased year on year by 13.8% to ZAR 40.8 billion. The quantum of the decrease amounts to ZAR 6.5 billion, which represents a reduction of ZAR 11.74 per share. If you look at CIVH, it's the second biggest unlisted investment.
The DCF evaluation of CIVH is performed internally, based on a board-approved forecast, and we apply discounts for lack of marketability and forecast risk. Pieter will provide more insight on the valuation of CIVH later on in the presentation. If you look at HeinBev, the valuation for 30 June 2024 is based on the DCF methodology. This methodology differs from the price of a recent investment, the PRI approach, used at 30 June 2023, and the market multiple methodology used at the interim stage. You can remember that the Distell Heineken transaction was effective 26 April 2023. With no formal board-approved forecast information on which a DCF could be performed for June 2023, and reliable historic and updated forecast information was also not available for multiple valuations.
Therefore, PRI was used as a valuation methodology last year. For December 2023, a market multiple was used based on a forecast EBITDA and listed peer market multiples. For 30 June 2024, board-approved forecast information was made available, on which we have based the DCF valuation. The valuation outcome of ZAR 7.1 billion represents a 43% decrease in the valuation since 30 June 2023. But you can remember, and you can see that it's in line with the 31 December 2023 valuation. We also applied discounts to the DCF valuation for lack of control, lack of marketability, and a forecast risk discount. So just a general comment on the results overview per platform.
If you look at the financial information disclosed per platform, you will see that in addition to the intrinsic value and headline earnings disclosure per platform, we have also included the cash dividends received during the year, as well as the headline earnings yield and dividend yield for the current period under review for improved transparency. The healthcare platform consists of Mediclinic, and that's the single biggest investment in Remgro's portfolio and contributes approximately 30% to INAV and 24% to headline earnings. It's currently not performing optimally from an earnings yield and a dividend yield perspective. So Mediclinic's headline earnings contribution decreased by 10.4% to R1.5 billion. Excluding the impact of corporate actions, consisting of transaction costs of R165 million this year.
The previous year, transaction cost of $612 million was included, as well as a fair value adjustment of the redemption liability in respect of the acquisition of La Colline Grangettes, which has a negative impact of $344 million, this year, compared to 2023, a positive impact of $338 million. The comparable headline earnings increased by 3%, and that's in line with their dollar-adjusted earnings, which is flat year on year. Ronnie and Jurgens will unpack Mediclinic's results later in the presentation. The consumer products platform, very busy slide. And you'll see, the platform consists of RCL, including Rainbow, HeinBev, Siqalo, and Cape Wine, and contributes approximately 19% to INAV and 15% to headline earnings.
Dividends contribution lagged currently due to no dividends received from RCL in 2024 and HeinBev also. RCL declared a final dividend of ZAR 0.35 per share, which will be accounted for in FY 2025. RCL Foods reported an increase in underlying headline earnings from continuing operations, excluding Rainbow and Vector, of 8.3%, mainly due to strong performance in sugar and the grocery business units. Paul will elaborate in more detail on RCL Foods results later on in the presentation. Just a few notes on Rainbow. Rainbow is classified in RCL Foods results as a discontinued operation. So included in RCL's headline earnings as discontinued operation is the contribution by Rainbow, amounting to a profit of ZAR 145 million.
In 2023, they incurred a loss of ZAR 230 million. A significant increase, a turnaround of 163%, despite the negative impact of the avian influenza experienced during the year under review. Rainbow also reported significant improvement in underlying headline earnings from a loss of ZAR 249 million in 2023 to a profit of ZAR 207 million, mainly due to enhanced agricultural KPIs, higher processing yield, and that's mainly due to the introduction of a new breed, I think they call it Indian River, approximately two and a half years ago. Marthinus Stander said it takes approximately two years for the breed to be fully established throughout the system, and now we see the positive effects of the improved KPIs of that breed.
And also, improved results due to improved pricing and increased retail and wholesale channel volumes. There was also a relief in commodity prices, as well as effective cost management and reduced load shedding cost. So I think that company has a few tailwinds, and we expect more and improved performance from them. Just on the spreads business, Siqalo Foods, the headline contribution of ZAR 452 million represents an increase of 31.4%. If you look at the trading environment, it remains a challenge due to elevated interest rates, high inflation, and volatile commodity prices and exchange rates. The business increased prices in September 2023 to offset the impact of inflation and continued cost pressure.
After that, Siqalo experienced a 6.7% decrease in volume for the year under review, as consumer spend was also negatively impacted by the elevated inflationary environment. All commodity markets have stabilized at pre-Russia-Ukraine war levels, which assisted to offset the decrease in volumes, resulting in a 23% increase in operational EBITDA. Overall, a pleasing set of results in a challenging trading environment. The other investment is Cape Wine. Cape Wine's valuation increased by 13% to ZAR 1.8 billion, mainly due to the value of the overall business increasing by 5.1% due to an improved long-term growth outlook based on the more mature whiskey stockpile, as well as a lower WACC.
In addition, Remgro's economic interest increased from 31.4% to 33.6% due to Cape Wine's repurchase of a 5% stake from Heineken, and Remgro also repurchasing a 1.3% stake directly from Heineken. If you look at the Heineken, Cape Wine, Distell group, Jannie has elaborated in detail about the challenges experienced during the six months ended 31 December 2023. I will focus on Heineken's performance during the six months ended 30 June 2024. Excuse me if I repeat some of the words of Jannie, but this six months was characterized by low single-digit revenue growth in South Africa, primarily driven by price. The spirits, wine, cider, and RTD portfolios outperformed the market in their respective categories, and that's a big positive.
In the beer segment, however, volumes remained under pressure due to the continued challenging competitive environment. And, in this regard, Heineken has implemented various measures to restore both market share and margins, which Jannie has already alluded to. Outside of South Africa and Namibia, double-digit revenue growth was supported by strong performance across most of the categories. So as a result of all these challenges that Heineken experienced during the reporting period, the trading results for the year under review of Heineken is not deemed to be an accurate reflection of the long-term prospects of this business. Both Jannie and I have now spoken at length on the performance of Heineken during our reporting period. So, as mentioned in our profit announcement, the results of Heineken were severely impacted by certain once-off items as well as accounting anomalies.
