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Ghost Bites (Accelerate Property Fund | Ascendis Health | Caxton & CTP | Gemfields | Schroder Real Estate)

The Finance Ghost
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Ghost Bites (Accelerate Property Fund | Ascendis Health | Caxton & CTP | Gemfields | Schroder Real Estate)

Accelerate Property Fund finds a buyer for 73 Hertzog Boulevard (JSE: APF)

This disposal is at a discount to NAV

The Accelerate Property Fund share price is fascinating at the moment. The company is trading at a gigantic discount to net asset value (NAV) per share, as there are a number of share price overhangs (like the related party issue). This means that if the entire NAV was converted to cash tomorrow and distributed to shareholders, the returns would be wonderful.

Now, converting a NAV to cash isn’t easy. There are no plans to sell Fourways Mall, so a full “value unlock” isn’t the strategy right now. But what Accelerate is doing is offloading as many other properties as it can.

Here’s the thing that the market is responding quite strangely to: if you sell a property at a discount to NAV, then it can still be at a premium to the implied value based on where the share price is trading. Using a simple example, if the NAV is R100 and the share price is R40, then converting the NAV to cash of R80 is a 20% discount to NAV and a 100% uptick in value for shareholders! It’s not quite that simple obviously as the fund would still trade at a slight discount to even its cash NAV, but you hopefully get the idea.

In the case of 73 Hertzog Boulevard, Accelerate has sold the property for R68 million. They need to pay sales commission of 3% and some other costs, so they are looking at R66 million in net proceeds. The valuation as at March 2025 was R78 million. Net of costs, that’s roughly a 15% discount to NAV. There are some very good property companies on the JSE that trade at a higher discount than that. Accelerate trades at a discount to NAV of 80%, so you would expect the market to celebrate this update.

Instead, the share price dropped 12% on the day on strong volumes (by Accelerate’s standards). The key seems to be the Portside circular and getting that deal across the line, as I think the market is concerned that the small deals are getting done and the Portside circular has been delayed.

Ascendis Health wants to delist (JSE: ASC)

This time, the company wants to do it itself

You may recall a lot of social media activity and accusations flying all over the place the last time that Ascendis Health was trying to delist from the market. That time around, the potential delisting was structured as an offer to shareholders by a consortium of parties (including related parties). The price at the time was R0.80 a share.

That was back in November 2023, almost two years ago. We are now at a point where the company is considering a delisting via a repurchase of shares, which means the delisting is achieved through the use of the company’s balance sheet rather than an offer from a third party.

A cautionary announcement tells us that this delisting will be priced at R0.97 a share. Although that’s 21% higher than the previous offer, you have to think about the cost of capital over nearly a two-year period. Viewed through that lens, this offer is actually quite similar to the previous one.

The share price closed nearly 10% higher on the day at R0.90. Now we wait and see if the cautionary evolves into a firm plan to do this.

Revenue growth is hard to find at Caxton & CTP Publishers and Printers (JSE: CAT)

Kudos to management: operating profit was up in both major segments

Caxton closed 5.6% higher after releasing results that reflect a 16.7% increase in the dividend. Based on that growth, you might be expecting to see an exciting revenue outcome. Instead, revenue was up by just 0.9%! The good news is that operating costs increased by only 0.1%, so this revenue growth was sufficient to drive an improvement to operating profit in both major segments.

In Caxton’s publishing, printing and distribution business, they continued to suffer a decline in advertising revenues. Advertising was down 3%, with grocery retailers keeping local newspapers going. Encouragingly, The Citizen newspaper managed to grow revenue by 3%, with the focus on the Legal Notice market paying off (literally). Overall, Caxton has to manage a difficult treadmill in which newspaper tonnages at the printing plants are under pressure, mitigated by the volumes that Caxton is winning from retailers. Magazines are just as bad if not worse, with Caxton hoping that the education book demand from the proposed Foundation Phase curriculum rewrite will be in place for the start of the 2026 school year. As we know in South Africa, depending on government for anything is a risky strategy.

Moving on to the packaging and stationery business, Caxton has difficult underlying exposures to the alcohol industry. We know that the global trend at the moment is one of reduced consumption, so that’s something to think about over the long term. To add to the questions around structural demand, they also have a cigarette packaging operation. Thankfully, they also have exposure to quick service restaurants and the FMCG sector. These might be more cyclical industries, but they arguably have better structural demand opportunities.

Speaking of structural challenges, Caxton also has a stationery division that operates in the back-to-school space. The birth rate (and the recent news around Curro (JSE: COH) being taken private) tells us that this is also going to be a low-growth area.

As you can see, nothing comes easy at Caxton. They therefore have to focus on cost control and being as efficient as possible, something they seem to have done really well in this period.

If you work through the underlying results, you’ll see that HEPS fell by 8.8% without any normalisation adjustments. This is because of a non-recurring insurance receipt in the base period that was recognised as income. If you normalise for that, then HEPS was up 12.0%. The increase in the dividend tells us that the normalised number has high cash quality of earnings, so I’m happy to go with that.

As year-to-date share price charts go, this is quite a thing:

Gemfields executed its first emerald auction since November 2024 (JSE: GML)

They seem to be happy with the outcome

The challenge with gemstones is that their value is as much a function of their flaws and non-homogenous nature as anything else. This makes it really hard to compare the trend in auctions at Gemfields, as the underlying mix of quality is always different. This is just an unfortunate reality of the sector and it makes things trickier for investors.

One thing we know for sure is that emeralds have been in a bad place, with Gemfields having last held an auction in November 2024. They then suspended the mining operations at Kagem in January 2025 based on weak supply and demand dynamics in the market. Mining recommenced in May and they’ve now gone back to market with the first auction in nearly a year!

Thankfully, they sold all the lots including a particularly fancy gemstone named Imboo. The fact that individual stones have names tells you just how difficult it is to track any kind of trend in this space.

Management seems happy with the outcome, talking about “strong demand” and “robust prices” that “validated” the decisions they’ve taken. In the context of all the caveats I’ve provided here about comparing auctions, the price per carat tells us that this auction was way ahead of November 2024 (41% better pricing) and roughly in line with auctions in mid-2023 and mid-2024.

The Gemfields share price is down 11% year-to-date. It’s worth noting that there was a rights issue a few months ago that had a negative impact on the share price. It has recovered quite well from the mid-year pressure related to that capital raise though! The latest auction results can only help.

