Delta Property Fund has entered into a sale agreement with Vivid Yellow Investments, to dispose of 101 De Korte Street in Braamfontein for a cash consideration of R25 million. The disposal is a category 2 transaction and as such does not require shareholder approval.
Astoria Investments has concluded the sale of its 49% interest in ISA Carstens, announced in January 2025. There was no adjustment to the purchase consideration of R66,8 million.
Unlisted Companies
Cape Town-based startup Open Access Energy (OAE) has raised US$1,8 million in a seed funding round backed by E3 Capital, Equator and Factor E. OAE is focused on using AI to enable digital infrastructure for electricity trading – its flagship product, EnergyPro, is a cloud-based software platform that enables energy wheeling, a process of delivering electricity from decentralised renewable producers, to consumers via existing transmission infrastructure. The investment will enable AOE to scale its platform and support the growing demand for flexible decentralised energy infrastructure in South Africa.
Wetility, a South African solar-as-a-service provider, has closed a R500 million structured capital agreement with Jaltech, a funder of solar energy projects in South Africa. The funding structure comprises a tailored blend of senior and equity capital, which will enable Wetility to provide clean, reliable and cost-effective energy to homes and businesses. In a statement, the parties believe the deal will serve as a blueprint for future funding rounds to support a national scale-up strategy and so enable the deployment of solar energy to ‘hundreds of thousands more homes and businesses over the coming year.’
In terms of its Dividend Reinvestment Plan (DRIP) Hammerson plc has, on behalf of shareholders electing this option, purchased 158,298 shares in the market at an average price of £2.84 per share and 154,921 shares in the local market at an average price of R70.22 per share.
Following the placement of 23,768,040 MTN shares in an accelerated book build, MTN Zakhele Futhi (RF), MTN’s B-BBEE vehicle, intends to declare a special dividend of at least R15 per MTNZF share.
Ninety One plc will issue 13,675,595 consideration shares to Sanlam in terms of the deal announced in November 2024 which sees the transfer of Sanlam Investment Management to Ninety One. The consideration represents a c.1.5% equity stake in Ninety One.
The JSE approved the transfer of the listing of Brimstone Investment Corporation to the General Segment of Main Board with effect from 17 June 2025. The listing requirements in this segment are less onerous for the smaller and mid-cap firms.
Following shareholder approval Gemfields has successfully raised US$30 million in a rights issue of 556,203,396 new shares. The rights issue was fully underwritten by Gemfields’ two largest shareholders, Assore International and Rational Expectations. Valid acceptances for 458,330,512 new shares were received representing c.82.40% of the total number of new shares to be issued. The remaining 97,87 million shares will be subscribed for by the underwriters.
Caxton and CTP Publishers and Printers have repurchased 23,911 shares for a total consideration of R339,536 in terms of the Odd Lot Offer to shareholders announced in April 2025. The shares have been cancelled and reinstated as unissued share capital.
Southern Palladium has completed the allotment of 16 million new fully paid ordinary shares at A$0.50 per share, which raised A$8 million before costs. The shares were issued at a 10.5% premium to the 10-day VWAP of A$0.45 per share. The funds will be used to accelerate the Definitive Feasibility Study and near-term mine development activities at the Bengwenyama mine.
This week HomeChoice International plc shareholders approved the proposed change of name to Weaver Fintech, marking a major shift in the company’s focus and growth strategy. The decision comes as the company’s fintech division has emerged as its main engine of growth and profitability.
The JSE has released the names of those companies who have failed to submit annual financial statements within the three months period as stipulated in the Listing Requirements. These are: African Dawn Capital, Brikor, Efora Energy, Copper 360 and Visual International. The companies have until 30 June 2025 to do so, failing which their listings may be suspended.
This week the following companies announced the repurchase of shares:
Glencore has completed the US$1 billion share buyback programme announced on 19 February 2025 repurchasing 268,121,000 shares for treasury. The company now holds 1,292,409,041 shares in treasury and has 11,932,590,959 shares in issue (excluding treasury shares).
In its annual financial statements released in August 2024, South32 announced that it would increase its capital management programme by US$200 million, to be returned via an on-market share buy-back. This week 1,119,646 shares were repurchased at an aggregate cost of A$3,61 million.
In October 2024, Anheuser-Busch InBev announced a US$2 billion share buy-back programme to be executed within the next 12 months which will result in the repurchase of c.31,7 million shares. The shares acquired will be kept as treasury shares to fulfil future share delivery commitments under the group’s stock ownership plans. During the period 9 to 13 June 2025, the group repurchased 147,764 shares for €9,46 million.
Hammerson plc continued with its programme to purchase its ordinary shares up to a maximum consideration of £140 million. The sole purpose of the buyback programme is to reduce the company’s share capital. This week the company repurchased 306,193 shares at an average price per share of 293 pence for an aggregate £897,665.
In line with its share buyback programme announced in March 2024, British American Tobacco plc this week repurchased a further 443,168 shares at an average price of £36.06 per share for an aggregate £15,98 million.
During the period 9 to 13 June 2025, Prosus repurchased a further 5,135,094 Prosus shares for an aggregate €242,9 million and Naspers, a further 305,608 Naspers shares for a total consideration of R1,65 billion.
Two companies issued profit warnings this week: Vunani and Brikor.
During the week three companies issued or withdrew cautionary notices: Tongaat Hulett, PSV and Metrofile.
Globeleq has reached agreement with Norfund to acquire its 51% equity stake in Zambian company, Lunsemfwa Hydro Power Company which operates two hydroelectric power plants and is constructing a 20MW solar PV project. The remaining 49% is held by Wanda Gorge Investments. Financial terms of the deal were not disclosed. The deal represents Globeleq’s first investment in hydropower in Africa.
BetaLab, the innovation and incubation hub of Britam Holdings, has invested Ksh5 million in Kenyan fintech Oye. The investment aims to boost access to insurance and ease fuel costs for the country’s two million boda boda drivers.
In Morocco, H&S Invest Retail has announced a strategic merger with the MrBricolage Maroc Group. The deal is structured as the acquisition by H&S of a 47.5% stake from the Benjelloun Family, 37.5% from O Capital Group and the acquisition by Majid Benjelloun, its Managing Director, of an additional 5% stake to increase his final stake to 15%. Financial terms were not disclosed.
Etablissement Maurel & Prom S.A and Afentra plc have agreed to jointly acquire Etu Energias S.A.’s 10 interest in Block 3/05 and 13.33 interest in Block 3/05A located offshore in the Lower Congo Basin of Angola. Each party will pay an initial US$23 million for their 50% share plus and contingent consideration of up to $11 million.
PZ Cussons has sold its 50% stake in PZ Wilmar to Wilmar International for US$70 million. PZ Wilmar, a sustainable palm oil business in Nigeria, was formed as a joint venture in 2010 by PZ Cussons plc (UK) and Wilmar.
Nambia’s O&L Leisure has acquired two new hospitality properties – Le Mirage in the Sossusvlei area and Divava on the Kavango River. Financial terms of the deal were not disclosed, and the deal is still awaiting Namibian Competition Commission approval.
Fintech-focused investment firm, DisrupTech Ventures has made its first investment outside of Egypt – backing Nigerian startup, Winich Farms. The agtech focuses on improving marker access and financial inclusion for smallholder farmers in Nigeria. The funding is part of a Pre-Series A round.
British International Investment, the African Development Bank and the European Bank for Reconstruction and Development have announced that they are providing a total of US$ 479.1 million to Obelisk Solar Power SAE, a special-purpose vehicle incorporated in Egypt and owned by Scatec ASA. The blended financing will support the development of a 1.1 GW solar photovoltaic power plant integrated with a 200 MWh battery energy storage system in the country’s Nagaa Hammadi region.
