EMPOWERMENT icon Brimstone looks set to cause a flutter among the corporate fashionistas and perennially fashionable value investors.

This week Brimstone signalled an intention to cast off its investment in fashion retailer Rex Trueform (RexTru).

Brimstone acquired an effective 34.6% stake in RexTru in late 2007.

At last count, the empowerment company’s interest in Rextru was spread as follows: 242 654 Rextru ordinary shares and 2.6 million Rextru N-shares as well as 254 126 ordinary shares and 3.7 million N-shares in Rextru’s pyramid holding African & Overseas Enterprises.

That’s a holding roughly worth R50m, but – more importantly – a holding representing a big chunk of a company which cannot, by any stretch of the imagination, be regarded as one of the JSE’s most liquid counters.

Despite the canine connotation of Rex – having been schooled in the classics at Muir College in Uitenhage, I do know Rex is actually latin for “king” – the company is no dog. Rextru, which owns the Queenspark fashion chain, has proved a remarkably resilient (and rewarding) business over the years.

Originally, Rextru was to form part and parcel of Brimstone’s longer-term plans to build a fashion brand house around its clothing manufacturing subsidiary, House of Monatic (HoM).

I suspect that plan is no longer on the table. And Brimstone directors admit as much in commentary that accompanies the company’s recently released year to end-December results.

In reference to the Rextru investment, they noted: “Events and developments within the clothing industry and specifically within Brimstone’s clothing cluster have given cause for Brimstone to review its strategy.”

Brimstone unlikely to be panicked

In this regard Rextru is no longer considered strategic, which means Brimstone is “actively pursuing opportunities to extract maximum value” from the Rextru investment.

For those that need reminding, Brimstone’s clothing cluster was dealt a heavy body blow when subsidiary Fifth Element was liquidated after some unsavoury business practices were uncovered in an internal investigation.

In any event HoM – which thankfully does hold some valuable industrial properties – posted a loss of R30m after factoring in write-offs and expenses.

Still, Brimstone probably won’t be panicked into selling Rextru. Indeed the empowerment company, which has a strong portfolio ranging from healthcare to fishing and assurance to insurance, can afford to sit back and collect the dividends from Rextru.

I reckon, though, Brimstone has done a clever thing in “putting out” its intentions for Rextru. It certainly would not surprise me to hear that Brimstone was inundated with polite calls of enquiry from interested parties – probably ranging from larger fashion retailers to private equity specialists.

I even wonder whether former asset manager Hugh Roberts, who already holds a sizeable position in Rextru, might be tempted to harness a bigger stake?

While there should be no shortage of buyers for Brimstone’s Rextru stake, there is a question around price. When Brimstone struck the deal to buy out Old Mutual’s stake in Rextru and Af&Over, the shares were trading at around 800c and 600c respectively on the JSE.

The shares have crept up, but are still – according to my calculations – trading below tangible net asset value. NAV aside, the earnings multiple on Rextru is well below its larger peers like Foschini, Mr Price and Truworths.

In other words, I don’t think Brimstone will be looking at a 1 000c/share offer for its Rextru shares or 800c/share for its Af&Over shares.

The thing is that there is so much potential tucked away in Rextru, more specifically Queenspark, that it seems quite possible that a larger fashion conglomerate or private equity firm could well be willing to fork out a premium.

One has to consider that Rextru, run for generations as a family-controlled business, has always erred on the side of caution.

Quite striking is the fact that at last count Rextru had over R100m in the bank and a chain of around 50 Queenspark stores.

Perhaps the real potential of the business could come to the fore with a chain of 100 Queenspark stores and only R50m in the bank?

source: – Fin24.com

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by Reports by Katlego Moeng

PAUL Verryn is a member of the dying breed of activist priests. A church minister since he was 21, Verryn says all he ever wanted was to fight for – and with – the poor.

In an interview just before his suspension by the Methodist Church, this social activist spoke of his history and inspiration.

“My first social conscientising was at a very young age with our helper, Julie Nkadimeng. She always shared stories of how apartheid affected her family.

“What I took from her was that it was a system that alienated black people. She took a bet with me that I would forget what she taught me and I vowed to never forget.”

The embattled 58-year-old Pretoria- born clergyman admits that he “can be rude and my tongue can be cutting”.

He is no stranger to being at odds with the powers that be.

Read more »

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background) and the rubbish dumped on the ground is causing concern for Redhouse residents, who say the municipality doesn’t listen to their appeals for the area to be cleaned up.

