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Ghost Stories #114: The STADIO growth formula

The Finance Ghost
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Ghost Stories #114: The STADIO growth formula

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A year after becoming the first JSE-listed company to join Ghost Stories for a results podcast, STADIO returns to discuss the next chapter of its growth journey. CEO Chris Vorster and CFO Ishak Kula unpack how the group reached its 56,000-student target and, more importantly, how it plans to grow to 80,000 students by 2030 while maintaining academic quality, affordability and attractive returns on capital.

The conversation explores the building blocks of the STADIO growth formula, from new campuses and blended learning to operating leverage and curriculum development. We also discuss employability, the role of industry partnerships, the Springboks sponsorship, and why management believes the group can continue expanding while investing heavily in the future.

In this episode:

  • The roadmap from 56,000 students today to 80,000 students by 2030
  • How STADIO balances contact, distance and blended learning
  • The economics of operating leverage in higher education
  • Campus expansion plans and capital allocation priorities
  • Why management believes the Springboks partnership will help build the STADIO brand

This podcast has been sponsored by STADIO, but The Finance Ghost was allowed to ask whichever questions he felt were most pertinent for an investor audience. Please always do your own research and do not treat this as an endorsement of the stock.

Read the transcript:

The Finance Ghost: Welcome to this edition of the Ghost Stories podcast. This is quite a special one for me actually because, a year ago, STADIO was the first company on the JSE to do a results podcast with me.

And here we are today – I think everyone on this call has been very busy in the last year. I’ve managed to do a lot more of those podcasts and thank you to the team from STADIO for kicking that off.

Much more importantly, this team – that’s CEO Chris Vorster and CFO Ishak Kula – has been busy delivering on their promises. They promised 56,000 students for 2026; that’s what they delivered, but they’re not done yet. They have an ambition to grow to 80,000 students by 2030, and they certainly plan to grow beyond that, as well.

I’m excited today to get a much better understanding of what that journey is going to look like.

Chris, Ishak, welcome to this podcast. Thank you for coming back, and thank you for doing the first one with me a year ago. I think you guys really did kick off that snowball effect.

Chris Vorster: Yes, thank you, Ghost. Good morning from our side and thank you for inviting us back to the podcast.

Ishak Kula: Good to be here with you, Ghost, and to share more about our journey.

The Finance Ghost: Yeah, and what a journey it’s been! So, I met both of you in person, finally, at your recent earnings presentation, which was at your Durbanville campus.

Quite an impressive facility, now that I’ve been there myself. Definitely, a different take on tertiary education to what I experienced at a public university all those years ago. It’s amazing how things evolve.

Something that really struck me when we were doing the campus tour – and this is where I want to start – was the extent of specialist programmes versus your more generic degrees. I’m not sure if I just lived in a bubble maybe when I was at university, but it felt like everyone was just doing a more generic thing and they’d figure out later on what they were going to specialise in. But when we did the tour of the Durbanville campus, the stuff was really specialised, which I found incredibly interesting.

So, I wanted to start by understanding if this tells us something about how you compete in the tertiary space when you build these new facilities. Do you look specifically for qualification gaps and then try to plug them? Or do you say to yourself, “Well, we’re going to compete in qualifications that already exist at competitors in the region; we’re just going to try to do it better, or a little bit differently.”

Chris Vorster: Yes, thank you. I’m actually very happy to hear that you enjoyed the campus and the layout. I think the Durbanville campus was a very special project for us, Ghost, in the sense that we started from a blank piece of paper and were able to design and develop the campus as we believe a new, modern, high-facility campus should look. So, it was a very exciting project for us as a management team, along with our specialists, architects, and designers.

And we think we’ve managed to really get that flow between the different faculties – we have some engineering labs and IT labs next to general lecture halls, so you get that very nice flow between the different faculties on the campus. That was always something we wanted from day one, and I think we have managed to get that right.

Looking at the programmes we’ve identified – yes, we definitely do a lot of research in a specific area whenever we identify programmes. But I also think that what guides us in the number of programmes and faculties that we put on these comprehensive campuses is our ambition to become a university.

And to be a university, you need to offer a number or variety of programmes and faculties.

So, it’s a bit of both. Obviously, we do our homework. We won’t offer programmes for which we believe there is not a demand in a specific area, but we are also guided by our ambition to put down a comprehensive offering at these campuses.

Ishak Kula: Ghost, if I may add to what Chris has just said there, I think invariably, strategically, part of our underlying philosophy in our organisation, to Chris’s earlier point, is what we dubbed ‘the world of work’. And part of that is obviously to make sure our qualifications remain relevant in the workplace, but also importantly that we financially back that.

So, as part of our capital allocation strategy, you would see over the last number of years, we’ve invested between R10 million and R20 million at least in the development of the curriculum. And that we believe is a strategic responsibility of us as an institution to make sure our qualifications are relevant to the industry, but it also gives our graduates the best opportunity of employment and making sure that what they study remains relevant. But also, the investment is allocated to make sure that students have a fantastic education experience as they venture into the group.

The Finance Ghost: Yeah, I think the point you made there, Chris, around labs near lecture halls, is interesting.

Because now I’m reflecting on the university I went to – and maybe that’s why this seems so different to me, because we had this campus where it was just commerce and law, and there were obviously no labs involved there, so it was kind of just stamped-out lecture halls (maybe I didn’t see enough of the engineering campus). So, it’s very cool that it’s a bit more integrated. I quite like that.

And Ishak, as you say, lots of curriculum development going on, and that’s a big part of the capex decision that you have to make as a group.

But the other thing that came through there is employability, and I just want to touch on that for a moment because I think that’s an important part of the offering, right?

If I look at what STADIO is doing – it’s a very practical approach to tertiary education, and I would imagine that from a business-case perspective, that’s important. Because for someone to come and pay for a tertiary qualification, they need to know that on the other side of that, they’re improving their earning potential; their chances of getting a job and what they can earn.

It’s not so much ‘academic programmes for the sake of it’, if I can call it that. At the moment, at least, it’s very practical stuff.

Is that a fair take on the strategy at the moment?

Chris Vorster: Absolutely, I think you’ve got it spot on. What we’ve done from day one to align with the world of work was to invite industry into the institution.

What do we mean by that?

Right from when where we design a new programme, industry will be involved to ensure that we have the relevant industry needs captured in those new programmes. Obviously, there are certain academic standards that we must meet, but we always try to accommodate the needs of the work environment as much as possible.

From there, we then also invite industry into the classroom. We think that’s important – for experts in the field to come and offer lectures and specialised classes to students and give them the opportunity to engage with experts in their fields. We see that is also very popular with our student base.

Thirdly, and something that’s also very important, is then to get industry involved in the evaluation of our programmes. What we mean by that is, where industry employs STADIO graduates, we engage and find out how they are actually performing in the workplace. We get that feedback and take it all the way back to the curriculum, as well as to what we offer in the classroom.

So, it is a continuous process to ensure that our graduates are actually desired and that they are employable in the different industries that they go into, after obtaining their qualifications.

The Finance Ghost: Yeah, and I think that’s really important, particularly given the consumer pressures that are out there – and we’ll talk about that a little bit just now.

Before we do that, I just want to take the spotlight off of the Durbanville campus for a moment, because that’s been a big part of the story in the recent financial period, but there’s obviously much more to the group than that.

One of the other campuses that was opened in the year was AFDA Hatfield. We made a joke just before hitting the record button – Chris couldn’t get the camera on his iPad to work, which is mildly hilarious when AFDA is part of the group, so we almost needed to parachute in a couple of film students to sort that out [laughing].

But perhaps this is a great opportunity to walk through the rest of the group, some of the other offerings – maybe for someone listening to this podcast who isn’t as familiar with the STADIO offering. Just high level, the sorts of brands and those centres of excellence and the different verticals they operate in.

Chris Vorster: Yes, in the holdings group we have the three brands. The biggest one, without a doubt, is STADIO Higher Education, our big comprehensive institution. That is the institution where we have four comprehensive campuses, and within that brand we offer contact and distance learning.

Then we have our two more niche, specialised brands. The first is Milpark. Milpark Education is very well known for its programmes, especially in the accounting, finance, and business sectors. And Milpark is a pure online offering.

Thirdly, there is our well-known and award-winning film school, AFDA. AFDA is the smallest of the three entities, and they are doing only contact learning.

So, looking at the year thus far, we’ve seen very good growth in STADIO Higher Education. 18% growth in that institution, 33% in contact learning, and then 16% in our already big distance learning offering. So, very happy.

At the other two institutions we’ve seen more muted growth. Both of these institutions are operating at a higher price point, but we have seen some headwinds, especially in the film industry.

I’m sure many of your listeners will know about the turmoil currently in the entertainment and film industry – with Canal+ and the closure of Showmax, and then also the DTI (the Department of Trade and Industry), who have withdrawn their funding to the industry, also at the beginning of this year.

So, we did see some headwinds in our AFDA brand, but I’m also excited to report back that, with that new campus which we opened in Hatfield in Pretoria, as well as Canal+’s commitment to really invest in local productions, there are a lot of green shoots already.

We see our application numbers for next year in AFDA tracking way ahead of last year, so we’re still positive that that was just a glitch in the road and that AFDA can still show growth, come the 2027 academic year.

At Milpark, it’s that B2B business (I think Ishak talked a lot to that during our results presentations). That still hasn’t recovered since COVID, where a lot of the big corporates decided to move away from your formal three-year, four-year degree programmes for employees and rather go to shorter, specific learning programmes. That has an effect on our Milpark business, but as the years go on, that is starting to phase out and will have less and less of an impact on the group’s results.

But there are also very good prospects for Milpark especially. They are introducing a few very exciting new programmes that we believe will do very well, come the 2027 academic year.

The Finance Ghost: My take on what’s happening in the world is we’re very much in the era of the specialist. It feels like generalists… I don’t know, I don’t have data to back this up, but it just feels to me like in an AI world, being a generalist is quite dangerous and being a specialist is probably where you want to be. And that strikes me as what the STADIO offering is really built around – achieving specialisation in specific industries, which is probably not a bad thing.

So, yeah, headwinds there, that’s going to happen. Anyone who has built a business knows that it doesn’t happen in a straight line. And that’s why I think diversification is important, right?

Chris Vorster: Definitely. That is exactly how we think the group is well balanced. Looking at where these different brands are positioned, and also how we’ve positioned them, price point-wise. So yeah, we are actually happy with the balance of the three brands thus far.

The Finance Ghost: Let’s dig into some of the recent financial results, then (so, that’s for the six months to June).

One of the slides in that deck, which I think was pretty good, shows that over the past five years, your student numbers were up roughly 60%, but revenue was up 97%.

Now that’s obviously not per year. That’s in total. But some of that would be pricing increases, over and above volumes (just to be clear, student numbers would be your volumes growth for anyone who’s just thinking about STADIO like they would think about any other business), and then the other levers you can pull are pricing and mix.

So, if a student comes in and does a more expensive course rather than a cheaper course, that is net positive for revenue without you having to have implemented price increases – that’s what we mean by ‘mix’.

Ishak, this one’s probably for you, I would imagine.

These levers, as part of your planning for the next few years – you have student numbers, you have pricing, you have mix effects. How do you think about these things when you’re doing target setting, when you’re wondering where the business might go, when you’re explaining this to your institutional shareholders?

Maybe you can also just speak to, as part of this, some of the pressure that you’ve seen in the higher-priced qualifications, which I know have had a bit of a struggle lately.

Ishak Kula: Ghost, I think if I didn’t know any better, I would have said you’re an accountant. You gave your listeners quite a good view there.

The Finance Ghost: You’re outing me here. You’re outing me. I’m just a podcaster! What are you talking about?

Ishak Kula: [laughing] No, you’ve done well there. Yeah, to give that a bit more colour, we’ve seen fairly good growth over the last couple of years. And maybe for the listeners again, it’s important to understand contextually – I think strategically, as a group, we have always said that we want to accommodate 80% of our students studying via the distance-learning mode of delivery, and 20% via contact learning.

At the half-year, we were around about 87% of our students studying in the distance mode of delivery and 13% via contact learning.

I think over the last two to three years, and particularly post-COVID, we’ve really seen that more students want to have a contact learning experience. Particularly those school leavers, they want to have an experience with fellow students. They want to hang out together. They want to socialise. And they have so many things in common that we have definitely seen incredibly good growth there.

So, from a strategic levers-perspective, invariably, the distance-learning mode of delivery has high economies of scale. You can scale that business quite quickly. It never comes at zero incremental cost in the distance learning world, but there is limited incremental cost in that distance-learning mode of delivery.

Ghost, that gives us quite a nice ability to unlock a lot of leverage in the distance learning space in particular. But I think what’s helped our numbers fairly nicely (particularly in a year of investment when the margins, although we’ve invested, have still sort of expanded) is that we’ve really seen this contact-learning momentum coming through.

I think Chris cited it quite nicely earlier. Particularly in STADIO Higher Education, we’ve seen contact learning as a whole growing by 33%, which really demonstrates the demand for our product.

But similarly, if you look at the financial metrics that sit behind that, in education, Ghost, you obviously incur a lot of your costs up front. You need to put down the infrastructure and the academic staff complement, and incur a lot of those operating costs before the first student walks through the door. So, there are a lot of costs that you front-run, and invariably as student numbers grow, you start to unlock those efficiencies and the J-curve, so to speak, plays out.