Nigerian fintech, Hizo has raised US$100,000 in seed funding through a friends and family round that closed on 4 June. The investment was led by a prominent local investor.
The International Finance Corporation has announced a US$72 million debt package to Abydos Solar Project Company, a subsidiary of AMEA Power. The funding will be used to support Egypt’s first utility-scale battery energy storage system (BESS) through the integration of the 300MWh BESS into a newly commissioned 500MW solar photovoltaic power plant in Kom Ombo, Aswan Governorate which become operational in 2022.
Egyptian fintech, Octane has raised US$5,2 million in a funding round led by Shorooq Partners, Algebra Ventures and Elsewedy Capital. Octane, founded in 2022, provides a digital platform for fleet and on-road expense management.
It is a strange thought that an outsider may know more about the affairs of a company than the company’s own management team. However, this phenomenon is not uncommon in the M&A space, where comprehensive due diligences are undertaken by armies of experts hired by a purchaser to scrutinise every aspect of the business operations of a target company. The result is that a seller may reasonably believe that it can offer a warranty regarding the target, but the purchaser – after its due diligence – may be aware that the seller’s representation is not true. The practice of the purchaser remaining silent and accepting such a warranty despite knowing it is not actually true, in order to retain a claim for breach following closing, is referred to as “sandbagging”.
Historically, the term “sandbagging” is believed to refer to the practice of hitting an unsuspecting victim over the head with a sandbag before robbing them. Clearly, the spirit of the practice remains the same, despite the change in methodology over the years. Sandbagging within the M&A space is well fleshed out in other jurisdictions whose laws have evolved to address it, in one way or another. However, this concept has not yet been properly explored within South African law and remains a grey area.
South African contract law is informed by values such as Ubuntu, good faith, fairness and reasonableness. However, these values are not standalone requirements and must also be balanced against the need for certainty between parties and the equally recognised values that support the freedom to contract and to have such contracts be honoured.
Good faith and fairness
Consider a seller selling 100% of its shares in a target company. If the seller represents to the purchaser that the target complies with all applicable laws, despite knowing such representation is false, this is a misrepresentation. The law recognises that such conduct of the seller is in bad faith and offers various remedies to the purchaser. However, the situation differs where the purchaser, after conducting its due diligence, is aware of the target’s non-compliance, but the seller, acting in good faith and to the best of its knowledge, offers to warrant the target’s compliance. Arguably, it may be bad faith for a purchaser to agree to the warranty’s inclusion simply to have a claim for breach as soon as the contract is closed, particularly since the purchaser could seek protection from more appropriate legal mechanisms if it disclosed the non-compliance (such as an indemnity, or making the agreement conditional on such non-compliance being rectified). However, the law will not necessarily aid the seller for various reasons.
Firstly, a warranty is a representation made by the seller – not the purchaser. The purchaser is not responsible for the representations that the seller chooses to make, even if the seller is acting in good faith and is unaware of its misrepresentation. Secondly, there is no standalone requirement that contracts must be concluded in good faith, and merely concluding an agreement in bad faith will not render it unenforceable. The court would only set aside such a contract if, due to the bad faith of the purchaser, the enforcement of the terms of the contract would be so unreasonable and unfair that it would be against public policy and therefore unlawful, which is not a guarantee where sandbagging is involved.
Commercial and legal certainty
South African courts recognise the importance of commercial and legal certainty in the law of contract. Parties who negotiate, bargain and agree on something should be able to rely on such agreement, even if it is not entirely fair or reasonable. It is not unlawful to contract to your own detriment. This is particularly so where the contracting parties are sophisticated, well-advised and hold relatively equal bargaining power – as is often the case in the M&A space. In such a situation, the courts have previously shown that they are more reluctant to interfere with the terms of the contract, as it is assumed the parties had the opportunity to protect their position during negotiations. This creates the difficulty that, as there is no clear legal position on sandbagging in South Africa, it will be for the parties to regulate the position through agreement. If a seller offers a warranty but does not limit its liability, where the purchaser was aware of the falseness of such warranty, it is possible that the courts will not interfere with those terms.
The lack of specific legal rules dealing with sandbagging in South Africa means that the courts will likely apply general rules and principles if a case of sandbagging makes its way to a courtroom. The facts and circumstances of the matter will strongly influence the court’s decision. There may be greater sympathy for a seller with a weaker bargaining position and fewer resources than to the purchaser. However, the courts are likely to favour upholding the contractual terms where the bargaining positions and resources of the parties are relatively equal.
The upshot: there is uncertainty on the topic of sandbagging in South African M&A. Where there is legal uncertainty, it is up to the parties to take matters into their own hands and regulate the position contractually in order to manage risk. A seller may wish to include anti-sandbagging clauses in a contract to limit its liability where a purchaser has knowledge of the breach of warranty prior to the signature date. A purchaser, however, may want to refine the anti-sandbagging clause to reduce the parameters of such limitation. Ultimately, both sides must be firm in protecting their position contractually instead of relying on a court coming to their rescue.
Roxanna Valayathum is a Director and Keagan Hyslop an Associate in Corporate and Commercial | Cliffe Dekker Hofmeyr
This article first appeared in DealMakers, SA’s quarterly M&A publication.
Ten years on from the Paris Climate Accord of 2015, the negative impacts of climate change continue to exacerbate the existential threats to ecosystems and society – both globally, and in Africa. In fact, despite the fact that Africa contributes only approximately 4% of global carbon emissions, seven out of 10 countries most at risk from climate change are African.
According to the World Meteorological Organisation, African nations are losing up to 5% of their GDP per year due to extreme and catastrophic climate-induced events, and many African nations spend as much as 9% of their national budgets on climate adaptation policies. There is also a massive, growing health risk – rising temperatures, shifting rainfall patterns, and more frequent extreme weather events are impacting nearly every dimension of human health in Africa. Since 2019, there has been a disconcerting increase in the proportion of deaths related to malnutrition, and vector-borne illnesses like malaria and dengue fever, as well as water- and food-borne diseases, such as cholera, are resurging or appearing in new areas as the climate becomes more erratic.
Food production shocks due to climate increasingly threaten food security in the region. According to the International Labour Organisation, agriculture provides livelihoods for more than half of Africans, and agriculture systems both contribute to climate change and suffer from its effects. For example, overgrazing increases the risk of drought, which may degrade pastures and water sources. At particular risk are pastoralist communities in African drylands, where precipitation is already highly variable and uncertain.
These variables make for a climatological witches’ brew that data reveals is reaping dire consequences for citizens across the continent and around the world. Amid this challenge, the private sector can play a crucial role by investing to support resilient and sustainable infrastructure.
Private investment can be part of the solution
In this context, institutional fund managers Scalar International and Mergence Investment Managers have, in partnership, launched a private equity fund to finance clean energy and digital infrastructure in sub-Saharan Africa, with a target size of US$100-150 million. The Africa Decarbonisation Fund will invest in energy-efficient / decarbonisation projects in the private commercial and industrial (C&I) sector within SADC, with a focus on women- and youth-led SMEs. The potential is significant as, according to Bloomberg, by 2030, the electricity demand in Africa’s C&I sector is expected to grow by more than 270% compared with current levels.
The target is to reduce 1 GT of carbon emissions by 2030; achieve energy efficiency in 30,000 buildings by crowding in investment of at least $400 million; and create 15,000 full-time jobs.
Scalar is a black-owned international venture capital and private equity firm with experience in clean energy and other programmes in the US; Mergence is a leading black-owned institutional fund manager with a strong impact investing track record in SADC.