Schroder European Real Estate Investment Trust’s dividend is higher than its earnings (JSE: SCD)

Unsurprisingly, the market didn’t love this

Schroder European Real Estate announced a dip in quarterly earnings due to the sale of the Frankfurt DIY asset in the previous quarter. This unfortunately means that the quarterly dividend was only 90% covered by adjusted EPRA earnings (the European standard). Or, put differently, the payout ratio is more than 100%! This obviously cannot carry on forever, so the market is quite correctly being cautious here.

A much bigger risk to the dividend is the ongoing tax fight in France, where the French Tax Authority has demanded the payment of €14.2 million including interest and penalties. The group will appeal this decision and has not raised a provision, but they are ring-fencing this amount from cash reserves.

With the share price closing 6.9% lower on the day, the market is clearly concerned about what the forward dividend yield will look like. The underlying portfolio was valued at roughly the same level as the previous quarter, so there also hasn’t been any recent capital growth to get excited about.

Nibbles:

  • Director dealings:
  • Shareholders in Fortress Real Estate (JSE: FFB) are being given the choice to either receive a cash dividend or a dividend in specie of shares in NEPI Rockcastle (JSE: NRP). This is in line with the recent approach taken by Fortress regarding creatives uses for its 15.2% stake in NEPI Rockcastle.
  • Altvest Capital (JSE: ALV) will start trading under its new name Africa Bitcoin Corporation from Tuesday 23rd September. The new share code is JSE: BAC and the underlying preference shares will also all change their stock codes.
  • Kore Potash (JSE: KP2) released its interim financials for the six months to June 2025. As an exploration company, the progress made on developing the project is usually more important than the specifics of the financials. The company is still in the process of finalising the funding package with OWI-RAMS GMBH, with full focus on moving towards financial close. The company had a cash and cash equivalents balance of $3.5 million as at 30 June 2025.

How Sony fumbled the bag with Kpop Demon Hunters – and Netflix picked it up

Dominique Olivier
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How Sony fumbled the bag with Kpop Demon Hunters – and Netflix picked it up

Sony Pictures went into the summer of 2025 hungry for a blockbuster. What it got instead was a bruising reminder that timing, contracts, and a little bit of bad luck can rewrite the rules of Hollywood. This is the story of megahit KPop Demon Hunters and a tale of how different risk cultures at Sony and Netflix led to this outcome.

By the time the popcorn buckets were swept up and the box office receipts were tallied, Sony stood alone as the only major studio without a single $500 million–grossing film from May through August this year (this timeline coincides with the US summer, which is traditionally when cinemas make the most money). Its biggest box office hit of the year so far, 28 Years Later, limped to just over $150 million worldwide. For Sony, the countdown to their next big release – 2026’s Spider-Man: Brand New Day – can’t tick by fast enough.

Although technically, Sony actually did make one of the biggest cultural sensations of the summer. It’s just inconvenient that Netflix is feasting on most of the spoils.

A monster hit, but for the “wrong” company

The film in question is KPop Demon Hunters, an anime-style, neon-drenched, $100 million animated musical about a K-pop trio who moonlight as supernatural monster fighters. In almost any other era, this would have been Sony’s dream: a franchise with built-in sequel potential, crossover music sales, and Halloween costume dominance. But despite Sony writing, making, and producing the thing, it belongs almost entirely to Netflix.

Released globally (and exclusively) on the streamer in June, Demon Hunters has been unstoppable. As it stands at time of writing this article, the film has racked up 291.5 million views, cementing its spot at No. 1 on Netflix’s all-time Top 10 list for English-language films and dethroning Red Notice as Netflix’s most-watched original film ever.

And it’s not just the movie – remember, this is a musical, so there are musicians involved too. The soundtrack, featuring both the fictional band HUNTR/X and the real-world K-pop powerhouse who voiced them, Twice, has taken on a life of its own. Seven songs currently sit in Spotify’s global Top 50, and “Golden,” the breakout anthem, has spent 11 weeks at No. 1 on the Billboard Hot 100. 

Netflix, after more than a decade of trial and error in animation, finally has its megahit. If you listen carefully, you can hear the sound of Mickey Mouse quaking in his little boots.

Sony – the blood, sweat and tears behind it all – will make about $20 million from the deal, which is less than some stars pocket for appearing in Netflix originals. And while the studio does retain the rights to produce sequels or spinoffs, it gets no back-end upside from the first film’s runaway success. In other words, Sony did the work, and Netflix gets the empire.

How did Sony let this one slip?

To answer that question, we need to look all the way back to the pandemic-era dealmaking of 2021 (how does that already feel like a lifetime ago?). At the time, theaters were shuttered or running at reduced capacity, the future of cinema was uncertain, and every studio without its own streaming platform was scrambling to stay afloat.

Sony didn’t have a mass-market streamer of its own – no Disney+, no Max, no Peacock. What it had instead was a relatively solid filmmaking reputation and the option to sell its content to the highest bidder. That year, Sony inked a lucrative “Pay One” output deal with Netflix, covering theatrical films after their box office runs. Alongside it, the studio signed a separate “direct-to-platform” agreement: Netflix would get a first look at certain projects, with a guarantee to greenlight a set number of them for direct release.

Of the films that Netflix chose, Sony would receive the production budget plus a premium (i.e. profit margin) –  typically about 25 percent, capped at $20 million. Netflix would own the rights outright, with no obligation to share profits or renegotiate.

Back then, it looked like a smart hedge. Theatrical grosses were shaky, layoffs loomed, and Sony needed reliable cash flow, pronto. Movies like Greyhound (sold to Apple) and The Mitchells vs. the Machines (sold to Netflix) found audiences outside of cinemas while boosting Sony’s bottom line. Even if a breakout occurred, the thinking went, the studio had guaranteed income during a turbulent era.

No one – least of all Sony – predicted that KPop Demon Hunters would be that breakout, four years after the pandemic. 

Could it have worked in theaters?

Of course the billion-dollar question at this point has to be whether KPop Demon Hunters would have been a global hit if Sony had kept it for itself and released it in theatres instead.

The case for yes: the movie is a genre mashup with global appeal, featuring an anime aesthetic, a built-in K-pop fanbase, and music with real commercial traction. By the time “Golden” hit No. 1, Sony could have been printing money off concert tie-ins, merchandising, and spin-offs. A theatrical launch might have been modest at first, but could have snowballed into a full-on franchise as the earworm-quality of the songs took effect. In other words, Sony may have seen slow uptake on the first movie, but once audiences were hooked, they would have been minting it with every sequel.

The case for no: original animation has been a tough sell at the post-Covid box office. With the exception of Spider-Man: Into the Spider-Verse and its sequel, anime-style projects rarely draw mainstream audiences in large numbers. Netflix’s algorithm-driven environment may have been the perfect incubator, offering slow build, viral chatter, and music-driven discovery. In theaters, Demon Hunters might have opened soft, played well in Asian territories, and then gone on to explode in streaming anyway.