So, in a year where we’ve seen very good contact learning growth and investment, I think that J-curve has played out and has allowed us to expand our margins.

But, to your point and specifically to respond to that part of the question, we have definitely seen a lot more pressure on the high price-point products, particularly in our AFDA business. That we believe has been compounded by the broader macro film industry, as Chris cited earlier.

We are under no illusions that the broader macroeconomic conditions definitely play a role in students’ and sponsors’ ability to pay these accounts.

Therefore, strategically, we believe that in AFDA’s particular case, even though the price point is higher, if we offer a world-class service there… I mean, that product in particular, you get an amazing experience. You work on industry-grade equipment there, and it is quite a high-end and very expensive product, so we believe the price point is justified. But in saying that, there’s recognition that the consumer remains under pressure.

And then the question is: What do we do? How do we respond as an institution? So, sticking to our philosophy of widening access, I think it’s also our responsibility as an institution to make our product as affordable as we can.

One of the levers we are able to pull, given the fact that our distance learning and contact learning are on different growth trajectories and we can also unlock leverage there – we think of our price increases quite cleverly and, I believe, responsibly.

What’s important strategically, over the years, is that we have always tried to track CPI from a price-point perspective. We haven’t gone significantly beyond that, and I think that’s important. We want to really make our prices and our products attractive to students, within the confines of a challenging economy.

The Finance Ghost: You know, someone listening to this might be tempted to think, “Well, if it’s such a volumes game and it’s leverage and it’s all the rest, then why not just lower your prices and just really fill these things?”

But I guess the challenge there – apart from the fact that it’s just not good business practice – is that once you rebase yourself lower, it’s really hard to come back from that. And I guess the other issue is, in a multi-year degree, it doesn’t help you to make the first year more affordable and then in year two and year three you need to do a huge jump. That’s actually more unfair. Then you create this lower baseline for the whole thing.

I mean, it’s tough. That’s why I love asking you this question, because I think the pricing decision is not straightforward.

Ishak Kula: Yeah, that’s correct, Ghost. The pricing decision isn’t straightforward. But I think we keep ourselves honest, partly as a management team and being listed as well, it is easy to quickly pass that pressure back onto our consumers and hike prices, but that isn’t the strategy. We believe we need to stay well priced.

And to your earlier point, when we’re thinking about our pricing increases and where we do see good demand or some pricing pressures, we’re also not afraid to reinvest in those margins. I think that’s an important component for us, and that sticks to our values and our norms within our business.

Chris Vorster: If I can add to that, obviously STADIO’s purpose is to widen access. Now, that is something we take very seriously, and to truly really stand for widening access, affordability is obviously very important in that regard.

So, if we look at the different pricing of the programmes that we offer, we really believe it is well and fairly priced.

And we have done work, especially in our distance-learning offering, to ensure that the majority of South Africans will have the opportunity to have access or to study at higher education institutions with those fees. We believe that is affordable for a lot of people.

And then I think something we would also like to mention to you today is our excitement about a new mode of delivery which we call our blended mode. We will start implementing it at the beginning of next year. This, we believe, will attend to the affordability issue – especially for school-leavers who want a contact-learning experience and want to be on a campus, but at the same time, affordability is of utmost importance to them.

So, we will launch a new blended mode next year, which will be a combination of contact learning, on-campus learning, and distance-learning support in the background. We believe that can really address the market who can’t afford the R70,000 to R80,000 per year tuition fees at a normal comprehensive campus.

The Finance Ghost: Yeah, I guess that blended offering is very much about just driving return on assets, right? You’ve got the campus, you’ve got the online tech, you’ve got the ability to do all of this stuff, and it’s about trying to find the sweet spot for each individual student’s needs and how you then bring them into the STADIO ecosystem. Which makes a lot of sense because of things like operating leverage and everything else, right?

Chris Vorster: Exactly that. Our research has also shown a lot of people or students attending higher education institutions – especially campus life – of your total costs, more than half will go to auxiliary costs.

What do I mean by that? It’s more accommodation, travelling, where less than half of the total cost of studying on a campus is going towards tuition fees. We think we can address this with our blended and city-campus model, bringing education closer to people in major towns and cities in the country.

The Finance Ghost: I want to dig into the point around leverage a bit more, and Ishak this is something that you raised where, what you’re essentially saying is you need to have the same stuff in place whether you have 1, 10, or 40 students in a class.

You still need a lecturer, somewhere for them to sit, the curriculum, everything. You need all that stuff.

And so, your contribution margin of additional students is very strong, but you essentially can lose money if you don’t have enough students. That is possible. It’s that J-curve that you’ve referenced there.

So, when I look at those numbers (and again, I’ll reference your recent results and take the longer-term view here), student numbers are up 60% over 5 years, we’ve talked about revenue being up 97%, but core headline earnings are up 152%. So, that is the beauty of leverage coming through.

If anyone listening wants to understand more about leverage, that’s what we’re talking about. It’s when you’re basically taking a revenue growth number and turning it into much higher profit growth number.

Now some of that is capacity utilisation, but some of it would probably be operational efficiencies as well. And so, beyond just the obvious of bums-on-seats and people on the other end of a video where they’re learning (which is just basically getting more people in the room), how do you think about the rest of your cost base? Where do the opportunities lie?

I would imagine AI is a conversation at the moment around saving costs and everything else. Just help people understand a little bit more about the efficiencies you think are in there.

Ishak Kula: Yeah, good question, Ghost. I’ll have a stab at it, and then there’s an element of it that I think Chris can speak to. So, when I think about our organisation, to the point I made earlier about how we think about particularly the long-term trajectory of our business, I think the big benefit we have is firstly this mix of contact learning and distance learning.

To make that point again, I think we are very fortunate that we’ve overseen very good growth in the distance-learning mode of delivery over the years, and we continue to see that good growth and remain the leaders in the distance-learning space, but this is really supported well now by contact learning.

And, as those two growth trajectories align and are both going let’s call it full steam ahead, that unlocks a significant amount of efficiency. And I think that’s the benefit we are starting to see in our margins.

If I look at our cost base in specific terms, we’ve talked about our revenue mix. I think there the price point and what drives revenue and our strategy is clear.

If I think about the biggest cost line next, it’s probably our academic contingency. We’re an academic institution, and as a consequence, we always need to be innovative and creative in that space. And I think this is where Chris can touch on that new academic model.

We’ve invested quite heavily into a brand-new academic model, which we believe will yield efficiencies and further scale over time. And Chris, maybe it’s a good opportunity you could touch on that point as I delve further perhaps into one or two other opportunities.

Chris Vorster: Yeah, without going into too much technical detail on the academic model, it is something that is very important in our world. The challenge here is to scale, but to scale a higher education institution, one of your biggest threats would be that you lose quality. And that is something we have really unpacked, and we believe that with our new academic model, we will tick the quality box first while we scale the business.

We looked at everything – from the curriculum design and how we offer programmes in the classroom, to evaluation and assessments – to ensure that we have that all aligned and of the best quality across our different campuses, but also very importantly, across our different modes of delivery.

So, we’ve launched our new academic model, and it’s now to capacitate it to make sure that we get the right academic quality and resources in place. And yeah, we are very excited because we believe that by doing this now and investing in this model now, it will bring a lot of potential margin growth over the coming years because we will grow into it. So yes, the academic model is definitely important.

Just to add to that point, we still have a lot of growth ambitions, Ghost, in the sense that we’ve set ourselves the next target of 80,000 students. So, I think for the next couple of years we will continue investing into our operations and systems as well as infrastructure.

But we have proven to ourselves this year. If we look at our EBITDA margins, even in this year of investment, we’ve reached 31.3%. So, we believe we can continue expanding, investing in systems and infrastructure, and still maintain a healthy margin.

Ishak Kula: To add to Chris’s point, despite the year of investment, we’ve opened these two new campuses. And to Chris’s earlier point, we continue to invest significantly into the business.

The investment areas also included our brand awareness, right?

We’ve invested and strategically aligned with SA Rugby, which we believe will assist us in becoming a household name. We believe there’s brand synergies and that’s alignment. And I think it will put us in good stead in the long term as an institution.

To your earlier point, significant amount of time and effort is going into investing into the AI domain, which we believe also over time, not only is it a relevant topic of conversation globally, but also in the academic world and how we think about AI and incorporating AI into every single module.

How we teach our students to be AI-literate so that they ultimately take relevant workplace AI capabilities into the world of work when they eventually graduate.

So, a significant amount of investment has gone into that.

And then also, more broadly, a significant investment in the IT domain. At the heart of our institution, being an academic institution, the reality is, to run this business at scale, you need to have the IT capability. And although we’ve got infrastructure in place, there’s always an optimisation element. And speaking to our levers, there’s significant amount of recognition that we need to continue to invest in this space as technology evolves.

The Finance Ghost: I think we’ve got time for one more question. You’ve been on your roadshows, you’ve spoken to your institutional investors, and I’m sure some of what would have come up would have been things like EBITDA margin expansion in a period of investment, which is excellent. I’m sure you got asked some interesting questions about the Springboks partnership as well.

I guess if it was me wearing my analyst hat, I would probably have asked you about capex and the extent to which you believe you can hit your target over the next few years without any major investment in new facilities versus what you have today.

So, it would be quite cool to understand a little bit more about that, and obviously there’s the blended offering to think about, etcetera, and how that all comes in with your targets and capex.

And perhaps then, to just finish off the show, if there’s anything else that was raised by the institutions that you think is worth highlighting to the wider audience who will listen to this podcast and who don’t necessarily have the ability to attend that roadshow.

So, let’s start with capex in the context of your big goals, and then anything else that you just want to bring to the fore here.

Chris Vorster: Ishak, do you want to talk to the capex, especially with the expansion we are currently busy with at our four contact-learning campuses in STADIO Higher Education?

Ishak Kula: Yeah, thank you Chris. I think, contextually, it’s important to recognise that in our ambition to reach 80,000 students, we believe we have the existing footprint to reach that target when considering our contact-learning and distance-learning mix. But importantly, there is still an amount of capex investment that is needed to get there.

If we think of our four campuses in STADIO Higher Education specifically, to support the growth that we’ve seen in contact learning, you would have seen our Durbanville campus, where we’re concluding the second phase of that project. That total spend for phase one and phase two was circa R325 million, which we spent over the last two-and-a-half years. That will conclude in Q4 of this year. Then there is still land available at Durbanville which allows us further expansion, but the capex up to date will allow us 5,000-plus students on the Durbanville campus.

Looking at our second-largest campus, Centurion. In student numbers, it’s currently the largest, but if you think of the growth story there, we’ve invested significantly there as well. This year, in 2026, we have converted the existing hall into more lecture facilities to optimise for space.

But our investment into the future to allow for growth there involves constructing a brand-new 1,500-seat hall there. That will commence next year, which will probably allow us to take that campus to about 4,000 to 5,000 students. And there is further land available to expand our Centurion campus.

This year, on our Waterfall campus, we acquired one of the Curro buildings that’s situated on the existing land that we rent there. We acquired that land for R18 million and there’s an opportunity, perhaps, to acquire another building on that site. So that will also allow us in future to probably get to 4,000 to 5,000 students on that site.

Then, if we think about our Musgrave campus, in 2025 we signed a new lease there to cater for that expansion. It was a block situated across the campus, so very convenient for our students. But that, over time, will likely remain more equivalent to a city campus, while we seek, perhaps, a comprehensive campus in the KZN region.

And if you look at the capex levels over the next two to three years, we believe that, if you look at 2026, we cited a R301 million capex investment, it will probably remain at those levels for the next two to three years to get us to that expansion strategy and to be able to unlock the growth that we have cited.

I want to add, importantly, for the listeners: strategically, I think we have always been a very lean business when it comes to debt. I think at the half-year we had R120 million of debt which we repaid post the half-year. So, it’s important for us to remain lean.

This allows us to continuously reinvest into the business, yet it also balances the capital returns to our shareholders and what they expect of us.

And also, I think in the macroeconomic conditions it allows us to move quite quickly if other opportunities come our way, because we have a lean balance sheet.

Chris Vorster: Thanks, Ishak. Also, some of the topics which came up during our roadshow, as you put it, was definitely to understand the whole Springbok partnership and why we decided on that.

For us, as a very young brand, it made sense to partner with one of the most respected and beloved brands in the country. We see a lot of synergy between the two. We’re South African first, very passionate about our product, and it made sense for us to partner with them and use the Springbok branding to become a household name. So, that was the vehicle that we identified.

Already, in this test series that just concluded (The Greatest Rivalry with the All Blacks), there were three STADIO students playing in that test series, which we are very excited about. But I think over the next few years we will really start to see the benefits.

If we look at the under-20 group who won the Junior U20 World Cup, 16 out of the 30 are STADIO students. So, these are all brand ambassadors, and we believe they will do great branding work for us in the years to come.

So, we are excited about that partnership. It comes at a cost now, but I strongly believe it will serve us well in becoming a household name in the next few years.

The Finance Ghost: Yeah, look, the Springboks are the best brand in the country at the moment, so I think that’s a fantastic partnership there. And what’s also very cool is that it feels very full circle from when I went to high school where, let’s be honest, rugby was not associated with academic excellence.