Scalar is one of only five fund managers chosen out of 66, as part of the 2024 cohort of the International Climate Finance Accelerator (ICFA) – a programme powered by Accelerating Impact. Accelerating Impact is an independent non-profit initiative, set up as a public-private partnership in 2018 by the state of Luxembourg and a dozen private partners with deep experience in impact finance, with a mission to accelerate the impact finance leaders of tomorrow across the globe.
The ICFA is a unique multi-year programme that includes technical and financial support to selected impact investment managers in their start-up phase, who have strong, innovative climate investment strategies and are in the process of fundraising. To date, 39 fund managers have been supported.
The Scalar-Mergence Africa Decarbonisation Fund is also one of only 10 so-called “Article 9” funds worldwide, launched recently by the EU’s Sustainable Finance Disclosure Regulation (SFDR) to facilitate the attraction of Limited Partners to private equity funds.
The fund’s pipeline of projects is primarily in the data centre and manufacturing sectors, which have seen a 40% decrease in grid energy reliability due to their reliance on the regional energy pool. Most SADC member states consume their energy from the Southern African Power Pool, which is primarily 40% hydro energy and 50% coal-powered energy.
The fund is in advanced negotiations with European Development Finance Institutions in support of the EU-Africa Global Gateway Investment Package. The fund seeks to work with local pension funds in support of South Africa’s national determination contributions, together forming a Global Just Transition Partnership using the Scalar platform.
Investments will be guided by four of the United Nations Sustainable Development Goals (SDGs) – 7 (affordable and clean energy); 8 (decent work and economic growth); 10 (reduced inequalities); and 13 (climate change).
Investee businesses will be put through their own incubator and accelerator programme by the Scalar-Mergence fund, providing training and technical, as well as financial, assistance.
Clean energy in an African context
Africa holds 60% of the best solar resources globally, yet has only 1% of installed solar photovoltaic capacity. Furthermore, women make up 48% of the global workforce, yet account for less than 20% of labour in the renewable energy sector.
According to the International Energy Agency, 43% of the African continent’s population lack access to electricity, and many African governments are struggling with power infrastructure – South Africa’s power utility being no exception.
Massive investment is clearly required, and given the growth potential, investors could see robust and steady long-term returns while making a significant impact on the lives of millions of people in Africa.
Hubert Gutsa is CEO of Scalar International, and Semoli Mohkanoi, CCO of Mergence Investment Managers
This article first appeared in Catalyst, DealMakers’ quarterly private equity publication.
In an era marked by geopolitical and economic volatility, the call for legal and regulatory certainty in African markets has never been louder. For investors navigating these markets, particularly in the context of competition law, predictability is paramount. African competition regulators, to their credit, are increasingly cognisant of this need, and are actively working to deliver clear, coherent, predictable and consistent regulatory frameworks.
Heightened complexity
Regulatory unpredictability can take many forms—chief among them, overly complex legal frameworks and insufficient clarity on their interpretation. These can inadvertently lead to regulatory fragmentation, overlapping mandates and, ultimately, a chilling effect on investment and competition.
At last count, 35 African countries had enacted national competition laws, with additional layers emerging at the regional and continental levels. While this expansion reflects growing regulatory maturity, it has also heightened complexity. Key issues include the need for clarity around concurrency of jurisdiction and the harmonisation of enforcement mechanisms and procedural guidelines.
Towards regional one-stop shops
Regional one-stop shops for merger control provide a single, centralised authority for merger review in transactions that span multiple jurisdictions. This gives transacting parties a clear and predictable pathway for notification and approval. Instead of having to navigate a patchwork of differing national laws, filing requirements and merger review timelines, parties can anticipate a uniform process, reducing legal uncertainty and procedural surprises.
In the COMESA Common Market, significant changes are on the horizon, as the COMESA Competition Commission (CCC) intends to adopt revised Competition Regulations, intended to come into effect during the third quarter of 2025. The revised regulations will reaffirm the CCC’s exclusive jurisdiction over mergers with a regional nexus, reinforcing its role as a single point of contact for such filings.
The East African Community Competition Authority (EACCA), while not a new institution, is set to assume a similar role for its member states — Burundi, the DRC, Kenya, Rwanda, Somalia, South Sudan, Uganda and Tanzania. Amendments to the EAC Competition Act and Notices relating to merger control were gazetted in December 2024, introducing yet another regional competition law regime that transacting parties need to navigate.
Notably, the CCC and EACCA share jurisdiction over Burundi, the DRC, Kenya, Rwanda and Uganda. That said, the CCC and EACCA are in discussions to resolve the issue around dual jurisdiction, and to avoid requirements for merging parties to notify in both jurisdictions.
A parallel development is occurring in West Africa. In 2024, the ECOWAS Regional Competition Authority (ERCA) introduced new legal instruments, further clarifying the region’s merger control framework. Under the expanded framework, cross-border mergers that involve at least two member states and meet prescribed financial thresholds are mandatorily notifiable to ERCA. The objective of ERCA is clear: to avoid duplicate filings at the national level, thereby increasing procedural efficiency. The Nigerian Federal Competition and Consumer Protection Commission (FCCPC), however, has indicated that they take an opposite view and still require notification under the national merger control regime. ERCA and the FCCPC are in discussions to resolve the issue around dual jurisdiction. Also to be noted is that a number of ECOWAS member states are also member states of the West African Economic and Monetary Union (WAEMU), where competition law is regulated at a regional level by the WAEMU Commission.
Enhancing legal coherence through collaboration and capacity building
It is widely acknowledged that the development of competition law frameworks across Africa must be rooted in consultation and stakeholder engagement. Legal certainty is best achieved through a participatory process involving regulators, policymakers, the private sector and the legal community.
Moreover, alignment with internationally accepted best practices — whether in merger review standards, investigative procedures, or remedial measures — will enhance coherence and reduce the risk of fragmented enforcement across jurisdictions.
Institutional unpredictability also warrants attention. Economic constraints in some jurisdictions may hamper regulatory capacity, occasionally leading to reactive or inconsistent decisions. Political transitions, too, can disrupt enforcement priorities or redirect focus to other policy imperatives, further complicating the competition regulatory landscape.
Regional regulators are well aware of the structural disparities among member states — be they in the form of varying competition law maturity, resource constraints, linguistic diversity, or differing national priorities.
Strengthening the authority and autonomy of regional bodies in overseeing cross-border mergers represents a constructive step toward reducing this variability.
In COMESA, for example, the CCC has been a key player in building a coherent and effective enforcement ecosystem across the COMESA Common Market. Through strategic collaboration and robust capacity-building programmes, the CCC has significantly advanced the institutional and procedural capabilities of national competition authorities within Member States. In ECOWAS, ERCA intends to do the same. ERCA has designed a curriculum to aid capacity building in Member States and intends soon to roll out training for competition authorities in Member States. ERCA is also in the process of reviewing the laws of Member States with the aim of modifying, updating and harmonising the laws with ECOWAS instruments.
The role of legal practitioners in advancing predictability
The legal profession plays an indispensable role in fostering certainty in competition regimes. Where legislative gaps or ambiguities exist, lawyers can help shape outcomes through constructive dialogue with regulators, the provision of legal opinions and, where necessary, litigation. Judicial pronouncements in precedent-setting cases also serve as catalysts for regulatory reform or prompt reconsideration of administrative decisions.
In summary
Recent regulatory developments across Africa — especially those spearheaded by regional authorities — reflect an encouraging recognition of the critical role predictability plays in attracting and sustaining foreign investment. For legal practitioners, investors and regulators alike, this evolution signals a shared commitment to creating a more stable, transparent and investor-friendly competition law environment on the continent.
Nazeera Mia is a Knowledge Lawyer | Bowmans
This article first appeared in DealMakers AFRICA, the continent’s quarterly M&A publication.