Netflix might have been the right place at the right time. But that doesn’t soften the sting for Sony.

The Netflix playbook pays off

Netflix has spent years trying to crack animation, with mostly middling results. KPop Demon Hunters gives it more than just a hit movie – it gives it a virtual band with millions of fans worldwide. And unlike real-world pop idols, movie band HUNTR/X won’t age out of their prime, demand renegotiated contracts, or enlist for mandatory military service (looking at you, BTS).

Better still, the cast behind the voices aren’t A-list stars with big bargaining power. Netflix owns the music, the characters, and the momentum. Sequels are already inevitable, and this time the streamer doesn’t need to pay Sony for the rights.

It’s the stuff every studio boss dreams of: a relatively cheap hit that spawns multiple revenue streams, from music to merchandise to future films. The upside for Netflix really is nearly limitless.

No risk, no reward

Sony has long argued that it “won” the streaming wars by refusing to launch its own platform. Unlike Warner Bros. or Disney, it didn’t pour billions into trying to beat Netflix at its own game. Instead, it played the middleman, selling films to whichever streamer paid most. That strategy insulated Sony from the streaming bloodbath, which meant no ballooning subscriber-acquisition costs, no shareholder fury, and no need to explain billion-dollar losses to shareholders.

But the KPop Demon Hunters saga shows the downside of being the arms dealer. Sometimes you sell the weapon that wins the war, and someone else plants the flag.

In the end, KPop Demon Hunters is a parable about timing, contracts, and the unpredictable alchemy of hits. In 2021, selling to Netflix looked like a safe bet – keep the lights on, avoid layoffs, hedge against a wobbly theatrical landscape. In 2025, it looks like Sony accidentally sold off the crown jewels. And Hollywood, never one to pass up a narrative, will keep asking the same question: What if Sony had just taken the risk and released KPop Demon Hunters itself?

About the author: Dominique Olivier

Dominique Olivier is the founder of human.writer, where she uses her love of storytelling and ideation to help brands solve problems.

She is a weekly columnist in Ghost Mail and collaborates with The Finance Ghost on Ghost Mail Weekender, a Sunday publication designed to help you be more interesting. She now also writes a regular column for Daily Maverick.

Dominique can be reached on LinkedIn here.

Ghost Bites (City Lodge | Discovery | FirstRand | Lesaka Technologies | Mantengu)

The Finance Ghost
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Ghost Bites (City Lodge | Discovery | FirstRand | Lesaka Technologies | Mantengu)

City Lodge’s momentum is interesting (JSE: CLH)

Meanwhile, the share price has gone the other way

We begin with a year-to-date chart for City Lodge Hotels, reflecting a rather sad and sorry tale of a market that stopped believing in SA Inc:

Some of the metrics looked pretty bleak in the interim earnings, like occupancy rates. But with the release of full-year earnings, there’s been a significant improvement in the second half of the financial year. Even more importantly, the first couple of months of the new financial year are telling a much better story.

For the year ended June 2025, City Lodge increased revenue by 3% thanks to pricing increases that offset a 200 basis points decrease in the occupancy rate to 56%. HEPS for the year was down 0.3%. Adjusted HEPS, which takes out the impact of things like forex, was up 9%. As always, the dividend is a better indication of which HEPS number to focus on, with no increase at all in the dividend for the year.

This was a year of significant investment in refurbishments of hotels, as well as a refreshed website that they must be very proud of because it made the cut as a highlight of their capex programme in the announcement! I don’t think I’ve ever seen that before. Presumably, the website wasn’t cheap. More importantly, they took advantage of the weaker share price by repurchasing shares worth R30 million.

The refurbishments do take some rooms out of commission, but I somehow doubt that this is the reason for the dip in occupancy. There’s still a demand problem, especially as City Lodge doesn’t really appeal to international inbound travellers in the same way that Southern Sun (JSE: SSU) does. The important thing is that occupancy was down 400 basis points for the first half of the year, so ending the year down 200 basis points reflects a decent recovery in the second half.

The food and beverage part of the business has been a major strategic push in recent years and the company has done a great job in that regard. This segment grew revenue by 8% for the year and now accounts for 20% of total revenue (up from 19% in the prior year).

With a tough revenue story, it’s really valuable that the company managed to keep cost growth at just 4%. This did wonders for protecting profitability.

We now get to the particularly good news: July and August 2025 saw an uptick in occupancy of 400 basis points year-on-year. Food and beverage revenues jumped by 16% and 14% for July and August respectively. To add to this, the group is now debt free.

Perhaps it’s time for that share price chart to start heading back into the green?

An ugly day for the Discovery share price (JSE: DSY)

And this was despite strong earnings

The market can be such an unforgiving place. Discovery tanked 9.5% on a day in which it released earnings that showed HEPS growth of 30% for the year ended June 2025. But how can that be?

The concern definitely isn’t a metric like annualised return on opening embedded value, which increased from 13.2% to 15.7%. The final dividend per share was up by a juicy 31%, so it isn’t that either. And as we already know from Discovery’s detailed recent trading update, Discovery Bank achieved breakeven in the second half of the financial year, which is ahead of plan.

A particularly fun fact about Discovery Bank is that 65% of their new clients don’t have any other Discovery products. This isn’t just a cross-sell model. If anything, it’s a helpful funnel to bring new clients into the broader group.

Word on the street is that expected future profit from insurance contracts could be the issue for the share price, with a concern around margins going forwards. I’m certainly not an expert on this sector, so I can’t say for sure whether this is what drove the drop in the share price. Something that did jump out at me is a decline in new business in Discovery Life, a key source of bringing new clients into the Discovery ecosystem.

Despite this, the group’s growth ambition is earnings growth of 12.5% – 17.5% per annum in Discovery South Africa from FY25 to FY29, along with 20% – 30% per annum in Vitality over that period. Those are lofty goals, helped along by Discovery Bank now being on the exciting part of the J Curve.

If there’s any criticism to be levelled here, it’s that whoever did these charts needs a tough talk about the use of the y-axis:

Either that, or it’s done on purpose to make the volatility seem much lower than it actually is. I’ll let you decide whether this is a happy accident or a deliberate distortion of the charts.

FirstRand’s UK issue is but a scratch m’lord (JSE: FSR)

Group earnings grew by 10% and guidance looks fantastic

FirstRand has been dealing with a nasty headache in the UK motor finance industry. There’s been a lot of regulatory noise around commissions paid to dealers. FirstRand recognised a provision of R3 billion in the prior year and they’ve increased that provision by R2.7 billion in the year ended June 2025. They’ve also spent R253 million in legal and professional fees on the matter in the past year (an actual cash outflow, not just a provision).

