Is this the bottom for Accelerate Property Fund? (JSE: APF)
This remains a highly speculative play
The concept of a “speculative” play is exactly that – a punt that carries a high risk of loss, while offering potentially substantial rewards. Accelerate Property Fund sits firmly in that bucket, with all eyes on the Fourways Mall improvement plan and whether they can pull it off. In the meantime, they’ve been selling assets and raising capital, all while trying to put a legacy related party issue to bed.
In a trading statement for the year ended March 2025 (and these are now quite outdated numbers, the company reminded the market that there’s a long way to go. There’s obviously no distribution for the period, as the balance sheet is nowhere near that point. More importantly, the company suffered a distributable loss of between R70.6 million and R72.0 million, a huge negative swing vs. the comparable distributable loss of R9.4 million.
This is based on the removal of headlease income on related party transactions, higher operating expenses and interest expenses.
If there’s any truth to the saying that the day is darkest before the dawn, then Accelerate will be one to watch. The risks remain extremely high.
AECI turnaround is showing success (JSE: AFE)
But they are running a bit behind plan
AECI has released results for the six months to June 2025. This is important, as the group is currently making its way through a turnaround. The good news is that despite revenue from continuing operations dipping by 2%, all the important profitability measures have headed firmly in the right way.
For example, EBITDA from continuing operations jumped by 24% and HEPS is up by a whopping 132% to 604 cents per share. To add to the party, net debt is down from R5.1 billion to R2.9 billion, which is good enough to support a return to paying interim dividends! Admittedly only 100 cents per share and thus a modest payout ratio, but that dividend is still a sign of confidence.
There are more disposals of businesses in the pipeline, with the company having recently announced deals to offload a couple of the international operations.
On a segmental view, it’s clear that AECI Mining did the heavy lifting. This is thankfully the largest segment, so this is where the company wants to see growth in EBITDA margin from 13% to 15%. AECI Chemicals suffered a margin decline from 11% to 7%, with ongoing demand and pricing pressures.
No turnaround is a smooth ride and this one isn’t any different. Although there’s clearly been early success here, they’ve suffered unrecoverable lost production volumes at the Modderfontein facility and this puts them behind where they want to be for the full year goal. With the share price up 25% year-to-date though, the market doesn’t seem to be too unhappy with the progress.
Astoria is reducing its stake in Outdoor Investment Holdings (JSE: ARA)
They are unlocking R106 million through this process
Astoria has an important investment in Outdoor Investment Holdings (OIH), which holds specialist retail business Safari and Outdoor, along with various wholesale businesses and a chain of mega pet stores.
The company has announced that OIH will be repurchasing some shares that are currently held by Astoria, which means that cash of R106 million will flow to the listed group. This will reduce Astoria’s stake to 33.15%, with the rest of the shares in OIH held by management and the founders of OIH.
The cash will be invested in short-term instruments as the group changes its portfolio balance. With the market cap at around R490 million, that’s a decent chunk sitting in cash.
Brimstone benefits from Sea Harvest (JSE: BRT)
I just wish they would use NAV for trading statements
Most investment holding companies use NAV as the basis for their trading statements. There’s a good reason for this, as HEPS is only appropriate for companies that control the majority of their assets and thus consolidate their earnings. Investment holding companies tend to have few if any controlling stakes, hence it’s better to go the route of focusing on NAV.
Brimstone continues to stubbornly use HEPS, even though they have a page on their website called “Intrinsic Value” that gets investors thinking about the company from a NAV perspective.
Sea Harvest (JSE: SHG) is the second largest asset in Brimstone (measured by value). The strong performance by the business has thus boosted Brimstone’s HEPS, contributing to the expected increase of between 32% and 42% for the six months to June 2025.
When results are released on 2 September, investors will have a better view on NAV.
Glencore has raised long-term EBIT guidance, but is behind on copper production (JSE: GLN)
The pressure is being felt in own sourced copper production
Although there are signs of positive momentum in the Glencore share price (up 7.4% in the past month), the stock is down 11% year-to-date and 26% over 12 months. Glencore’s basket of commodities includes the likes of coal, which has come under pressure pressure in recent times.
Copper is the prize asset in the world of mining at the moment and Glencore is heavily invested in the commodity. In fact, they even disclose something called copper equivalent production, in which they take all the underlying commodities that they produce and then do some maths to show total group production as though it was all in copper. On that basis, group copper equivalent production is up 5% year-on-year for the six months to June.