DealMakers AFRICA is a quarterly M&A publication www.dealmakersafrica.com
At Brait, Virgin Active is less dumbbell, more belle of the ball (JSE: BAT)
Things are finally on the up for the gyms
The Brait share price chart has to be seen to be believed. In fact, if you really feel like a challenge, try get one of those fancy exercise bikes to match the gradient of your cycle to the profile of this chart:
I feel tired just from looking at it.
But hidden inside that absolute mess is the performance over the past 12 months, with Brait enjoying some excellent momentum:
The results for the year ended March are a strong indication of why the chart is looking so much better. Virgin Active (62% of Brait’s assets) and Premier (32% of Brait’s assets) are doing the heavy lifting, pun shamelessly intended.
Virgin Active’s revenue increased by 13%, with positive contributions from both volumes and pricing. This is more than good enough to drive EBITDA margin higher, assisted by cost decisions like the absolutely tiny television on the wall at my local gym. Football highlights look like a group of ants on the grass on that thing. It seems to work though, with a 45% increase in EBITDA. Jokes aside, they do note a significant refurbishment programme at their gyms – I just can’t see any evidence of it at mine.
Virgin Active is far more than just a Fourways boet factory. Southern Africa is only 35% of group revenue, with Italy contributing 27%, the UK at 24% and Asia Pacific at 14%. Most regions are doing well, with the exception of Australia where they’ve now changed the management team.
As a big fan of Kauai’s offering, I’m not even slightly surprised that their revenue is up by 37%. Kauai is consistently excellent and by far my favourite choice for a healthy, convenient meal. EBITDA for the chain is up by 25% though, so there’s some margin pressure coming through there.
I thought that this slide from the results presentation tells an excellent story of the impact of the pandemic on Virgin Active and how well the recovery is going:
We have to give Premier a mention, even though that group is separately listed these days. With revenue growth of 7% and EBITDA growth of 15%, Premier has been an excellent performer. The Premier share price has literally doubled over the past 12 months, doing wonders for the Brait look-through valuation.
New Look in the UK is still a reminder of the bad old days of Brait, with a 4% drop in sales and a 3% decrease in gross profit. The UK retail fashion industry seems to be far too difficult to really be worth it. Brait is looking to sell the business and is transitioning it from an in-store to online focus.
With all said and done, the net asset value (NAV) per share at Brait increased by 6% (adjusting for the recapitalisation) to R3.06. Brait is trading at R2.18, so that’s a 29% discount to the reported NAV per share. By investment holding company standards, that discount is on the low side. This means that the market is giving more credit to Virgin Active’s valuation than before (despite the meaty forward EBITDA multiple of 9x), with the group also enjoying the value unlock of having separately listed Premier and sold down a part of that stake.
Notably, New Look’s valuation has dropped so severely that the business is now just 3% of Brait’s total assets (vs. 7% in the comparable period). Brait didn’t participate in the recent equity injection in that company, so they’ve finally stopped throwing good money after bad.
It’s great to see so much improvement at Brait, with the next obvious catalyst being the potential separate listing of Virgin Active.
Metrofile is still in the “will they / won’t they” bucket (JSE: MFL)
The company has released a further cautionary announcement
Back in March this year, Metrofile released a cautionary announcement in which they indicated that discussions were in progress regarding a potential acquisition of the company. Metrofile has been down this road before, although it was becoming harder to find people who believed that the day for a deal might actually come.
The cautionary announcement certainly breathed some life into the share price:
Here’s the more important view though, demonstrating why it was becoming increasingly difficult to find Metrofile bulls:
After the initial announcement in March, there was a further announcement in May that confirmed that a single party was negotiating with Metrofile and was ready to commence with a high level due diligence.
The latest cautionary announcement is lighter on details, merely confirming that discussions are ongoing. Shareholders must continue to wait with bated breath.
Another stop-start quarter at Renergen (JSE: REN)
Will ASP Isotopes be able to improve these operations?
The latest quarterly update at Renergen is another example of stop-start operations. On the LNG side, production dipped from 1,371 tons to 1,311 tons quarter-on-quarter (a 4.4% drop, despite the announcement calling this “steady” production). The all-important helium business sold precisely one dewar to a customer before halting production to look for an optimised filling solution. They believe that this has been achieved and that helium filling will resume in due course.
So, it’s much the same as usual then – the resource is there, but it’s difficult to monetise. This is of course the opportunity for ASP Isotopes, as they will look to come in as strong engineering operators.
In this quarter alone, Renergen burnt through R88.5 million in cash through operating activities and another R78.5 million through investing activities. The only reason why the cash balance has jumped from R28 million to R152 million is because of the R290 million net inflow from financing activities.
Above all else, Renergen is a case study in how any asset with a weak balance sheet can become a sitting duck for a plucky acquirer. In my view, Renergen was headed for business rescue if not for the ASP Isotopes deal and associated capital injection.
Nibbles:
Director dealings:
Three directors of Lucky Star, the all-important subsidiary of Oceana (JSE: OCE), received Oceana shares linked to share-based awards. One of the directors only sold the taxable portion and retained R1.8 million in shares, while the other two directors sold the entire awards worth R5.3 million in aggregate.
Santam (JSE: SNT) announced some director dealings. Although there are a few nuances here, including minimum shareholding requirements and sales to fund the tax on awards, there’s also an outright sale of shares worth R584k by the company secretary.
SA Corporate Real Estate (JSE: SAC) also has a variety of director dealings, including sales to fund taxes and the acceptance of new awards. There was some selling of shares in excess of the tax though, including the CFO selling 72.5% of the vested shares (a total trade of R3.6 million) and the company secretary selling the full award (R1.1 million).
The CEO of Spear REIT (JSE: SEA) bought shares for himself and his minor children worth around R105k.
A director of Finbond (JSE: FGL) and his associate bought shares worth R84k.
Grindrod (JSE: GND) announced that Xolani Mbambo is stepping down as CEO with effect from 31 December 2025. He’s been with the group for 12 years and the recent strategic initiatives really have cleaned up and focused the group for the next chapter of its growth. At this stage, his successor has not been named.
Hammerson (JSE: HMN) had very little uptake for its dividend reinvestment plan alternative, with most shareholders choosing to receive cash instead. Holders of just 1.17% of shares on the UK register and 1.14% of shares on the SA register elected to reinvest their dividends in shares.
Anglo American (JSE: AGL) has made some changes to its executive team following the demerger of Anglo American Platinum (now called Valterra Platinum). They are taking the opportunity to appoint Ruben Fernandes as COO for the group, with Themba Mkhwanazi (currently the Regional Director – Africa and Australia) stepping down at the end of June after 11 years with Anglo American. For now at least, Al Cook (CEO of De Beers) is part of the top structure, but we know that Anglo is actively looking to offload that asset. Notably, Mkhwanazi is also stepping down from the board of Kumba Iron Ore (JSE: KIO) where he was Anglo’s representative, with Fernandes taking up that directorship.
In another great show of AYO Technology’s (JSE: AYO) attention to detail, the company had to release an announcement correcting the calculation for the total number of shares outstanding for purposes of the Sekunjalo offer. Sigh.
According to the Forvis Mazars C-Suite Barometer: Outlook 2025, business leaders are focusing on new or revised talent and retention strategies, which will play a major role in redefining organisations and creating opportunities to unlock growth, compete for market share, and sustain a competitive advantage.
However, as talent rises as a strategic priority in 2025, just under half (43%) of organisations continue to report a struggle to recruit talented people, with the emphasis shifting to high-quality employees at more junior levels.