In this slide, we have attempted to provide you with a better understanding of the magnitude of the effect of, of these items on the results of Heineken for the twelve months to thirty June 2024. And please note that, the numbers presented, here is at a Remgro level, thus our portion, which is 18.8% of the results of, of Heineken. Interpreting the waterfall graph presented, firstly, we have adjusted, for Remgro's share of the amortization and depreciation charges relating to the additional assets identified when Heineken obtained control over Distell and Namibia Breweries, and this amounts to ZAR 257 million. It is important to note that these are non-cash flow items and will diminish over time.
Secondly, when we presented our interim results during March this year, we also referred to certain substantial one-off costs incurred by Heineken, relating to the integration and supply challenges experienced. Our portion of these costs amounts to approximately ZAR 209 million, of which the majority was incurred in the six months to December 2023. These costs primarily relate to demurrage charges, malt washout costs, and transaction costs. It should be noted that we have not tried to quantify the effect of the importation of beer that also occurred during this period. As previously mentioned, these imports were sold at very low margins, if any, to protect market share.
Lastly, we have also added back the after-tax interest cost and foreign exchange adjustments accounted for Heineken during the period under review to provide a better understanding of the underlying operational performance of the business. After these adjustments, the contribution of Heineken to Remgro's headline earnings would have increased to a positive R92 million. To close the conversation of HeinBev, the company has experienced an exceptionally tough period of integration, challenges regarding supply chain and also front-end issues. Although we acknowledge that a lot of them were self-inflicted. As Jannie mentioned previously, the company is now, however, in a much better space and well prepared for the upcoming peak season and beyond. The financial services platform contributes 17% to INAV and 19% to headline earnings.
OUTsurance is a significant contributor to our cash earnings at the center, with dividends received during the year of ZAR 693 million at a Remgro level. The OUTsurance Group share price increased also substantially by 37%, leading to a positive increase in contribution to INAV. Their contribution to headline earnings increased by 22% to just over ZAR 1 billion, mainly due to higher contribution from OUTsurance Holdings Limited and the reduction in head office costs following the listing transaction transition. OUTsurance Holdings Limited normalized earnings increased by 16%, supported by good operational performance and investment income results, despite higher natural peril claims at Youi and the start-up loss incurred by OUTsurance Ireland. They announced their results on the seventeenth of September.
The final ordinary dividend of ZAR 11.32 and the special dividend of ZAR 0.40 will be accounted for in Remgro's 2025 financial year. The infrastructure portfolio, the big investment there is CIVH, and their contribution to Headline Earnings resulted in a loss of ZAR 75 million, compared to a profit of ZAR 206 million in 2023. As I previously mentioned, the decrease is mainly due to higher finance costs and higher maintenance and security costs. Pieter Uys will elaborate more on CIVH results and valuation later in the presentation.
The industrial platform companies, Air Products, TotalEnergies, Wispeco, are profitable, as you can see, on a sustainable basis, and are consistent dividend payers with high cash conversion ratios, as seen in the contribution to headline earnings and dividend received, with attractive earnings yield and dividend yields. Their valuations are also not very demanding. Quick notes on Air Products valuation. Increase in value is mainly due to an improvement in growth assumptions, as well as the weighted average cost of capital decreasing year on year. TotalEnergies increase in value is mainly due to the WACC decreasing year on year. Wispeco's increases in value due to an improvement in growth assumptions, a decrease in WACC year on year, and improved gross margin projected over the forecast period.
From a results perspective, Air Products' headline earnings increased by 18.9% to ZAR 566 million, and that's mainly because of demand from large tonnage gas customers was generally stable, while the packaged gases business performed well. If you look at TotalEnergies numbers, there's stock effect in both years. Excluding the stock effect, their contribution increased by 84% due to improved refining results, as well as a negative impact in on the 2023 results due to supply chain challenges experienced during that period. Wispeco's decrease in headline earnings was due to sustained downward pressure on trading margins and inflationary cost increases. Moving on to the other KPI, the cash generation at the center.
As you can see, the cash at the center decreased by ZAR 2.2 billion to ZAR 6.8 billion, mainly due to the redemption of pref amounting to ZAR 5.4 billion, resulting in net cash at the center increasing by ZAR 3.2 billion over the reporting period. The main driver of cash earnings at the center is dividends received from investee companies, and this year amounting to ZAR 3.1 billion. And as mentioned earlier by Carel, the portfolio is currently not performing optimally from a cash or a dividend yield perspective, with a few investee companies not paying dividends due to obvious reasons. In this case, I will just mention HeinBev, CIVH, and RCL, that didn't pay a dividend in 2024, but they declared a final dividend.
Looking at the dividend declaration, you can remember at the interim stage, the board took a cautious approach in keeping the dividend flat at ZAR 0.80. They declared a final dividend of ZAR 1.84, and that final dividend is up by 15% year on year, resulting in a total dividend for the year of ZAR 2.64. The increase in total dividend is 10% year on year. Also note the gradual improvement in the dividend yield over the last three years from 1.2% in 2022 to now 1.8%. That's the end of my presentation. I'll hand over to Ronnie for Mediclinic.
Good morning, and thank you very much for the opportunity. At Mediclinic, we are experiencing a healthcare landscape that's changing faster than ever before. The driving forces behind these changes are the continuous advances in medical technology, which is really very exciting, general healthcare-related cost increases, regulatory changes, pressure on tariffs and pricing, a shortage of skilled healthcare workers, and a continuous rise of consumerism in healthcare, which is also exciting. In this shifting environment, Mediclinic remains true to our purpose of enhancing the quality of life of the communities we serve, and we are very proud of that. This drives our strategy and priority setting, and more importantly, motivates our everyday behavior. Our strategy is aimed at adapting our organization to these changing healthcare environment, forces that I've just mentioned, and preparing to take advantage of emerging opportunities. With all changes, there will be opportunities.
We continue to focus our efforts around three key strategic goals. The first goal is to strengthen the core, which includes improving operational efficiencies, refining and implementing the optimal group operating model, which we are reviewing and expanding across the continuum of care. The second strategic goal is to focus on clinical care, which is the core, and this involves the optimization of clinical service lines and care delivery models. And the third strategic goal is to develop a comprehensive service excellence differentiation, which involves the development of a much stronger business to consumer capability. Progress made on strategy execution at this point includes the following: opening of Medical Center Wangen in Bern, in Switzerland, which is a single destination offering expertise in the fields of internal medicine, physiotherapy, radiology, and nutritional counseling. We are also expanding our renal clinic network and mental health facilities in Southern Africa.