Generally, either you crashed into other okes very successfully, or you did maths. And I really enjoy the fact that these things are starting to come together. There are no prizes at all for guessing which of those two groups the Sorting Hat put me into, genetically, so we’ll leave it there.

Chris, Ishak, it’s been a really, really cool conversation. It’s lovely to come full circle over the past year. And I think one of the interesting takeouts for me from this is what you said right now, Chris, which is STADIO as a young brand and how that’s the brand that has partnered with the Springboks.

So, it’s not just AFDA or Milpark or STADIO Higher Education – it’s really lifting it now to what used to be, I suppose, seen as a consolidator in this space and what has now grown into its own brand, and I think that says a lot about where the strategy is going.

So, I hope we’ll be doing another one of these a year from now, and I wanted to just wish you luck in the current financial period as you continue to deliver towards those 2030 goals. And yeah, looking forward to following the progress.

Ishak Kula: Thank you, Ghost. Looking forward to our next conversation.

Chris Vorster: Thank you very much.

Podcast: The inside scoop on Gelato Mania (The Finance Ghost Plugged in with Capitec)

The Finance Ghost
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Podcast: The inside scoop on Gelato Mania (The Finance Ghost Plugged in with Capitec)

In Season 2 of this podcast, The Finance Ghost talks to South African entrepreneurs about the ideas, choices and turning points behind building a business from scratch.

Listen to the podcast:

In this episode of The Finance Ghost Plugged in with Capitec, The Finance Ghost sits down with Gelato Mania Financial Director Kosta Kappatos to unpack the journey behind one of South Africa’s favourite gelato brands.

From making gelato in the basement of a Cape Town shopping centre to building a national brand and manufacturing base, Kosta shares the highs, challenges and lessons of growing a family business over 20 years.

Along the way, he explains why quality matters, what entrepreneurship really looks like behind the scenes and why the family remains focused on sustainable growth rather than chasing a quick exit.

This is a story about family, resilience and building a business that makes people happy.

Episode 5 covers:  

  • How Gelato Mania started
  • The realities of entrepreneurship
  • What makes gelato different
  • Flavour trends and customer favourites
  • Expanding from Cape Town to Johannesburg
  • Turning accounting theory into business practice
  • Why family is at the heart of the business
  • The long-term vision for Gelato Mania

The Finance Ghost plugged in with Capitec is made possible by the support of Capitec Business. All the entrepreneurs featured on this podcast are clients of Capitec. Capitec is an authorised Financial Services Provider, FSP number 46669.

Read the transcript:

The Finance Ghost: Welcome to this episode of The Finance Ghost plugged in with Capitec. I always enjoy it when I get to speak to the entrepreneurs and families who sit behind household names, and this is a household name.

In fact, this is a business that I have used many times. My kids love it. I love it. My wife loves it. Chances are pretty good that you love it too, and that is Gelato Mania.

Who better to speak to today than Kosta Kappatos? He is the… Well, actually, Kosta, you’re just part of the founding family, really. I feel like you’re just the get-everything-done officer, now.

I wanted to say a fancy title and this and that, but I’m probably right in guessing that actually, having grown up in this thing, you just get involved. That’s your job – to just get involved. Am I right?

Kosta Kappatos: [laughing] I guess, like anyone else who’s got a family business or who started from very humble beginnings – you’re the IT department, the finance department…

The Finance Ghost: [laughing] Exactly.

Kosta Kappatos: …the Customer Complaints, HR… Every department kind of put into one. The title’s kind of there for when people say, “Oh, what do you do?” But it’s so much more than that.

The Finance Ghost: No, absolutely. So, tell us the title, Kosta. We may as well start there, then everyone knows.

Kosta Kappatos: The actual title is Financial Director.

The Finance Ghost: There we go. And Chief Tasting Officer, I hope. There have to be perks to this, right?

Kosta Kappatos: That’s one. There are definitely a couple of perks to what we do.

The Finance Ghost: Love it. So, you’ve been involved in this thing, well, I guess from the start. You’ll tell us now about your parents starting this business, and I’m obviously keen to hear about that journey along the way, but you’ve certainly grown up with it.

And you’ve decided to be part of the family business, which I think is wonderful. I’m sure your folks are thrilled – because actually, that’s quite rare. People think that’s kind of the default, but it’s actually not, so that is really lovely to hear.

Just walk us through the most rewarding part of this journey. Is it the free ice cream, or has it been something else?

Kosta Kappatos: Look, the ice cream does help along the way, but I wouldn’t say that it’s the most rewarding. We started 20 years ago, exactly, this year. We started back in 2006.

At the time, we had just immigrated back to South Africa from Greece (we were living there for a couple of years) and my parents had started a coffee shop. They started getting ice cream supplied by one of the local suppliers, and it just wasn’t up to scratch.

So, my dad booked a flight to Italy. Where better to learn to make gelato? He went to Italy, learnt how to make gelato. I think he spent about two weeks there, learnt, then came back to South Africa and we started making ice cream in the basement of a shopping centre in the Northern Suburbs in Cape Town, called Willowbridge. That’s really where we started.

Fast-forward 20 years, and we’ve got 16 stores across two provinces.

Definitely, the most rewarding part of the journey is looking back at all those old photos. Looking back at where we’ve come from and actually being amazed at where we are today. We had six, seven staff to start, and now we’ve got over 150 staff in our company.

The looking back is definitely the most rewarding part.

The Finance Ghost: I love that. I’m never going to look at Willowbridge the same again…

Kosta Kappatos: [laughing]

The Finance Ghost: …I had no idea that that was really the genesis of this journey, but I love that. I’m guessing that today you are not manufacturing the ice cream in a broom cupboard somewhere at the bottom of Willowbridge, are you?

Kosta Kappatos: No. Look, making gelato the way we make it, we hold ourselves to very high standards. So, we’ve got a factory in both Cape Town and Johannesburg. We’ve kitted it out in a way that allows us to produce the highest quality gelato. It’s not in a broom closet anymore. We’ve got proper facilities in both provinces.

The Finance Ghost: Fantastic. Now, obviously, a journey like this, like all businesses, cannot possibly just be Pino Pinguino and the sunshine. We’d all love it to be, but unfortunately, it’s not.

Even something as wonderful as this has got some tough stuff along the way. The product might be ice cream and you might be in the business of making people happy, but I know from my experience, from speaking to other entrepreneurs – anyone listening to this who’s been involved will know –  that even when the product going out the door is a wonderful thing, life is not easy.

As a business owner, perhaps you can give us an idea, especially as you’ve grown up with this business, what has been the journey, in terms of the difficult memories?

It’s wonderful to look back and think back to making the stuff at Willowbridge – I really do love that, but there has to be some tough stuff that happened along the way. Some big challenges, some moments where maybe the family thought this thing wasn’t going to make it.

Kosta Kappatos: Yeah. And I think every business will have it, right? When you do start off so small, it almost feels like everything can completely derail the train. Like, even the smallest little issue, when you’re so small, can just cause everything to collapse.

Some of the key standouts… It’s not just one thing. I can sit here and tell you about Covid – and Covid was incredibly tough. I don’t want to sound like a broken record. I think every business was rocked with that. You make a product, you can send a product out the door, but then it’s all the small things around you that you almost don’t pick up.

When I first joined, I did not know that you have to pay licences to play music in your store. And even that’s just a small headache to get your head around.

What was definitely one of the standout tough things when we were in our fledgling years was the importing of the products from Italy. You’re looking at three, four months for anything to get here from Italy on a ship. Flying is just too expensive, when you’ve first started out.

And you then have to order the right products, but you still want to offer 24 flavours, and you’re running out. You don’t have enough money when you’re so young to actually go out and buy a whole bunch of stock. That was quite a challenging balancing act.

You mentioned this idea of wearing lots of hats. The one person who did that more than I am doing it right now was my dad. Hermanus was one of our very first stores, and I remember so many Saturday and Sunday mornings, delivering ice cream to Hermanus with my dad, who also had to do everything else.

We’ve come a long way. There’ve been a lot of speed bumps along the way that we’ve had to navigate.

The Finance Ghost: Yeah, it’s great. Growing up with a business is quite a special experience. I come from a family where my parents had a crack at entrepreneurship. It definitely didn’t turn out even 0.1% as well as Gelato Mania, but I do have a lot of fond memories of my dad picking me up in the afternoon in high school.

I’d go with him to deliver these whacking great loudspeakers and help him carry, then I’d flick through the invoices in the car on the way home, and we were bombing around in this delivery van.

It was great. I wouldn’t change those memories for the world. It was fantastic. And it probably had a big influence on me in terms of what I’ve chosen to do with my life. It certainly didn’t put me off entrepreneurship (even though it probably should have [laughing]).

But it didn’t put you off either. I mean, you haven’t exactly gone the whole Sandton, suit-and-tie, investment banking route. You’ve chosen to get stuck into the business, right? So, obviously there are reasons beyond just the family and love. You’ve chosen to do this with your life. There must be a reason.

Kosta Kappatos: Yeah. You’re 16, 17, you want to get your first job. My dad always had a knack for being able to direct us in what we should do but always giving us the decision.

So, instead of, “Cool, I want to go get a job. What are the other jobs paying?” My dad would always make sure that he would pay the best out of everyone, so that we would then work in the business.

I just look back at that and I’m like, “It’s such a clever way.” Because he’s not telling you, “You have to work in the business.” He’s making you make the decision for yourself, in a way that ends up benefiting you in the long run – and benefiting everyone else. It was such an incredible way of looking at it.

You’ve touched on the whole Sandton suit-and-tie. There was a momentary point where it was like, “Okay, do I go ahead and do that?” And it was really like, “What really makes me happy?” And at the end of the day, it’s actually business.

Some of my best memories are behind the gelato fridge, whether it was at Camps Bay or at the Waterfront, serving customers and interacting with people. And I didn’t know if I could do that to the full extent, being somewhere high up in a skyscraper in Sandton.

The Finance Ghost: Yeah. I often fantasise about the pizza restaurant that I dream of owning one day. I don’t know if it’s a Mediterranean-background thing. You are as Greek as the day is long; I’m only half Italian. Maybe it’s just a Med thing – you just desperately want to open a food restaurant.

I don’t know if there’s a hive mind controlling us from the Med and being like, “Go, do food. Do your thing. This is what you were born to do.” It does seem to exist, right?

Kosta Kappatos: It does! You mentioned the hive mind. I think it’s more that food is central to pretty much every Mediterranean country. There’s so much love that gets transmitted through food.

When people say to me, what do you do? I say, “I make people happy.” Because at the end of the day, you’re selling something that does make people happy. Kudos to all the Meds out there who are running restaurants and ultimately making people happy.

The Finance Ghost: It’s a tough gig, hey? Regardless of where you’re from in this world, it is not an easy way to make money. But you’ve certainly made it work.

One of the things that you touched on there was supply chain. So, importing stuff from Italy. I’m starting to get a better understanding, now, of why Gelato Mania stuff is so yummy and, in many cases, is better than some of the so-called “gelato” I’ve had in Italy.

I think the word “gelato” gets abused, because quality varies dramatically. That’s actually what I wanted to ask you – there’s a difference between the different kinds of ice cream, and obviously, in your business, there’s a big commitment to quality. I mean, you run the manufacturing side like a bakery. I know you get very early starts every day.

Just talk to us about the quality that you’ve baked into this business and how it differs, then, from ice cream of varying quality that you can get all over the place?

Kosta Kappatos: When we first started in South Africa, gelato wasn’t really a thing. You’d maybe heard about it in a movie – the Americans saying “gelato” or something like that – but we didn’t really know.

We had to try to find a way to explain to people that not all gelato is the same. What has happened is that there’s this distinction between what gelato is and what we know as “ice cream”.

Ice cream – you’ve got a higher fat percentage. Fat isn’t necessarily bad, you do need fat, but you’ve got a higher fat percentage. The product can be frozen at, let’s say, –5 °C, –6 °C.

More often than not, ice cream is made in bulk quantities. Gelato, on the other hand, is using higher quality ingredients. You still need fat, as I mentioned, but here you’ll replace it with good fats, so it’s not necessarily going to be animal fats or things like that. You find alternatives to make the product much better.

And then one of the key hallmarks with gelato is that it’s made in smaller batches. Gelato you eat at roughly –14 °C. At –5 °C, gelato is like a milkshake, so it’s one of the key differentiators to ice cream.

What we found, when we first started – people didn’t understand what is ice cream, and what is gelato. What has subsequently happened is gelato is growing in the country, which is absolutely amazing.

But, just like not all boerewors is the same, not all gelato is the same. So, you get really, really good boerewors. You get really, really bad boerewors. You can make small batches, you can still make gelato, but your ingredients might not necessarily be the highest quality. We focus on the highest quality, constantly.

The Finance Ghost: Thank you. I was sitting here, listening to you talking about the different temperatures and, you know, at this temperature it’s a milkshake, basically, and at that temperature it’s solid. It must be quite difficult to be around this stuff all the time.

I’ve met your family recently, at a Capitec-sponsored event, and none of you look like you spend too much time digging in the ice cream tub. Do you just eventually generate the sort of self-control required to spend this much time around gelato?

[laughing] Obviously, it’s a business at the end of the day. You’ve tasted the flavours. But the temptation feels enormous. Every time you’re going to a store or to just check that it tastes good and that it’s fresh – how on earth do you have the self-control here?

