Labat CEO Brian van Rooyen has resigned as CEO of the JSE-listed group as it announces a shift in strategy by moving into the IT space through the acquisition of Classic International Trading. He will be replaced by Irfaan Mohammed, who says the group will be reviewing the risks associated with the cannabis sector and decide on the appropriate way forward.
Brian van Rooyen announced his resignation at the Labat AGM on 23 January 2024, according to a statement on the JSE’s SENS service. He is stepping down after leading the company through a raft of changes, including a dual listing on the Frankfort Stock Exchange. He will remain a director.
He will be replaced by Irfaan Mohammed, an IT veteran with 20 years of experience in the industry. Labat chairperson. Ms RM Majiedt also resigned at the AGM and Hershel Maasdorp, head of Cannafrica, was appointed to the board as was Farook Paruk.
The board shuffle follows the lifting of the suspension in the trading of Labat shares by the JSE, a precondition for its acquisition of Classic International Trading for R16,75 million to be paid for in Labat shares.
EXCERPT FROM OUTGOING CEO BRIAN VAN ROOYEN’S OUTGOING ADDRESS
“Over the past five years, we have focused considerable effort and resources on the medicinal cannabis and healthcare sector. We've been at the forefront of this industry, working tirelessly to navigate regulatory hurdles,build a strong market presence, and contribute to the development of a legal cannabis economy in South Africa.
Our research and development work though our subsidiary companies in the medicinal cannabis value chain has resulted in significant new value in our healthcare business. The intellectual property, knowledge infrastructure and data sets on South African cannabis consumption is the envy of many across the world.
The Cannafrica retail chain of self-care and wellness outlets grew to a national footprint of 104 stores at the end of the 2024 calendar year…the largest chain of CBD Dispensaries in the southern hemisphere and 4 th largest, globally. Our progress has been substantial, and we are proud of the groundwork we've laid and the jobs we've created. We have reflected on our journey, and are disheartened by the lack of enabling regulatory reform in South Africa.
The slow pace at which changes are being implemented by the state and its relevant agencies has resulted in the closure of many enterprises in the sector, and has left numerous licensed cultivation facilities dormant aftersignificant capital investments which is north of R1B. Many of you are aware that another locally listed cannabis company (CiloCybin) announced last week that they are withdrawing from the South African cannabis market and instead focusing on international opportunities such as Australia.
The delay in the implementation of a sound regulatory framework have made it increasingly difficult to move forward with the confidence that theinherent financial returns for our shareholders' demand with the desired predictability that we all deserve.
As part of the Board's mandate it will continue reviewing the risks associated with Labat's continued participation in the cannabis sector and will make appropriate decisions in this regard in the near future. In the meantime, the Board has decided to strategically diversify Labat's business interests with the integration of a fintech sector into the business, which can only bode well for Labat Africa and all shareholders given the company's historic track record in the technology sector.
In line with this strategic shift, I am excited to announce the acquisition of Classic International Trading Pty Ltd, which will play a pivotal role in Labat's evolution.This acquisition has already brought significant benefits to the company and will continue to bring new opportunities to integrate valuable technology and IT assets, positioning Labat Africa for future growth in the digital age.
We believe this move will unlock new pathways to innovation and create exciting prospects for our stakeholders. These recent decisions made with the future of Labat Africa in mind. It will allow us to protect shareholder value while minimizing the risks that the current regulatory environment poses.We are committed to ensuring the long-term success of the company and will continue to explore strategic alternatives that will position Labat for growth in new areas.
It is with a great sense of pride that I introduce Mr. Irfaan Mohammed as CEO. Irfaan brings over 20 years of experience in the ICT sector, and I am confident that his leadership and expertise will guide Labat Africa into an exciting new chapter of growth."
EXCERPT FROM OPENING STATEMENT FROM IRFAAN MOHAMMED (INCOMING-CEO)
"Labat Africa's resilience and adaptability have been key to its long-standing tenure, particularly in its ability to remain listed on the JSE and to continue to evolve in an ever-changing economic landscape, through global economic recessions, through the Covid pandemic and in the period since the end of lockdown.
One of the most remarkable aspects of Labat's journey has been its bold and maverick approach to entering and navigating the cannabis sector. As we embark on an exciting new chapter, we are thrilled to embrace a bold focus on technology and innovation, starting with the strategic integration of Classic International into Labat Africa. This transformative step marks a pivotal moment as we position ourselves for a future defined by cutting-edge technologies such as artificial intelligence (AI) and advanced IT infrastructure.
In today's world, data and AI are becoming indispensable drivers of decision-making, efficiency, and innovation, reshaping industries and creating unprecedented opportunities.
By entering the dynamic and fast-growing Fintech space through Classic International's valuable assets and expertise, we are unlocking significant opportunities to diversify our revenue streams, enhance market leadership, and drive sustainable long-term growth.
This evolution underscores our commitment to staying ahead in a rapidly evolving digital world, delivering value to our shareholders, and empowering our stakeholders in new and innovative ways. The Board and I will deliberate on an exciting pipeline of acquisitions that will add strategic value to Labat and its Shareholders in the medium term. “