IN The Herald on Thursday I saw the municipal dumpsite eyesore in Rosedale (“Separate Uitenhage from Mandela Bay!”), so I took some pictures of the Redhouse dumpsite which has the same problem. The Redhouse residents also blame the municipality for poor service delivery.

Phoning them does not help. Hopefully they will see this in The Herald and clear all the rubbish. – D Robertson, Redhouse, Port Elizabeth

source: The Weekend Post

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POLITICAL activists and ANC supporters are expected to turn out in large numbers for the funeral of liberation struggle veteran and former Uitenhage councillor Nosipho Dastile, who will be buried on Saturday.

The funeral will be held at the Roman Catholic Church from 9am, while a memorial service will be held at the Babs Madlakane Hall in KwaNobuhle at 5pm today.

Dastile, 71, became a well-known political figure in the region as a founder of the United Democratic Front (UDF) in the town, the first president of the Uitenhage Women‘s Organisation, and chairman of the ANC Women‘s League in the town after the liberation movements were unbanned in 1990.

Dastile was one of the first councillors in the democratic Uitenhage Transitional Local Council from 1994 to 1999 with figures like current deputy Nelson Mandela Bay mayor Bicks Ndoni and the late Sanco leader Fikile Kobese.

Dastile‘s community involvement took shape while she was a teacher at the Little Flower Primary School and as a volunteer teacher at the Roman Catholic Mission School in Uitenhage.

At the time of her death after a long illness, she had retired from active politics and was a volunteer at the Ruth Dano Creche.

source: Weekend Post

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USE of the debilitating drug tik has exploded in Nelson Mandela Bay, with experts saying it has become the drug of choice among youth due to its availability and affordability.

While there are no official statistics on the severity of the problem, Shepherd‘s Field Rehabilitation Centre outside Port Elizabeth reports that tik addicts now account for 57 per cent of its patients.

And the SA National Council on Alcoholism and Drug Dependence (Sanca) in Port Elizabeth said its number of addicts on tik had more than doubled in the last six months.

As the second cheapest drug on the streets after dagga, tik has saturated the city‘s poorest communities.

The drug can get a buyer a “high” for just R20, but experts warn it causes parts of the brain to “dissolve” after prolonged use.

Tik is made up primarily of crystal methamphetamine, but can also include a number of household products such as anti-freeze, slimming drugs, rat poison and household cleaning products.

Sanca information, training and education co-ordinator Zarina Ghulam said the drug had infiltrated the northern areas of Port Elizabeth specifically and that the number of users was growing rapidly.

“From July to December last year, we‘ve seen a huge jump of tik users coming to us for treatment.

“It went from 3,1% to 7,2% in those six months. Although we do not have the latest figures available for the last couple of months, I can definitely say the numbers are growing rapidly.

“The majority of the people who come to us for tik abuse are from the northern areas and it‘s moving to Uitenhage.”

Tik was first identified as a potential problem in the Bay two years ago when gangsters were being paid for poached perlemoen with tik by Cape Town crime barons.

Shepherd‘s Field chief executive Gerrie Cronje said the number of tik users at their centre accounted for 57% of people admitted for substance abuse.

Although a number of these addicts came from Cape Town, the majority were from the Nelson Mandela Bay area.

Reinhardt Coetsee, director of Rei‘s Place House of Recovery at Greenbushes in Port Elizabeth, said it was evident that tik was a fast growing problem in the city.

“Although it hasn‘t hit PE as bad as Cape Town, it is definitely a major concern and the problem is escalating.”

Humewood Community Police Forum chairman John Preller said the number of tik users attending his group meetings was increasing.

“We‘re definitely seeing an upward trend. Numbers are increasing drastically and the alarming thing is that it is younger people between the ages of 18 and 25.

“Tik has found its way to PE from Cape Town and we can no longer say it‘s coming, because it‘s here, and it‘s growing.

“The scary thing is that people only seek help when their lives become unmanageable, when the problem is at its worst.”

Aaron Liddell, a recovering tik addict at Shepherd‘s Field, said he was able to buy tik on nearly every street corner as it was so freely available.

“I can get it from the guy down the street or go to any of the coloured areas and buy it. It‘s everywhere. It‘s even in schools and prisons.”

Ghulam said it had devastating long-term effects on the body, although tik users were often swindled by the initial feelings of euphoria, increased energy and self-confidence.

“One client who came in for treatment ended up in hospital. They discovered he had holes in his brain because of the tik and he had to have two brain surgeries. They couldn‘t do anything to repair his brain, so he died.”

She said tik users were prone to HIV/Aids because the drug heightened arousal, which could lead to high-risk sexual behaviour.