“Executives are reporting widespread difficulty in attracting and hiring the right talent and the bigger challenge now is in recruiting entry and mid-level talent, rather than senior talent as we saw in 2024,” explains Daniella Frank, HR Senior Manager at Forvis Mazars in South Africa.
In some regions, C-suite executives are having an especially tough time finding the right people. Leaders in Africa report the most difficulty, with smaller businesses bearing the brunt of recruitment challenges, with more than half struggling to hire top talent compared to around a third of $1billion+ organisations.
“Locally, businesses are struggling to attract and retain skilled professionals, despite rising unemployment,” continues Frank.
Findings from the report reveal that South Africa faces a dual challenge of high youth unemployment and a skills mismatch, particularly in tech and finance.
From a talent acquisition standpoint, companies are seeking individuals who can effectively integrate artificial intelligence (AI) with business goals and utilise it adeptly.
“The success of AI and the businesses that embrace it is dependent on the skills of those who implement and operate it, because the technology will not replace professions like auditing,” explains Susan Truter, Audit Partner and Member of the Executive Committee for Talent at Forvis Mazars in South Africa.
Instead, Truter says AI will enhance organisational efficiencies and help distinguish the service offering by enhancing human skills and traits like understanding, trust, empathy, personal connections, and nuanced approaches to the specific cultures and needs of its people.
“Establishing trust with clients and effectively communicating findings and solutions are critical skills that AI cannot replicate,” she continues.
“Our auditors are evolving into strategic advisors, concentrating on higher-value tasks such as interpreting complex data trends, focusing on areas of judgement and estimate, offering insights, and making risk-based decisions. As such, all staff, from the CEO to team members, need to enhance their proficiency in AI applications, which is why we have launched initiatives like our data school.”
However, finding, attracting and retaining people with these skills is a major challenge facing organisations in every sector.
While a generous salary and benefits remain the top factor (96%) in the report, the salary premium already being paid in certain sectors is making it harder for organisations to put inflated offers on the table that are big enough to persuade candidates to join.
As such, companies need to look at other means to secure the right candidates for the business.
In this regard, learning and development opportunities (94%) continue to feature highly as important factors to attract and retain talent.
“To get the best people, organisations must recognise the importance of learning and development opportunities for employees and their business but may need to review with their people what they expect from their employer of choice,” continues Truter.
In addition, findings from the report suggest that companies need better employer branding, upskilling programs, and flexible work models to remain competitive, as how companies structure work will impact talent attraction and retention.
To make their organisations more attractive places to work, C-suite executives are focusing on flexibility and hybrid working.
However, there is still a split in consensus regarding ways of working. While many are leaning into flexible working, another group is doubling down on standard working hours, with compliance with this traditional model still chosen by 37% of executives. In South Africa, certain industries like finance, law, and consulting are resisting full flexibility.
“The reality is that business leaders cannot bring back the working models used before COVID-19, and they cannot lead an organisation as they did even 10 years ago,” cautions Truter.
“If leaders expect and push everyone back to the office, they will struggle to retain their best people. Business leaders need to consider intergenerational differences in how and where people want to work.”
Among organisations that use hybrid working, the aim is to be as flexible as possible for employees, not ensure that everyone is in the office.
Based on the findings shared in the report, three in five executives say that a key goal of hybrid working for their business is to “be fully flexible for our people”.
Business leaders should view the workplace model as an opportunity to readdress their business strategies, listen to their people and create a sustainable working model that retains experienced workers and attracts new talent, states the report.
Alongside this, a modern working environment with access to tech increased by three points (93%) in the 2025 report, with employee engagement emerging as another important factor.
“To create engagement, it’s important to give people the trust and responsibility to ensure they know that they matter,” explains Frank.
“At Forvis Mazars, we do this through our own people surveys to capture a consensus of opinions as well as the more personal day-to-day discussions during development. This is a great way to establish engagement and receive more value in return from your people.”
Ultimately, the talent is out there, leaders just need to approach their needs differently.
Talent today does not necessarily need or want to work from a specific location or office. The more flexible organisations can be with their people, the more opportunities they will have to attract the best talent when combined with other factors, such as top-paying jobs and access to the latest technologies.
Assura will formally respond to the revised Primary Health Properties offer later this month (JSE: AHR | JSE: PHP)
Assura’s board has a duty to keep assessing the offers
The latest attempt by Primary Health Properties to get the Assura board to back its offer at least has some chance of success, as Assura has committed to fully review the revised terms of the offer. I’m pretty sure that the sticking points will still be around the risks facing the merged entity, rather than the exact share ratio that Primary Health is willing to offer.
The Assura board has committed that by 27 June, they will have sent a response circular to shareholders that deals with its views on the Primary Health Properties offer.
Although this could still go either way, my view remains that cash is king in these deals and that puts KKR and Stonepeak at the front of the queue.
Astoria’s sale of ISA Carstens has been completed (JSE: ARA)
Diamonds are anything but sparkly right now, but Goldrush and Leatt are on the up
Astoria is an investment holding company with a diversified portfolio. This means that the constituents of the portfolio have varying performance at any point in time, with the overall direction of travel for the portfolio hopefully being up.
A significant change to the portfolio saw the sale of Astoria’s 49% in ISA Carstens Holdings for R71.0 million (cash and loan accounts), with that deal having now met conditions precedent and closed accordingly.
Elsewhere in the portfolio, the ongoing pressure on diamond prices has wreaked havoc on Trans Hex. With debt providers in Trans Hex having called for an equity injection to support the balance sheet, Astoria has elected not to participate in this round or to provide further funding. Thankfully, Astoria has not provided any guarantees either. The value of the investment in Trans Hex has been written down to zero.
In much happier news, the share prices of the two listed investments (Goldrush and Leatt) have increased significantly since 31 March 2025, the date of the last quarterly results. Goldrush is up 56% and Leatt is up 17%.
Gemfields seems happy with the latest ruby auction results (JSE: GML)
As always, comparability is very limited
It’s difficult to form a view on how Gemfields is performing in each auction, as the underlying mix of rubies (or emeralds, as the case may be) changes from one auction to the next. This leaves us largely reliant on management’s commentary about the auction, which isn’t a great position to be in as management is obviously at risk of giving a biased view.
To their credit, Gemfields isn’t shy to talk about the tough stuff in the market. The current economic and geopolitical backdrop isn’t exactly favourable to shiny stones. Despite this, Gemfields notes that pricing of fine-quality rubies is strong and that secondary-type rubies (recovered from a newer area of the MRM mine in Mozambique) found support with buyers.
The gems come out the ground in all shapes and sizes, with this auction including a 36-carat fine-quality ruby that achieved a high price.
This auction achieved an average price of $461.48 per carat and revenues of $31.7 million. This is a much higher average price than in other recent auctions, but that number was skewed by the mix of lots that actually sold at the auction, as well as the lack of small-sized rubies in this auction.
A point of concern here is that the total revenue of $31.7 million makes this the smallest ruby auction (and by quite some margin) of the past couple of years. Only 78 of the 90 lots offered for sale were sold. The market is clearly still struggling with weakness.
Powerfleet is growing rapidly – but where are the profits? (JSE: PWR)
The SA market isn’t very receptive to “adjusted EBITDA” as a metric
The US market is filled with eternal optimists who firmly believe that adjusted EBITDA will eventually lead to huge net profit growth and great rewards in the share price. Conversely, the South African market is filled with realists who want dividends above all else. As usual, somewhere in the middle is the truth.
But just where does Powerfleet lie on that spectrum? With the primary listing in the US, you can be sure that terminology like adjusted EBITDA is all over this thing. I would’ve loved to be a fly on the wall in the meeting where the concept of HEPS was introduced to them and how it deducts things like stock-based compensation, which most tech companies incorrectly view as a quasi-expense at best.