Kosta Kappatos: The funny thing, and everyone thinks that I’m talking hogwash when I say this, but gelato, made well, is not necessarily unhealthy. Now, I’m not going out there and saying that it’s healthy – by no means. But, knowing what goes into the product.

Yes, there’s sugar, but I eat a lot of ice cream. Whenever I go to a store to make sure what’s happening, I’m eating the ice cream coming out of the things here to make sure that it is what it needs to be.

We actually eat a lot of ice cream. Look, it could be our good genes.

The Finance Ghost: I was about to say! It’s like when you go to Italy (this is the half of the genetic pool that I did not get), and you’re like, “Wow, all these people are so beautiful and in such great shape – how do they do it?” And then they’re chowing their third plate of pasta and I don’t know what it is. It’s remarkable.

I didn’t get those genes, unfortunately. Maybe you did. So just, disclaimer for everyone else out there: just tone it down on the ice cream [laughing]. Because Kosta and his team there, they can have the gelato, but the rest of us have to be a little bit careful, hey? As delicious as it is.

Kosta Kappatos: That is the case, but I think that if you are going to have something… I know what goes into the product. People might not know me from a bar of soap, but the proof is in the pudding. We’re making you happy.

The Finance Ghost: Absolutely. Look, my dad is diabetic. I must say, I appreciate the fact that you do actually have sugar-free options. Do you find that those are quite good sellers? I think there is demand among diabetics and more health-conscious people for the “healthier gelato”, if I can call it that.

Kosta Kappatos: No, there definitely is demand, and so our sugar-free options are great. What was really funny is that we have two flavours – we’ve got a hazelnut and a chocolate – which are the sugar-free ones. That’s because the hazelnuts and the chocolate are pure. It comes either from the cocoa seed or the hazelnuts, and so there’s no added sugar in them, so you can make it sugar-free.

Anyone that has had our product or anyone that does have it will pick up that it doesn’t taste that much different to the normal thing with sugar and with everything. Because we’re using the pure nut.

There was such a great success for it. We tried to increase the number of flavours. There aren’t that many flavours which you can do sugar-free, but, for example, we brought in a vanilla and a pistachio – again, centred around nuts or a pod or a bean – and, Ghost, they never really sold! People just went for the hazelnut and chocolate.

Yes, we offer lots of flavours in our stores, but almost every one of those spots is prime real estate. If a flavour is not doing well enough, there’s someone else knocking on the door who wants that spot.

The Finance Ghost: And that must be one of the most interesting things about the business, right? As you say, it is literally prime real estate. You’ve got a serving counter there; you have X number of flavours that can fit.

Every additional flavour is a supply chain and manufacturing consideration, and potential wastage, and how that impacts gross margin – we’re starting to get into the juicy business stuff now.

And I’m guessing you do sometimes just have flavours that surprise you to the upside, and some that are long-term winners, others that are just a trend.

I mean, I feel like I see Dubai Chocolate everywhere I go now. For whatever reason, that’s just become a thing. And then you’ve got, as I say, Pino Pinguino, which has been my cousin’s favourite for longer than I can remember (I’ll definitely get her to listen to this podcast) and it’s one that I love, as well.

Do you find that there are just flavours which last forever and others which just come and go?

Kosta Kappatos: Definitely. And I describe flavours almost (and I’m going to make a really bad metaphor, but) like fashion. Flavours will go through a run where they are absolutely flying.

One of the flavours that does this quite a bit – I don’t know why – is Snickers. Snickers is our peanut-butter-chocolate flavour. And sure, it will be on an absolute run. Flying. We can’t make enough Snickers. And then, all of a sudden, it will hit a wall, and it will just stop.

And so, going back to that idea of “we’ve got so many flavours knocking”, we’ll pull the flavour, we’ll put a new flavour in. You reintroduce Snickers in a couple of months’ time, and then it starts flying again. So, we don’t often know why a flavour works and doesn’t work.

There obviously are the ones that come and go. Most recently, the one I can remember is matcha. I think there’s still a huge craze around matcha, but matcha seems to have taken a bit of a backseat. We’ve stopped making matcha.

Dubai, though, is still on a very, very hot run. It really just depends on what’s happening and what people are feeling like. To what you mentioned about the Pino Pinguino – there are some of those flavours that have never left the fridge. Pino Pinguino is one of them.

The Finance Ghost: I know where to find you now, so if I ever go to a Gelato Mania and there’s no Pino Pinguino, then you and I are going to have a talk, my friend. That is what’s going to happen. Because that is the stuff. It is really, really good.

I also want to just get an understanding from your side. You’re also a Chartered Accountant, like me, and real-world business is very different to the stuff we learned in our textbooks, that’s for sure. I’m just curious about some of the, let’s call them “shocks” on one hand, but also, perhaps, happy surprises you’ve had as you’ve moved into an operational role.

Maybe you’ve had a slight advantage in that you grew up with it, so you had a better idea of what to expect, but – for people listening to this who are looking at this and going, “Well, I’ve got a path ahead of me which is the big corporate world, and another path which is to get my hands really dirty in a proper operational business,” – what has been your experience with that?

Kosta Kappatos: If I had to put it into one sentence, it’s kind of like, “Throw the theory book out of the window.” I don’t think it’s quite like that. I think that I’m sure you might have seen it, but we’ve both been blessed by having the CA background. What that certainly prepares you for, is change.

Moving from a purely academic background to an operational background, change is everywhere. When you read about theory or you read about this, even basic contract law, you don’t really talk about what happens when the other guy doesn’t do what he says he’s going to do.

Things don’t always work as they’re meant to work and not every net present value (NPV) calculation that turns out positive is actually a good idea. You’re trying to merge these two things together.

For anyone entering from an academic background, you almost have to park your theory, park what you’ve learned, and kind of say, “Okay, it’s there. I can’t use it as a crutch, but I can use it to help me.” That would probably be the best way to do it.

You’re kind of saying, “I’m going in with a blank slate, but I’ve got this toolbox of tools that I can use. But it’s not like I can solve everything because I learned it in a textbook somewhere.” Because you are going to get found out, if you do something like that.

What I will say is that not everyone does what they say they’re going to do, whether that be staff or landlords or suppliers, all of these things. You don’t really learn about that at varsity.

The Finance Ghost: No, you absolutely don’t. You learn that you go and do these wonderful technical calculations and then you speak to people who have been doing this for a long time and you realise how decisions actually get made in the real world, and the extent to which forecasting on a spreadsheet is maybe an interesting exercise and definitely has a place, but that’s not actually how small businesses are run in the real world. At least, in my experience. It really isn’t.

Kosta Kappatos: The best example that I can actually give… We spend so much time learning about the discount rates. You spend three, four, five weeks trying to calculate the discount rate. And then you get into the operational world, you’ll talk to the bank or whatever the case is, and they just slap 10% and they call it a day.

And [laughing] it’s kind of like, “So what did I go and study all of that for? If we’re just going to slap a basic number and move on?”

The Finance Ghost: In my corporate finance career, I’ll never, ever forget – I prepared this whole model. It was for a big JSE-listed client (they’re still listed today). I went in and presented it to the CFO. We show him this whole valuation and it’s great and it’s all wonderful, and he’s like, “That’s fine, but I pay 7x.”

What do you mean you pay 7x? He’s like, “I pay a 7x P/E. That’s what I pay. Whether you tell me it’s 6x, or 8x, or 9x, or 5x, or 12x, or 14x, I’ve been doing this for, like, 30 years, and trust me when I tell you I pay 7x.”

I remember that day, just getting back into the car, I was like, “Okay, that was interesting.” I’m so grateful to have actually had that experience because it tells you so much about how decisions are made in the real world.

That’s from someone who’s paid 9x before and been burnt, and paid 5x before and also been burnt (because it was probably actually too cheap and not a good asset). 7x is what he pays. I respect that.

So, these are the kinds of rules of thumb that you develop over time. And that’s the difference between experience and the textbook, right?

Kosta Kappatos: Absolutely. It’s so funny. In business, a lot of the time you’ll see really successful businessmen make decisions at the drop of a hat, and you look at that and you’re like, “Wow, that was incredible.”

And it’s almost that they have certain key tenets that they just stick to the whole time. One of them is, as you mentioned, what am I paying? What is the cash implication? Cash is always king in a business. A lot of the theory gets cut out in business decisions sometimes.

The Finance Ghost: Yeah, 100%. And of course, one of the things that you have had to deal with in this business is obviously seasonality. This is something I’ve always wondered about, and I’m sure anyone listening to this is also thinking about it.

You need to have a lease, you need to be there all year long, you need to have fresh gelato – because, if I treat myself to that Pino Pinguino in the middle of July, it has to be just as good as it tastes in December. And that’s a hard thing to manage.

Without obviously giving away anything silly publicly (this is genuine trade-secret territory), just give us an idea of how you actually manage the business and deal with the seasonality?

Firstly, is the summer-versus-winter split as severe as I would imagine? And then secondly, how do you get through the cold and make it to summer?

Kosta Kappatos: I’ve almost got three ways that we look at that. So yes, there definitely are big swings in summer versus winter, also buoyed by the school holidays, which are a major impact for us. People are out and about.

One of the things that’s actually been really great to see (with our move to Joburg in the last three years) has been that the bumper December period that you have in Cape Town doesn’t actually get reflected in Johannesburg. Because the Joburgers are all down, sitting on Camps Bay and Clifton Fourth.

That’s been quite interesting. Joburg is a bit more stable, as opposed to Cape Town’s peaks and troughs.

And what I can say, having lived for 20 years in Cape Town (I may be a bit fledgling in saying it, but), the weather here in winter far surpasses that of Cape Town. Big swing, summer, winter, to answer your question.

So, the first thing is almost a diversification of locations of our stores. If I just look at Cape Town, we have quite a lot of stores that are outside, exposed to the elements. We’re talking our Hermanus store, our Camps Bay store, our new Sea Point store on Regent Road.

In winter, you might have some days where you suddenly want two ice creams and that’s it. But then in summer, everyone wants to be outside, Hermanus is pumping and all the rest.

Now, what we’ve tried to do to offset some of that is you, for example, have locations in shopping centres. When the weather is miserable in Cape Town, where do people go? They’re not going to go to Camps Bay to walk along the promenade, but they might go to Canal Walk or they might go to the Waterfront.

And in a small way, you’re kind of balancing (inasmuch as you can) your fluctuations because of seasonality, due to your locations.

What’s been difficult to try and manage – and especially if you’ve got such high peaks compared to your troughs – you can’t, for example, spend a whole bunch of money on machinery and make sure you’re good for summer, but then that machinery is sitting idle in winter. Trying to balance that has been quite tricky over the last couple of years.

We’ve tried to get it so that, yes, you’ve gone up in summer, but you’re not leaving whole machines completely idle. It’s a tricky thing, but it’s just a bit of a balance. And what has been great, as I mentioned – the Johannesburg element to our business has also flattened those peaks and troughs a little bit.

The Finance Ghost: Yeah, that certainly makes a lot of sense. I can imagine that (again, just from a supply chain perspective) it must have been a big decision to go past your original Western Cape roots.

To actually go up north, which is a huge consumer market and, as you say, is actually kind of a steady one with (in some ways) a better winter. I think it depends on how much rain there is.

I did it the other way around. I grew up in Joburg; came down here. Any thoughts around that? What it was like to actually take the business national?

Kosta Kappatos: So, there are three siblings. It’s myself, I’m the oldest. My sister’s a year behind me, and I’ve got my brother, who’s six years behind me (a bit of a laat lammetjie).

And, because my sister and I were always so close in terms of age, we were involved in the business pretty much at the same time. We would work during school holidays and everything. And we always said, “Okay, we want to take Gelato Mania to Johannesburg.” That was kind of our big goal.

And after finishing our studies and joining the business, we were like, “Cool, let’s go to Johannesburg,” fully knowing that one of us was probably going to end up being here and living here; sacrificing the promenade, Lion’s Head. And I think that it was a great time in our business.

Not to give too much of a shout out to our banks, but we were definitely helped in terms of this expansion. It wasn’t done alone. You have a lot of partners in the business to make this happen and a lot of things that fell into place.

We also started small. When we moved up to Johannesburg, we got a really big store in Rosebank and we actually produced out of the store, which was a bit of a different modus operandi to what we were doing in Cape Town. But, because we couldn’t set up a store and a factory, that was what we had to do.

Very quickly, probably within eight or nine months, we outgrew that factory and were then able to set up another factory here in Johannesburg to then supply our now seven stores.

To answer your question, how do you jump from different areas? You want to try and make those steps as small as possible, so that you can get them. Any hill can be surmounted when you make those steps small enough and have help along the way. That certainly helped for us.

It wasn’t, “Oh, we need to set up a factory. Oh, we need to do this. Oh, we need to do that.” No, there are different ways to skin the cat to get to where we need to be, and I think that that’s been a great move.

And all my friends will tell me that I’m absolutely bonkers for saying this, but I’m actually enjoying Johannesburg and everything that it has to offer.

The Finance Ghost: There is definitely upside to Joburg – and nowhere is all bad or good. There are downsides to Cape Town. I’m glad you are enjoying that side of things. It is a very high-energy place, that’s for sure.

Glad to hear that you are enjoying it up north and, I think, just particularly enjoying that you had that goal to say, “Well, let’s take this thing national. Let’s go.” Because it’s hard. It’s not an easy thing to do.