We are opening two outpatient clinics and a fertility center in the UAE. We've automated 100,000 working hours of repetitive tasks and creating a pipeline for further opportunities in robotic process automation. We've reduced our readmission rates across the entire group, which is really good for clinical performance, and we've been driving improvements in our net promoter score in different care settings. An example of that is a recently launched mobile initiative that allow for real-time feedback and service recovery in our hospitals when we receive complaints. Very well received by patients and their families. Alongside strategy execution, we are prioritizing performance improvement, driving operational margins, and expanding revenue generating opportunities within our existing facilities. The broader market dynamic in Switzerland remains challenging.
While the economy continues a steady growth path, pressure on tariffs and pricing on the one hand, and rising costs on the other, puts the healthcare system under immense pressure. As mentioned previously, we are in the process of executing a comprehensive plan aimed at reducing costs, improving efficiencies, and adapting the business to a path of sustainability and growth. The plan is focused broadly around the following three work streams and deliverables. The first one is optimization of the back office administration costs through automation and the reduction of hierarchy levels of the organization in Switzerland. We have to date, achieved a reduction in corporate office headcount of approximately 10% and are working towards a further reduction of administrative staff through consolidation of admin tasks per region.
Secondly, is strengthening the core business through increased volumes and market share at lower cost, accelerating our billing process through automation, as well as the standardization of doctors' fees to optimize our cash position, and using market strength per region to negotiate better tariffs. The last of our work streams is to evaluate opportunities to optimize strategic positioning of our medical infrastructure in Switzerland. We remain committed to the targeted outcomes of this plan, and together with the appropriate capital allocation and the benefit of facility upgrades which are underway, this plan will drive an improvement in return on invested capital over time. The South African market, experiencing an improvement in general political and economic prospects following the 2024 general elections and the formation of the government of national unity.
Q2 business confidence increased to 35 from 30 the previous quarter, and with some analysts forecasting an economic growth rate of up to 2% for 2025. The signing of the National Health Insurance Act into law took place on the fifteenth of May of 2024. At this point, a great deal of uncertainty still remains about the various regulations that need to be enacted for the NHI Act to come into effect. We, however, remain engaged with government and various industry players on the best way forward, and we do not believe that NHI will have a material impact on our business in the short term. We are committed to the objectives of universal healthcare access and but we also believe that this can best be achieved through cooperation and collaboration between government and the private sector.
In the meantime, we are, we have embarked on a multi-year replacement of our core ICT revenue cycle management systems and the implementation of an electronic health record. In combination, these two projects will improve digital capabilities, it enhance clinical decision-making and clinical performance, and drive efficiencies in billing and inventory management. In addition to the above, we continue to grow the business across the continuum of care by expanding our offerings in mental health, oncology, radiology, and renal services. The UAE economy continues to grow as it benefits from ongoing investments in infrastructure and services. GDP growth of 4% is forecast for 2024. The regional prosperity in that part of the world continues to seed growth in healthcare services infrastructure, as well as offerings, however, also intensifying the competition for doctors and nurses.
The market dynamics in the Abu Dhabi market, with ongoing pressure on pricing and tariffs, continue to challenge the operating performance of our units there. We, however, remain focused on organic growth through selected investments in infrastructure, as well as new offerings and pursuing operating leverage as our volumes and revenues grow. During this period, we embarked on a thorough review of the specialty strategies at all our facilities in the UAE to optimize the service offerings of each of these facilities within a revised hub-and-spoke model, where smaller units feed into our multidisciplinary hospitals, and then with that, I'm going to hand over to Jurgens to go through the financial results.
Thank you very much, Ronnie, and good morning, everyone. I'm going to take us through the group results of, of Mediclinic and then look at, each of the divisions in turn. And at the end of each divisional discussion, I'll also give an update of where we are year to date and, a bit of a view of what we see in this financial year. So starting with the, the group's results for the year ended 31 March 2024, was impacted, as has been discussed, by a weak performance in Switzerland, partially offset by a strong showing in the Middle East. Group revenue was up 5% at $4.6 billion.
This result was driven by 0.9% growth in inpatient admissions and 1.6% growth in daycase admissions, with the increase in average revenue per case below inflation due to ongoing tariff pressures and mixed changes that was referenced by Ronnie as well. Adjusted EBITDA was down 2% at $673 million. The group's adjusted EBITDA margin reduced to 14.7% from 15.8% in the prior year, reflecting the pressures on revenue and above inflationary increases in the cost base, particularly employee-related costs and consumables and supplies. The group delivered cash conversion of 92% within the targeted 90%-100% conversion rate. Cash and cash equivalents at year-end was $673 million.
Given the impact on profitability, the group's leverage ratio, including lease liabilities, increased marginally during the year to 3.8 times. If you were to exclude lease liabilities, that number would be around 2.2 times. In Switzerland, bank borrowings were utilized for a part redemption of the Swiss bonds and a partial buyout of a minority shareholder in the Geneva hospitals. The effect was offset by a final debt repayment in the Middle East of around $50 million. So after a period of significant repayment and deleveraging in the group, our reported and incurred debt increased marginally to $2.2 billion. Turning then our attention to Switzerland. Revenue increased by 0.3% to CHF 1.9 billion, with inpatient admissions up 0.8%.
The general insured mix increased to 52.1%, and average length of stay decreased by 4.7%, resulting in an occupancy rate of 58.1%. Outpatient and daycase revenue was up 2% to CHF 408 million francs, contributing 21% to total revenue during the period. Employee benefit and related costs were impacted by inflation-linked increases to salaries and an ongoing spend on agency and overtime costs... This, together with an increase in consumables and supplies driven by input costs, resulted in a 9% decrease in adjusted EBITDA to CHF 255 million francs. The adjusted EBITDA margin was 13.4%. In trading since year-end, we've seen an improvement in inpatient volumes, with continued pressure on supplementary insured tariffs and agency costs. Our efforts to improve working capital management are beginning to translate into better cash conversion.