Despite this significant cost, FirstRand still managed to grow normalised earnings and HEPS by 10%. Normalised return on equity was 20.2%, which means they are still one of the best performing financial services groups in South Africa and certainly the pick of the legacy banks in terms of underlying business quality, which is why FirstRand has been trading at a premium valuation for as long as I can remember.

Cash quality of earnings is strong, with the dividend up 12%.

There was a small uptick in the credit loss ratio, attributed to various factors including “early emerging strain” in the SME book within FNB Commercial. Those interest rate cuts really need to come now, although the retail book actually seems to be in good shape.

Surprisingly, the rest of Africa wasn’t great for FirstRand in this period, bucking the trend we’ve seen elsewhere. FNB Africa grew earnings by 5% and RMB was down 2% as reported, or up 8% and 5% in constant currency respectively.

The star performer was WesBank, with earnings up by 20%. It only contributes 6% of group earnings though. RMB was also solid, with earnings up 10% and a contribution to the group numbers of 26%. If you look through all the segments, the major source of earnings uplift was at the centre, which means areas like endowment and group capital management. Banks are complicated things.

We see this come through again in the note on net interest income, which increased by 6%. The capital endowment benefit was up 14% thanks to the asset and liability management strategies that they use, while they also increased both deposits and loans to customers. Interestingly, they note subdued demand for mortgages, with growth up just 3%. South Africans are buying cars, not houses. Further bucking the trend in the sector, net interest margin also improved (by 6 basis points) thanks to the mix effect of underlying loans.

On the non-interest revenue side, income grew by 6%. Insurance was a particular highlight, up 9%. Unsurprisingly, as we’ve seen everywhere else in the sector, short-term insurance was the major driver.

In RMB, it was advisory fees that really did well, along with realisations of private equity assets. Trading income fell by 27%, so again the benefit of having various sources of revenue is on full display.

Looking ahead to the new financial year, FirstRand expects high single-digit growth in net interest income, which is impressive. The credit loss ratio is expected to remain at the bottom of the through-the-cycle range. Non-interest revenue growth is expected to be in the low- to mid-teens, which would be excellent. They expect cost growth below inflation, which then translates into normalised earnings growth in the “high mid-teens” in their words. Return on equity is expected to be at the upper end of the range of 18% to 22%.

It’s little wonder that the share price closed 6.4% higher based on such strong guidance!

Lesaka Technologies guides a strong FY26 (JSE: LSK)

They just have an awkward accounting restatement to deal with

The unfortunate thing about the markets is that people don’t always read properly. When an announcement talks about an accounting restatement, far too many people just panic and head for the exit as sentiment deteriorates. At Lesaka Technologies, there is indeed a restatement of the past few quarters, but revenue will go up in that restatement rather than down. This relates to agent vs. principal accounting and the split between revenue and cost of goods sold. The TL;DR is that there’s no impact on net profit, so my read is that it’s really just a storm in a teacup that is more a function of accounting complexities than anything else.

If we focus on the fourth quarter earnings that bring FY25 to a close, we find that net revenue was up 47% and adjusted EBITDA increased by 61%. That’s encouraging margin expansion, although the same isn’t true for the full year where revenue was up 38% and adjusted EBITDA increased by “only” 33%.

If you look at the net loss without adjustments for the year, you’ll find a gigantic loss of $87.5 million. This is primarily because of $49.3 million in post-tax negative charges related to the sale of MobiKwik. Adjusted profits are a better way to assess maintainable performance, but investors also shouldn’t gloss over situations where assets were sold at a loss, even if they were considered non-core.

Looking ahead, the guidance for FY26 is adjusted EBITDA growth of at least 35%. They are also introducing adjusted earnings per share as a metric (like all technology companies love to do), with an expectation for this to at least double. Notably, the guidance excludes the Bank Zero acquisition.

The market didn’t love this, perhaps because of the revenue restatements. The share price closed 6.9% lower on the day, taking the year-to-date drop to 23%.

Mantengu looks to acquire New Salt Rock City, giving control of a PGM tailings business (JSE: MTU)

They need to be careful with how they’ve structured this

Mantengu announced the acquisition of 100% of New Salt Rock City, which owns 60% of Kilken Platinum. In turn, Kilken Platinum owns 70% of the Kilken Imbani Joint Venture. In other words, this structure means that Mantengu will ultimately control the joint venture (subject to any unusual terms of that agreement that we aren’t privy to), but will only have 42% economic exposure (60% x 70%).

The Kilken Imbani Joint Venture treats the tailings from the Amandelbult platinum mine owned by Valterra Platinum (JSE: VAL). The joint venture acquires the PGM rich tailings from the mine, processes them and then sells them back to the mine.

For some reason, the announcement says they will issue shares to New Salt Rock City, which doesn’t make any sense as that’s the entity they are acquiring. I’m sure they mean that shares will be issued to the seller of that business, being the Lutzkie Besigheids Trust. It will be done in such a way that the seller will have less than 35% in Mantengu and thus won’t trigger a mandatory offer, which means there’s a cash component as well. There’s no indication yet of how it will be funded.

The price also hasn’t been announced yet, as this will be established during the due diligence. All we have to work with is a valuation from back in 2020 that values the joint venture at R4.4 billion. Inexplicably, the last set of audited financials for the joint venture was from 2019! Sigh.

We haven’t even gotten to the weirdest part yet. The CEO and CFO of Mantengu Mining will be appointed to the board of Kilken immediately upon execution of the term sheet i.e. before any of the deal conditions are met and before the price has even been agreed. They better hope that there isn’t a Competition Commission approval requirement for this deal, as one of the core elements of competition law is that you cannot behave as though the deal is done before it is actually approved by the regulator. I’m no legal expert, but it’s hard to see how a director appointment wouldn’t be in breach of that. Perhaps things have changed since my advisory days a decade ago, but I doubt it.

The due diligence period will last for three months, with the CEO and CFO being directors of a company that they wouldn’t even have done a due diligence on. That’s certainly not a risk I would personally take.