And, as you mentioned there, credit to Capitec, who no doubt has helped you along the way. I love how it always comes through so organically in these discussions. I never have to say to someone, “Oh, tell us about Capitec.” It’s always like, “Actually, as part of the journey, this was really helpful, and it was them.” Always nice to see that.

As we bring it to a close, Kosta, last question from my side.

Walk us through the big dream. You’ve taken it from Cape Town to Joburg. Where does this thing go long term?

Do you think it’ll be a family business forever? Are you waiting for someone to knock on your door and send you guys away with a big cheque to go and retire somewhere pretty? Tell us what the story is long term.

Kosta Kappatos: Before I answer your question, I’ve got a funny thing. I joke about it the whole time, but there are periods where it’s 100% true.

There have been weeks and months where I’ve called my banker at Capitec more than I’ve called my mother, because of everything that it takes to continue building a business. So, there’s definitely been a lot of help along the way.

But now, to get to your actual question, I think the big dream… I certainly am not wise enough to make it seem like these are my words, but I think that the journey is often more important than the destination. And we’ve seen that more and more.

We’re not chasing any specific number of stores, we’re not chasing a turnover figure, we’re not chasing anything like that. We’ve been blessed with the ability – we’ve got hands, we’ve got feet, we’ve got minds – to put us in a position where we can impact not just our customers through great gelato, but also our staff and the environment around us.

The big dream is to continue building Gelato Mania sustainably, while being able to offer gelato to more people around the country. I don’t know if fortunes lie further than the boundaries of our beautiful country. If they do, I hope we get there sustainably and not crashing and burning.

The other thing which has been super important for us is keeping it a family business. It’s not easy running a family business. You’ve mentioned about your family and having seen what your childhood looked like as well. Family businesses are tough.

You can’t sit around a lunch table or a dinner table and not talk about work. The notion of, “Oh, leave work at the door,” – it works in theory. In practice, it doesn’t really work that way.

There’s a lot of headbutting. We all are fiery, Greek. We will go to war to make sure our point is heard.

But at the end of the day, it is a very fulfilling job, and it’s a very fulfilling thing knowing that you’re working with family and working for family.

One of the things that my parents always like to remind us of is what a big privilege it is for them to be working with us every day.

I’m reminded of my own mortality quite a bit. I read a lot of philosophy.

Our formative years, our young years before we’re 18, we spend a lot of our time with our parents. And the vast majority of people move away. They go overseas, and the time with your parents grows shorter and shorter.

Myself and my siblings have been blessed to be interacting with our parents on a daily basis. And yes, it comes with its struggles, but it is so rewarding. My sister’s just had two beautiful kids. The next generation’s here, and that’s kind of why we’re all doing it.

So, Ghost, we’re not interested in franchising. We’re not really looking for anyone to knock on our door.

Getting up in the morning and being able to provide more people with our product that we’re super proud of, being able to create spaces that we’re proud of – that’s what kind of gets us up in the morning. And, yeah, it probably will be a family business forever.

The Finance Ghost: Yeah. People always say that the family you’re born into makes a big difference in life. And of course, it’s complete luck. It’s completely beyond your control.

I’ve got to say that being born as the grandkids into this ice cream family feels like luck. That is quite the blessing for those little ones. They will appreciate this as they get older, but they’ll certainly have the best ice cream at their birthday parties, and I love that.

Kosta, thank you so much for your time. You’ve gone over time, actually, but it’s been such a great chat and I’ve really enjoyed it, so thank you so much. All the best, and I just can’t wait to watch this family business go from strength to strength. I will certainly continue to buy my gelato from you (I mean, I would have already, but now even more so).

Good luck and thank you for sharing your insights so openly with us on the show.

Kosta Kappatos: It’s been great. Thanks, Ghost.

The Finance Ghost: Real stories and real people. Yours could be next. Plugged in with Capitec. Capitec is an authorised financial services provider. FSP 46969.

Like my jacket? Thanks, it’s seaweed

Dominique Olivier
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Like my jacket? Thanks, it’s seaweed

It’s in your yoghurt, your toothpaste and possibly your next pair of boots. Here’s how a slimy beach nuisance became one of the planet’s most valuable – and greenest – economies.

Quick question: did you eat any seaweed this morning? 

For most of us (those who don’t eat sushi for breakfast), the obvious answer would be no. But there’s a good chance that we would be wrong. Because these days, seaweed doesn’t just mean slimy lengths of ocean vegetation or crumbly dried sheets. It means the carrageenan stopping your almond milk from separating, or the alginate thickening your yoghurt, or the agar responsible for making those bubbles in your bubble tea so squishy. 

Open your bathroom cabinet, and you may find a bit of seaweed in here too, hidden in your toothpaste, your face cream or perhaps even your shampoo. Unassuming, unglamorous seaweed – the same stuff that we step over on the beach – has become one of the great invisible workhorses of both the grocery aisle and the pharmacy shelf. Today, it’s the star of a global economy worth almost $20 billion a year, and by most forecasts it’s set to roughly double that number by the mid-2030s.

High time, then, to give the weed its moment in the sun.

The Mother of the Sea

Eating seaweed is not exactly a new idea. In fact, people have been doing it for about as long as they’ve lived beside the sea. But for almost all of that history it was gathered, not grown, foraged from rocks and shallows, at the mercy of tides and storms. Nobody really understood how to cultivate it. Early Japanese farmers nicknamed nori “gambler’s grass”, because you never really knew whether the next crop would show up at all.

This all changed thanks to the determination of one British woman, armed with a microscope and a collection of old jam jars. 

Kathleen Drew-Baker was a phycologist (a scientist who specialises in the study of algae) who lectured at the University of Manchester. She was dismissed from her position after marrying a fellow academic in 1928, since the university had a policy against employing married women.

We may have our share of challenges in 2026, but at least we’re not dealing with this type of nonsense anymore.

Undeterred, Kathleen continued her research. Working as an unpaid research fellow, she cracked the missing piece of the nori farming puzzle and published it in a paper in 1949.

Kathleen discovered that during one microscopic phase of its life cycle, the elusive seaweed shelters inside shells. On the other side of the world, a Japanese scientist named Sokichi Segawa read her findings and applied them. By the 1950s, Japanese farmers could reliably seed nori onto nets, and as a result production surged into the industry that supplies the majority of the world’s sushi wrapping today. 

Kathleen Drew-Baker never set foot in Japan, yet she is revered there as the “Mother of the Sea”. The Japanese were so grateful for the contribution of her knowledge that they built a monument to her at a shrine, and even host a festival in her honour on the 14th of April every year.  

So the next time you’re out for sushi, make sure to raise a glass of sake to Kathleen Drew-Baker, without whom your maki wouldn’t be the same. Her breakthrough marked the moment that seaweed stopped being foraged and started being farmed at scale. Global seaweed farming has since grown around a thousandfold since 1950, to more than 35 million tonnes a year, cultivated across more than 56 countries. 

Sea star

Food is the obvious use for seaweed – nori, kombu, wakame and the rest of the Asian pantry, now joined by a Western market chasing a wider selection of plant protein and “sea vegetables”. But the lucrative, lesser-known business is the hydrocolloids I mentioned earlier: agar, carrageenan and alginate. These are the gelling and thickening agents extracted from seaweed that turn up in ice cream, beer, processed meats, pharmaceutical capsules and the petri dishes of every microbiology lab on Earth. It helps that these hydrocolloids are essentially vegan and kosher alternatives to animal-based gelatin, which broadens the consumer base for these products.

It’s on the newer frontiers, though, where exciting things are happening.

Agriculture is a major growth driver, as seaweed-based biostimulants and fertilisers feed into regenerative farming. Cosmetics lean on its antioxidant-rich extracts. Also, an unexpected barnyard surprise: a red seaweed called Asparagopsis, fed to cattle at a ratio of just 1-2% of their diet, has been shown to cut the harmful methane they emit by anywhere from 30% to as much as 70%. Given how much of global warming rides on livestock methane, that is not a minor party trick. 

And then there’s the material element. For decades now, the fashion industry has wrestled with the problem of leather. The genuine item (a product of livestock farming) puts strain on the environment, since cattle need so much space and water (and of course there’s the previously mentioned methane problem). The alternative, polyurethane (also known as pleather or vegan leather), is hardly any better, since it is made from fossil fuels and degrades into microplastics. 

Fortunately, there’s hope.

Off the coast of Zanzibar, the Tanzanian biomaterials company KelTex is blending locally grown seaweed with sisal and banana fibre to make a biodegradable leather alternative for the fashion industry. This leather alternative needs no arable land, no fresh water and no fertiliser, and is ready to harvest in about 60 days. It’s no science-fair novelty, either – the material apparently matches real leather for feel and strength, has won H&M’s Global Change Award, and is already being commercialised for global brands.

The stuff we wrap around sushi, it turns out, may soon be wrapped around us.

A blue ocean of opportunity

Asia grows about 97% of the world’s seaweed, with China responsible for roughly 60% and Indonesia around a quarter. Layered on top of that base is a market forecast to climb toward $40 billion or more within the decade. 

But the more compelling growth story is who it lifts. Seaweed farming is light on both land and capital, which makes it a rare economic lifeline for coastal communities in lower-income countries.

Tanzania alone produces about 92% of Africa’s seaweed. Zanzibar is home to roughly 23,000 farmers, more than 80% of them women, and the seaweed they grow has become the archipelago’s third-largest export after tourism and spices. Now layer fresh demand in the form of bioleather, biostimulants, cattle feed, and add new technology onto that foundation.

KelTex, for instance, uses AI to help its farmers predict weather, temperature and water pH so they can increase both yield and quality. The result is a genuine multiplier on incomes that have historically been very slim.

The wealthy world is stirring, too. Alaska, Maine, France and Norway have all more than doubled their output of farmed seaweed in recent years, and both the EU’s Algae Strategy and US climate-smart farming programmes are now channelling money and research toward the sector.

For a plant with no roots, no flowers and a longstanding reputation as beach litter, seaweed has assembled a remarkable CV. It feeds us, sets our desserts, softens our skin, calms our cattle, fertilises our fields and may soon clothe us. We spent centuries treating it as the sea’s afterthought. But now it seems as if the tide is turning. 

About the author: Dominique Olivier

Dominique Olivier uses her love of storytelling and ideation to help brands solve problems.

Her first book, Lessons from Loss, has been published by Penguin Random House.

She is a weekly columnist in Ghost Mail and collaborates with The Finance Ghost on Ghost Mail Weekender, a Sunday publication designed to help you be more interesting.

You can learn more about her work at dominiqueolivier.com and she can be reached on LinkedIn here.

Who’s doing what this week in the South African M&A space?

Marylou Greig
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Who’s doing what this week in the South African M&A space?

Listed Companies

Fertiliser and explosive manufacturer Omnia received a firm, all cash buyout offer from Solar Industries India in a deal valuing the company at R21,83 billion. The offer of R134.50 per share represents a premium of 35.73% over the 30-day VWAP. The transaction by the Indian listed company will create a global platform to accelerate Omnia’s product offerings internationally and as such the Board intends to recommend the buyout scheme to its shareholders. The potential exit of the company from the JSE and A2X further reduces investment options available to institutional investors.

Accelerate Property Fund is to dispose of the Cedar Square shopping centre in a deal with Aristonas valued at R630 million. The purchaser will acquire the existing letting enterprise, its related income stream and available bulk but will not acquire the right to develop the bulk, this will be retained by Accelerate. The deal is classified as a category 1 transaction and as such a circular will be issued and shareholder approval sought.

In a trading update, Pepkor announced it had structured a sale and leaseback of three distribution centres unlocking R2,25 billion in capital that it will redeploy into high-growth opportunities within the group. The properties, Pep Kuils River, Pep Hammarsdale and Ackermans Hammarsdale, are housed in Badger Properties which Pepkor has anchored as a black-owned and managed property fund and in which it has retained a 35% minority interest. The property leases are 15-year triple net lease agreements which ensures operational continuity. The Competition Commission approved this transaction in June 2026.

Supermarket Income REIT has acquired a portfolio of six grocery assets for £104 million. The assets situated in the UK are across key locations bridging traditional omnichannel supermarkets, convenience stores and distribution hubs in Macclesfield, Leeds, Nottinghamshire, Birmingham, Glasgow and Avonmouth. The acquisition of the portfolio will be funded from the proceeds of the £100 million equity raise in July 2026. The average net initial yield across the assets is 6.6% with a weighted average unexpired lease term of 10 years.

The much-acclaimed R41,3 billion Vodacom deal announced in December 2025 which saw its presence in East Africa scale, has encountered a legal hurdle. Vodacom acquired a further 5% stake in Safaricom from Vodafone and a 15% shareholding from the Government of Kenya giving it an effective shareholding in Safaricom of 55%. This week the High Court of Kenya handed down an adverse judgment on a petition challenging its deal to take control of Safaricom. Vodacom is to appeal against the decision.

The disposal by Putprop of a specific portion of Summit Place located in Menlyn, Pretoria announced in November 2025 has been terminated. The deal which would have seen the property sold to Veritas 1000 for R26,5 million will not proceed as the requisite approval by the purchaser from its board of directors has not been obtained.

Unlisted Companies

Private investment firm VEA Capital Partners has announced a strategic investment in Bonisa Applied Insights (Bonisa AI), a local data science and artificial intelligence business. Bonisa AI serves clients across retail, banking, telecommunications and a range of other industries and sectors. The company also works with credit bureau data as a registered reseller, combining bureau information with alternative data sources to create additional value.

