Mohsin Tajbhai was appointed as a director of Grand Parade Investments in 2018 and CEO in 2019.

In a brief update to shareholders, the investment holding company – which has interests in gaming, hospitality and leisure – said Tajbhai had been instrumental in leading the turnaround of Grand Parade Investments (GPI) and unlocking value.

“Mohsin has achieved his objectives as CEO and has decided to embark on new challenges. Mohsin will continue to serve on the Board as a non-executive director to ensure a seamless transition. The Board thanks Mohsin for his contribution to the GPI group and wishes him well in his future endeavours.”

Tajbhai said his time at GPI had been “extremely rewarding”, that he was proud to have achieved what he set out to do, and that he was now looking forward to taking on new challenges.

GPI, which has a market cap of R1.58-billion, was founded in 1997 to partner with Sun International South Africa as its primary black economic empowerment partner in the Western Cape. It initially raised R28-million in the deal for more than 10,000 previously disadvantaged community members. GPI listed on the main board of the JSE in 2008.

In a separate statement, GPI said Tajbhai’s appointment to the GPI board came at a very turbulent time for the company, when shareholders had grown impatient with the performance of the group and demanded changes.

At the time, GPI had leveraged its balance sheet to fund its loss-making quick-service restaurant (QSR) business and had stopped paying dividends. 

Strategy

After his appointment, Tajbhai worked with the board to develop a strategy aimed at reducing the deep discount at which the group traded relative to the intrinsic net asset value (NAV); help improve the group’s financial position; exit non-core businesses; reduce head office costs and resume dividend payments.

After his appointment in 2019, he helped the group exit its investments in the QSR industry, with the most significant being GPI’s sale of its 91% stake in Burger King in November 2021 to private equity firm, Emerging Capital Partners, for R570-million. This deal helped the group to reduce debt and pay dividends of 88c to shareholders.

Last year, GPI announced it would make a complete break from the food business. On 20 June 2022, it unbundled its 9.3% interest in the Spur Corporation by giving GPI shareholders the opportunity to hold a direct interest in Spur. In the past 18 months, the group has returned 100c in cash dividends and 37c in a dividend in specie through the unbundling of Spur shares.

The group said Tajbhai has helped reduce debt by R450-million; reduced head office costs by more than 40%, and reduced the discount to net asset value from 30% to a bullish 27% premium NAV.

GPI is now controlled by GMB Liquidity Corporation, which is chaired by horse racing pundit Greg Bortz.

Bortz also heads Kenilworth Racing, in partnership with sports betting specialist, Hollywoodbets.

The GPI shareholders have received an offer from GMB for R3.33, which is a 27% premium to net asset value. The offer is unconditional and will be finalised on Thursday.

In 2018, GPI shares traded at R1.80. They are now trading at R3.33, excluding dividends paid of R1.37.

On an annualised return, this is an increase of 21% per year.

Back to roots

With GPI out of the food business, it has set its sights firmly on its roots in gaming and hospitality. Its interim results for the six months ended 31 December 2022, released on 24 March, revealed strong performance driven primarily by the continued improvement of the hospitality sector and the group’s gaming investments – coupled with a reduction in corporate head office costs over the period.

SunWest, which owns GrandWest Casino in Cape Town, saw revenue increase by 71% from R665.3-million to R1.137-billion.

Sun Slots’ revenue increased by 13% to R775.8-million, with R167.8-million in cash.

GPI reported a R25.2-million (144%) increase in net profit after tax (an improvement from R17.5-million in the prior period to R42.7-million).

Basic earnings and headline earnings per share for the period amounted to 9.9 cents per share, which equates to an increase of 5.9 cents and 5.1 cents, respectively, compared to the prior period. BM/DM