Latest news with #R252m
IOL News
27-05-2025
- Business
- IOL News
Constitutional Court to decide on CPS's profits from unlawful social grants contract
The lucrative R10 billion social grants tender is still subject to litigation between the government, non-governmental organisations, and the company contracted to pay social grants. Image: File The long-running legal battle over the payment of social grants by Cash Paymaster Services (CPS) is set to be settled by the Constitutional Court over the company's profits from the lucrative deal. Lobby group Freedom Under Law (FUL) has approached the apex court in a bid to force CPS to produce documents proving the company earned from the unlawful social grants contract. The organisation wants CPS's profit from the contract to be calculated properly and repaid to the SA Social Security Agency (Sassa) with documents showing how much the profits were. On Tuesday, the Concourt heard that CPS only declared R252 million and that the profit could be understated by as much as R800 million, according to papers filed by the parties. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ 'We now know, as the court did not know when it ordered the profit accounting, that CPS has significantly benefited from the unlawful social grants contract. Its independent audits filed with this court show the profits were R252m. 'That is the floor of its unlawful benefit. RAiN investigations and reports, while inconclusive, suggest that the amount may be over R1 billion,' FUL argued. RAiN is the company of chartered accountants asked to investigate the profits received by CPS after the Concourt ruled that its contract was unlawful but allowed it to continue paying social grants. The court heard that the Lesaka Group, previously CPS' parent company Net1, advised the market that its loss of the Sassa social grants contract had led to a reduction of its profit by approximately R5bn. 'The no-profit, no-loss equilibrium allowed the court to permit an unlawful contract to continue for five years, and then even ordered it extended (beyond its original tendered and contracted term) for a further year and a half to protect the many millions of beneficiaries whose constitutional rights would be violated if the payment of social grants (however unlawful the means) ceased,' the court heard. CPS is currently under liquidation, and its liquidators insist that they have handed all the documents in their possession to the auditors looking for the money paid to the company for its contract. 'We respectfully submit that this court should order a just and equitable remedy to ensure the determination of CPS's profits in line with the proposals and considerations,' the company told the Constitutional Court. FUL continued: 'When the court held that the no-profit principle, which means not allowing profit from unlawfulness, and prevented the perpetuation of unlawfulness, it was clear that any such profits were received not as a private party but as an organ of state discharging constitutional obligations to ensure that beneficiaries' rights were not violated by any disruption in the payment of social grants.'
IOL News
26-05-2025
- Business
- IOL News
Spear REIT expands Western Cape portfolio as distributions grow and forecast brightens
Spear REIT's Northgate Park office building in Cape Town. The Western Cape focused group has seen strong demand and lower vacancies for its office portfolio in its 2025 financial year, driven by declining availability and high development costs in the Cape Metropolitan area. Image: Supplied In a remarkable year for Spear Reit, the Western Cape property investment group expanded its portfolio significantly while reporting a solid increase in distribution per share (DIPS). With a rise of 3.06% to 81.27 cents for the 2025 financial year, expectations for the forthcoming years remain optimistic, as CEO Quintin Rossi anticipates further DIPS growth of between 4% and 6% for the 2026 financial year. Describing the past year as transformative, Rossi, in an interview on Thursday. highlighted the acquisition of 13 commercial properties from the Emira Property Fund as a key milestone. This expansion, coupled with a R130 million share issue for a fully let 30 000 square metre agriculture and wine logistics facility in Paarl announced this week, signifies a firm commitment to a growth strategy that is expected to bear fruit in the years ahead, he said. 'The R1.15 billion transaction positions Spear firmly on a growth trajectory,' said Rossi in an interview Thursday. The diversified portfolio encompasses industrial, medical, life science-focused retail, and commercial assets in the Cape Metropolitan area. Despite the challenges posed by South Africa's macroeconomic landscape, including fluctuating inflation rates and intermittently disruptive loadshedding, Spear's core portfolio thrived. Distributable income soared by 25.5% to R252m, while revenue climbed 12.10% to R681.70m—a testament to Spear's tenacity in an uncertain environment. 'Our focus on operational imperatives yielded tangible results,' Rossi asserted, noting a steady increase in leasing momentum and a 97% occupancy rate at the end of the reporting period. 'The Cape Metropole's office space has seen tenant demand surpassing supply, a clear indicator of a robust market.' With a rental collection rate steady at 98.59%, the board approved a final six-month payout ratio of 95%, ensuring sustained income distribution to shareholders amidst economic volatility. 