DealMakers is SA’s quarterly M&A publication.
www.dealmakerssouthafrica.com

Weekly corporate finance activity by SA exchange-listed companies

Marylou Greig
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Weekly corporate finance activity by SA exchange-listed companies

Novus has acquired an additional 10,000 shares in technology distributor Mustek on the open market at price per share of R15 (outside of the Mandatory Offer) for R152,500. The company now holds 33,14 million Mustek shares constituting 57.60% of the issued shares in Mustek. Alongside concert parties this shareholding increases to c.77.89%.

Fortress Real Estate Investments is offering shareholders the opportunity to receive the final gross cash dividend per Fortress B share as a distribution of new fully paid-up Fortress B shares in lieu of the cash dividend. Shareholders may also elect to receive the dividend as a part cash distribution and part capitalisation of shares.

OUTsurance has received approval from the South African Reserve Bank to distribute the special dividend of 87.5 cents as announced in its financials for the year ended 30 June 2026.

Visual International’s shares were suspended on the JSE in July 2026. The company has advised shareholders that its auditors require payment in full prior to commencing the audit, the costs of which are at least R1 million. Visual is in the process of raising the required funds.

This week the following companies announced the repurchase of shares:

The Pan African Resources board has approved a share buy-back programme to the value of R500 million, commencing during October 2026. The repurchased shares will be cancelled. The Company completed a share buy-back programme during the current reporting period, which resulted in the total shares of the Company decreasing by 2,003,735 at an average price of 47.8 pence (US$0.66 cents) per share.

On 5 August 2026, Glencore announced a new US$500 million buyback programme intended to run through to February 2027. This week the company repurchased 5,280,000 shares for an aggregate £31,69 million.

Reinet Investments commenced its proposed 7th share repurchase programme, for up to an aggregate maximum amount of €250 million subject to a maximum of 8 million ordinary shares over a period ending on 15 December 2026 at the latest. The shares will not be cancelled. During the period 7 to 11 September 2026, the company repurchased 545,951 shares for an aggregate R235,77 million.

In March 2026, Quilter commenced a £100 million share buyback programme, to reduce the share capital of the company and return capital to shareholders. The third and final tranche of the programme commenced on September 8, 2026, with repurchased shares to be cancelled. During the period 8 to 11 September 2026, Quilter repurchased 1,722,572 shares on the LSE with an aggregate value of £3,19 million and 269,920 shares on the JSE with an aggregate value of R10,91 million.

In June 2026, Greencoat Renewables announced its intention to commence a second tranche of the repurchase programme to return a further €25 million of capital to shareholders. The second tranche repurchase will be complete by end-December 2026. This week 687,118 shares were repurchased for an aggregate €530,903.

Ninety One plc announced an increase in the repurchase programme from £30 million to £55 million. The shares, to be purchased on the open market, will be cancelled to reduce the Company’s ordinary share capital. During the period 9 to 11 September 2026, the company repurchased a further 106,888 ordinary shares at an average price 210 pence for an aggregate £224,236.

British American Tobacco has again extended its share buyback to end on 12 October 2026. All shares repurchased will be cancelled. Over the period 7 to 11 September 2026, the company repurchased a further 506,000 shares at an average price of £40.94 per share for an aggregate £20,72 million.

Anheuser-Busch InBev’s US$6 billion share buy-back programme continues. The shares acquired will be kept as treasury shares to fulfil future share delivery commitments under the group’s stock ownership plans. Over the period 7 to 11 September 2026, the group repurchased 1,107,539 shares for €75,26 million.

During the period 7 to 11 September 2026, Prosus repurchased a further 1,771,604 Prosus shares for an aggregate €63,76 million and Naspers, a further 541,876 Naspers shares for a total consideration of R397,80 million.

Two companies issued profit warnings this week: Choppies Enterprises and York Timber.

Two companies announced, renewed or withdrew cautionary notices: Omina and Northam Platinum.

DealMakers is SA’s M&A publication.
www.dealmakerssouthafrica.com

Who’s doing what in the African M&A and debt financing space?

Vanessa Aitken
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Who’s doing what in the African M&A and debt financing space?

DealMakers AFRICA

Bekia, an Egyptian startup digitising waste collection, has announced a US$765,000 seed round led by Madica, the Africa-focused investment programme affiliated with Flourish Ventures. Catalyst Fund, the pan-African climate investor to first backed Bekia in 2023, re-invested, with participation from Dakar-based Jambaar Capital. The funding will be used to grow its engineering team, take Bekia Next to market, and begin testing the model in a second African market.

Bradda Head Lithium, a North America-focused lithium development Group, has announced a conditional, definitive and binding asset purchase agreement with Zeus Resources, and its parent company, US1 Critical Minerals, pursuant to which a newly formed wholly owned subsidiary Company of Bradda Head, BHL Tanzania, will acquire from Zeus the entire rights and interests in six prospecting Uranium licences (PL 11703/2021, PL 11704/2021, PL 11705/2021, PL 11708/2021, PL 11709/2021 and PL 12354/2023), including the Mkuju Project. The total consideration under the Asset Purchase Agreement will be US$1,8 million.

Noma Services Consolidated has secured a US$650,000 loan facility from Sahel Capital, through its Social Enterprise Fund for Agriculture in Africa (SEFAA). The facility comprises $400,000 for working capital and $250,000 for capital expenditure. Noma is a Nigeria-based agribusiness specialising in the aggregation and processing of commodities including rice, maize, sorghum, and beans. Headquartered in Abuja, the company sources from a network of over 11,000 smallholder farmers (SHFs) and supplies high-quality produce to leading FMCG players.

Synapse Analytics, an Egyptian AI company that builds agentic decisioning infrastructure for regulated financial institutions putting policy control directly in the hands of credit and risk teams, announced today that it has raised US$13 million in a Series A funding round. The round was led by Partech, with additional participation from Algebra Ventures and Silicon Badia. The new capital will be used to scale the team, accelerate product development and expand international market reach.

The Kenyan government will appeal a court ruling that ordered the cancellation of the December 2025 deal in which it sold an extra 15% stake in telecoms firm Safaricom to Vodacom. Kenya’s High Court said the sale of the Safaricom stake did not adequately involve the public and was marked by concealment of material information, Kenyan television station NTV Kenya reported. It ordered the 15% stake be returned to the government.

DealMakers AFRICA is the continent’s quarterly M&A publication
www.dealmakersafrica.com

The next chapter: How Glenart found a global growth partner

Anthony McCardle
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The next chapter: How Glenart found a global growth partner

For every entrepreneur, there comes a moment when the question changes. It’s no longer, “How do I grow this business?” Instead, it becomes, “Who is best placed to take it to the next level?”

For many founders, that moment arrives after years, sometimes decades, of building something exceptional. The business is profitable. The brand is trusted. Customers are loyal. Yet the next stage of growth requires greater scale, broader market access, additional resources or international reach that cannot easily be achieved independently.

Recognising that moment is one of the most important strategic decisions a business owner can make. That was the position in which Glenart found itself.

Founded in South Africa, Glenart had built an enviable reputation as a designer and manufacturer of premium Christmas crackers, supplying retailers both locally and internationally. Through a commitment to innovation, quality and operational excellence, the company established itself as a market leader within its niche, one that would ultimately attract the attention of one of the world’s leading celebration product businesses.

The business had reached a stage and size where the next level of growth could only come through acquisition by a strategic acquirer.

Rather than viewing such a transaction as the end of the journey, Glenart’s shareholders saw it as the beginning of a new chapter, one that would position the business for continued growth within a larger global organisation.

Their eventual partner was IG Design Group PLC, a London Stock Exchange-listed designer, manufacturer and distributor of celebration products, stationery, gifting and creative play products, with operations spanning multiple international markets. For both organisations, the transaction represented an opportunity to build on existing strengths and create a platform for long-term growth.

Navigating a complex cross-border transaction

Strategic acquisitions aren’t straightforward, and cross-border transactions introduce an additional layer of complexity. Different legal systems, regulatory environments, commercial practices and financial considerations all need to be carefully navigated while maintaining alignment between buyer and seller.

The Glenart transaction took close to two years from inception to completion, which is, in itself, a reflection of the care required to ensure that every aspect of the transaction supported the long-term interests of both parties. One of the more significant challenges emerged during negotiations around working capital.

The cyclical nature of the business, combined with its continued growth, created differing views on the appropriate working capital position. Resolving those differences required careful analysis, open communication, and a shared focus on achieving the right long-term outcome.

While negotiations naturally involve differing perspectives, the shared objective remained constant: creating a transaction that reflected the true value of the business while establishing a strong foundation for future success.

More than an acquisition

For IG Design Group, the acquisition represented more than additional manufacturing capacity. The company identified Glenart as a highly complementary business with a proven manufacturing platform, longstanding customer relationships, and a strong reputation for quality and innovation. Integrating Glenart into its global celebrations portfolio strengthens the Group’s position within a key product category, while creating opportunities for operational collaboration and continued international growth.

For Glenart, becoming part of a global organisation provides access to broader markets, increased resources, and the scale needed to continue building on decades of success.

The result is a transaction that creates value on both sides, bringing together two businesses whose capabilities complement one another and position each for future growth.

A reflection of South African business

Reflecting on the transaction, it represents something much broader than the successful completion of a single deal. It was a great reflection on the quality of businesses in South Africa.

South African businesses are robust and can be agile or measured in their response to challenges and opportunities. That resilience continues to distinguish South African businesses on the global stage. Companies that combine entrepreneurial thinking with disciplined execution are increasingly attracting interest from international strategic acquirers seeking high-quality businesses with proven capabilities and long-term growth potential.

The Glenart transaction demonstrates that world-class businesses are not defined by geography; they are defined by the quality of their people, products and operations.

Preparing for your own next chapter

While every transaction is unique, one principle remains remarkably consistent: businesses that are built for long-term excellence are the businesses that attract exceptional opportunities.

For owners considering their own future, the following simple, but powerful, advice is offered:
Always run the business like you were not selling it, but were rather preparing for a listing on a stock exchange. Strong governance, disciplined financial reporting, capable management teams and operational excellence do far more than increase saleability. They create stronger, more resilient businesses, whether a transaction ultimately takes place or not.

Looking ahead

The acquisition of Glenart by IG Design Group is more than the story of a successful cross-border transaction. It is a story of recognising the right moment, preparing a business for its next phase of growth, and finding a strategic partner capable of unlocking new opportunities.

For business owners, it offers an important reminder that the best exits are rarely about stepping away. More often, they are about ensuring that the business you have spent years building is positioned to achieve even greater success in its next chapter.

As South African businesses continue to demonstrate their resilience, innovation and global competitiveness, transactions like Glenart’s serve as a powerful example of what is possible when exceptional companies are built with ambition, discipline and a long-term vision.

Anthony McCardle is a Director | Benchmark International

This article first appeared in DealMakers, SA’s quarterly M&A publication.

DealMakers is SA’s M&A publication.
www.dealmakerssouthafrica.com

Ghost Stories #113: What every CFO should know about changing auditors

The Finance Ghost
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Ghost Stories #113: What every CFO should know about changing auditors

Listen to the show on Spotify and Apple Podcasts:

Or on YouTube:

Changing auditors is not something most CFOs do often, but when the moment arrives, the decision can have far-reaching implications for governance, stakeholder confidence and the effectiveness of the audit process.

In this episode of Ghost Stories, The Finance Ghost is joined by Yolandie Ferreira, Head of Africa for Forvis Mazars Africa, to explore what companies should consider when appointing a new auditor and why the process is about much more than compliance.

From audit quality and industry expertise to AI, auditor independence and sustainability assurance, the discussion unpacks the factors that separate a routine audit from a truly valuable audit relationship. Whether you’re preparing for an auditor transition or simply want a better understanding of how modern auditing creates trust and accountability, this episode offers practical insights from the front lines of the profession.

In this episode:

  • Why companies change auditors and how CFOs should approach the transition
  • Common misconceptions about auditing, fraud detection and audit quality
  • The role of industry expertise, geographic reach and auditor relationships
  • How AI is changing audit processes while leaving human judgment at the centre
  • Why sustainability assurance is becoming increasingly important for businesses and stakeholders

Transcript:

The Finance Ghost: Welcome to this episode of the Ghost Stories podcast. I’ve got the team from Forvis Mazars back in the mix here and someone we haven’t spoken to before, which is always very exciting: Yolandie Ferreira.  

She is a partner at Forvis Mazars and, more importantly, certainly for the purposes of this podcast, she is also the Head of Audit Africa. 

It’s going to be a very interesting discussion because what we will be talking about on this podcast is that your auditor is actually a strategic business choice, it’s not just a compliance exercise. It’s the source of confidence in your business for your stakeholders. It’s about more than just signing off the numbers – it’s actually a trusted advisor that you are bringing into your business.  

And I must say, as the team pointed out to me when we were deciding what to cover in this podcast, it’s possible to go your whole career actually, as a CFO, without really having to go through a change in auditor. It can just depend on lucky timing.  

So, sometimes you come across these things. Maybe you’re not sure exactly what to think about when choosing an auditor or changing an auditor. If that sounds like something that will resonate with you, then stick with us because there’s going to be lots to learn.  