Nibbles:

  • Director dealings:
    • A non-executive director of two major subsidiaries of MTN (JSE: MTN) – and more importantly, the group COO) – sold shares worth a meaty R14 million. That’s a large disposal after a strong rally in the price.
    • A director of SPAR (JSE: SPP) bought shares worth R748k.
    • A director of a major subsidiary of PBT Group (JSE: PBG) bought shares worth almost R500k.
  • Barloworld (JSE: BAW) updated the market on the standby offer conditions and the acceptance levels thus far. The Namibian Competition Commission approval has now been received, with only the COMESA and Angolan approvals outstanding. It’s always the regulators in the rest of Africa that take the longest. The longstop date has been extended by three calendar months to 11 December 2025 to achieve these approvals. At this stage, the offer has been accepted by holders of 41.1% of Barloworld shares in issue, which would give the consortium and the Barloworld Foundation an effective 64.5% in Barloworld. The offer will be open for 10 business days after the transaction becomes unconditional, so it’s likely there are shareholders out there just keeping their options open until they have no choice but to accept or decline.
  • The various resolutions required for the implementation of the Cilo Cybin (JSE: CCC) transactions were all passed by shareholders. The company will be transferring its listing to the main board of the JSE on 29 September.
  • Libstar (JSE: LBR) has not exactly been a success story on the local market, with the share price having shed nearly 70% of its value since listing. This is why Libstar has been able to repurchase the shares in its B-BBEE scheme for nominal value. If a share price heads in the wrong direction, then so too will the value in a B-BBEE scheme. As these schemes usually have huge amounts of leverage in them, they can easily end up with no value unless the underlying shares go up in value significantly over time.
  • For those who like to get a sense of the cost of debt, Bidvest (JSE: BVT) has priced US$-denominated seven-year bonds at a coupon of 6.2%. The notes are issued in the UK (despite being in US dollars) and are guaranteed by Bidvest, so that’s a solid indication of the group cost of debt in hard currency.
  • Although the offer by Primary Health Properties (JSE: PHP) to shareholders of Assura (JSE: AHR) has now formally closed, there is still the compulsory or “squeeze-out” offer to get the rest of the shares. In other words, even for those who didn’t accept the offer in time, they will likely be forced to sell their shares anyway.

Who’s doing what this week in the South African M&A space?

Marylou Greig
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Who’s doing what this week in the South African M&A space?

Exchange-Listed Companies

Mantengu has entered into a binding term sheet with the Lutzkie Besigheids Trust to acquire 100% of New Salt Rock City which in turn owns 60% of Kilken Platinum. Kilken is the 70% owner of the Kilken Imbani Joint Venture. The jv is an integrated processing operation treating the tailings from the Rustenburg Platinum Mines owned by Valterra Platinum. The purchase consideration, which is still to be finalised pending a due diligence, will be payable in a combination of cash and shares issued by Mantengu.

Anglo American has announced a proposed merger with Canada’s Teck Resources in a US$60 billion deal. Anglo has a market capitalisation of R630 billion while Toronto-listed Teck is valued at c. R300 billion. As this is a merger, no significant takeover premium is being paid by Anglo who will issue 1,33 shares to existing Teck investors for each share they hold in the company. Anglo shareholders will receive $4,5 billion via a special dividend (using proceeds received from the shedding of its remaining shareholding in Valterra Platinum) and will end up with a 62.4% stake in the merged entity to be called Anglo Teck. The new entity will shift its headquarters to Canada and retain its primary listing in London with secondary listings in Johannesburg, Toronto and New York. The merger will concentrate around 70% of the company’s portfolio in copper, alongside iron ore and zinc. The merger is expected to produce a total $800 million in pre-tax savings. The transaction is subject to regulatory approvals expected to complete within 12-18 months.

The Spar is to sell its interest in Spar Switzerland to Tannenwald Holding AG in a deal with an equity value of c.R1,03 billion. In addition, Spar will be entitled to further earn-out payments of up to c.R660 million due at the end of 2027 based on actual achieved EBITDA of Spar Switzerland for FY26 and FY27.

CP Finance, as subsidiary of Newpark REIT, has entered into a conditional agreement to dispose of the industrial property known as Crown Mines, situated at 28 Renaissance Drive in Crown City, Johannesburg. Aviwe Nonya will pay R101,4 million to Newpark for the property, the proceeds of which will be used to reduce debt and fund new acquisitions.

As of 11 September 2025, Newco’s Standby Offer had received valid acceptances in respect of 76,67 million Barloworld ordinary shares equating to a c.41.1% stake in the company. This together with the Consortium’s and Barloworld Foundation’s existing shareholdings, equates to 64.5% of the shares in issue.

Unlisted Companies

Rekindle Learning, a women-led local digital learning innovator, has acquired EpiTek, a South African educational technology (EdTech) company that provides Software as a Service (SaaS) for online education platforms tailored for the African market. The EpiTek acquisition positions Rekindle Learning as a significant player in a sector largely dominated by international players. Financial details of the transaction were not disclosed.

Educational technology company The Invigilator, has secured US$11 million in international equity investment led by Kaltroco, a private investment company based in Jersey and investment professionals in Nashville, Zurich and Cape Town. The investment will give it the ability to ramp up AI development, allowing greater access to education while maintaining assessment credibility. It will roll out further, creating teams and presence in the US, Asia and Europe. Since inception in 2020, The Invigilator has served over 100 institutions with over 850,000 registered students, processing over six million results through more than 75,000 assessments across these institutions.

The African Forestry Impact Platform (AFIP), a fund of New Forests, a global investment manager of nature-based real assets and natural capital strategies, has invested in Rance Timber, a forestry and saw milling company in South Africa. The family-owned business consists of c.14,000 hectares of pine plantations and two sawmills based in the Eastern Cape. The acquisition follows AFIP’s earlier investment in Green Resources in East Africa. The fund, which has US$8 billion in assets is headquarter in Australia. Financial details were undisclosed.

Mulilo Energy, a renewable energy developer and strategic equity investor based in Cape Town, has secured a corporate facility from Standard Bank with an initial commitment of R1,1 billion available to support equity commitments while a further R5,9 billion can be allocated from headroom as the security pool grows raising commitments to R7 billion. This will enable Mulilo to execute on a robust pipeline of renewable energy projects spanning REIPPPP, Battery Energy Storage Systems and private off-take agreements with aggregators and traders.

TaxTim, a Cape Town-based digital tax assistant has been acquired by a consortium led by Twofold Capital and including Stellenbosch-based Octoco. Founded in 2011, TaxTim’s platform integrates with Sars eFiling, guiding users through a step-by-step process to prepare and submit returns and has processed over R700 million in tax refunds for its users to date.

Fintech platform Float has secured US$2,6 million (R46 million) in funding co-led by Invenfin (89% held by Remgro) and SAAD Investment Holdings with participation from existing investors including Platform Investment Partners. Lighthouse Venture Partners contributed as an investor and strategic adviser. Float offers consumers a responsible alternative to traditional credit by enabling them to split large credit-card purchases into monthly instalments up to 24 months without interest or fees, using existing credit limits. The funds will be used to scale Float’s footprint across SA, improve its technology and prepare for international market expansion.