Like all US growth companies, most of the announcement is dedicated to talking about revenue. For the year ended March 2025, they bought plenty of revenue through acquisitions. The MiX Telematics deal closed right at the start of this year, so don’t treat metrics like revenue growth of 169% and adjusted EBITDA growth of 882% as being remotely sustainable numbers. The group reports numbers adjusted for the MiX deal, reflecting revenue growth of 26% and adjusted EBITDA growth of 65%. Now, those are still strong numbers of course, but is adjusted EBITDA worth focusing on?
In a business that relies on telematics devices and the associated working capital that gets tied up, I definitely wouldn’t look at EBITDA. Instead, I would look at the operating loss that worsened considerably, or the headline loss per share that came in at $0.43 (better than a loss of $1.14 in the comparable period).
In terms of exit velocity for the year, the fourth quarter net attributable loss was $0.09 per share (this isn’t the same as the headline loss but is certainly a lot closer than adjusted EBITDA and other fairy tale numbers).
Here’s the interesting thing though: the attributable fourth quarter loss is only better than it was a year ago because of a change in the capital structure. Instead of a large attribution of value to preference shareholders, we now have losses spread across more ordinary shareholders. If we just look at the net loss before tax (instead of on a per-share basis), it climbed from $1.4 million in Q4’24 to $12.7 million in Q4’25.
My final comment is on the cash flow profile of the group and the related debt. Net cash from operating activities was an outflow of $3.3 million in the year ended March 2025 vs. an inflow of $26.3 million in the prior year. They invested $137 million in acquisitions and had to raise long-term debt of $125 million to do it, along with a private placement of equity of $66.5 million. The excess proceeds from the placement were used to redeem the preferred shares mentioned above. Total cash at the end of the period is down at $49 million vs. $137 million the year before.
In summary, this is a heavily indebted technology company that is very focused on telling an American story. The problem is that the Americans aren’t exactly forming an orderly queue for the stock, as evidenced by the Nasdaq chart (note: this includes a few years before the recent acquisitions):
The market didn’t love the lower payout ratio at Stor-Age (JSE: SSS)
Being less of a cash cow than before leads to churn on the share register
Stor-Age released results for the year ended March 2025. The focus in the market is on the dividend per share, which decreased by 6.3% to 110.72 cents. This is despite distributable income per share increasing by 4.1%. The payout ratio has dropped from 100% to 90%.
Net property operating income grew by 11.1% in South Africa and 5.0% in the UK. Here’s a great slide for those who like to argue that the UK is a stable operating environment compared to good ol’ sunny South Africa:
In terms of the balance sheet, the loan-to-value ratio sits at a solid 31.3%. That’s almost identical to the prior year and well in line with where it needs to be. Stor-Age is a solidly managed business.
There’s a great slide in the investor presentation that tells the story of the past decade. Over 10 years, the distributable income per share grew at a compound annual growth rate (CAGR) of 4.9%, whereas net property operating income increased by 27.8%. Note that the former is a per-share metric and the latter is not. Another useful way to see this distinction is that investment property value grew at a CAGR of 27.8%, while the net asset value per share grew at 6.6%. This tells you that there are far more shares in issue than a decade ago, with Stor-Age taking full advantage of its listed structure to grow the group.
Speaking of the NAV per share, they are currently at R17.04, up 5.6% in the past year. The share price closed 3.6% lower at R15.86, so there’s a fairly modest discount here by REIT standards.
With a lower payout ratio, the group is focusing on NAV-accretive initiatives for the next chapter in its growth. To justify the retention of capital, they will need to be some interesting things.
They are also busy with joint ventures aimed at boosting return on equity, with the idea being that Stor-Age earns management fees on a portion of the portfolio that is paid for using that most illustrious of banking concepts: Other People’s Money. The management fees are still small in the group context (R71 million), but 70% of the fees are classified as recurring and I think we will see significant growth in this metric.
With the payout ratio of 90% now baked in, the outlook for the 2026 financial year is for distributable income per share growth of between 5% and 6%.
Vukile is growing in both regions of focus (JSE: VKE)
This is what investors want to see
When a company has diversified exposure, there’s always a risk to investors that a certain part of the business might drag the entire thing down. Groups are only as good as their weakest link. The good news at Vukile is that there is no weak link right now, with the portfolio doing well in both South Africa and Iberia (Spain and Portugal).
In the year ended March 2025, the South African portfolio achieved like-for-like retail net operating income growth of 6.4%, while enjoying lower vacancies and more efficient operations with a better cost-to-income ratio. The like-for-like retail portfolio value moved 8.5% higher thanks to the stronger metrics.
Over in Spain and Portugal, like-for-like net operating income growth was 6.4%. I must highlight positive rental reversions of 17.3%, as this indicates that new leases are being put in place at much stronger rates than before. The like-for-like valuation increase is only 3.6% though, as the property metrics are dovetailed with broader macroeconomic conditions when assessing the valuation. Recent acquisitions in the area have been at appealing yields, ranging from 7.2% for a flagship centre in Spain through to an interesting, more tourist-focused centre in Madeira for 9.5%. Remember, these yields are in euros.
Although the loan-to-value ratio of 40.95% is perhaps slightly on the high side by large REIT standards, the good news is that only 1.6% of debt is maturing in FY26. The credit rating outlook for both Vukile and Castellana (the subsidiary in Spain) improved from stable to positive. When they do come to market for refinancing in years to come, they are doing so from a place of strength.
The total dividend per share grew by 6.0% for the year. They aren’t offering a dividend reinvestment plan, so that will thankfully limit dilution of earnings for shareholders going forward. For the year ending March 2026, Vukile believes that the dividend per share can grow by at least 8%.
The market loved this, with the share price up 2.5% on the day and more than 20% higher in the past year.
Nibbles:
Director dealings:
Here’s a director purchase of shares that is well worth paying attention to: Willem Roos (one of the original founding members of OUTsurance, among many other achievements) is a non-executive director of WeBuyCars (JSE: WBC) and he’s bought shares (via an associated entity) worth nearly R20 million.
The CEO and another executive director of AVI (JSE: AVI) bought shares in the company worth a total of over R5.2 million.
There’s some selling of shares by directors and senior execs of Tharisa (JSE: THA). Notably, the CFO sold shares worth nearly R4.5 million. The sales by the company secretary and a director of a major subsidiary came to R1.2 million.
A prescribed officer of Thungela (JSE: TGA) sold shares worth R2.2 million.
An associate of an executive director of Trematon (JSE: TMT) sold shares worth R77.5k.
The company secretary of Alexander Forbes (JSE: AFH) sold shares worth R41k. Although these were related to a share award, the announcement isn’t explicit on whether this is only the taxable portion.
A director and an associated entity bought shares in Finbond (JSE: FGL) worth just over R30k.
The director of Italtile (JSE: ITE) who is busy selling pledged shares has sold another R20k worth of shares.
A non-executive director of Quilter (JSE: QLT) bought shares via a dividend reinvestment plan to the value of around R20k.
YeboYethu (JSE: YYLBEE) had a much better time in the year ended March 2025. Thanks to a sharp increase in the Vodacom share price that this B-BBEE structure relates to, the net asset value per share shot up from R31.51 to R73.77. The final dividend increased by 5% to 101 cents per share. YeboYethu is trading at just over R26 per share, so the discount to NAV is vast.
Brikor (JSE: BIK) has released a trading statement dealing with the year ended February 2025. They expect HEPS to be between 0.3 cents and 0.7 cents, which is a nasty drop of between 46.2% and 76.9% vs. the 1.3 cents in the comparable year. They have indicated that detailed results will be out by 20 June (which is particularly relevant as they are late with the release of financials – you’ll see that update further down as part of the broader naughty corner announcement by the JSE).