Yolandie, thank you so much for joining me on the show. I’m very excited, personally, to learn from you because I’m not that jacked up on the world of audit, actually. 

Yolandie Ferreira: Thank you. It’s great to be here. I hope that I can enlighten you and your listeners today to certainly understand that auditors are not all grey – and not always men, either. So, there’s a lot of value that can be added to businesses and, as you said, strategically, through the right choice of an auditor. 

The Finance Ghost: Yeah, absolutely. It’s very cool to chat to you today. 

Let’s talk about the decision to change auditors, because as I said, it’s not something that every CFO goes through.  

I remember from my corporate finance days, you’d have the same thing on large corporate restructures, or M&A. Not every CFO has dealt with this and then suddenly they find themselves in charge of a project which is actually almost fundamental to the business and which, if you get it wrong, can actually be an existential issue. And I guess, choosing your auditor can be right up there in that regard.  

So, perhaps you can kick us off by just understanding the decision to actually change auditors, what the drivers of that would be, and then what the typical timing of that decision would be, as well. 

Yolandie Ferreira: Absolutely. It’s one of the most common misconceptions that companies only change auditors either when something has gone wrong or when regulation requires them to.  

For a long time in South Africa, regulation didn’t actually require companies to change auditors, but that changed with the new firm rotation requirements. That’s been in place for a number of years, so most CFOs at large corporates have probably gone through one change in auditors.  

But CFOs also don’t always stay in that position. As you say, it’s very possible that a CFO goes into a position, has been there for a couple of years, and then all of a sudden has to change auditors.  

The thing that I see go wrong most often is that the CFO or audit committee is not focusing holistically on the process, but rather has an idea in their mind of what the auditor should be looking at right at this moment – so, either because there has been a problem in the company, or because there’s a preconceived idea that the auditor is only going to look at the past and issue an audit opinion and then move on and we’ll see them next year. 

So, the timing is very important, because you want to have enough time between when you appoint a new auditor and when they need to issue their first report for the auditor to really gain a good understanding of the business. The audit report – and the auditor – are only going to be as good as their understanding of the business and the challenges that the business faces. 

Anyone can probably sign off a set of financial statements and issue an audit report (well, I guess, any auditor could do that), but really adding value through that audit report is something different. That’s not something that any auditor with any standard experience would be able to provide to a company. 

The Finance Ghost: Let’s start to dig into some of those concepts, because I think that’s where it’s difficult for someone who hasn’t worked closely with an audit team at that level to understand. 

And certainly, for outside stakeholders, they see an audit report and they incorrectly assume (even though it generally says it), “Oh, this is audited by a big brand audit firm. Hence, it must be completely free of misstatements, fraud…you know, take your pick.” It’s like, “This is the silver bullet. We’ve caught everything.”  

That’s not really how this works in practice, as we know, and there is additional value that you bring to it through sector expertise and that kind of thing. So, perhaps just deal with some of those misconceptions for us, and then also just walk us through the value of knowing a sector, for example, or maybe of being an auditor who understands listed versus unlisted companies and multinationals and those sorts of concepts. 

Yolandie Ferreira: Yes, I think probably the biggest misconception out there – well, there’s two. One is that fraud can never happen if the auditor has issued an audit opinion. Well, fraudsters are quite a bit cleverer than most auditors and finance practitioners or experts, because fraud is normally all around collaboration, or doing things which are not in the ordinary course of business – quite undercover. Quite difficult for an auditor or a CFO to just pick up. Otherwise, there wouldn’t be large frauds because it would be easy to pick up.  

So, I think one of the big misconceptions is that having an audit opinion from a large audit firm means that there’s nothing wrong in that company. And I think the reason for that is the very nature of audit. Auditors don’t look at every single transaction. Auditors don’t express explicit assurance that everything is right. And that’s a difficult thing to understand, particularly when something has gone wrong.  

I think while everything goes right, everyone understands that. But when something’s gone wrong, then all of a sudden people will say, “Why did the auditor not see this? Why did the auditor not prevent this?” 

And yet, when we talk about auditors, people will often say, “Auditors don’t bring value because they only look at the history.” But how, then, would they spot that something could go wrong potentially, if they’re only looking at the history? 

So, that’s where you really need to, as CFOs and audit committees, carefully consider a couple of things when appointing new auditors. 

Industry expertise is always going to be close to the top of that list, if not at the top of the list. The auditor needs to understand the unique risks and the complexities in the sector that you operate in.  

It’s very different auditing a mining company to auditing a financial institution, or a retailer, or having technology and being in a business that is completely driven by technology, and bringing in an auditor that completely wants to substantively audit everything without the use of technology. 

So, it’s clear, when you’re in a specialised sector, that you probably need an auditor with industry expertise. When it becomes less clear is when audit committees say, “Yes, but we’re not necessarily in a specialised sector – we manufacture.” Well, manufacturing is also a specialised sector. 

But when you’re listed, that is a specialised understanding that is required of being listed versus being owner-managed versus being a large privately held business. All of these bring a different complexity that your auditor needs to understand if they’re going to add value. 

All auditors audit under the same standards, so if we do our jobs properly (which we all try to do), then we will all issue the same audit report under the same standard. But where that becomes tricky is to understand the unique risks, the complexity of whether that’s the business model, the sector, the market that you operate in. And that really is something that audit committees and CFOs need to think about: whether the auditor has the relevant experience and expertise. 

Quality is sometimes, you would think, easier to measure. But we only need to look at the different reports issued by the regulators across the world to understand that sometimes it’s very difficult to understand what a regulator is saying, and sometimes they come out quite clearly listing quality failures.  

But how does an audit committee then apply that to their auditor? Just because a quality failure may be listed doesn’t mean that incorrect audit opinions have been issued. So, there are a lot of things which have to be taken into account, around quality and reputation, to make sure that the audit opinion carries weight because the stakeholders trust the quality standards behind it. 

And for that reason, audit quality must always be a primary consideration, but it’s not always a black and white consideration. It’s something that audit committees need to get comfortable with, with the auditor, to really understand how the auditor is going to ensure quality on the opinion that they’re issuing. 

Another thing I think that can be quite fundamental for a business is geographic reach. If the business is only operating in one location, it’s probably not that relevant. But many organisations these days operate in multiple jurisdictions – whether that’s within an African region, or globally; in South Africa, it may be just multiple locations within one country – and it’s always better to have an auditor who can deliver seamlessly across those different geographic locations. 

If you ask my personal opinion, the people and the service model are integral to this process. Relationship really matters. Yes, the auditor must be independent, but boards should understand clearly who’s going to actually perform the work. 

How accessible will the senior audit partner who’s signing off on that opinion be to the management and the audit committee, and how will the team collaborate with management and the audit committee? 

It’s very difficult if management is only dealing with a manager, for instance, at an audit firm, versus when they have direct access to the audit partner who is actually going to be signing off on the opinion. So, that’s definitely something I think that any CFO or audit committee needs to make sure that they will have access to the audit partner who will be signing off on the opinion. 

And then these days, you always hear from either the CFO or the audit committee, “How much AI are you going to use in the audit opinion or in performing the audit work?” 

So, the profession is changing rapidly and all the firms are making use of data analytics, automation and AI to deliver more efficient audits, and often to identify insights that traditional processes may miss, purely because of the volume of data that auditors have access to and which they need to analyse.  

But I think, going back to my previous point, the relationships matter. Who are you going to pick up the phone to speak to when there’s a blockage and a deadline may be in question, or when something has gone wrong and you need to understand what the impact is or how it needs to be rectified? 

You can probably ask AI that, and you may get an opinion, but if you don’t have a relationship with an actual person, it’s very difficult to actually resolve those issues as they arise. 

So, for me, those would be the five top things that audit committees and boards need to consider. 

The Finance Ghost: Thanks. That’s such a good helicopter view of many of the factors which people need to think about, for sure. I’m so glad you brought up AI – which does not stand for ‘audit intelligence’, of course. It’s ‘artificial intelligence’, and the amount of intelligence is extremely debatable, for anyone who has been using any of these models.  

Sometimes they are amazing, sometimes they are awful. The thing that always scares me is that they are a black box. It’s quite difficult to audit exactly what’s happened, ironically.  

I have always wondered about where you can and can’t use AI in an effective audit process in the modern world, so I’d love to get those insights from you, and I think anyone listening to this will find that interesting as well. 

Yolandie Ferreira: Absolutely. It’s undoubtedly been one of the most exciting developments in our profession. But I must tell you, I probably don’t go through any week where someone doesn’t tell me that auditors will be replaced by AI. And that is something that I do not believe.  

I mean, historically, auditors have spent probably most of their time gathering, organising and analysing information, and AI and automation is helping a lot with that. It gives us insights much more quickly, and it therefore allows experienced auditors to spend most of their time focusing on actual risk assessment, applying their judgment and scepticism, and then communicating with clients.  

So, we’re seeing a lot of improvements in the analysis of documents, data interrogation and (speaking to the fraud point we raised earlier) helping us with identifying unusual transactions or patterns that may warrant further attention that, when you were in the past just testing 50 items, you may never have seen those unusual patterns. So, that is all adding to the value of an audit.  

But one point is extremely important, and that is that AI is not – and cannot – replace auditor judgment. Audit remains fundamentally centred around professional scepticism, ethics and governance, and human judgment.  

It’s one thing to give me an answer that is technically correct, but the auditor needs to think about everything that they’ve gathered, all the information that has come to them, and really apply that professional scepticism and human judgment to make sure that we process information effectively and that we draw conclusions from there which are supported by the evidence we have gathered.  

My view is that the future auditor won’t be replaced by AI at all. We will simply be enabled by AI. So, probably better auditor intelligence, rather than just AI, as such. 

The Finance Ghost: Yeah, I tend to agree with that. I see it in my work, as well. It’s only as good as the prompt you give it…  

Yolandie Ferreira: Exactly. 

The Finance Ghost: …It’s only as good as the stuff you train it on. And whenever there’s a judgment call or you need to be able to bring together a variety of different sources and life experiences and conversations, that’s where it falls over.  

Which makes sense, right? I mean, it’s just a predictive model based on the inputs that it’s seen. So, all of that makes absolute sense.  

Perhaps we can now move on to some practical examples of the sort of value add that auditors do bring. Because people hear this (and you’ve raised it as well), but it’s always so good if there are some real-world examples that you’ve perhaps got at hand where – as an auditor, as an audit partner, or that you’re aware of – actual value has been added beyond just, “Hey, you are now compliant, ticking the box.”  

What can you give us there to help us understand that better? 

Yolandie Ferreira: I think that balance is kind of at the heart of the audit profession. Because yes, we have to be independent, and we have to maintain that independence and objectivity almost at all costs. But we also need to make sure that that professional scepticism and objectivity that we bring remains a concept that we apply to add value.  

So, because we see different businesses, we see different controls and implementation of whether it is a control-system way of thinking. When we’re then working with clients, that is the value that we can bring. Our experience, the way that we’ve challenged and our objective view.  

So, a good auditor should be collaborative but never compromise their independence, which is difficult. But that is why we are audit professionals. 

In practice, it means asking the difficult questions which, often, management haven’t thought about because they are focused on delivering on a particular goal.  

So, it is being that challenge and saying, “Have you thought about this?” Challenging those assumptions. Making sure that you do have the evidence. And we’ve seen it when sometimes – not always on the audit – but on the audit where we look at systems and controls, for instance, challenging management to really say, “This is the control you have in place, but are you actually still reaching your control objective?” 

Particularly when things change so quickly in the world of technology. It may have been a perfect control process five years ago, but is it really still working? 

And sometimes you see, when you hear about fraud or you’ve picked up a fraud situation at another client and you go to your client and you say, “You know this control? This is the way someone could get around that control,” or “This is a pattern that you may miss.” 

The classic example (which we do still see) is that you can really, currently – specifically with technology – take away segregation of duties almost completely. And if you don’t bring controls in to compensate for the fact that one person can now do what five other people may have been involved in the process of before, then you could have an outcome where your control is actually failing because you’ve automated or you’ve brought in AI or a different system to get to a much more efficient way of doing things, but at a higher risk. 

Other examples would be things like when we’re working not on an audit maybe, but to help a client review a prospectus to go into a listing or the launch of a new project. Again, it’s the experience and the objectivity of challenging the assumptions that are built into valuations, for instance. Challenging the assumptions of how perceptive a market would be to a new project. 

So, I think it’s those types of things that you don’t always think about as adding value into an audit opinion, but just raising it as part of the overall audit process brings value to management, particularly where the relationship is strong enough that the mutual trust and respect is there between management and the auditors for the role that each party plays. 

The Finance Ghost: Yeah, brilliant. And you’ve raised that whole working relationship with management. That’s come up a few times, actually. That is obviously something which is very important. 

Of course, it’s something you also have to manage, because the whole idea is that auditors are not supposed to be too close to management – because otherwise all the familiarity issues start to come through. 

So again, maybe for people outside the profession (and even for those in it, frankly) and for the CFOs out there, how do you personally practically manage independence and professional scepticism while still having that relationship with management which creates a good, efficient way to do audits? 

Yolandie Ferreira: It is a balancing act. It’s not getting too close to your client, but building a close enough relationship that you can have that really honest conversation and really challenge what your client is thinking or presenting you with as evidence.  