Cape Town-based HOSTAFRICA, a provider of web hosting, domains and VPS services for the African continent has signed an agreement to acquire the Tanzanian web hosting company Zesha (T). HOSTAFRICA already has a footprint in South Africa, Nigeria, Kenya and Ghana. Financial details were undisclosed.

DealMakers is SA’s quarterly M&A publication.
www.dealmakerssouthafrica.com

Weekly corporate finance activity by SA exchange-listed companies

Marylou Greig
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Weekly corporate finance activity by SA exchange-listed companies

Libstar has exercised its option to repurchase 73,049,783 shares from the special purpose vehicles – Business Venture Investments No 2071 and Business Venture Investments No 2072 owned by the Libstar Employee Share Trust. The option became exercisable on the scheme’s seventh anniversary. The repurchased shares have reverted to authorised but unissued shares of the company.

The category 1 transaction announced by eMedia in June this year involved the subscription by Venfin (Remgro) of 18,3 million EMH N shares, the disposal by Venfin of about 17,7 million ordinary shares it owned in EMI, post the subscription, to EMH in exchange for 220,1 million EMH N shares. This resulted in giving eMedia control of the entity EMI that holds its stake in e.tv., eNCA, OpenView and Yfm. As per the transaction agreement, Remgro has now unbundled to shareholders by way of a distribution in specie, its 35% stake in EMH, creating a significantly larger percentage of the EMH N shares now in the hands of public shareholders.

Copper 360 intends to raise new equity of R400 million from existing shareholders at a price of 50 cents per share, underwritten by Differential Capital, in the amount of R260 million. In addition, the company will undertake a debt restructure with the conversion of long-term debt instruments on its balance sheet and the reduction of revenue-based royalty payments. The debt conversion will result in the issue of a maximum of 1,5 billion new ordinary shares issued in terms of the rights offer.

Last week Dipula Properties launched an equity raise of c.R500 million, implemented through an accelerated bookbuild process to fund acquisitions, which will include the Protea Gardens Mall in Soweto, announced on 19 August 2025 for R478,1 million. The bookbuild raised R559 million with 102,946,593 new ordinary shares placed at an issue price of R5.43 per share. The issue price represents a discount of 4.23% to the closing price prior to announcement and a discount of 4.86% to the 30-day VWAP.

Altvest Capital has launched an equity capital raise through the allotment and issue of 1 million shares at R11.00 per share. Having formally adopted the Bitcoin Treasury Strategy, the company now proposes to change the company name to The Africa Bitcoin Corporation, subject to shareholder approval. The name change is expected to take effect from 12 November 2025.

PBT Group is to change its name to PBT Holdings to better reflect its entire service offering – providing services via three core brands, PBT Technology Services, PBT Insurance Technologies and CyberPro Consulting. Shareholders will need to vote on this and will trading under the new name from 12 November 2025.

Pan African Resources is to apply to move the trading of its shares from AIM to the main market of the LSE. Management believes that the proposed move to the Main Market could enhance the company’s corporate profile and broaden its access to a wider pool of UK and global investors thereby supporting its next phase of growth.

The revised offer by Primary Health Properties (PHP) of Assura closed on 10 September. On 11 September PHP listed a further 44,845,540 new PHP shares in terms of the scheme. Following the successful acquisition the trading of Assura shares on the Main Board of the JSE is expected to be suspended on 3 October 2025.

Cilo Cybin previously indicated that the expected date of transfer of the company to the Main Board was Friday, 26 September 2025. The revised expected date of transfer is now Monday, 29 September 2025.

This week the following companies announced the repurchase of shares:

The Board of Old Mutual has approved a share buyback of up to R3 billion subject to prevailing market conditions. The buyback will proceed while the share price reflects a level that is considered accretive to shareholder value.

South32 continued with its US$200 million repurchase programme announced in August 2024. The shares will be repurchased over the period 12 September 2025 to 11 September 2026. This week 691,649,215 shares were repurchased for an aggregate cost of A$4,30 million.

On March 6, 2025, Ninety One plc announced that it would undertake a repurchase programme of up to £30 million. The shares will be purchased on the open market and cancelled to reduce the Company’s ordinary share capital. This week the company repurchased a further 170,951 ordinary shares at an average price of 188 pence for an aggregate £321,528.

Investec ltd commenced its share purchase and buy-back programme of up to R2,5 billion (£100 million). Over the period 3 to 9 September 2025, Investec ltd purchased on the LSE, 8,60,871 Investec plc ordinary share at an average price of £5.5219 per share and 1,237,210 Investec plc shares on the JSE at an average price of R131.2998 per share. Over the same period Investec ltd repurchased 546,340 of its shares at an average price per share of R131.5593. The Investec ltd shares will be cancelled, and the Investec plc shares will be treated as if they were treasury shares in the consolidated annual financial statements of the Investec Group.

The purpose of Bytes Technology’s share repurchase programme, of up to a maximum aggregate consideration of £25 million, is to reduce Bytes’ share capital. This week 227,893 shares were repurchased at an average price per share of £4.10 for an aggregate £929,881.

Glencore plc’s current share buy-back programme plans to acquire shares of an aggregate value of up to US$1 billion. The shares will be repurchased on the LSE, BATS, Chi-X and Aquis exchanges and is expected to be completed in February 2026. This week 10,951,423 million shares were repurchased at an average price of £2.89 per share for an aggregate £31,66 million.

In May 2025 Tharisa plc announced it would undertake a repurchase programme of up to US$5 million. Shares have been trading at a significant discount, having been negatively impacted by the global commodity pricing environment, geo-political events and market volatility. Over the period 1 to 5 September 2025, the company repurchased 5,438 shares at an average price of R21.80 on the JSE and 148,499 shares at 92.2 pence per share on the LSE.

In May 2025, British American Tobacco plc extended its share buyback programme by a further £200 million, taking the total amount to be repurchased by 31 December 2025 to £1,1 billion. The extended programme is being funded using the net proceeds of the block trade of shares in ITC to institutional investors. This week the company repurchased a further 602,401 shares at an average price of £41.38 per share for an aggregate £24,93 million.

During the period 1 to 5 September 2025, Prosus repurchased a further 1,183,810 Prosus shares for an aggregate €61,66 million and Naspers, a further 98,781 Naspers shares for a total consideration of R564,4 million.