As Ronnie pointed out, we continue to focus our attention on revenue growth and the efficient deployment of staff across the division. Hirslanden expects to deliver moderate revenue growth and are targeting to break the trend of deteriorating EBITDA margins in FY 2025, with incremental margin improvement in subsequent years, as the benefits of our actions to adapt the business for sustainability and growth are retained. Moving then our attention to Southern Africa. Revenue for the period increased by 7% to ZAR 20.8 billion. In comparison with the prior year, paid patient days increased by 0.5%, with day case growth exceeding inpatient admissions. Occupancy decreased slightly to average 67.4%, owing to new capacity generated for future growth.
Average revenue per bed day was up 5.7% compared to the prior year, below the average annual tariff increase, largely due to the effect of network formation. The average length of stay was up 0.3% compared to the prior year. Adjusted EBITDA in Southern Africa was flat at ZAR 3.8 billion, resulting in an adjusted EBITDA margin of 18.2%, as revenue growth was more than offset by higher employee and benefit and related costs, and also an increase in ICT spend. In trading results since the full year, we've seen good volume growth and disciplined cost management. The division expects to deliver FY 2024 revenue growth ahead of inflation and a slightly improved EBITDA margin. Finally, then moving on to the Middle East.
Revenue for the period increased by 10% to AED 4.9 billion dirhams, driven by strong growth across all services. Inpatient admissions and day cases were up 9% and 15%, respectively, and outpatient cases up 4%. The volume increase was partially offset by a decrease in the average revenue per case in the inpatient and day case environment, driven by mix changes. Adjusted EBITDA increased by 11% to AED 714 million dirhams, driven by the strong revenue performance, which was partly offset by an increase in consumables and supplies due to speciality mix. The adjusted EBITDA margin increased to 14.6%. In trading since the full-year results, we've seen continued revenue growth, albeit off a higher base, and an increase in consumables and supply costs due to the ongoing mix changes that I've referenced.
The division expects to deliver moderate revenue growth and an improving EBITDA margin in FY 2025. With that, I'll hand back to Ronnie.
Thank you, Jurgens. In summary, our top priority is executing on our comprehensive plan to deliver resilience and future growth in Switzerland. That's by far and away our most important focus area, and the success of this is critical to us. This is followed by our second priority, which is focused on driving growth and operating margin improvement in the Middle East, and then followed on by the initiation of the core system replacement in Southern Africa. We will continue to grow across the continuum of care throughout the group as well, and we will also drive service differentiation through innovation of our services, products, and digital capabilities to develop a closer relationship with our customers.
We remain focused on improving operating performance and increasing revenue across all of our businesses, and this will provide us with a robust position from which to execute on our strategic objectives to compete in a changing environment, taking advantage of opportunities, and grow our return on invested capital sustainably over time and across all our divisions. Thank you very much. I'm handing over to Pieter Uys.
Good morning, everyone. I'm just gonna start by reminding us of the strategy of the CIVH group and specifically also the Maziv group. Maziv was formed during the last period, and on the left-hand side, there's a circle with the different pieces and products that make up our offering to the market. The bottom half of the circle has got the fiber to the telcos, where we started the business. We then started expanding into backhaul, to ISPs, to other FNOs or fiber network operators, and thereafter followed the fiber to the business. The top half of the circle shows our products to residential customers. This is where we are democratizing the internet. On the left, Vuma Core, where we started, the Sandtons of the world. On the right, Vuma Reach, where we expanded into lower LSM, typically Mitchells Plain, Soweto.
Then at the top is showing the Vuma Key product, where we're rolling out into, for example, Alex and Khayelitsha. But we remain true to our original strategy: open access, wholesale, uncapped fiber. On the right-hand side, the structure that supports the strategy with the shareholders shown at the top, Remgro, 57%, NewGX thirty-seven, and CIH, 6%. Holding company, CIVH, underneath two operating units. The one is Africa, that we're busy forming, and we're looking across the continent for opportunities. We are in discussions with, for example, MTN and Vodacom. On the right-hand side, Maziv. This is also where Vodacom, if once the transaction is approved, will do their investment. At the bottom, you will see the two main operating units of Maziv: Dark Fibre Africa, we also know it as DFA, and Vumatel or Vuma.
Vuma also has the 49.X% shareholding in Herotel. If I move on and just look, take a wider look at the environment. Firstly, the macroeconomic environment. It was mentioned earlier on that interest rates had a huge impact on the business. If I rewind the clock to April 2022, and I compare that interest rate to today's interest rate, there's a 4 percentage points basis points difference between then and now. So if you take 4% on 20 billion debt, that results in 800 million rand more interest being paid in the current year to two years ago, if you use the same variables at the bottom. Consumers still under pressure. Hopefully, this afternoon, there will be some relief, if interest rates start coming down.
DFA, shown in the center, last time I reported, we had to do a lot of work to get the DFA network world-class again. We started off, as I said on the first slide, as a network building fiber to telcos. We then expanded the product portfolio, but the network didn't keep up, and we really had to freeze the network rollout and re-architecture the network. Most of that work is now done. We've invested ZAR 450 million out of the ZAR 750 million that we planned to get the network world-class again. Vumatel at the bottom, also mentioned last time that we are looking at our balance sheet, making sure that we are ready for the future, with or without a Vodacom investment, and this shows how we slowed down the capital expenditure in the residential area.
The prior year, 400,000 homes passed. In the last financial year, only 138,000 homes passed. This is a very busy slide, but a very useful slide to explain how the Vumatel business works. I've split the market up into three columns: our core market, middle, the reach market, and the right-hand side, the key market. Then in the top row of the columns, I show the market size. So if we take, for example, the core market potential of 2.2 million homes that can be passed, that market is more or less mature. That is the leafy suburbs, as some call them. 20% of those homes are currently overbuilt, mostly by Telkom's OpenServe.
And if you look at how we've done there, we've, by the end of the financial year for CIVH, passed 906,000, more or less the same as the prior year, as we didn't really focus build in that segment. We have rolled out just short of 400,000 of the 900,000 homes and given them internet through ISPs. That gives us then a, at the bottom, an uptake or penetration of our homes passed of 43.3%. We have spent a lot of effort in the last couple of months. How do we mine the homes passed base better?