And, I guess, a mutual respect. Just building your relationship based on that mutual respect. Because we are there, both of us, to do a job. And, in the auditor’s case, you have a team below you that also, as a team, holds each other accountable, and challenges what each other is thinking, and brings the different professional scepticisms and different ways of thinking to the forefront.  

But for me, the most important thing is that that relationship with your client is not a personal, we’re-friends-around-the-braai-type relationship. It is very much a professional relationship built on respect for what each of us brings to the party. 

And we know that auditors need to be independent. So, as an auditor, you need to guard that line because that is what gives you that objectivity and what allows you to add value. 

The Finance Ghost: I love it. You’re taking us through such a great view of auditing and how the profession actually works out there. And, last question. Another thing that’s come up in recent years, I think, is sustainability assurance. Really interesting space.  

So, I generally see this play out when I’m looking from an investment perspective and I see companies raising sustainability-linked financing and that has metrics attached to it.  

I can’t remember which group it was, but it doesn’t matter, there was a hospital group and they raised sustainability-linked financing, and one of the metrics was the number of people who they help from a health perspective, which blew my mind.  

I’m like, “That is what you do. You are a hospital.” That has to be the best negotiated funding deal in the world. It’s like, “Our core business is to make people better. Let’s link that to our loans somehow.” So, some very clever person ran a smart negotiation with the banks there.  

There’s a bigger underlying issue there, which is lots of greenwashing. ESG can sometimes be very good. It can also be very dicey. So, this all rolls up into sustainability assurance and actually just doing the right thing in that space.  

Are you seeing more of these engagements coming up in practice? Is it a growth area that’s quite interesting to talk about? 

Yolandie Ferreira: Absolutely. We’re seeing it more and more that all stakeholders want confidence not only in financial information, but also in non-financial information. 

And the biggest challenge is that it can’t just be a warm and fuzzy story, because that’s generally where the greenwashing comes out. It has to be something which can be proven. 

Whether organisations are reporting on climate risk, emissions, diversity, how many people’s lives they make better, there has to be – just like with financial information – a level of support which can be given for the information that they want to publish. Because for stakeholders to have confidence in it, you need to be able to say, “This is what I say, this is why I say this, and someone has verified that I’m not just making up nice stories.” 

We’re seeing this mature rapidly globally. Just like with financial information, stakeholders want assurance that the information is reliable, consistent and, as I said, supported by evidence. 

What makes it so interesting is that it’s sometimes very different to the financial reporting areas which we’re so used to having strategic implications for businesses. So, as auditors, we really need to think outside of the box.  

But if you think about it, we’re used to placing reliance on experts. It’s part of what we learn to do, because we’re used to not being the expert in every single thing that we could come across from a financial information perspective. So, it’s just a different type of expert that you have to go find and really think about how you can find evidence to support what companies are wanting to report on.  

So, I really believe that sustainability assurance will continue to become even more mainstream and that the broader assurance landscape will incorporate that into ultimately being part of just one level of assurance, not being spoken about even as “financial versus non-financial assurance”. 

The Finance Ghost: Brilliant. Yolandie, thank you so much. You’ve given us lots to think about here. I’ll make sure that people can easily reach you via LinkedIn through some links here in the show notes. They can go and find you on the Forvis Mazars website as well.  

To the CFOs out there, if you are perhaps thinking about a change in auditors or you just want to learn more about the offering at Forvis Mazars in South Africa, then please do check it out. Reach out to Yolandie.  

And yeah, it’s an interesting space. It’s ever-changing. It’s very important to the fabric of our economy, so thank you for doing what you do, Yolandie, and enjoy navigating this changing world, because there’s lots going on, and I’m sure there will be plenty for us to talk about in subsequent episodes. 

Yolandie Ferreira: Thank you, Ghost. And if I can leave with one takeaway, it’s that a great audit doesn’t just verify the past. It actually helps build confidence in the future. 

The Finance Ghost: Absolutely. I love that. 

Yolandie Ferreira: Thank you. 

The Finance Ghost: Ciao. 

The internet can’t serve you spaghetti ice-cream

Dominique Olivier
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4
The internet can’t serve you spaghetti ice-cream

Once upon a time, getting lost was how you found the good stuff. Then the internet learned to predict exactly where you were going – and how to redirect you. Are we in the twilight era of the digital flâneur?

When I was 14 years old, I travelled to Germany as part of my high school exchange programme. It wasn’t the brightest idea, in retrospect: I had only been studying German for a year and some change, which meant I could barely speak or understand the language. But I was young, naive and convinced that I could navigate both the foreign language and the foreign country all at once. With my parents’ blessing, I boarded the plane and took my first steps into a big, unknown world. 

All in all, the trip was a success. I spent three weeks with a family in Köln, where I learned about Germans (always happy to correct your grammar), myself (surprisingly susceptible to homesickness) and the world beyond the familiar confines of my home town (more confusing, exciting, frightening and inspiring than I ever imagined). 

I also learned that my German host family was way more relaxed about my general whereabouts than my parents were. On my second day in their home, they pointed me in the direction of the nearest bus stop and told me to go explore. Confused but happy to oblige, I boarded the bus alone and made my way into the centre of town, where I spent about two hours getting myself thoroughly lost. 

I was too shy to ask anyone for directions (and fairly sure that I didn’t have the vocabulary or pronunciation skills anyway). So I wandered around without any particular aim, popping in and out of shops as the mood took me, until I started to get hungry. I found a restaurant on the corner of a street and went inside. There, I was given a menu covered in German that I could barely read, but I did recognise two words – “spaghetti” and “eis”, the German word for ice-cream. 

Unsure whether or not this was some sort of strange meal combo (but again too shy to ask), I ordered it. What arrived in front of me looked exactly like a plate of spaghetti covered in Neapolitan sauce, crowned with a handful of perfectly round meatballs. But the clever trick revealed itself when I tried to twirl the noodles onto my fork: it was ice-cream. The “spaghetti” was vanilla ice-cream, fed through some contraption that shaped it into realistic noodles. The red sauce was made of strawberries. And the meatballs? Chocolate truffles, of course. Spaghetti ice-cream – exactly as named.

Photograph: Frank C. Müller, Baden-Baden – Own work, CC BY-SA 2.5, Link

Why am I telling you this story? Because this moment of delighted surprise, of encountering something completely novel and wonderful without really seeking it out, is something that I am finding harder and harder to achieve as the years go by. I don’t think I am alone in this experience – nor do I think that this is because of some fault or mistake on my part, or yours, if you feel the same way.

The world doesn’t have fewer new things in it. But something has made it much harder to stumble across them. 

The wonder in wandering

There’s a word for what I was doing on the streets of Köln, though I didn’t learn it until I was at uni years later: I was being a flâneur. The term is French, and it belongs to the 19th century and the wide boulevards of Paris that Baron Haussmann had carved through the medieval tangle of the old city. A flâneur was a stroller, a saunterer; a person who walked the city with no destination and no purpose beyond the walking itself. Drifting and observing, the idea was to let the street deliver its surprises.

The poet Charles Baudelaire made the flâneur into something close to an artist. To stroll aimlessly, he suggested, was a way of seeing – a discipline of openness, of being available to whatever the crowd and the shopfronts and the passing faces might offer. Later, the critic Walter Benjamin spent years on an unfinished study of these Parisian arcades, the glass-roofed passages where the flâneur could wander among goods and strangers, half-shopping, half-dreaming. The point was never to arrive anywhere. The point was to remain porous to the world, to let it act on you.

It’s easy to romanticise this, and plenty of people have. But strip away the top hats and arcades and what you’re left with is something quite ordinary and quite precious: the human capacity to go looking for nothing in particular, and to be rewarded for it. 

The boulevard of links

For a while, the internet was one of the great flâneur’s playgrounds. If you are old enough, you might remember what it felt like to really browse the internet, in the full, literal sense of the word. You followed a link because it looked interesting, and it took you somewhere unexpected, and that place had three more links, and an hour later you were reading about deep-sea fish or medieval siege weapons with no memory of how you’d gotten there.

Web pages were made by people, one at a time, often badly, and their badness was part of the charm. Every site was like a room someone had decorated by hand.

Sometimes I get a bit nostalgic for the internet that I grew up on, and when I do, I look up the Space Jam website. This is the original promotional page that Warner Bros. built for the 1996 film and then simply forgot to take down. It’s still live, decades later, exactly as it was: the corny starfield background, the planet-shaped navigation, the chunky pixelated buttons floating haphazardly in space. No banners, no ads, not a pop-up in sight.

And because we know you’re allergic to clicking anything these days, here’s a screenshot of the home page:

It is gloriously useless by modern standards. It sells you nothing efficiently. But it is a place, unmistakably, with its own weird kind of weather, and you can still wander into it and feel the particular texture of an internet that hadn’t yet decided what it was for.

That’s the internet as boulevard. What we have now is the internet as shopfront.

Today’s web is built around the destination. You arrive with a goal – a product, an answer, a booking – and the entire architecture exists to move you from intent to completion as smoothly as possible. Friction is the enemy. Every stray path has been paved over or fenced off, because a wanderer is, from a commercial point of view, a customer who hasn’t converted yet. The modern site doesn’t want you to drift. It wants you to buy, and then leave, and then come back and buy again.

The algorithm doesn’t do surprises

We rarely wander the internet anymore because we live in a world of platforms and everything apps. The feed decides. The recommendation engine decides. The algorithm watches what you linger on and hands you more of it, and more, and more, in a loop tuned with extraordinary precision to your existing tastes.

And it works. It is genuinely good at giving you what you already like. Which is exactly why it can never give you spaghetti ice-cream.

Serendipity, by definition, is the thing you weren’t looking for. It requires a gap – a moment of not-knowing, of aimlessness, of being loose in a space large enough to contain surprises. Algorithms, on the other hand, are built to close those gaps. They remove the wandering, and with the wandering they remove the possibility of the genuinely, delightfully unexpected. 

I feel this most strongly when I’m on social media, where even the painters that I follow all start to look the same after a few months; I am unable to tell the work of one from another. A few weeks ago I liked a painting of a floral still-life, now every time I open my window to the world I am choked by flowers.

On Spotify, every “Recommended For You” playlist reschuffles the same five albums I have loved since varsity. I haven’t listened to a new song in months.

So what do we do about it? Beats me, honestly. Move to the platteland, delete everything, become unreachable? I’m too fond of my playlists for that (even the stale ones). International travel is the best playground for any committed flâneur, but it also costs a fortune.

But maybe I can leave a little more room for accidents – click the link that has nothing to do with anything, follow the account the algorithm would never have picked for me, take the wrong turn on purpose now and then, order the thing I can’t pronounce. Online or off, the move is the same: stop letting something else decide where I’m going before I’ve even left. 

About the author: Dominique Olivier

Dominique Olivier uses her love of storytelling and ideation to help brands solve problems.

Her first book, Lessons from Loss, has been published by Penguin Random House.

She is a weekly columnist in Ghost Mail and collaborates with The Finance Ghost on Ghost Mail Weekender, a Sunday publication designed to help you be more interesting.

You can learn more about her work at dominiqueolivier.com and she can be reached on LinkedIn here.

Who’s doing what this week in the South African M&A space?

Marylou Greig
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0
Who’s doing what this week in the South African M&A space?

Listed Companies

In a two-step transaction, Exxaro Resources will sell the Moranbah South coking coal project in Australia to Stanmore Resources for US$105 million. The asset was classified by Exxaro as non-core. In an initial step, Exxaro will exercise its pre-emptive right to acquire Anglo American’s 50% stake in Moranbah, temporarily holding a 100% stake. Immediately Exxaro will on sell the full 100% shareholding to Stanmore Resources. The transactions were triggered by Anglo selling its Australian coal portfolio to Dhilmar QLD ahead of its merger with Teck Resources.

PBT has introduced a new B-BBEE investor by way of a 30% shareholding in subsidiary PBT Innovation. The group will consolidate various operating businesses and related intra-group funding arrangements (R625m) under PBT Innovation. TheIntrepid will invest R50 million which will be locked in for eight years. PBT will use the proceeds of the BEE subscription together with available cash resources to repurchase c.13,8 million PBT shares, representing 14% of the company’s issued share capital by way of a specific repurchase for R7.50 per share, an 8.7% premium to the 30-day VWAP. This repurchase will largely offset the dilution arising from the BEE partnership subscription. A put option granted to TheIntrepid may require PBT to acquire the shares in PBT Innovation held by the BEE party in exchange for the issue of new PBT ordinary shares.

Standard Bank and Java Capital have entered into a strategic partnership designed to bring innovative capital-raising, advisory, financing and co-investment solutions together in an integrated platform. Initially the focus will be on South Africa’s real estate, infrastructure and broader real estate asset sectors.

Negotiations between Sebata and a non-related third party regarding the potential disposal of certain assets has, according to the company, been terminated.

Shareholders of Mahube Infrastructure have been cautioned that the company has entered into discussions with a consortium, of which the CEO of the company is a member, to acquire the remaining shares not already held in the listed entity.

Unlisted Companies

BetterHome Group, an established participant in the South African residential property market, is to acquire Mortgage Support Services, the parent company of Stonebridge Mortgage Solutions and a portfolio of UK mortgage, protection and technology businesses. The acquisition represents an expansion of its footprint in the UK following the investment in HLPartnership in 2024.

DealMakers is SA’s quarterly M&A publication.
www.dealmakerssouthafrica.com

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