Ninety One (JSE: N91 | JSE: NY1) and Sanlam (JSE: SLM) have concluded the transaction related to Sanlam’s UK business that has been acquired by Ninety One. As consideration for the deal, Ninety One issued shares to Sanlam. Sanlam now has a 1.5% stake in Ninety One.
Glencore (JSE: GLN) announced that the merger of Viterra with Bunge has now met all conditions and will close in July.
Caxton and CTP Publishers and Printers (JSE: CAT) completed its odd-lot offer for total consideration of R340k. This reduced the number of shareholders by 31%, thereby significantly decreasing the administrative burden of the share register.
Eastern Platinum (JSE: EPS) has suffered a cybersecurity incident. This hasn’t disrupted business operations, but it does appear as though some sensitive files made their way onto the internet. No further details have been given at this stage.
In the naughty corner for late submission of financial statements, we find African Dawn Capital (JSE: ADW), Brikor (JSE: BIK), Efora Energy (JSE: EEL), Copper 360 (JSE: CPR) and Visual International (JSE: VIS). If they fail to release financials by the end of June, their listings may be suspended.
In case there are any desperate souls out there hoping that PSV Holdings (JSE: PSV) might one day return to life, the company has renewed the cautionary announcement on the basis of recent engagements between DNG Energy and the company liquidator regarding taking the business out of provisional business rescue. There is no further clarity at this point on what might happen. The fact that their old website domain currently reflects as being held for sale tells you a lot.
The Gemfields rights offer was well supported by the market (JSE: GML)
But there’s still a slice for the underwriters
After the near-perfect storm that severely broke the Gemfields balance sheet and forced them into a situation where they needed to raise capital from the market, it’s good to see that the overall narrative of “this is temporary, not forever” was accepted by investors.
The rights issue was fully underwritten, so there was no doubt regarding the company raising the full amount. Still, the response of the market to the rights issue tells you a lot about how investors are feeling about the company at the moment.
82.4% of the new shares to be issued were taken up by existing shareholders in proportion with their holdings. There were no excess applications allowed. This would of course include the underwriters taking up their rights in respect of their existing shares. The remaining 17.6% of shares were then taken up by the underwriters, Assore International Holdings and Rational Expectations.
The rights issue raised $30 million in gross proceeds. The ball is now in Gemfields’ court to make sure that they don’t find themselves in this position again by taking on too many risks at the same time.
Challenges continue at Merafe (JSE: MRF)
The South African ferrochrome sector is in trouble
Back in February 2025, Merafe alerted the market to a business review process in which they needed to take a hard look at their assets in the ferrochrome joint venture with Glencore. This eventually led to a decision to suspend the smelting operations at Boshoek and Wonderkop from 1 May 2025 and 31 May 2025 respectively.
The latest update is that the company has also suspended operations at the Lion smelter, although this is on a temporary basis for maintenance and rebuilds.
The company is “engaging” with “all relevant stakeholders” about the ferrochrome industry and the potential cost-saving measures and policy changes that would be required to get things right. In my experience, that’s the kind of wording that a company uses before announcing a permanent change to operations. We will have to wait and see.
A juicy payday is coming for MTN Zakhele Futhi shareholders (JSE: MTNZF)
The recent performance of the MTN share price has driven this decision
It’s incredible how quickly things can change in the market. At the end of last year, MTN had to take steps to extend the MTN Zakhele Futhi scheme to avoid it maturing in such a way that minimal residual value would go to investors. Fast forward a few months and we have a situation in which the directors of MTN Zakhele Futhi have chosen to unwind the structure based on the current strength of the MTN share price and the seemingly irresistible opportunity to put real value in the hands of investors.
To achieve this, MTN Zakhele Futhi executed an accelerated bookbuild offering of most of its stake in MTN, representing 1.26% of MTN’s total issued shares. This raised gross proceeds of R3 billion, which in turn will be used to settle debt in the structure.
The estimated current net asset value per MTN Zakhele Futhi share is between R20.00 and R21.50. They are looking to distribute R15 per share as a dividend or a return of contributed tax capital as soon as possible. The residual value of R5.00 – R6.50 per share will take longer, as they need to wind up the company and delist it from the JSE.
When it comes to volatility, there isn’t much out there to match MTN Zakhele Futhi:
You may notice that the current price is still well below the estimated net asset value. This is because of execution risk and the time value of money, although it feels like the current discount may still be too big. In illiquid stocks like this, there isn’t always a bid and/or offer available in the market to close the gap to sensible levels.
Novus is successfully evolving its business – but not without headaches (JSE: NVS)
With newspaper and magazine printing plummeting, the rest of the group is a mixed bag at the moment
Novus is a great example of why it’s important not to be blind to disruption. Once upon a time, the printing of magazines and newspapers was a lucrative business. Today, those publications are barely staying alive, which means that printers would be in just as much trouble if they hadn’t diversified.
Novus has found a couple of new growth avenues. One is the printing of books, particularly with an educational flavour thanks to the acquisition of Maskew Miller Learning – and even that’s far from being a guaranteed source of growth, as you’ll shortly see. Another important growth area is the packaging business. They aren’t sitting still either, with a well-publicised mandatory offer to Mustek shareholders that led to a nasty spat with the regulator. Other recent deals included the acquisition of 48.58% of Bytefuse and the acquisition of three divisions of Media24. These are much smaller transactions than the investment in Mustek, but are still relevant.
There’s plenty going on here, so the numbers for the year ended March 2025 are particularly important. Revenue increased by 6.6% and operating profit was pretty flat. Assisted by a small reduction in the number of shares outstanding, HEPS increased by 12.1% to 88.3 cents. Finally, the cash dividend was 10% higher at 56 cents per share. The end result for shareholders may have been solid, but there’s plenty of underlying volatility here that makes it difficult to guess how the future might unfold.
For all the efforts to find growth in the Print segment, they still struggled with a drop in sales volumes in that segment of 6.9%. Magazines and newspapers saw a far sharper decrease, with books helping to mitigate some of that pain. Margins moved much higher in this segment though, with the gross margin up sharply from 17.4% to 24.8% as the business has evolved. This takes operating profit from R55 million to R149.2 million.
In Packaging, there are no such challenges in finding growth. Revenue is up 12.5% and operating profit increased 14.8%. That’s solid.
Finally, on the Education side, revenue fell by 4.2% thanks to a Limpopo order that was below expectations. Operating profit fell sharply from R264 million to R162.6 million. This decrease is driven by not just the drop in revenue, but also by technology investment, an expected credit loss allowance (the joy of waiting for government to pay you) and the amortisation of product development costs. Supplying the public sector with textbooks isn’t an easy business and it’s difficult to forecast exactly what route government will take with the curriculum.
Net working capital pressures are clear, with net working capital cash outflows of R144 million. Government debtors are one of the factors here. Net cash after debt has dropped from R461.1 million to R375.8 million.
On the whole, Novus continues to face uncertainty. They are doing the best they can to navigate a disruptive environment in which nobody is quite sure what the steady state for print vs. digital mediums will look like. The share price may be up 42% in the past 12 months, but it’s really anyone’s guess regarding the level of maintainable earnings for Novus.
Primary Health Properties just won’t give up on the Assura deal (JSE: PHP | JSE: AHR)
Could this end up as a hostile takeover bid?
The game of to-and-fro continues at Assura in the wake of the decision by that company’s board to throw their weight behind the KKR and Stonepeak all-cash offer. Primary Health Properties is trying to convince the board that a merger is the way forward, which is of course a much trickier thing to get right than an all-cash offer. Sadly, the world has many examples of unfulfilled merger promises to refer to when deciding whether to go with a merger or a cash take-private offer.