But if we dig deeper, we find that copper itself suffered a 26% drop in own sourced production, with pressure on head grades and recoveries. There were sharp negative moves in nickel and gold as well, along with ferrochrome based on the pressures that we already know about from Glencore’s partner Merafe.
The big positive move was in steelmaking coal, which isn’t a surprise as it includes the acquisition of Elk Valley Resources back in July 2024. In other words, the acquisition isn’t in the base period at all and is fully in this one. On a far more comparable basis, cobalt, zinc and lead all went in the right direction, as did energy coal.
The copper pressure has led to a decrease in the upper end of full-year guidance, with all to play for in the second half, which is expected to contribute 60% of annual production. This will hopefully also improve unit costs, which moved sharply in the wrong direction for copper (and in the right direction for coal).
Despite the near-term noise, Glencore has revised their guidance for through the cycle long-term Marketing Adjusted EBIT (yes, it’s a mouthful). They’ve increased the midpoint of guidance by 16% from $2.5 billion to $2.9 billion. This excludes Viterra from the previous guidance, as that asset has now been disposed of.
Mining is a tough gig, which is why investors often prefer the large diversified players like Glencore. But even then, the word “diversified” needs to be approached with caution, as it all comes down to the underlying commodities. If it wasn’t for the steelmaking coal production that they acquired through the Elk Valley deal, it looks like this would’ve been a nasty period.
Orion Minerals looks ahead to Christmas 2026 (JSE: ORN)
This is a fun way of putting it
With Orion Minerals due to present on Unlock the Stock at 12pm on Thursday 31 July (if you read this in time, you can still sign up here), it’s helpful that they’ve released a quarterly activities report.
Remember, this company is firmly in development phase, with definitive feasibility studies for both the Prieska Copper Zinc Mine and the Okiep Copper Project having been released in March 2025. The last quarter has thus been focused on project development and funding conversations.
With a new CEO in place, they’ve cleverly promised “concentrate by Christmas 2026” – a nice way to remember the timing of the plan to achieve bulk concentrate production from phase 1 at Prieska Copper Zinc Mine by the end of next year. To make that happen, the company is engaging with potential funding parties for offtake agreements. They are also talking to the IDC.
The Okiep Copper Project is second in line, with the current focus being on optimisation of the plan for that asset.
The company recently raised A$5.8 million in equity through a combination of fresh capital and the conversion of shareholder loans. They are also looking to raise A$4 million through a share purchase plan being offered to the current shareholder base.
Junior mining share prices tend to be volatile things and Orion Minerals is no different, down 32% year-to-date.
Nibbles:
- Director dealings:
- Here’s a substantial move in the Brait (JSE: BAT) register, with Christo Wiese selling R95 million worth of shares held by Titan Premier Investments in an off-market trade. We know that Oryx Partners, who has a management agreement with Titan that includes a cession of voting rights, has bought R43 million worth of shares. There’s no indication in the announcement of where the rest went.
- There’s yet more selling of Santova (JSE: SNV) shares by a director, this time to the value of R767k.
- The CEO of Sirius Real Estate (JSE: SRE) bought shares worth almost R700k.
- A director of Octodec (JSE: OCT) bought shares worth R26k.
- The CEO of Vunani (JSE: VUN) is still on the bid, this time picking up shares worth R9k.
- There’s a very small value unlock at RMB Holdings (JSE: RMH), the poster child for how difficult it can be to actually sell off assets and delist a company when there are complicated shareholder relationships further down. It’s not much, but it looks like R22.2 million from a disposal of a warehouse in the Integer stable will be flowing up to the listed company in the form of shareholder loan repayments. The market cap of the group is R557 million, so this doesn’t make much of a dent.
- AYO Technology (JSE: AYO) has released the circular dealing with the offer by Sekunjalo and concert parties to take the company private at 52 cents per share. Here’s my favorite line that I spotted while skimming it: “Sekunjalo is of the view that if AYO is given time away from public scepticism, the intrinsic value of the AYO Group can be increased over time…” – it’s worth noting that shareholders who don’t accept the offer will hold unlisted shares. Good luck.
- The CEO of Putprop (JSE: PPR), Bruno Carleo, will be retiring after 37 years with the company. The company hasn’t named a replacement yet.
