Paarl Media Group is being renamed Novus Holdings, it is planning to list on the JSE next month. The group hopes that this will give it the opportunity to diversify into manufacturing and technology in the printing sector.  Alec Hogg and Gugulethu Cele were joined by Stephen van der Walt, Chief Executive of Novus Holdings on CNBC Africa’s Power Lunch to talk about the impending listing.Â
Stephen, we’ve got a couple of issues to ask you about, before we get into the nuts-and-bolts. The first is are you by taking a Latin name, turning your back on your African heritage? You’ve been here for 100 years. Did you consider an African name?
I think what is important over here is that the Paarl Media name has served us extremely well, from our small beginnings in Paarl. I think that there are two important things. Firstly, we have very little business left in Paarl to gain and expand geographically to 15 countries, south of the Sahara. I think what’s also important is, is that when we’re diversifying we want to establish a new brand and a new name. This is where Novus comes in, because Novus obviously means new, in Latin, but the Paarl Media brand will not be lost.
The Paarl Media brand will be retained for hardcore printing functions so it is really just, to dynamically group all of our brands under one heading, to indicate a new direction.
That wasn’t my question. My question was why a Latin name and why not an African name?Â
I think because of the fact that many of the companies that we deal with, inside our industry and inside the industries, we’re targeting are international brands, etcetera, and we want to be readily recognisable, from that perspective. We would certainly brand African names in our sub-brands.
Stephen, just to go through the likely market-cap that you will come on. Paarl Media has been around a long time and your major competitor, of course is Caxton. Like-for-like how does it size up?
Okay, I think what’s important is the Paarl Media Groups inception date was September 2000. Some of the companies we brought into the Paarl Media Group have, obviously had histories far longer than that, so we are a company with a 15-year-old history.  At the present moment, our business is core printing, into retail, magazines, and newspapers and into books. To compare that to Caxton, Caxton obviously had publishing, they had printing, and they had the packaging sector, so they had a bunch of sectors making up the whole, which is different to us, at the present moment in time. As far as market capitalisation is concerned, between the two companies, there’s not much difference.
Okay, so you are around about the Caxton size. The other issue that is interesting, from a broader Naspers perspective, and this is the point that David Shapiro made earlier. There are a lot of listable subsidiaries within Naspers, particularly the South African operations. Are you going to be the only one to be listed or is this part of a trend?
I think that you’d have to ask Naspers that but I think that what you have is, Naspers as a company, is on a different course to that of Paarl Media. Obviously, with ecommerce platforms, internet platforms, and the growth coming from that capital, with satellite television. If you look at Paarl Media, we’re in manufacturing, so I think the ideology is, is that Paarl Media gets freed up to explore diversification in other related technology and other related manufacturing. There is not necessarily a coupling between Naspers and Paarl Media into the future, as to where we’re going. I don’t know whether this is the same result with any of the other subsidiaries of the Naspers Grouping but it is certainly applicable to Paarl Media.
Stephen, a lot of your revenue is generated by your relationship with Naspers, the magazines, and newspapers, etcetera. How secure are those contracts if you are going to be treated independently?Â
I think firstly, in our so-called deep-set operations, reliance on Media24 is only 18 percent, so 82 percent comes from other market factors. What is also important is that Media24, through the listing process continues to be a majority shareholder. This means that the printing contracts and things in place with Media24 and the greater Naspers Group do continue.
Stephen, you did mention diversification and for some of the naysayers who say that printing is a dying industry, where are you looking to grow and develop?
Okay, so we’re looking for growth in industries, especially on the African continent and we have bought a tissue-making facility in Phoenix, KwaZulu-Natal. We are expanding that facility by three times its capacity, by bringing in a tissue plant, which we acquired in Italy. We are also looking at self-adhesive labels, specifically inside the packaging industry, and print onto packaging and we’re making substantial investments in these as well.
Those investments have just started, and will probably reach fruition for the first time in our 2017 Financial Year. Those are examples of where our core competencies in technology and manufacturing, etcetera, are being extended into those sectors.
That was Stephen van der Walt, the Chief Executive Officer of Novus Holdings, which used to be known as Paarl Media. Â
