Dear shareholders, family and friends
It’s my pleasure to share Beagle’s results for the year ended March 2026 with you.
I have taken the liberty of adding some new staff members and friends to the distribution list. If you find yourself on the list and are receiving this email but it is of no interest to you, please let me know. Alternatively, if you know someone who would be interested in this investment opportunity, please pass along their details – I’d be happy to add them to the list.
Beagle is an investment holding company managed by RECM. It has been set up specifically to act as an empowerment investor. Its main shareholder is the RECM Foundation, which funds education initiatives in some of the country’s poorest communities. The Foundation’s trustees manage its affairs and are all independent of RECM. You can find out more about the Foundation and its activities here. Beagle’s successful investment program has provided the Foundation with a strong, growing capital base and a sustainable income stream with which to pursue its charitable program.
As a spin-off, Beagle also provides RECM’s staff, the staff of its wider “business family,” as well as friends and family, with an additional investment opportunity that is differentiated from our local and global unit trusts managed by our associate Merchant West Investments, our hedge fund managed by RECM, and the funds managed by our two associates Desert Lion and Urquhart Partners.
Finally, if you have a company that needs a BEE shareholder, Beagle is a rational, well-capitalised investor and always open to ideas. If nothing else, you will always get a quick answer.
You can read more about Beagle at https://recm.co.za/beagle/
2026 annual results
To calculate the net asset value, we mark Beagle’s listed assets to market at prevailing market prices as at our year-end, being 31 March. The unlisted assets are valued internally, on a consistently conservative basis.
At year-end, Beagle’s net asset value (“NAV”) per share increased by 23.5% to R7,809 (from R6,323 per share at the end of March 2025). You would have also received a dividend of R125 per share last year. Over the same period, the FTSE/JSE All-Share Total Return Index increased by 33.6%.
The bad news is that this was the second year in a row that Beagle underperformed the All-Share Index. The good news is that our long-term track record remains intact. Since inception, Beagle has compounded its NAV per share at 25,6% p.a., compared to 12,6% delivered by the JSE All Share Index (with dividends reinvested). Beagle has generated this level of outperformance over the long term due to certain structural advantages. These are:
• It is a privately owned business, not subject to the ebbs and flows of public opinion.
• It has a solid base of long-term oriented shareholders.
• It has access to cheap, non-recourse leverage due to its BEE status.
• It has permanent capital, allowing it to invest in illiquid situations when they are favourably priced.
• Due to its permanent capital base, it never has to become a forced seller of mispriced assets.
You might notice that “the brilliance of Beagle’s management” is not listed as an advantage. In managing Beagle, our most important job is to sit on our hands and watch its investments compound in value as underlying business growth is magnified by leverage. Inactivity is well rewarded, and we love our job.
Beagle now controls assets of almost R180mn.
The table below shows the progression of our NAV per share since 2010, compared to the JSE All Share (Total Return) Index.
You will note from the table that the original investors have made almost 40x their money, while index investors have “only” made 7x.
Our portfolio
The value of our biggest investment, Reef, now stands at R101.6mn, up from R90mn a year ago. This represents 57% of our asset base. Beagle has a 4% direct interest in the Reef group, which owns Reef Switchboards, Victoria Engineering, and UCP Holdings. Beagle also has separate, direct stakes in all three of these companies. The group enjoyed a good valuation uplift, despite the less-than-buoyant economy. Valuation multiples have remained unchanged. Reef also declared a R7.5mn dividend to Beagle.
Beaprop showed 73% growth over the past year, from a NAV of R12,5mn to R21.6mn. Its only asset, Spear REIT, grew its NAV per share by 5,8% and its distribution per share by 6%. Its share price moved from R9.45 to R12.15. The leverage in the structure magnified this positive move. Today, Spear REIT trades at a premium to NAV, up from a 40% discount when Beagle originally invested. After year-end, we sold our entire investment and repaid the debt we took on to finance it. We thank the CEO, Quintin Rossi and his team for a job well done. Spear has been one of Beagle’s best investments ever.
“GoedeHoop” is a portfolio of high-quality mid and small-cap listed South African stocks. 18 months ago, Beagle borrowed R10mn and, together with R2mn of its own money, invested R12mn into the portfolio. As of 31 March, Beagle’s investment in GoedeHoop was worth R13.7mn, while the debt had been reduced to R7.8mn.
Goldrush had another tough year. Its EBITDA decreased by 10%, with online gaming continuing to hurt its land-based operations. Fortunately, Goldrush’s growing online business has mitigated this effect to some extent. The weak economy also didn’t help matters. Given its poor historical track record, Goldrush’s valuation multiple was reduced. The decline in EBITDA, coupled with the lower EBITDA multiple, led to a significant decline in the value of Beagle’s investment in Goldrush, from R13.4mn to R10.6mn.
