Group Five: Mid-Cap Business

Adrian Saville presented his in-depth investment thesis on Group Five (JSE: GRF) at Best Ideas 2017.

Mid-cap business Group Five is a Johannesburg-based investment holding company with interests in the building, infrastructural, and engineering sectors. The business was founded in 1969 and listed on the JSE in 1974. The company has a market value of R2.8 billion (R13.60/US$) and operates in South Africa, the rest of Africa, and Eastern Europe, with 9,000 employees, turnover of R13.8 billion and bottom-line earnings of R380 million. This translates into an established business trading on an undemanding earnings multiple. To boot, the business is cash-rich with annuity income based in hard currency. Recent corporate action involving an equity partnership with Group Five’s concessions business in Europe and Aberdeen Asset Management has highlighted the extent to which Group Five’s assets are underpriced.

About the instructor:

Adrian Saville has been involved in the investment management industry since 1994, when he formed an investment vehicle which later led him to establish BayHill Capital Advisors (in 1998), the forerunner to Cannon Asset Managers. Adrian is an executive director and Chief Investment Officer of Cannon Asset Managers. He has experience in managing all of the major asset classes, including equities, bonds, property, cash and derivative instruments. Adrian’s qualifications include a Bachelor of Arts (Honours) degree (cum laude) and M.Com (cum laude) from the University of Natal. He completed his PhD (Econ) at the University of Natal in 1997, for which he was awarded the Economics Society of South Africa’s Founders Medal. He is a UNESCO laureate and a matriculant of Linacre College (Oxford). Alongside his career in asset management, Adrian holds a Visiting Professorship in Economics and Finance at the Gordon Institute of Business Science. He has published widely in peer-reviewed journals and books, and is a member of the Investment Analysts Society and Economics Society of South Africa. Adrian is married to Kerry; they have a daughter, Sydney-Bo, and son, Saxon. Adrian claims that fatherhood is the most rewarding investment he has ever experienced.

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