'While we navigate challenges such as crime and high unemployment, we see promising signs of recovery within the South African-listed property sector,' Rossi explained, adding that the declining interest rate environment has contributed to the sector's recent successes. The Western Cape, said Rossi, had seen its property metrics diverge from national trends, aided by extensive infrastructure investments—R120 bn over 10 years—which are fostering economic growth and job creation within the province. This local focus has proven advantageous as Spear's industrial portfolio occupancy stands at 98.85%, driven by prime locations and diverse offerings that make it resilient in fluctuating markets. 'The industrial segment accounts for 63% of our total lettable area and continues to show sustainable cash flow as we observe an in-force escalation of 7.3%,' he said. Spear's retail assets also delivered above-expectation results, with a strong occupancy rate of 96.05%. Rossi said they were pursuing new retail opportunities, ensuring that Spear remains well-positioned for the future, focusing on convenience and destination retail spaces that cater to a wide income spectrum. Additionally, two medical retail properties added to the core portfolio were backed by long-term lease agreements with recognised entities like Intercare and Clicks Group. Rossi was particularly optimistic about the commercial portfolio, which is poised for rental growth due to constrained supply in high-quality office spaces across the Cape Metropolitan area. 'The occupancy rate has improved to 92.99% from 84.37% in the last financial year, reflecting the strong demand,' he remarked. As Spear Reit continues to navigate the complexities of the property market, its focus on the Western Cape and a diverse portfolio positions it competitively for sustained growth and resilience. Visit:
TimesLIVE
29-04-2025
- Business
- TimesLIVE
SAA should tap into high-income routes to maximise growth
While SAA's reported modest net profit is encouraging, further progress will require strategic planning, entrepreneurial foresight and global partnerships By To ensure long-term success, SAA needs to consider targeting potential new high-income routes now under-serviced, strategic partnerships with other airlines and pivoting South Africa as a key international connecting hub between continents. SAA has experienced a moderate yet steady recovery since resuming operations after the Covid-19 pandemic, slowly acquiring additional aircraft and reintroducing destinations it once served. Despite facing a few obstacles, such as the privatisation deal with Takatso Consortium disappointingly falling apart and the recent pilots strike causing significant delays and cancellations, which have since been resolved, SAA appears to be on the up. SAA claimed to have achieved a net profit of R252m for the 2022/2023 financial year. While SAA's reported modest net profit is encouraging, further progress will require strategic planning, entrepreneurial foresight and global partnerships. Restarting a direct flight between Johannesburg and Mumbai seems an obvious strategic move. In 2019 more than 3,000 passengers travelled between the two cities each month in both directions. Because of SAA's endemic past struggles nearly 50% fly the India-South Africa route via Addis Ababa with Ethiopian Airlines. This highlights a clear demand for a nonstop connection. A recent study by Airbus suggests a direct flight between Johannesburg and Mumbai would significantly increase passenger numbers between Johannesburg and Mumbai. The convenience of nonstop travel would not only benefit business travellers and tourists but also South Africa's significant Indian diaspora. Furthermore, direct flights to Mumbai could open smoother connections to other major Indian cities such as Delhi and Bengaluru. This would offer SAA a valuable opportunity to tap into an underserved market. This enhanced connectivity would strengthen economic, business and cultural ties between the two regions. South Africa is geographically situated between Asia and Latin America. This offers an opportunity for SAA — to serve as a bridge, offering efficient transit options for passengers travelling to and between these two regions. SAA is particularly well-placed to be a link between Brazil and China via South Africa. As two prominent members of the Brics trade alliance, China and Brazil are taking steps to boost economic collaboration. Many global airlines leverage their geographic advantages to facilitate travel between Asia and the Americas. Leading carriers such as Qatar Airways, Ethiopian Airlines, Turkish Airlines and Emirates have positioned themselves as key transit hubs connecting these regions. However, there is a surprising lack of direct air connectivity between China and Latin/South America, with only one direct route linking China to Mexico City. China and Brazil have strengthened their bilateral ties, including signing a mutual visa agreement. This agreement allows ordinary passport holders to obtain visas valid for up to 10 years for purposes such as tourism, business and family visits. Visa holders can stay for up to 90 days per visit, with the option to extend their stay to 180 days if necessary. There is great potential for SAA to expand its