To try and sweeten the deal and once again get Assura to give them a chance, they’ve made some tweaks to the proposed structure. For example, they will allow Assura to declare a dividend of up to 0.84 pence per share that won’t affect the purchase price. They’ve also reduced the acceptance condition to 50% of the voting rights, aligning it with the KKR and Stonepeak offer.
Perhaps more interestingly for those of us who don’t specifically have a horse in this race, Primary Health has also responded to the comments made by Assura regarding the outcome of their due diligence process and their concerns with a potential merger.
The easy one to address is the level of debt in what would be the combined group, which Assura is worried about over the next two to three years. Primary Health notes that the spike in the leverage ratios would be temporary and that they have a deleveraging plan, with Fitch confirming that the company would remain investment grade following the potential merger. They also try to make the argument that lenders also tend to be more supportive of listed groups rather than private equity structures, although I think that’s a stretch.
One of the other points is really a matter of personal taste, with Assura believing that private healthcare assets are the way to go and Primary Health building their business more around public sector assets. They may as well argue about religion or politics, as investors will have their own preferences here. The response does include a rather spicy comment that Primary Heath has achieved outperformance relative to Assura on total property returns in every year since 2017!
Another risk raised by the Assura board is the potential for regulatory delays. Primary Health has already commenced discussions with regulators and they believe that this issue can be managed if Assura cooperates with them on information flow.
For now, Primary Health is still hoping to get the Assura board to work with them. I just can’t see it happening to be honest, not after the last announcement by the Assura board regarding the KKR and Stonepeak offer. If Primary Health is serious about taking this all the way, then they may have to go the route of a hostile takeover.
To keep the ball rolling, Primary Heath released the prospectus and circular dealing with the issue of shares that would be needed for this merger. They certainly aren’t shy to incur advisory fees in the pursuit of this transaction. But despite all their best efforts, cash remains king and it’s the KKR and Stonepeak offer that ticks that box.
Remgro is seeing earnings growth at Mediclinic (JSE: REM)
The health strategy is a major part of Remgro’s investment case
Although Mediclinic is no longer listed, having been taken private by Remgro, the group continues to put the spotlight on Mediclinic’s earnings as the company is important to Remgro’s overall story.
Hospital groups have been seeing improved results lately and Mediclinic is no different, with the exception of the Swiss operations. More on that to come.
Group revenue is up 5% for the year ended March 2025, while adjusted EBITDA increased by 9%. This pushed adjusted EBITDA margin up from 14.7% to 15.3%. Adjusted earnings increased 21%, so that’s also encouraging. Finally, thanks to strong cash conversion, net debt dropped and the leverage ratio improved from 3.7x to 3.1x.
By now, you’re hopefully wondering what all these adjustments relate to. Sadly, there’s a large impairment of $279 million related to the assets in Switzerland and what Remgro refers to as ongoing changes in the market and regulatory environment in that country. If you included this impairment, you would find that earnings actually swung into a negative position!
The impairment certainly shouldn’t be ignored or swept under the carpet, but it doesn’t reflect the improved operating results that the sector is seeing in South Africa.
Vunani swings into losses (JSE: VUN)
Yes, even on a headline level
Vunani has released a trading statement for the year ended February 2025. It’s not good news I’m afraid, with an expected headline loss per share of between 2.0 cents and 3.5 cents. This is compared to positive HEPS of 7.4 cents in the prior year.
If I look at the interims for the six months to August 2024, they reported a drop in HEPS from 18.2 cents to 6.7 cents. This means that the second half of the year was severely loss-making for the group.
No further details are available at this point, with results due for release on 20 June.
Nibbles:
Director dealings:
The CEO of Barloworld (JSE: BAW) and an associated family trust pledged shares under a funding arrangement worth nearly R130 million.
Two officers of AngloGold Ashanti (JSE: ANG) sold shares worth a total of R72 million that are described as being “in part to fund the tax liability” related to share awards. In other words, that’s a sale over and above the taxable amount.
The CEO of Woolworths (JSE: WHL) sold shares worth over R38 million in a “portfolio rebalancing” – and if the CEO wants to tilt away from the company’s shares when they’ve been underperforming so much, goodness knows I would do the same if I was a shareholder here. Luckily, I’m not.
The CEO of Altron (JSE: AEL) has sold R16.3 million in shares, described as a sale of a portion of his stake to meet personal funding requirements. For context, Altron’s share price is up 67% over 12 months, though it has now come under some broader selling pressure that is worth keeping an eye on.
The Chief Strategy Officer of Investec (JSE: INL | JSE: INP) sold shares to the value of R15 million. That’s a meaty trade.
Here’s another sale of shares by a Discovery (JSE: DSY) director as part of the unwind of a collar structure, this time being a sale by Barry Swartzberg of shares worth R37.3 million. Again, this is a forced sale, so you can’t infer anything about the current valuation.
Here’s an interesting one: James Templeton (CEO of Castleview Property Fund (JSE: CVW) and an overall big-hitter in the property game) has been appointed as the chairman of Accelerate Property Fund (JSE: APF). Personally, I would add this to the bull case for this speculative story at Accelerate.
In case you wondered how the sale of Karooooo (JSE: KRO) shares by founder Zak Calisto is structured, I flicked through the underwriting agreement. It looks like the underwriting banks bought the shares from him at $47.50 per share and will try to place them in the market at $50 per share. They are allowed to place to certain investors at no lower than $48.50 per share. There are six underwriters buying the shares and subsequently placing them with clients, with Standard Bank as the only South African underwriter from what I can see.
In recent months, Ninety One (JSE: NY1 | JSE: N91) has been implementing an important transaction with Sanlam (JSE: SLM). As you may recall, this is part of a long-term active asset management relationship between the companies. The UK piece of the deal, which is the transfer of Sanlam’s UK active asset management business to Ninety One, has now been completed. Ninety One is paying for that business through the issuance of shares.
With everything going on at MAS (JSE: MSP) right now, it’s important that executive management is ready to deal with the wolves at the door. Nadine Bird resigned as CFO with effect from 30 June 2025 and the group has now announced the appointment of Bogdan Oslobeanu as her replacement. He seems to come with tons of experience, as one would hope.
Delta Property Fund (JSE: DLT) continues to chip away at the debt, with an agreement to sell 101 De Korte in Braamfontein for R25 million. The valuation is R27.09 million and the net operating loss for the year ended February 2025 was R2.75 million, so the purchaser clearly has significantly different plans in mind for the property. And in other good news, the sale of Unisa House has been completed and Delta has used those proceeds to settle debt.
Salungano (JSE: SLG) has once again announced a delay to the completion of its financials for the year ended March 2024. No, that isn’t a typo. They initially indicated a mid-June 2025 release but they’ve obviously missed that. They haven’t even given an indication of a new timeline.
Vodacom (JSE: VOD) and Remgro (JSE: REM) have extended the long stop date for the fibre transaction to 4 July 2025. You can expect to see further extensions, as the hearing dates at the Competition Appeal Court have been set down for 22 to 24 July 2025.
Northam Platinum (JSE: NPH) placed R5.7 billion worth of notes under the R15 billion Domestic Medium Term Note Programme. There are three tranches of notes: R2.6 billion maturing in 2028, R0.6 billion maturing in 2029 and R2.5 billion maturing in 2030. Corporates put a lot of effort into designing these tranches, with the goal of maximising capital flexibility and minimising the cost of debt.
Brimstone (JSE: BRT | JSE: BRN) is adding its name to the list of companies that have moved their listing to the General Segment of the Main Board of the JSE. This comes with a far less onerous regulatory burden, hence why so many smaller companies have taken advantage of this.
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