Preller said it caused extreme aggression, which often led to uncontrollable violence. “Just recently, I heard from a parent who said her son beat her because of his tik aggression,” he added.

Preller said some of the permanent effects of the toxic drug were that it dissolved the teeth and areas of the brain.

Substance abuse in the northern areas was one of the main reasons for the disintegration of families and gangsterism there, he said.

Tik addiction also had a drastic effect on the economy, and on families, said Preller, with addicts ultimately losing jobs and homes torn apart.

“With tik, they lose their ability to think straight and they end up getting fired.

“Shortly after that they‘ll start breaking into houses or hijacking cars to get money to buy more drugs and most of the time end up in jail.

“You end up losing a strong productive person in the economy, and if you multiply that by the thousands of tik users we see, it results in the loss of thousands of productive people in the economy.”

Source : The Weekend Post

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TWO political rallies, to be addressed by heavyweights from the ANC and the Congress of the People respectively, are scheduled to be held at the same venue, the Jabavu Stadium in Uitenhage, on Saturday, Human Rights Day.

The municipality confirmed yesterday that it had invited Winnie Madikizela-Mandela to be keynote speaker at a gathering that will be held on the soccer field at the stadium to celebrate the day.

It has been disclosed by the National Union of Metalworkers of SA (Numsa) that youth league president Julius Malema, will also deliver a speech.

SACP general secretary Blade Nzimande has also been invited, said Numsa organiser Andile Zitho.

At the same time, Cope supporters are expected to turn out in big numbers to hear their president, Mosioua Lekota, speak in the rugby section of the stadium.

It is not clear how the municipality decided to allocate the venue to both parties.

ANC provincial spokesman Mcebisi Jonas said he was not aware that the rival party intended holding its own rally at the same venue and has undertaken to investigate.

“This has potential for conflict,” he said.

Municipal spokesman Roland Williams said the municipality “would encourage any political party to encourage its members to attend the municipal celebration”, which would commemorate the Langa massacre.

Cope regional spokesman Elvis Bana confirmed they had booked the venue to hold their own Human Rights Day celebration rally and were adamant that his organisation “will not call off the rally” .

Bana said “the venue was booked as early as February 2 this year and it was confirmed by the municipality.

“We are perturbed by this apparent political intolerance and by the kind of behaviour of the municipal officials who exhibit partisanship in their work,” said Bana.

Two other popular ANC crowd pullers, Cosatu general secretary Zwelinzima Vavi and the party‘s head of elections, Fikile Mbalula, will be in the Eastern Cape on that day to address a Queenstown rally.

Source:   The Weekend Post

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THOUSANDS of employees were handed an early Easter present yesterday when Volkswagen SA announced a “surprise” multimillion rand export contract had been secured, staving off a planned two- week shutdown at the Uitenhage plant.

VWSA managing director David Powels said that after export orders for the Uitenhage-built Polo had been halved at the start of the year from 40000 to 20000, a German parent company order for an additional 6000 had been confirmed this week.

“We had been planning to close down production during the week before Easter and in the week after the holiday, as both would have been short weeks,” he said yesterday.

“However, the order – valued at between R500-million and R600-million – means that the plant will no longer have to work the short weeks.”

The Easter weekend runs from Friday, April 10, to Monday, April 13.

Powels said the German market was experiencing a “buying down” to smaller cars and that Volkswagen AG – which yesterday reported the best annual sales and profit figures in its 70-year history – had asked Uitenhage to provide the extra vehicles.

Powels said VWSA “were obviously not happy” after the export order was halved “and informed Germany of the significant consequences” of this “in terms of our head count”.

“Those representations, our record of producing world-quality units and our ability to increase volumes helped our case at a time of continuing demand for Polos,” he said.

“It is very good news and enables us to keep the plant running,” said Powels, although adding that the local market was still “very dismal”.

“However, our R3-billion investment to secure the future of our operation is still firmly on track, although some programmes not directly related to product, productivity and quality improvements, and skills training have been delayed,” Powels said.

The process of offering voluntary retrenchment packages to 400 employees was still under way and should be completed next month.

The new export order was hailed by Port Elizabeth Chamber of Commerce and Industry (Percci) chief executive Odwa Mtati as “a very positive development, especially in the current economic climate”.

“We are happy that this will enable employees to continue working, coupled as it is with positive spin-offs for component manufacturers.”