Dietlof and his team have come up with very clever ways how we can get the penetration deeper, working with the ISPs, and I can report that the last couple of months, we've seen a good uptick in activating those homes passed but not connected to the internet. Right at the bottom, I show our percentage of the market. In this case, because the market is mature, of the 2.2 million, we are passing 44%. So our market share, 44%. Reach in the middle, the exciting part. This is where we built the homes in the last financial year. 4.8 million potential homes, 10% overbuilt already. 42, 42% of the 4.8 million have been penetrated, penetrated by homes passed. How have we done? 107.6 million homes that we've passed.
Of that, we have connected, by the end of the financial year, 335,000 homes. That gives us, at the end of the financial year, 31% penetration. But also in Reach, Dietlof and his team have focused a lot more recently, connecting more of those homes, and I can report now that as of now, the subscribers of those homes passed have gone past the Core homes that are connected. So almost 400,000 of the homes passed and reached have now been connected, which pushes up the uptake to around 37% penetration of our homes passed. At the bottom, 50% market share in Reach. So of the homes already passed out of the 4.8 million, we have passed 50%. On the right-hand side, Key, that is where the huge opportunity sits. We haven't really focused on this.
We are optimistic about it. We've built a trial network in Alex and in Khayelitsha and Kayamandi, and at the end of the financial year, we had 1.9 thousand subscribers connected. Again, focused, and that number has now doubled in the last few months. So again, the focus shows that the business is there, people want the internet, democratizing the internet. DFA mentioned that we had to rebuild the network, and we today are starting to connect again. The last couple of months, we are seeing the connections coming through. Addressable market, 570 thousand. So each of those connections, the 41,000, serves a customer in the enterprise space. Probably the last...
It's also taken up now that we've opened up the taps again, probably doing between a thousand and a thousand five hundred businesses at the moment through the ISPs. On the right-hand side, I've put together what I previously reported separately as fiber to the telcos and fiber backhaul. This is where we're connecting and provide products to fiber network operators, FNOs, the ISPs, and the MNOs to connect their base stations. Now, just drilling into some of the financial results. Don't forget, there's also a Maziv layer in the middle, but I haven't shown that. So Vuma and DFA builds up into Maziv. So if you compare, for example, the Vuma numbers, it's not 100% comparable to the prior year, and I'll maybe just repeat that just now.
But if you look at DFA, you will see the revenue growth slower than expected, slower than what we budgeted for, but it has to do with us freezing the network, and we stopped all connections to the network. Because what happened was, because the network was designed to serve initially, mostly telco customers and not thousands of connections a month, we could not effectively connect those customers without disrupting the network. So before we rearchitectured the network, it took sometimes three months to connect a corporate customer from the date of order. With the new architecture now, that has come down to three weeks from the three months, showing a huge improvement. Also, in DFA, the costs are higher than expected. With the rearchitecture, most of that work can only be done at night.
At night, it is very dangerous to work in some of these areas where the work was done, so we had to step up the security. And also, load shedding had some impact on the operating cost in this business. Vuma at the bottom, I mentioned the revenue, or show the revenue up 3.2%. However, if you compare it to a comparable number in the previous period, that's probably up close to 6%. Again, the operating earnings slowed down. A big chunk of the CapEx in the prior year was spent in Vumatel, so there was a big uptick in CapEx. So that depreciation is starting to come through in the showing then in the earnings that are more down than the prior years.
Also, what we have seen in the residential areas, such as Reach, where not everybody has inverters and batteries, the customers did not recharge, as they would without load shedding because they could not use the internet while there was load shedding. Fortunately, load shedding seems to be something of the past, and the customers are becoming active again and recharging. The next slide, I show the cash flow, and where it comes from, the EBITDA on the left, ZAR 4.3 billion, and half of that goes into paying down interest. So there is a ZAR 2.1 billion interest payment. Not all of that goes to the banks. There are also some lease liability debt in there, probably ZAR 1.8 billion of the debt that sits at Maziv in the debt, loan co.
That leaves us then with ZAR 2 billion that we've spent on CapEx. You can see that we've slowed down as per my prior slides, where we've passed many fewer homes in the prior year. CapEx last year was ZAR 3.5 billion. This year, it's ZAR 2.6 billion. But there's still good cash coming from the business. Interest rates I mentioned is high, so if that starts coming down, it will have a big impact on our cash generation. The next slide, the valuation. We are using internal valuation, using the cash the forecast coming from management approved by the CIVH Maziv board. That gives a valuation of ZAR 51 billion. There's the Maziv debt, ZAR 19.5 billion.
Of that, ZAR 1.7 billion, the lease liabilities that I mentioned earlier on, the rest, bank debt, giving us the equity value of thirty-one and a half billion. The half-year results, I said that we were cautious, and we applied a 20% forecast risk discount to what we got from management. We have normalized that again, so comparable to the prior year, we've used a 10% forecast risk, which gives then the six billion haircut that we put onto the valuation, resulting in a CIVH equity value of twenty-five point four billion, and our portion, fourteen and a half billion. So slightly up from the previous year's valuation. I also want to spend two slides on the Vodacom investment into Maziv. First time we discussed a potential investment with Vodacom was in January 2020.
We finally concluded a deal in December 2021, submitted that to the regulatory authorities, ICASA and the Competition Commission. The commission then recommended it with a prohibition to the tribunal in August last year. A lot of work was done between then, preparing for the hearings that started on the twentieth of May this year. When we went into the hearings, Rain and MTN were not supportive of the transaction, and there were many asks from DTIC as well, for public interest conditions that we must commit to. What I can report today, we have come up with conditions that we are more than willing to commit to, and Rain, and MTN, and the DTIC have come out in favor of the transaction and reported to the tribunal that they are supportive of the transaction if the conditions that are put forward is then accepted.
Then we are now with the process. The end of this week, we have to submit our final written arguments, and then next Thursday, Friday, will be the final hearings. Then typically they have 10 to 20 business days to make their decision known. By the end of October, we should be in a position to know if the transaction is approved or not. The whole process run by the tribunal was very professional, very detailed, and we spent the last three months, really, in Pretoria, taking part in the tribunal hearings. Last slide just shows some of the public interest commitments that we are making. Firstly, a ZAR 10 billion investment that we are committing over a five-year period. We say we will pass another 1 million homes in the next five years. We are committing to create jobs.