During the week four companies issued or withdrew a cautionary notice: Copper 360, Tongaat Hulett, PSV and Mantengu.

DealMakers is SA’s M&A publication.
www.dealmakerssouthafrica.com

Who’s doing what in the African M&A and debt financing space?

Vanessa Aitken
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Who’s doing what in the African M&A and debt financing space?

DealMakers AFRICA

Janngo Capital has invested an undisclosed sum in Jobzyn, a Moroccan startup that uses artificial intelligence to transform the recruitment process. The platform combines automation, transparency, and AI to help companies find the right talent while helping candidates make better career decisions.

WaterEquity has made its first investment from the Water & Climate Resilience Fund, committing US$5 million to Savant Group, the parent company of Kenya’s SunCulture. SunCulture’s solar-powered water pumps offer an affordable alternative to diesel and manual water pumps. Designed for irrigation, the pumps are also used by more than 90% of customers to access groundwater for drinking, cooking, and cleaning – helping rural households meet daily water needs more reliably, efficiently, and sustainably. WaterEquity’s investment will enable SunCulture to scale its operations and deepen its impact – aiming to expand water access to millions of farmers and their families in rural Africa.

ARISE Integrated Industrial Platforms (ARISE IIP), a pan-African developer and operator of integrated industrial zones, announced the successful completion of US$700 million capital raise. The raise will see Vision Invest, a Saudi Arabian infrastructure investor and developer, join existing institutional shareholders, Africa Finance Corporation, Equitane and the Fund for Export Development in Africa (FEDA), the development impact platform of Afreximbank. ATISE IIP was founded in Ghana in 2010 and has now expanded to more than 14 countries across Africa, deploying nearly US$2 billion in infrastructure and enabling over 50,000 jobs. The platform focuses on creating local value through the transformation of raw materials and import substitution.

International Lithium Corp (ILC) has acquired an option from Lepidico (Canada) to buy 100% of the shares of Lepidico (Mauritius) on a debt-free basis for consideration of C$975,000 plus certain payments in the future that are contingent on and linked to various possible receipts by Lepidico Canada. Lepidico Mauritius in turn owns 80% of Lepidico Chemicals Namibia which owns the Karibib Lithium, Rubidium and Cesium project in Namibia. The Karibib Project comprises two areas near Karibib, Namibia, with fully permitted mining licences known as Rubicon and Helikon along with an Exclusive Prospecting Licence EPL5439 for an adjacent area.

Mezzanine finance fund manager, Vantage Capital, has fully exited its investment in Equity Invest, a Moroccan group comprising six companies operating across various segments of the information technology space. The group’s business lines include electronic security, audiovisual multimedia systems, renewable energy, digital payments, e-commerce and hospital management software. Vantage provided Equity Invest with an €8 million mezzanine finance facility in October 2019. The funding enabled the founder, Mr. Ali Bettahi, to secure a controlling stake in one of the group’s flagship subsidiaries, Unisystem Group, by acquiring the shares that were held by a private equity investor. Under Mr. Bettahi’s ownership and with Vantage’s strategic support, the group has consolidated its position in Morocco and also expanded into new markets in sub-Saharan Africa.

Helios Investment Partners has received preliminary approval, by the board of Telecom Egypt, of Helios’ binding offer to acquire a stake ranging from approximately 75% to 80% in a subsidiary that will own the Regional Data Hub (RDH) data centre assets of Telecom Egypt. The offer values 100% the RDH on a debt-free, cash-free basis at US$230 million, which could reach US$260 million subject to the achievement of certain KPIs. The RDH is a multi-phase data centre campus in Cairo. The first phase was launched in 2021 and provides approximately 2.5 MW of IT load; it reached full utilization within a year, and achieved multiple Uptime Institute Tier III certifications. RDH2 is designed for approximately 4.6 MW, received Uptime Institute Tier III Design Certification in November 2024, and is registered for the Leadership in Energy and Environmental Design (LEED) programme.

Nigeria’s Husk Power Systems has secured a ₦5 billion revolving, local currency debt facility from United Capital Infrastructure Fund (UCIF). The revolving facility is the first Naira-denominated debt instrument of its kind. The revolving loan has a tenure of 10 years, during which Husk expects to redeploy the capital twice. Initial deployments will be used to build out Husk’s standalone minigrid pipeline in Nigeria, with expansion plans to include interconnected minigrids (IMGs) and commercial and industrial (C&I) solar projects.

South Africa’s HOSTAFRICA has entered the Tanzania market with the acquisition of Tanzanian web hosting company, Zesha for an undisclosed sum. Since its founding in 2016, HOSTAFRICA has established a strong presence in South Africa, Nigeria, Kenya and Ghana. Tanzania becomes the fifth country in HOSTAFRICA’s regional network.

DealMakers AFRICA is the continent’s quarterly M&A publication
www.dealmakersafrica.com

SA CEOs re-evaluate strategic plans and approach to investments

Quintin Hobbs
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SA CEOs re-evaluate strategic plans and approach to investments

According to our latest EY Parthenon CEO Outlook Pulse Survey, South African CEOs navigating the complexities of today’s global landscape recognise that geopolitical tensions, macroeconomic fluctuations and trade uncertainties pose both significant risks and opportunities for their investment and growth strategies.

Unsurprisingly, the recent spate of tariff increases has become a pressing concern, compelling CEOs to re-evaluate their tactical plans and approach to deploying capital. In response, some are temporarily delaying planned investments, reflecting a commitment to safeguarding operations and ensuring long-term sustainability in an unpredictable environment.

Despite these challenges, South African CEOs are demonstrating resilience and adaptability:
• While 43% identify geopolitical, macroeconomic and trade uncertainty as a risk to achieving their 12-month growth targets – mirroring the global average – local leaders are taking more proactive steps.

• For example, 67% are considering joint ventures, in line with global peers, but 42% are accelerating digital transformation, compared to just 24% prioritising technology globally.

• Additionally, 54% have delayed planned investments due to economic uncertainty, yet SA CEOs remain notably committed to maintaining transactional activity over the next year.

• To mitigate the impact of rising tariffs and broader uncertainty, we see businesses actively investing to diversify their supply chains and end markets. This strategic pivot is essential for enhancing resilience. In the South African context, CEOs continue to show clear determination to continue investing in enterprise transformation and pursuing growth opportunities. This forward-looking stance signals confidence in the market’s potential, and a readiness to navigate complexity with agility and purpose.

