PSG Group strikes paydirt with its stake in retirement villages
‘I don’t think we’ve ever made an investment that has hit the ground running as hard as Evergreen,’ says CEO
Stellenbosch-based investment company PSG Group said its decision to back retirement village specialists Evergreen was turning out better than expected.
At an AGM on Friday PSG CEO Piet Mouton said Evergreen’s developments were going great guns. “I don’t think we’ve ever made an investment that has hit the ground running as hard as Evergreen.”
In September last year, PSG – which is anchored by investments in Capitec Bank and private education venture Curro – snapped up a 50% stake in Evergreen for R675-million.Mouton said Evergreen would have developed 1,074 units by February next year at an average value of R2.7-million per unit. He said Evergreen had recently secured four new properties for development. A table presented at the AGM showed that these four new developments would add over 2,300 new units by the end of February 2023.Mouton said the properties could not yet be identified as marketing efforts had not started. “But the pieces of land have already been bought.” The table forecast that Evergreen would hold 1,840 units by the end of February 2020 and 2,815 by the end of February 2021.
The company has existing Cape Town-based developments at Bergvliet, Muizenberg, Diep River, Broadacres and Lake Michelle, with the Val de Vei development in the Cape Winelands due to come on stream next year.
Turning to shareholding changes, Mouton noted that after Steinhoff International’s sale of its 25% stake in PSG in December and January the foreign ownership of the PSG Group’s shares had surged from 10.7% to 20.2%.
He said the Steinhoff share sale had also increased liquidity from 34% in 2017 to 58%.
But Mouton noted that the prevailing discount of 16% offered by PSG’s share price on its sum-of-the-parts (SOTP) value was “the largest for a long time”.
In early 2017 PSG’s shares briefly traded at a premium to the SOTP.