We're continuing to commit that we will pass and connect those schools with high-speed, gigabit-per-second internet. Also, the Vodacom transaction, we're really putting around ZAR 13 billion into the transaction. So in all, not just good for the company and the shareholders, but definitely it will have a huge impact on South Africa and democratizing the internet. And what we have said to them is, most of those 1 million homes that we are committing to, once this investment is approved, we will do in the lower and the lowest of LSMs in the country, bringing internet to the masses, making a difference in schooling and in the economy. With that, I'm gonna stop and hand over to Paul.
Thank you, Peter. Good morning, everyone, and good to be here again to shed some more color on the RCL Foods results for the year end of June 2024. Consistent with last time, I'll have three parts to the presentation. Firstly, an update on our strategic initiatives and portfolio review, as mentioned earlier. I'll look at the food market and RCL Foods's performance within the context of that market, and our brand health, and then move through some of the numbers, just to expand on some of the detail in certain areas. Just starting with our strategic portfolio review on the left-hand side of this chart. What's been mentioned already is the sale of Vector Logistics in August 2023. That relationship has now come to a complete end.
We had transitional services through to August twenty-four, which ended in the last couple of weeks, and we now move on to a transactional relationship with Vector through various distribution forums. Also mentioned earlier was the unbundling of Rainbow and separate listing on the JSE on the first of July 2024. And those two initiatives are critical milestones in our portfolio review and our portfolio reshape. But there are more parts to the portfolio reshape, and captured at the bottom there is to grow our value-added portfolio, and there's many mechanisms to do this. We mentioned the partnerships and acquisitions, and whilst looking for acquisitions, and have been for some time, we'll continue to do so. Having said that, our assets are scarce, and also difficult to come by, and we'll not overpay for assets.
So it is a difficult environment, but we'll continue to apply our mind to various opportunities which come our way. What is important is that while we do that portfolio shift, we continue to look at our brands and how we can grow organically our brands, and if we've got three key initiatives in our brand health, which is core organic growth, innovation, in our existing categories, and then looking where we can take our brands into adjacent categories. That work is ongoing, and good progress has been made in this, in that area in financial year 2024. All of our strategic initiatives are underpinned by our people. It's not possible without them, and that remains a cornerstone of our strategy, as well as being future fit, which includes becoming best in class.
Good progress has been made in that area in the financial year twenty-four, which is not only about cost and efficiencies, but also about how do we position ourselves for the future and building a business that is sustainable, and there's many aspects to it. So overall, from a portfolio review, strategic implementation, pleased with where we got to. Some areas still require some work on our end or getting the necessary attention FY25 . Just moving on to the market context, and starting holistically at total food. This information is sourced as ASK data. This is manufacturing data which is submitted into an entity which collates it all. Represents 80% of food manufacturers in South Africa, so a very good proxy, for what is happening in the food environment.
Starting on the left-hand slide, just unpacking in total food and in food excluding staples and staples, and I'll stop there. You can see inflation for the twelve months, 2024, sitting in just above the range of the 6%, 4%-6% range. But you can see what's happened in the last few months with inflation and food, which has been a significant contributor to overall country inflation coming down and more or less in line now with CPI. If you overlaid 2023 inflation, you would see significant double-digit inflation growth in food. The consequence there is on volume, and you can see that majority of categories for the full year of FY 2024 are actually in decline. And I'll come back to that in a second on the right-hand side. But in the pre...
In the last three months of the financial year, we're seeing some green shoots with some volume consumption starting to improve. What remains a concern is staples. That is where our poorest consumer is, and you can still see that even with despite improving in the, throughout the financial year, still in decline for the last three months, FY 2024. On the right-hand side, just shows food consumption, total food consumption, going back in time, and you can see anything below the line is negative. So we've been in negative territory in food volume for a significant period of time, but there is some green shoots in the last three months of the financial year kicking into positive. So some, positive sentiment coming through in overall food market. Then, just dialing into RCL Foods' performance within that market context.
On the left-hand side is our major categories, and that is total food market categories. And I'll come to the right-hand side, which is our performance within those categories. But you can see, despite food market improving, our categories in which we are, our material categories, remain in decline, bar rusks and bread. Bread obviously being a significant category within the South African context, rusks, small. And those, quite significant numbers are still playing through the system. But what is important to us is how have we performed within that context, and that is the right-hand side. Market shares are a complex conversation. There is category volume growth, margin aspirations, that need to be taken into account, and then overall market share trend lines.
We are very clear on our trend lines by each one of our brands that we wish to operate in, and we zoom in on this and make sure that we operate within those trend lines as much as possible. There are periods in which you go out of them. Overall, we would say we are pleased with our market share performance in the context of the overall food market, as well as the categories in which we operate, and most of the shares have held up, and if there are declines, we are mainly pleased with those declines, except for some of the pet food brands, being Bobtail and Catmor in particular. I'll come back to groceries and did mention at the last interaction the impact of load shedding, particularly on our Randfontein plant, with pet food being most significantly impacted.
That plant was only impacted from January 2023, so 2023 market shares are largely intact, but once your stock pipeline, being either in your own storage, distribution centers at retailers or on shelf depletes, then the market share starts to decrease, which is what you've seen in the full year to 2024. In fact, in some period in 2024, our market shares were lower than what we're publishing there. What is pleasing, and you can see in the last three months, is that our market share starts to improve across most of the categories. Specifically on Bobtail and Catmore, we will be the first to acknowledge that, it has taken too long to recover the market shares and remains a big focus area in the business, as those are material volume enablers in our pet food business. Also pleasing is Feline and Canine Cuisine.
While smaller brands in terms of volume, they're in the premium end of the market, and you're seeing significant inroads that we're making with those two brands. All said, overall, our brands are... Our brand health is good, given the context of the market conditions. Just moving into our performance for 30 June 2024. The outer blue bars show our statutory EBITDA performance for June 2023 through to June 2024, which shows a 36.8% increase. The inner blue bars show the underlying performance, which moves up 15%. I'd just like to add here that majority of the items in the recon, either in 2023 base or in 2024, are either non-recurring or material in nature.
Our board is quite vigilant in what we characterize as a reconciling item here, but what we are trying to do is give our best view of our true operational performance in the middle. Pleased with the grocery performance and its improvement there. I'll come back to baking and where the real challenge lies, and sugar, another stellar result, is driving the 15.5% increase in underlying EBITDA for FY 2024. Just some more color to our EBITDA performance, and in here we've stripped out Vector and Rainbow and showed our continuing operations. So one of the key initiatives in the portfolio reshape was to try and get more consistent earnings, and you can see that playing out through 2021 to 2024. It's obvious that we would-- we wanna kick on from here and create some growth in these EBITDA numbers.
