{"id":614716,"date":"2025-10-20T10:00:18","date_gmt":"2025-10-20T08:00:18","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=614716"},"modified":"2025-10-22T14:16:27","modified_gmt":"2025-10-22T12:16:27","slug":"huge-group-faces-huge-challenge","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/investing\/614716-huge-group-faces-huge-challenge.html","title":{"rendered":"Huge Group faces huge challenge"},"content":{"rendered":"\n

Huge Group\u2019s share price has hit lows not seen since March 2014 following a wave of retrenchments at the company, but CEO James Herbst says this is an opportunity for investors.<\/p>\n\n\n\n

The company announced job cuts and leadership changes at the start of September as part of a portfolio-wide productivity and efficiency enhancement initiative. Many top managers were retrenched.<\/p>\n\n\n\n

However, the company said it recently amalgamated the workforces of Huge Connect, Huge Platforms, and Huge TNS to \u201calign with current business and economic conditions.\u201d<\/p>\n\n\n\n

The company said separation agreements were concluded with employees who were affected by the process.<\/p>\n\n\n\n

While it did not reveal how many people were let go, it said the retrenchments would result in cost savings of around R16 million in the current 12-month period.<\/p>\n\n\n\n

That figure is after accounting for separation costs. For each subsequent 12-month period, the savings are expected to be roughly R32 million.<\/p>\n\n\n\n

Huge Group posted a poor financial performance in its 2025 financial year, recording an operating loss of R61.5 million after an operating profit of R35.4 million in 2024.<\/p>\n\n\n\n

However, during a showcase as part of the JSE Investment Forum on 7 October 2025, Herbst said Huge Group\u2019s portfolio of companies offers tremendous value.<\/p>\n\n\n\n

Herbst said that the company has grown from a single operating company to an investment entity listed on the main board of the Johannesburg Stock Exchange (JSE).<\/p>\n\n\n\n

It has also grown from having two companies in its investment portfolio to 19 companies worth nearly R1.5 billion, with a reported net asset value of R929 million.<\/p>\n\n\n\n

\u201cHerein, the very big opportunity is that we have a market cap of R150 million at a share price of 87 cents,\u201d said Herbst.<\/p>\n\n\n\n

\u201cNow what that suggests is that we are trading at a significant discount to our underlying portfolio value of around 94%.\u201d<\/p>\n\n\n\n

Huge Group\u2019s Tencent moment<\/h2>\n\n\n\n
\"\"<\/figure>\n\n\n\n

To the sceptics who don\u2019t believe their reported net asset value numbers, for which Herbst said there was no reason, he said they still have a demonstrable track record of creating value.<\/p>\n\n\n\n

\u201cIn 2015, the fair value of our portfolio was R37 million, and today it\u2019s valued at R1.5 billion. That\u2019s a 40-fold increase in net asset value over a decade,\u201d he said.<\/p>\n\n\n\n

Herbst highlighted four of the company\u2019s largest investments: Huge TNS, Huge Connect, Huge Distribution, and Huge NXTGN.<\/p>\n\n\n\n

He said Huge TNS competes with companies like Vox Telecom and Afrihost, providing connectivity to the consumer market through over 800 business partners and resellers.<\/p>\n\n\n\n

Huge Connect processes card transactions in locations like restaurants, petrol stations, and Pick n Pay with 600,000 SIMs installed across various devices in South Africa. <\/p>\n\n\n\n

Huge Distribution imports and supplies yellow metal, technology equipment, and renewable energy equipment within South Africa and across the continent.<\/p>\n\n\n\n

Herbst said Huge Distribution benefits from supplying premium renewable energy brands into the broader African market, where relationships are key.<\/p>\n\n\n\n

He said a R30 million capital injection into Huge Distribution in September last year doubled its revenue from R25 million to R53 million in the remaining five months of the financial year.<\/p>\n\n\n\n

Its revenue then grew further to R62 million in the subsequent seven months. Herbst said this translates into R20 million worth of additional free cash flow, worth R0.75 to R1.25 per Huge Group share.<\/p>\n\n\n\n

As for Huge NXTGN, Herbst said it was a very exciting opportunity that is poised to be their \u201cTencent moment\u201d.<\/p>\n\n\n\n

This is a reference to the phenomenal success of Naspers\u2019 2001 investment into a young Chinese tech company \u2014 Tencent \u2014 that has reaped extraordinary dividends.<\/p>\n\n\n\n

Herbst explained that Huge NXTGN was acquired out of Virgin Mobile’s business rescue. However, their plan was not to relaunch a mobile virtual network operator but to use it as an enabling platform.<\/p>\n\n\n\n

He said Huge NXTGN holds a tier-one telco platform and successfully migrated Pick n Pay mobile and Boxercom mobile from their historical platform providers to its platform in October last year.<\/p>\n\n\n\n

Huge Group’s share price since 2014<\/h2>\n\n\n\n
\"\"<\/figure>\n","protected":false},"excerpt":{"rendered":"

Huge Group’s share price has hit lows not seen since March 2014 following a wave of retrenchments at the company, but CEO James Herbst says this is an opportunity for investors.<\/p>\n","protected":false},"author":15,"featured_media":404795,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[80335],"tags":[1425,1399,963],"class_list":["post-614716","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-douglas-reed","tag-huge-group","tag-james-herbst"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/614716"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=614716"}],"version-history":[{"count":2,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/614716\/revisions"}],"predecessor-version":[{"id":615101,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/614716\/revisions\/615101"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/404795"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=614716"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=614716"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=614716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}