WORLDVIEW: Role model for CEO who needs to resuscitate SA’s Christmas cards

By Alec Hogg.Even in South Africa, a country overdosed with characters, Mark Barnes stands out. Once tipped to become the CEO of Standard Bank, he noisily migrated from that pillar of the establishment to Capital Alliance and Brait before ending up in his own shop, Purple Capital..___STEADY_PAYWALL___.The team at Purple, like Barnes, are infected with a belief that everything is there to be disrupted. Its revolutionary Easy Equities is applying a low cost base and fractional ownership of shares to transform the way middle class South Africa invests in the stock market. Purple shares, by the way, offer an interesting bet on their disruptive model succeeding – not only in SA..It was Christmas cards that got me musing about Barnes, who next month ends the first of a five-year contract to run the SA Post Office (SAPO). Here in the UK, the ritual of sending friends a physical reminder of your affection is alive and well. It is literally decades since I felt happy to send them in SA..The British postal system is courtesy of Royal Mail, an institution created by King Henry VIII exactly 500 years ago. It lives on in rude health..Royal Mail was rejuvenated in 2013 when 70% of its ownership was made available to citizens in an IPO ahead of its shares being floated on the London Stock Exchange. The British Government completed the privatisation last year by selling off the final 30% it owned..As a recent arrival, being able to resuscitate the December tradition of posting overpriced cards is only part of the benefit of having an efficient postal service. Royal Mail is the preferred vehicle for the delivery of credit cards and passports. The British continue to happily post each other envelopes with cash or cheques..In his new role, Barnes can only dream of offering this kind of service. Trust in the postal service was destroyed by incompetence and outright theft. Witness the collapse of a once flourishing direct marketing industry (ie junk mail distributors) and the decision in 2008 by Amazon.com to terminate deliveries to the country..Since the IPO, the share price of Royal Mail has bounced around, but the stock trades around the level it listed at three years ago. That values the business as being worth almost R80bn. Even at one tenth of that, the SAPO would be a sizeable operation in a SA context..Those market caps give you an idea of the upside which exists if the Barnes-run orphan can be turned around. For taxpayers, the SAPO is a long-term leaky sieve that has required regular and significant capital injections to keep going..Royal Mail's example suggests that capital need not be written off. With its enterprising CEO and a UK role model, the SAPO may yet be turned around. Bringing back a Christmas card tradition is only one of the upsides.

WORLDVIEW: Role model for CEO who needs to resuscitate SA’s Christmas cards

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