But at least we've done the first thing, which is stabilize that earnings base. Just one other point to make is the margin is obviously eroded from 11% in 2021 to 8.5% in 2024. We took a decision as a business when the war in Ukraine started to protect our EBITDA rands, as opposed to the percentage. The commodity price cycle was too extreme, to be able to recover those full costs in our margin. We think the strategy has worked for us. However, from now, we need to recover our margins back to the 2021 levels and preferably beyond. Our return on invested capital history is also important. This is a key metric within the business, and we rolled out throughout all our businesses, and spent significant time in educating our business on what this actually means.
What you can see is the dark blue bars show, including Rainbow and Vector, and hence it drops off in FY 2024 because it's only the continuing operations. You can see the volatility that was brought to our return on invested capital over that period. The gold bars, and then the light blue bar on the end, shows the recent performance, exiting Rainbow and Vector, and you see a small, stable environment. This is our market-reported ROIC. It doesn't include the underlying adjustments, the most material of which were in FY 2023, and if you excluded those, you would get to 10.4%. That 8.2% would translate to 10.4. You're getting a more stable return on invested capital.
This doesn't detract from our target to be consistently achieving our return on invested capital above our WACC, and we still haven't arrived at that place yet, and we're working hard to achieve this. Then finally, just a little bit more color on our business unit performance, starting with groceries. Earlier in the slide, we showed the ninety-one million improvements in groceries. It's largely attributable to better sales mix and improved pet food margins. I mentioned the impact of load shedding on our service levels, particularly at interim, and that has improved through the second six months. And obviously, we've had the impact of lower load shedding, from April to now, which has a significant improvement on your operational capability, as well as obviously the cost of running our diesel generators in Randfontein.
Positive performance from groceries, but in many ways a restoration of our profitability to where it should have been. Baking is a little bit of a story of two halves. Some good gains in specialty and milling has sadly been offset by disappointing performance in bread, buns, and rolls. The bread market has seen intense competition over the period, which has resulted in some volume compression in our space. But the most important factor in bread is a disconnect between the flour price or wheat price, driving into the flour price and the pricing that is being achieved with full bread in the market. We have seen an improvement in this relationship in the last few months, and so are confident going into F twenty-five that we'll see an improved bread performance. Then finally, sugar, a standout result.
Last year, we called our sugar result a record, and it was, and we produced another record, an even higher result. And I think it's worth just pointing out here that this is in the context of a sugar industry that has a unique way of operating with two very big sugar businesses in business rescue. So it is pleasing to see that we can produce this performance with that context. It is buoyed by higher prices in both local and export markets, and supported by some currency weakness during the period. There was an outstanding performance in Molatek, our animal feed business, which is using the byproducts of the sugar process. And we also had an improved agric yield performance in the financial year, and are looking for that to continue into the future.
A significant amount of work has happened in the agric space to improve those yields and make them more consistent and up there with the best performers in the industry. Finally, what also enabled the sugar business performance is strong operational improvements and cost-saving initiatives. We've mentioned this for a few years, and we continue to eke out opportunities, which are quite material, and we have a good pipeline coming at us from sugar in the future. With that, I'll hand over to Jannie.
Thank you very much, Paul. I know we're running short of time, and we still want to allow some time for questions, so I'll try to wrap it up. I mean, it's been a long presentation, and maybe if you just look through everything, if you look at the performance for the year under review, it's been fairly flat. We had a bad first six months, but a much better second six months. I think if we look at the positives, I mean, the majority of our portfolio in number actually improved quite significantly, and we're proud of those investments. If you think through the investments that hasn't performed well in the year under review, Heineken, Mediclinic, and CIVH, I think it's fair to say they also are our three biggest unlisted investments, and we're paying close attention to them.
I think it's important to realize that we're starting to see some green shoots in them, all three of them, especially, if we look at one of the things that we always proud of is Rainbow, the turnaround at Rainbow. If you look at CIVH, Peter has alluded to some of the things that we've seen coming through since the year end. Mediclinic, we know of the challenges in Hirslanden, but we're also quite confident in the Middle East operations, South Africa, South African operations to deliver growth. And then as well as hopefully with some on the CIVH side, with the decrease in interest rates, I think that is also going to be a positive effect on that. We're also critically evaluating our portfolios.
As you've seen, we've divested out of MMH, and we'll also critically evaluate the rest of our portfolio investments as well, and I think that is some of the things that you guys have asked quite consistently throughout. As I mentioned at the start of this presentation, we are adopting also a much more active investment style. This active investment side is starting to bear fruit, and I want to thank my colleagues here at Remgro, our colleagues here at the underlying investee companies, for their tireless effort throughout the year. And this is early signs. This is a journey, as we said, it's we're not finished, and this will continue in the near future. And hopefully, if we talk again, we will deliver a much better set of results for you.
Thank you for that, and I think we can go to questions now.
Well, we'll start with questions-
Thank you to the participants.
We'll start with questions on the webcast and then follow with the call online. Just a question, Carel, on Outsurance. Trying to understand what our ability to influence performance is, such that we categorize it as a core portfolio asset.
Thanks, Lwanda. Look, I would certainly say that, you know, we've been a strategic shareholder and partner in Outsurance for a long time, previously through RMI, obviously now directly. We represent on the board with Jannie and Fafa as his alternate, so I think we are a good anchor and strategic partner to them as they grow their business. But no doubt, it's an incredibly well-managed business. I don't think by any stretch that they would implode without us, but as I said on that slide, where we spoke about sort of divestments, the first lens that we also look through is what the business brings to us. No question that Outsurance brings a lot to Remgro. They're a very good cash generator, so important for us in our capital allocation process.
Jannie, I'm not sure if you want to add to that.
I think as from OUTsurance, it's a good performer. I think from my side, I sit on the board there. We give advice to the management, we're strategic, we discuss the Ireland expansion. So I think they appreciate some of our efforts and inputs there. But, yeah, as Carel has said, it's an investment. If we probably exit it, it probably won't change it too much, but we're very comfortable with our position in OUTsurance.
Thanks, Jannie, and Carel, another one for you. Can you comment on the share price of Capevin that's used in the valuation in these results, and also maybe on the acquisition that's been recently announced by Campari?
