Powerfleet is closer to having a net profit (JSE: PWR)

But they aren’t there yet

Thanks to a quieter day of news, we can actually dig into the Powerfleet numbers in more detail. The company is listed in the US, so the reporting is in the 10-Q format on the SEC website. They don’t give an additional narrative on SENS to help South African investors, so you have to go digging.

One of the things you’ll find is the company referring to itself as an “Artificial Intelligence-of-Things solutions provider” – a truly remarkable example of throwing darts at the tech buzzword wall and seeing what sticks. For all the fanciness, they are essentially a fleet management and telematics business.

The focus in recent times has been bedding down acquisitions and growing to the point where the debt costs are covered. They are getting closer, with third quarter revenue up 6.6% to $113 million. Product revenue was down 9.3% and services revenue was up 11.4%. That’s a positive mix effect on gross margin, as the margin on products was 31.6% and on services was 61.0%. This is similar to what you’ll see play out at the biggest tech names in the world, like Apple.

Operating expenses have reduced from $60.0 million to $56.3 million (mainly due to non-recurring acquisition-related expenses in the base period), so they’ve now moved from an operating loss of $1.2 million to operating profit of $6.4 million. Nice!

The hurdle remains the interest expense, which decreased from $7.9 million to $6.8 million. This leaves them with a loss before tax of $0.4 million, which is much better than the net loss of $10.8 million in the comparable quarter.

There’s a large tax expense despite the loss before tax, so the net loss after tax is $3.4 million. That’s still much better than $14.3 million in the comparable period.

The group appears to be sufficiently capitalised for now at least, so they need to keep ramping up their growth and lifting their head above water from a debt-servicing cost perspective.

It’s easier to break through a Trellidor than it is to turn that business around (JSE: TRL)

And to the credit of their products, that makes it very hard indeed

Trellidor released a trading statement for the six months ended 31 December 2025. It’s never good when the first sentence of the announcement starts like this: “Addressing the erosion in shareholder value…”

It’s been a tough few years.

It feels like the problems really started with the court case that went against them in a big way a few years ago. It related to an old employee dispute and ended up being a highly expensive setback for the business (over R32 million).

Another issue is that demand in South Africa has been under pressure, which in my view is due to two things: (1) people are living in complexes and estates that don’t need security doors to nearly the same extent as standalone houses, and (2) there are cheaper security alternatives on the market.

It may surprise you that recent periods were driven mainly by the UK business, where they earned decent project revenue as businesses in that region deal with an increase in the crime rate. Project fees are lumpy though, with the latest period showing you what happens when the lumpy revenue goes away.

As the final precursor to revealing just how bad this period was, I must note that Trellidor has implemented cost saving initiatives that aren’t in these numbers. They will come through in the second half of FY26 and the full year ended June 2027.

Brace yourself for the HEPS guidance: a decrease of between 95.97% and 99.87%! Or, in a way that is easier to understand, HEPS will be between 0.01 cents and 1.19 cents vs. 29.6 cents in the comparable period. In other words, the company was barely profitable in this period.

The share price is R1.96, so I think we can agree that this is an unsustainable Price/Earnings multiple. The announcement came out after the market closed on Tuesday, so the share price action will be on Wednesday.

I think it’s hard to see how this doesn’t end in a buyout offer from a plucky operator who goes in and makes sweeping changes.

But what do you think? Vote in the poll below:

As expected, Standard Bank isn’t trying to acquire other local banks (JSE: SBK)

They’ve now clarified the position

Eyebrows were raised by recent SENS announcements that noted Standard Bank building up positions of 5% or more in other large banking groups. I strongly suspected that this related to Standard Bank’s underlying investment groups, rather than a group strategy to go and acquire minority stakes in competing banks.

Sure enough, Standard Bank has confirmed that subsidiaries Melville Douglas Investment Management, Liberty Group and Standard Bank Jersey hold equity securities in JSE-listed companies as part of the ordinary course of business. Standard Bank needs to aggregate these holdings to test if they’ve gone through a 5% ownership threshold in any locally listed companies, as this threshold triggers an announcement.

In other words, you can expect to see this coming through more often – and it doesn’t mean that Standard Bank is trying to acquire competitors, or other random companies!

Nibbles:

• Director dealings:
  • Mark Barnes has sold R23 million worth of shares in Purple Group (JSE: PPE). The announcement notes that he intends to “start diversifying his investments” – so it seems that you can expect to see more of this.

• Coronation (JSE: CML) has appointed Aimee Rhoda as the CFO of the group. This is an internal appointment, with Rhoda having joined the group all the way back in 2007. It’s always good to see this kind of institutional memory coming through.

• With lots of chatter around RMB Holdings (JSE: RMH) and the offer for shares by AttBid (a consortium of Atterbury and the brothers who founded WeBuyCars (JSE: WBC)), it’s not surprising to see that Peresec Prime Brokers has a 5.04% stake in RMB Holdings. Peresec is often involved where there are corporate actions. It would be nice to know who really sits behind this stake…

• I don’t normally comment on institutional investors buying and selling shares, as this happens all the time, and for many reasons. But sometimes, there’s a smaller company where a respected boutique asset manager is doing something with the shares. In such a case, that’s worth noting. So, in that spirit, I’ll point out that Orion Minerals (JSE: ORN) announced that Fairtree Asset Management sold shares worth R8 million and is therefore no longer a “substantial holder” as defined. The share price has run incredibly hard this year and I don’t blame them for taking profit.

• There are a couple of notable independent director changes at Nedbank (JSE: NED). Hubert Brody is retiring as Lead Independent Director after a nine-year term on the board. Brian Dames is also retiring, having served an extended term that started in 2014. Peter Wharton-Hood, the CEO of Life Healthcare (JSE: LHC), is joining as an independent director. It’s unusual (but not unheard of) to see a current CEO of a listed company join the board of another company.

• Here’s another corporate governance announcement that is worth including: British American Tobacco (JSE: BAT) has extended Luc Jobin’s tenure as Chair for up to two years. This is a deviation from the UK Corporate Governance Code’s recommendation of a nine-year term, but the company doesn’t want to introduce uncertainty into the current “transformation agenda” at the group. In other words, they want to be left in peace to execute the current strategy for at least the next two years.

• Africa Bitcoin Corporation (JSE: BAC) has bought the bitcoin dip. They’ve acquired another 1.3554 bitcoin for R1.51 million at an average price of R1.11 million per bitcoin. My concern is they appear to have at least partially funded it through debt. They’ve now put R7.3 million into bitcoin at an average price of R1.6 million per bitcoin. The current price is R1.07 million per bitcoin, so that position is properly in the red thus far.