Spin-offs of partnership with Peu evident in workforce transformation and changes at management level

For the second year running, transport company Super Group has taken the top spot in the Empowerdex survey in its sector.

That should not be too surprising. Super Group earned last year's victory on the back of a well-structured transaction with Peter Malungani's Peu Group, which landed Peu a 25,1% stake in the company. During 2005 there was little change to the equity stake - ensuring the company did not lose its position.

Super Group scored 12% in the survey for ownership.

However, it should be borne in mind that Imperial Holdings - which has concluded an exciting empowerment deal with Popo Molefe and Valli Moosa - is not considered a transport company in this survey, thus it does not feature in this sector. Otherwise, the rankings for the sector would have looked different.

The fairytale story of Peu and Super Group is well-documented, from the day the two partnered in FleetAfrica eight years ago, to the present situation where Peu has converted its FleetAfrica stake into Super Group ordinary shares.

What has earned this transaction respect is that it goes beyond simply shaking hands during the deal-signing ceremony. Super Group has incorporated its Peu partners in the board and its various subcommittees.

Peu's influence can also be traced in the workforce transformation and the changes at management level at Super Group.

Super Group investor relations executive Karen Bell says the two companies had a long courtship. "We really wanted to do the deal with Peu. The deal was not only good for the company, but it was good for the country as well."

Following on from the deal, Malungani took over as Super Group chairman in 2005. Two other Peu executives - Bheki Shongwe and Busi Tshili - joined the board as nonexecutive directors.

The deal allowed Peu to appoint a minimum of 25% of Super Group's board of directors and to participate on all committees that influence the operations and strategies of Super Group.

"It was a board decision from the beginning that Peu must fully participate in the business to add shareholder value. So, it was on that basis; people were appointed to the (Super Group) board on merit," says Bell.

Super Group estimates that another 14% of its shares are in black hands through pension funds and other investment vehicles.

But the Peu deal is the most exciting holding in the company.

Bell says it would be difficult to quantify - in monetary terms - whether the empowerment deal is bearing fruit for both Super Group and Peu at the moment. But she says the partnership has driven transformation and skills development in the company. Because of the lag in deal flow in the company, the deal was not expected to result in new contracts for Super Group from day one.

She points out that the board has transformed from 8% black representation in 2004 to 27% representation in 2005. Also, black representation at the top and senior management level has risen to 14% in 2005 from about 9% in 2004. The representation of previously disadvantaged individuals in top and senior management has grown to 21% in 2005 from 16% in 2004.

"The deal with Peu has improved the face of the company across the board," says Bell.

With an overall score of 43,51%, Super Group is ranked 47th when including all sectors.

Bell says there are a number of areas where the company can improve. These include corporate social investment and improving the representation in management of people who were previously disadvantaged.