connecting role by linking Latin America, Asia and Australia through a South African transport hub. These routes are strategically important for the airline as they benefit from strong point-to-point demand, ensuring consistent passenger traffic. Furthermore, these routes position SAA to serve as a key connector for passengers travelling between Latin America, Australia and other destinations via its Johannesburg hub. Over and above business and tourism travel, with more than 200,000 Latin American-born people living in Australia and a growing number of Australians with ethnic or cultural ties to Latin America, there is an increasing demand for connectivity between these regions. SAA, as of writing, operates direct flights to São Paulo, Brazil, and Perth, Australia. LATAM Airlines, the largest airline company in Latin America after LAN Airlines of Chile took over TAM Linhas Aéreas of Brazil in 2012, expects to transport more than 200,000 passengers annually on routes connecting Australia and Latin America. This is also a potential opportunity for SAA to explore to partner with LATAM Airlines. SAA will have to be run not like a failing state-owned entity ... but as a profitable commercial company run by experience, merit-based management and board The Cathay Pacific Group last week announced plans to expand its routes, changing strategy from rebuilding to expansion, with a focus on new destinations including to mainland China and the southeast Asian (ASEAN) region. The Cathay Group, which includes the low-cost carrier HK Express and Cathay Pacific, carried more than 28-million passengers in 2024, up 30.7% year-on-year. The Cathay Group has strategically used Hong Kong as a hub to attract transit passengers, particularly those travelling between mainland China and the rest of the world. SAA could for example explore a strategic partnership with the Cathay Group. SAA is desperate for a capital injection. SAA has for example been outspoken about its struggles to acquire additional aircraft since its return to the skies — because of lack of capital. A strategic partnership with a capital-rich airline group is one option to secure new capital. In Africa, a strategic partnership between SAA and Ethiopian Airlines, modelled after Qatar Airways' arrangement with International Airlines Group (IAG), could offer significant financial, operational and strategic benefits. An SAA-Ethiopian Airlines partnership has been talked about for many years but has never been realised. The Qatar Airways-IAG partnership offer an example for how an SAA-Ethiopian Airlines or an SAA strategic partnership with a Latin American, Asian, Middle Eastern or European airline group could look like. Qatar Airways first acquired a 9.99% stake in IAG in 2015, gradually increasing it to 25.1% by 2020 with a $600m (R11.13bn) investment. In 2024, IAG announced a €350m (R7.40bn) share buyback and Qatar participated by selling €88m (R1.86bn) worth of shares. Despite this sale, Qatar maintained its 25% stake due to the reduced number of shares in circulation after the buyback. Through this move, Qatar Airways can maintain its influence in IAG, but at the same time providing liquidity to IAG. Ethiopian Airlines could, for example, provide SAA with a much-needed capital injection, through acquiring an equity stake or participating in a share buyback programme if one were initiated. This would immediately strengthen SAA's financial position. SAA stands at a critical juncture, with encouraging signs of recovery marked by a reported net profit and the gradual expansion of its fleet and routes. However, sustaining this momentum requires strategic foresight, new capital and partnerships. Above all, it will require bold decision-making. Reintroducing key routes such as the Johannesburg-Mumbai connection, leveraging Johannesburg as a strategic transit hub between Latin America, Asia and Australia and exploring financial partnerships with established carriers such as Ethiopian Airlines are essential steps. By capitalising on these opportunities, SAA can strengthen its competitive edge, drive sustainable growth and reaffirm its position as a leading African carrier on the global stage. SAA will have to fix its failing governance. Lack of competent management, political interference in operations, appointments and contracts and procurement corruption have been among the reasons the organisation has struggled. In February the cabinet approved the appointment of John Lamola as permanent group CEO for a two-year term. However, the decision has sparked controversy, with the DA filing a complaint with the public protector against Deputy President Paul Mashatile and transport minister Barbara Creecy for alleged undue political interference in the selection process. The SAA board initially recommended Allan Kilavuka, the CEO of Kenya Airways, as the preferred candidate. Philip Saunders was also recommended as an option by the SAA board, who ranked Saunders higher than Lamola. Saunders was appointed SAA's chief commercial officer in 2019 and briefly became the airline's interim CEO in 2020. SAA will have to be run not like a failing state-owned entity, with political management and board appointees and needing state bailouts year after year, but as a profitable commercial company run by experience, merit-based management and board. • Gumede is an aviation analyst based at the University of Sussex.