Yeah, certainly. So our share price or our valuation translates into something around ZAR 24.50, in that sort of order. Close enough. Thanks, Neville. So ZAR 24.42, Neville shows me. The transaction that was announced was around ZAR 51, or just let's call it north of ZAR 50, so roughly, double the price that we carry it at in our INAV, at least. That was a bilateral deal between two third parties. So it's not a, you know, offer that was available to us. I think we've always been consistent to say that we'd like to think our valuations are conservative. It's certainly not a price list.
Our INAV, it's not a price at which we would sell our investment, so it's pleasing that there are reference points out there that are meaningfully higher than the INAV. But, yeah, it's not. It's also not for us to mark our valuations to third-party deals. So we're comfortable with that price for now.
Thanks, Carel. Pieter, a couple of questions on CIVH. Just on the Herotel stake, is there still a plan to increase this to 100%? And if so, what are the implications of the Vodacom ruling that's upcoming on that potential acquisition?
So the Herotel transaction is also currently in front of the competition regulator. The Competition Commission is currently reviewing our submission to also take 100% control of the business. Currently, we have 49.9% shareholding in Herotel. We do not have control. It's just a financial investment at the moment, but there is a path to control, subject to Competition Commission approval. This, this deal is separate from the Vodacom transaction, separately filed at the regulators. If the Vodacom transaction doesn't go through, we will continue with the Herotel process at the Competition Commission, and possibly then afterwards, the tribunal.
Thanks, Peter. And just linked to the transaction, can you give a sense of what the plans would be if the deal doesn't go through?
So if the Vodacom transaction is not approved, then, there's. It's not a crisis for us. The business will carry on as is. We have got plans in place with the banks, where we have extended the deadline in covenant measurements, where they measure debt to EBITDA. So there's no immediate crisis. The biggest impact probably is that we will have to slow our ambitions to roll out Vuma Key into many parts of South Africa. So the company will continue. It will continue to be cashflow generative, continuing to invest in both DFA and Vumatel. But unfortunately, Key will be slower than planned. We will get there, but it will probably take five to 10 years, whereas we can do it in a much shorter period of time.
Another one, Peter, just related to the valuation. With the delay in the transaction, how has that affected the valuation that Vodacom will pay for the stake?
So I think this has been, in our sense, announcements as the deal has progressed. When the first long stop date transpired in March or April last year, we extended the long stop date and agreed a continuation of the valuation principles that we originally agreed on. So the initial valuation was done on a multiple basis, EBITDA multiple, and then from the extension of the long stop date, which was then in April last year, the valuation increases by a certain percentage, every month, and that's still in place.
Thanks, Pieter. Can we take questions on the call now?
Thank you. For the benefit of the participants who have dialed in, you're welcome to press star then one to place yourself in the question queue. Our question comes from Nkosinathi Nkomo of TechCentral. Please go ahead.
Thank you. Good morning. Jannie, at the beginning of the call, mentioned that there was an opportunity cost to the Vodacom deal being in stasis for so long. Could you please give some more detail of that? As well as, have you slowed down investments into fiber because of the pause?
I will. Thanks, thanks for the question. I want to reemphasize that of the opportunity cost. It's been nearly three years. So if we could have implemented this deal, let's say, just a year and a half earlier, I mean, we probably would have spent, I mean, Peter can come to the number, probably ZAR 3 billion-ZAR 4 billion in CapEx in doing, in rolling out fiber into the areas that we think we can actually deliver growth. So it's been a significant opportunity cost, not just for CIVH, but I also think for the country in that respect. I think, Peter has explained in the deal, because we haven't done it, we have definitely slowed down CapEx, as you can see, by about a billion rand between 2023 and 2024 in that respect. I don't know if you want to add anything, Peter.
Jannie.
In terms of Vuma Core, where are you going next?
So Vuma Key is currently in a trial phase. I showed that we've or I mentioned that we've rolled out Vuma Key in, on a trial basis in Alex and in Khayelitsha and Kayamandi, but it will be in similar LSM areas that we will roll out once the Vodacom transaction is approved. If it's not approved, we will continue also with our reach rollout, but the key rollout will definitely be slower than originally planned if the deal is approved.
Thank you. We have no further questions from the lines.
Yes, Jannie, we have a few. On Mediclinic, with this being 30% of INAV, how would Remgro frame the investment case, and what excites Remgro about the investment, given the tough environment in Switzerland?
I think it's the bottom of the market for us to a certain extent in Switzerland. I've got a lot of confidence in the management team that they can turn things around in Switzerland. The plans are starting to bear fruit. We're relooking at the operating model, and then lo and behold, we've got some good growth opportunities in the UAE. South Africa actually is now with the new momentum behind the business, or the new momentum in terms of the government of national unity, some good engagements with the president in terms of the NHI. I think even on the South African side, we're seeing some good pockets of growth in that respect. We're comfortable with the investment case at the moment.
Thanks, Jannie. Carel, just on the share repurchases, you covered a little bit of this, but maybe you can give a bit of detail on why we still believe that there isn't an opportunity to deploy excess cash on buybacks given the discount.
Yeah. Thanks, Lwanda. So I did sort of deal with that, but maybe to reiterate some of that. Again, we absolutely understand that there's an opportunity to accrete INAV per share by buying back shares at a relatively deep discount. The point that we made is that, you know, when the portfolio is not generating the returns and the dividends that it needs to, we are more cautious, we are less front-footed in our capital allocation. We cannot replace the absence of INAV growth from the core with growth from repurchases. So I understand we're being cautious on this, and we're probably being more cautious than people would like us to be. But it's something that we will absolutely continue to evaluate. It's not that we're saying that we... It's off the table.
We understand there's also. We could probably be doing both, you know, fixing the performance issues and find some capital for repurchases as well. So it's absolutely something that we continue to evaluate, but for us, the really important focus is to drive the underlying performance and to build the momentum in INAV growth from there.
Thanks, Carel. I think all the questions are covered, Jannie.
Thank you. Then I want to thank everybody for attending. We're right on time, eleven o'clock for the two-hour session. Thanks for attending, and we'll see you in six months' time. Thanks, everybody, for attending.
Thank you. Ladies and gentlemen, that concludes today's event. Thank you for attending, and you may now disconnect your lines.