Investment Committee report

Fagmeedah Petersen-Cook

CHAIRMAN

Fagmeedah Petersen-Cook

Attendance and composition

Members
Invitees
Relevant skills profile of members
Chairman
  • F Petersen-Cook (1/1)
Members
  • NJ Adami (1/1)
  • C Boulle (1/1)
  • SL Botha (1/1)
  • CEO
  • Group Financial Director
  • N Halamandaris
  • Group Risk Executive
  • Company Secretary

Committee members are highly skilled in investments, business strategy, and finance.

Capital deployment in a volatile environment

Our operating environment remained challenging this year as monetary policy tightening, geopolitical tensions and supply constraints weighed on the global economy. Locally, high unemployment and inflation continue to place additional pressure on consumers.

In the last year, we evaluated our investments by considering the weaker global economic environment and domestic factors such as load shedding and poor economic performance. The Committee oversaw investments aimed at improving efficiencies across our facilities and stores. This includes optimising our Supply Chain and enabling technology in our restaurants.

After approving the purchase of our Midrand Head Office property in February 2023, we proceeded with the planning and construction of a facility redevelopment plan, with the balance of this investment happening in 2025. The redevelopment of the Midrand Campus will help us better align our Logistics footprint with our strategy. This redevelopment includes developing new cold storage facilities and exiting our cold storage facilities at Crown Mines. We look forward to seeing how this will improve efficiencies throughout the Group.

As load shedding remains a concern for the business, we continued to invest in additional power supply, including installing solar energy and more efficient generators at our facilities. About 95% of our Leading Brands restaurants have alternative power solutions in place, and we have also made funding support available for franchise partners.

In 2023, we oversaw the introduction of a new cell captive insurance vehicle for the Group. We continued to capitalise the cell captive in 2024.

Advancing our consumer-facing technology capabilities is a key investment priority. This year, the Committee considered and approved the acquisition of a shareholding in Munch Software, a South African company that offers cloud-based POS and e-commerce solutions. This partnership will enable more efficiencies for our franchise partners through enhanced e-commerce capabilities. The acquisition is key to ensuring that we have sustainable POS systems and can leverage Munch Software’s skills and insights throughout the business.

Focus areas for 2024

During the year in review, the Committee evaluated and oversaw the following key investments:

  • Approved the allocation of capital for the redevelopment of the Midrand Campus and allocation of capex.
  • The extension of the lease at Crown Mines amid preparations for the new cold storage facility in Midrand.
  • Investing further in technology enablement at the front end and back end. This included approving the acquisition of a 45% strategic shareholding in Munch Software.
  • Implementation of the insurance cell captive.
  • The implementation of an automation-based warehouse management system in the Logistics division.
  • Approving investment in additional generating capacity through efficient generators and solar to mitigate the effects of load shedding.
  • Evaluated the viability of our Oman operation, which resulted in the closure of Debonairs Pizza stores in the country.
  • Reviewed our continued investment in UAC Restaurants in Nigeria.
  • Evaluated the performance and profitability of our UK portfolio.

Priorities for 2025

Our focus areas for 2025 include the following:

  • Finalising the consolidated Supply Chain operations at Midrand Campus.
  • Monitoring the development of the new cold storage facility in Midrand.
  • Investing further in technology to improve the front-end efficiencies and extract value from the Munch Software partnership.
  • Further optimisation of the insurance cell captive.
  • Assisting the Board in identifying investment opportunities in SADC and AME.
  • Improving efficiencies in UAC Restaurants in Nigeria.

Conclusion

The Committee is satisfied that it has fulfilled its responsibilities per its terms of reference for the financial year. I will attend the AGM to answer questions regarding the Committee’s activities.

Fagmeedah Petersen-Cook
Chairman: Investment Committee

21 June 2024