Keep an eye on the Pepkor (JSE: PPH) share price today (31 March) – they are hosting a Capital Markets Day. I will write about this in Ghost Bites when the materials become available.
A challenging year for Bell Equipment (JSE: BEL)
But the balance sheet is looking much better than before
In the year ended December 2025, Bell Equipment saw revenue decline by 5% and operating profit fall by 23%. HEPS was down 11% and the dividend per share took a nasty 38% tumble.
Perhaps the only highlight here is that inventory fell by 7%, with 199 days inventory vs. 201 days in the prior period. Trade receivables were down 8%, while trade payables increased by 17%. This means that they unlocked R476 million from working capital in this period.
But despite this, cash generated from operations fell by 44% year-on-year. This is because they unlocked R1.2 billion in working capital in the prior period! The past two years have been all about improving the balance sheet at Bell and getting the cash flow right.
Importantly, Bell is now in a net cash position instead of a net debt position! That’s a really big deal.
Excluding the working capital improvements, cash operating profit fell by 24% to R783 million. This is an indication of the underlying performance in the period.
An incredibly hostile global trade environment made things difficult for Bell. The manufacturing facilities in South Africa and Germany are far away from many customers. This leads to a complex supply chain. Once you layer on the tariff pressures, it’s a really difficult time for the company.
The geopolitical issues go beyond just the tariffs that the US is putting on South Africa and Europe. There is now greater competition in ex-US global markets due to products being forced into them by the US trade policy.
The South African operations saw an 11.3% decline in external dealer sales. This business now contributes 20.6% of group sales. The reduced volumes led to a drop in operating profit from R477.2 million to R218.7 million. In addition to the geopolitical minefield they had to navigate over this period, they also suffered supply chain failures that were outside of their control.
The tariffs are also a feature of the performance in Europe, where sales volumes fell by 17.9%. This business is now 28.5% of group sales, down significantly from 33.1% in the prior period. Bell Europe saw operating profit drop from R159.4 million to R94.8 million.
In the direct sales business (the South Africa (BESSA) and Zambia dealerships), Bell saw a sales improvement of 6.3%. This division is now 42.6% of group sales. But even then, operating profit fell from R247.8 million to R186.5 million.
Overall, Bell Equipment has done a decent job of making money in tough conditions. The balance sheet is in a much better place than before. With a more certain geopolitical environment, the company could see a resurgence in its performance.
Are you willing to buy this story? Before answering the poll, here’s the 12-month share price chart for context:
MAS shareholders jumped at the PK Investments bid (JSE: MAS)
The price of R21 per share is a premium to current market levels
MAS announced the results of the bid by PK Investments to acquire MAS shares.
Although the pricing of the offer was set to vary based on demand, MAS shareholders were willing to take a chance. Selling offers were in excess of twice the bid size, which means that over 80 million shares were offered to PK Investments.
The clearing price was thus set at R21 per share, a premium to the latest closing price of R19.49 per share. The final volume will still be 40 million shares.
This means that over R840 million will change hands.
Sirius Real Estate has acquired another defence asset in Germany (JSE: SRE)
They are executing a strategy that has been clearly articulated
Sirius Real Estate is pursuing a focused strategy in Europe.
If you would like to understand it in detail, I strongly recommend you listen to this podcast that I recorded with the Sirius management team in December. Andrew Coombs (CEO), Chris Bowman (CFO) and Tariq Khader (CIO) took me through the defence strategy in Germany in particular, along with the dynamics of the UK market.
Their latest deal is to acquire a business park in Germany for €93.4 million. The main tenant is Rheinmetall, a defence company that became a household name (in finance circles) in the past year or so.
The properties themselves aren’t always specialised. It’s more about the location. The city of Kiel is a maritime industrial defence and transport hub, as the geographical position leads directly into the Baltic Sea.
The net initial yield is 8.2% and the weighted average lease expiry is 4 years. The property is 98.5% occupied. That doesn’t sound like there’s much of an asset management opportunity to improve returns, but there’s a 955 sqm development on site that is due to complete in 2027. This will provide a rental uplift, with a tenant already lined up with a 10-year lease.
They have deployed over €200 million into defence-related acquisitions in Germany and the UK over the past 12 months.
Nibbles:
- Director dealings:
- A director of Richemont (JSE: CFR) bought shares worth nearly R8.4 million. Directors who buy/sell shares are never named in Richemont announcements – Swiss privacy and all that jazz!
- A director of Thungela Resources (JSE: TGA) sold shares worth nearly R1.7 million.
- A director of Momentum (JSE: MTM) bought shares worth R329k.
- A director of Zeda (JSE: ZZD) bought shares worth R198k.
- A director of York Timber (JSE: YRK) bought shares worth just over R49k.
- FirstRand (JSE: FSR) announced a reorganisation of segments at FNB and a new CEO. A Retail and Business Banking segment will service middle-income individuals and SMEs, led by Lytania Johnson. She will also become the CEO of FNB, replacing Harry Kellan who will take early retirement in 2026. A Private Banking and Wealth Management segment will target higher income clients, with Sizwe Nxedlana continuing to lead that business. The Commercial and Corporate Bank, run by Muneer Ismail, will service enterprise and public sector clients. A further update is that Gert Kruger, who has been the Group Chief Risk Officer since 2017, will take the Group Chief Operating Officer role.
- Sea Harvest’s (JSE: SHG) disposal of Ladismith Cheese is going to take a bit longer than planned. Due to various suspensive conditions that still need to be fulfilled, including approval by the Competition Commission, the parties have extended the fulfilment date to 30 June 2026.
- Wesizwe Platinum (JSE: WEZ) announced a change in strategy. They’ve discontinued the previously-communicated phased ramp-up approach. The revised strategy is to pursue a single-stage ramp-up to a 3.5 Mtpa operation. They are undertaking a comprehensive optimisation study to support this strategy, due for release in the 2026 financial year.
- RMB Holdings (JSE: RMH) announced that AttBid and Atterbury Property Fund have bought more shares in the company, taking their holdings to 32.77% and 9.67% respectively. The aggregate holding of the parties is thus 42.44%.
- TeleMasters Holdings (JSE: TLM) announced results for the six months to December 2025. The market cap is only R113 million and there’s little or no liquidity in this stock, so it just gets a mention down here. Revenue increased by 13.6%, operating profit was up 7% and HEPS shot up by 94%. The dividend per share increased by 150% to 0.50 cents per share. For context, the current share price (which hasn’t traded in a while) is R1.97.
- Labat Africa (JSE: LAB) completed the transfer of 400 million shares (at R0.10 per share) to pay for the acquisition of Ahnamu. The share price has other ideas, dropping as low as R0.03!
- Lighthouse Properties (JSE: LTE) announced the results of the scrip distribution alternative. Out of a maximum of 78.8 million new shares, elections by shareholders led to almost 23.4 million additional shares being issued. This is dilutive to investors over time, but it does retain cash on the company balance sheet.
- This is more of a corporate housekeeping update than anything else, but PBT Holdings (JSE: PBG) has scheduled a meeting of shareholders align the MOI to the simplified JSE Listings Requirements. The associated circular has been posted.
- André van der Veer will retire from the board of NEPI Rockcastle (JSE: NRP) at the upcoming AGM. He’s been on the board since 2017 and has played a major role in the recycling and deployment of capital over nearly the past decade.
