Strategy and Performance Metrics

Strategy

• Sabcap aims to maintain and grow a portfolio of equity interests across a spread of industries with sound growth records or potential for growth, with the objective of generating cash and earning above-average returns on capital over time.
• The Group’s interests in unlisted companies will usually be large minority holdings, commonly alongside management, financial shareholders or family shareholders with whom Sabcap interacts as partners.
• Sabcap also holds listed investments where it is represented on boards, where directors or material shareholders are known to the Group, or where special situations arise.
• Sabcap may hold equity investments that are small in percentage terms where the Group is still able to exert influence through board representation or shareholder agreements.
• Conversely, Sabcap may hold majority or joint controlling interests, but without direct management responsibility.
• The Group participates in good businesses with first-class management without being restricted by a required size of holding.
• Sabcap does not have a required balance between listed and unlisted investments.
• Sabcap does not have a required sectoral spread.
• Sabcap usually requires that its CEO, other Sabcap directors or chosen financial investors are directors of investee companies, other than general portfolio companies.
• Sabcap holds its investments on a long-term basis, subject to continual review of the quality of the underlying businesses, any constraints or obligations in shareholder agreements, and the Group’s exit parameters for each investment.
• Sabcap will, when necessary, make changes to its holdings or within the businesses in which it is invested, notwithstanding any short-term accounting consequences.
• Sabcap does not issue shares for acquisitions or investments, or for the purposes of raising funds, unless the value received meaningfully exceeds the value given.
• In addition to its long-term portfolio of equity investments, Sabcap also holds cash, bonds, listed and unlisted shares, other investments and debt instruments from time to time.

Performance metrics

Sabcap’s target growth rates over three-year rolling periods are:

These targets may be changed by the Board from time to time, particularly if movements in macro-economic factors such as CPI, exchange rates, interest rates and taxation rates make changes appropriate.