Goldrush management spent considerable time in the last year helping the Sizekhaya consortium set up systems to manage the National Lottery. Goldrush is a major shareholder in this consortium. The handover took place seamlessly on 1 June, for which the consortium should be commended. The financial benefits should start flowing through in the coming months and years.
YeboYethu (YY) is Vodacom’s BEE shareholder. It is listed on the JSE, and its market price increased by over 100% to R42 per share at year-end. At Vodacom’s current price of R148 per share, YeboYethu has a NAV of over R110.
Phuthuma Nathi (PN) – the BEE shareholder of MultiChoice South Africa – enjoyed a share price increase of 20%, from R40 to R48 per share. During the year, PN also paid a dividend of R6.11 per share, representing 9 months’ worth of earnings power, as its year-end changed from March to December following Canal+’s acquisition of the holding company. We hope the new owners bring some much-needed adult supervision to the situation. Their deep experience in pay TV across Africa bodes well for MultiChoice, a business that lost touch with reality under previous management. At year-end, PN’s NAV was R117 per share.
UCP is the BEE partner of Ritchey Crane Hire. Ritchey operates in the coal-mining area of Witbank. The industry did not have a good year due to heavy rain and subdued coal prices. So far, 2026 has continued in the same vein. At least it was able to grow its earnings by 10%, so the valuation increased by the same percentage, to R5.9mn. It also declared a R1.7mn dividend to Beagle.
The market price of SOLBE1 – an empowerment structure related to Sasol – increased by 58% to R80 per share. A SOLBE1 share has the same economic and voting rights as Sasol ordinary shares, which traded at R208 at year end.
The “other” line includes our investment in TIPone, which is listed on the Cape Town Stock Exchange and is essentially an open-ended BEE investment vehicle where management intended to acquire tranches of BEE shares in selected companies over time. This has proven to be an unsuccessful venture, and we have written it down to 0 value post-year-end.
Cash flow and balance sheet
In the year to March 2026, Beagle received distributions of R11.3 million. It had operating expenses of R2.1 million and paid interest of R1.1 million. It made net new investments of R2.7 million, mainly into additional shares of Phuthuma Nathi. It repaid R1.6 million of loans and paid a dividend of R2.4 million.
Beagle ended the year with cash of R6.1 million.
Regarding debt, Beagle has an interest-free loan of R1.7mn from Reef as part of its CSI program and a R7.8mn loan from Merchant West. It also has a deferred tax liability of R17.2mn, representing the capital gains tax that Beagle would have to pay if it sold all its investments today.
At year-end, Beagle’s investment portfolio looked like this:
Dividend Declaration
Under normal circumstances, Beagle would retain and reinvest all its income, as investment opportunities in the BEE space remain compelling. However, its reference shareholder, the RECM Foundation, is developing an Early Childhood Development programme. A regular dividend stream, which supplements its lumpy stream of donations, makes all the difference to the Foundation in making the programme sustainable and in achieving a lasting impact on the lives of the young people involved.
In this regard, Beagle has established a dividend policy to pay out up to half of the distributions it receives, after deducting business operating costs and interest payments. This year’s dividend is R160 per share, a 28% increase on last year’s. We aim to steadily increase this dividend over time so the Foundation can sustainably fulfil its mission.
Please let our CFO, Dean Schweizer, know if your tax status or bank account has changed. He can be reached at dean@recm.mu
If you can help source donations for the good work the Foundation is doing, it would be greatly appreciated. You will also make a real difference to the lives of many deserving young people. You can learn more about the Foundation at https://recm.co.za/recm-foundation/.
Some administration
If there is any interest, I will be available to answer any questions about the results publicly online on Wednesday, 22 July 2026, at 14h00. If you wish, you can also attend the discussion in person at the RECM offices. Simply let Yolanda Bowers (Yolanda.bowers@recm.co.za) at RECM know if you want to attend online (or in person). She will send you a meeting link. Alternatively, you can email me directly if you have any questions.
The full set of annual financial statements is also available to all shareholders on request. Please let me know if you require a copy.
Releasing these results also opens our regular semi-annual liquidity window. Please let me know if anyone wishes to sell their shares. If there are any buyers, you know where to find me. Unfortunately, we cannot guarantee that you will be able to buy or sell any shares – that depends on other shareholders’ willingness to transact. Transactions have traditionally occurred at the audited NAV per share as of 31 March 2026. As usual, we will pay the dividend on 1 August and settle any transactions shortly thereafter.
Beagle has delivered strong returns over the years, and the directors are comfortable with the current investment portfolio. However, do not extrapolate this history into the future when planning your financial affairs. Beagle is an investment company with a highly concentrated, illiquid, leveraged portfolio. The directors of Beagle will continue to do their best to ensure a positive outcome, but this cannot be guaranteed. Also, an investment in Beagle cannot be easily realised, so you should never invest money you might need urgently.
Thank you for joining us on Beagle’s voyage, and best wishes for the rest of the year!
Piet Viljoen
RECM
30 June 2026