The National Union of Metalworkers of South Africa (Numsa) said “a move in the direction of avoiding further job losses and expanding employment should be welcomed”.

source: THE WEEEND POST

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There will be rucking and mauling galore in Uitenhage when eight high schools battle it out in the maiden BK Top 8 rugby tournament at Jabavu Rugby Stadium, KwaNobuhle, today.

The tournament will be played under the auspices of the Uitenhage Schools Rugby Development Committee.

Mncedisi Jafta, a committee member, said they are grateful to businessman Butityi Konki for his financial support in a move to popularise the sport in the area.

He urged parents to come in large numbers because their presence will inspire the future stars to give it their best shot. – Meshack Khotha

Source: Sowetan

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THE Nelson Mandela Bay metro‘s Business Confidence Index continued to decline in January “under recessionary economic conditions and low levels of both business and consumer confidence”.

The decline came amid the economy contracting by -1,8 percent in the fourth quarter of last year, the first annual retail sales decline in nine years, and a 22% plunge in manufacturing output.

The index, compiled for the regional business chamber, tracks the performance of 15 key economic indicators chosen from those available that are believed to “best reflect the business mood in the PE/Uitenhage area”.

These include the inflation rate as measured by the Consumer Price Index for the metro; the prime rate at month end; the rand-dollar exchange rate; retail sales in the Eastern Cape; the total number of new cars sold in the metro; the value of building plans passed and completed; the Consumer Confidence Index for the metro by the Bureau for Economic Research of Stellenbosch University, and number of passengers arriving at the PE airport.

But Dr Neil Bruton, compiler of the index, says current developments “will ultimately yield a consolidation in the rate at which the index is declining at present”.

“The inflation rate is set to decline rapidly in 2009 and … interest rates are set to decline, probably steeply. Furthermore, households and businesses are addressing their debt positions, with growth in credit extension to the private sector down to 11,9% in January, the lowest since November 2004, and with growth in demand for mortgage finance falling to the lowest level since mid-2003.”

The indicators that supported the index through January included significant declines in the trend cycles of the metro inflation and prime interest rates; continued growth in the real value of buildings completed and steady growth in value of those passed; and marginal growth in the trend cycle of retail sales.

Negative indicators included the “steep decline” in new cars sold and the “declining” number of airport passenger arrivals.

“The level of consumer confidence in the Eastern Cape, while reflecting a generally declining trend, remained unchanged.”

source: The Weekend Post

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BATTERED consumers in municipalities across the country could face a further shock 25 per cent hike in the price of electricity.

In a circular last week, the national treasury advised municipalities to factor in a 25% rise in the cost of purchasing electricity from Eskom in preparing their budgets, although it stressed that the National Electricity Regulator of South Africa (Nersa) had yet to rule on what increase it would award the power utility.

Last year, Eskom was awarded an increase of 36%, of which 30% was passed on by the Nelson Mandela Bay municipality to residents.

Indigent households which qualified for the council‘s Assistance To The Poor programme were handed a 14,2% increase.

Eskom needs the tariff increase to contribute to the financing of its capital expansion programme.

The circular warns local authorities that in considering changes in property rates they should “take cognisance of local economic conditions such as the downturn in the property market, trends in household incomes and unemployment. Excessive increases in property rates and other tariffs are likely to be counterproductive, resulting in high levels of non-payment and increased bad debts”.

The national treasury requires the municipalities to justify all increases in excess of the 6% upper inflation target of the Reserve Bank. The circular states that given the current economic crisis, municipalities will be faced with some “very tough decisions” when preparing their 2009/10 budgets, adding that they must give priority to:

Managing all revenue streams, especially debtors;

Protecting the poor from the worst impacts of the economic downturn;

Supporting local economic development initiatives “that foster micro and small business opportunities and job creation”;

Securing the health of their asset base in increasing spending on repairs and maintenance; and

Speeding up spending on capital projects funded by conditional grants.

“Municipalities must pay special attention to eliminating all unnecessary spending on nice-to-have items and non-essential activities,” the circular states, adding that Finance Minister Trevor Manuel had noted in his budget speech that there was “insufficient control of foreign travel, advertising and public relations activities as well as consulting services”.

With regard to the fuel levy allocation that will replace the regional services council levy that was halted in 2006, the circular states that the sharing of the general fuel levy will be regulated in terms of the Taxation Laws Amendment Bill. This piece of legislation is expected to be passed in September this year.

At that stage the specific allocation for each metro will be released, although information on provisional allocations will be given to metros this month to allow them to budget for the next financial year.

The amount allocated is based on fuel sales in each metro and the amount that Nelson Mandela Bay is expected to receive is not likely to differ dramatically from what it gained through regional services council levies.

source: The Herald

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