A Global view

According to the latest EY Parthenon CEO Outlook Survey, 98% of Global CEO respondents are concerned about tariff increases affecting their company’s operations and sales in the next 12 months, with 50% very or extremely concerned. Indeed, geopolitical, macroeconomic and trade uncertainty is cited as the top risk to achieving growth (42%), and 54% say they have delayed a planned investment as a result. But CEOs are responding proactively by rethinking global relationships: 44% of respondents say they are looking to adjust supply chain arrangements; 42% are exploring product design innovations to reduce reliance on tariffed materials; and 39% are relocating operational assets to a different geography.

The complexity of the current landscape is reflected in the fact that the most critical trading relationships are not always the closest or most locally significant, according to the survey. While 42% of Chinese respondents cite the US-China tariff and trade dispute as their primary concern, 8% are more focused on the US-Mexico relationship. This underscores global interconnections and the difficulty of navigating tariff challenges, particularly as other major economies react to potential US tariffs. This contrasts with a highly positive outlook for M&A in 2025 prior to the US administration’s tariffs announcement of 2 April this year, which culminated in US$1T of deals recorded during Q1 2025 – up 25% year-on-year. With 57% of survey respondents hoping to pursue M&A in the next 12 months, the report indicates that pre-existing pressures – tech adoption and a talent squeeze key among them – will remain pent-up transformation drivers that will see CEOs return to dealmaking as the market settles.

M&A can drive transformation and deliver value in times of challenge

While reports of integration hurdles, cultural misalignment and overestimated synergies often lead to speculation around how much shareholder value is delivered post-deal, the survey tells a different story about the CEO experience. More than half of CEO respondents (55%) say their recent acquisitions met or exceeded value expectations, with only 2% reporting value destruction.

AI investment roadmap unclear as many CEOs look to cost reduction

Global CEOs report mixed results from artificial intelligence (AI) deployments to date, which may slow down implementation in a turbulent year.
While 36% of respondents say they plan to expand AI investments after positive results to date, 25% say they are “scaling back or reconsidering” AI investments due to “unclear or disappointing” returns. This may create pressure on AI deployments, as CEOs try to balance a cautious response to the current volatility with an ongoing demand to accelerate AI adoption, and to upskill and hire talent for specialised AI roles.

With nearly half of CEO respondents (42%) indicating that they are looking to absorb additional costs internally through operational efficiencies and cost reductions, many may be delaying tech investment pending more geopolitical certainty.

Also fuelling a renewed and likely growing focus on cost management is the challenge of inflation. Seventy-one percent of respondents agree that inflation continues to be a challenge and will be an issue they need to navigate for the next year, and many of those will be looking at opportunities to mitigate cost increases.

In summary

South African CEOs are proactively adapting to global challenges, with 43% citing geopolitical and economic uncertainty as a risk, on par with global peers. However, they are more likely to accelerate digital transformation (42% vs 24% globally) and pursue joint ventures (67%).

Despite 54% delaying investments, SA leaders remain committed to dealmaking and enterprise transformation. This mirrors global trends, where CEOs are rethinking supply chains and planning M&A activity despite tariff pressures and inflation concerns. While AI investment is mixed, both local and global CEOs are focused on cost efficiency and long-term value creation.

Quintin Hobbs is an EY-Parthenon Africa Strategy and Transactions Leader | EY

This article first appeared in DealMakers, SA’s quarterly M&A publication.

DealMakers is SA’s M&A publication.
www.dealmakerssouthafrica.com

How AI is revolutionising the M&A deal cycle

Njeri Wagacha and Wambui Kimamo
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How AI is revolutionising the M&A deal cycle

Artificial Intelligence (AI) is rapidly transforming the landscape of mergers and acquisitions (M&A). What used to be a slow, labour-intensive process involving countless hours of manual review is now becoming faster, more precise, and data-driven thanks to AI-powered tools. From deal sourcing through due diligence, negotiation and post-merger integration, companies are leveraging AI to gain competitive advantages and unlock greater value.

DEAL SOURCING AND TARGET IDENTIFICATION

One of AI’s most valuable contributions to the M&A process is its ability to identify and evaluate potential acquisition targets with speed and precision. According to McKinsey & Company, AI algorithms can analyse vast and diverse datasets, including financial records, transaction histories, news reports and social media content to highlight targets that align with strategic and financial goals. Beyond target identification, AI supports predictive analytics that allow legal and investment teams to forecast key performance indicators, revenue trends, ROI potential and market fluctuations, providing dealmakers with an opportunity to compare options and make data-driven choices. This reduces the risk of poor fit, and enhances strategic decision-making at the earliest stages of a deal. Additionally, AI platforms can assess softer factors such as corporate culture, customer overlap, and operational compatibility, helping organisations to anticipate integration challenges and prioritise the most promising opportunities.

DUE DILIGENCE AND TRANSACTION DOCUMENTS WITH AI AUTOMATION

Due diligence is often the most time-consuming and resource-intensive stage of an M&A transaction. Traditionally, legal and advisory teams manually review vast volumes of legal, financial and regulatory documents, a process that can take weeks or months. The sheer complexity and volume of data can lead to delays, increased costs and missed red flags, with many high-profile M&A failures stemming from inadequate or rushed due diligence. AI technologies significantly accelerate document analysis by automating the extraction of relevant data from diverse sources, reducing the burden on human analysts and ensuring a more comprehensive and accurate analysis. Whether it’s spotting inconsistencies in contractual clauses, identifying compliance gaps, or highlighting unusual financial metrics, AI empowers deal teams to swiftly conduct deeper and more accurate assessments. As such, AI adoption is quickly becoming essential for private equity firms, legal teams, financial advisors and investment banks seeking a competitive edge in today’s high-stakes deal environment.

AI has emerged as a transformative tool in the preparation and management of transaction documents. According to a recent article by M&A Community, its benefits at this stage include:

i. Reduced manual effort: AI eliminates repetitive and time-consuming tasks such as document review, data extraction and preliminary analysis. This allows deal teams to shift their focus to higher-value activities, including interpreting insights and making strategic decisions.

ii. Accelerated timelines: AI enables rapid generation and review of transaction documents based on the client’s needs, significantly reducing the time required to prepare, negotiate and finalise documentation, allowing deal timelines to move forward faster.

iii. Lower cost: automation of document review, drafting and data extraction reduces dependence on large legal or deal teams, lowering the overall transaction costs while minimising the risk of human error. AI also supports early detection of inconsistencies or missing provision in key documents, helping avoid costly oversight or post signing disputes.

SUPPORTING POST-MERGER INTEGRATION FOR SUCCESS

Ansarada has highlighted the use case for AI in post-merger integration to include:

i. Uncovering hidden synergies by analysing customer behaviour, market trends and internal capabilities, revealing new growth opportunities and suggesting innovative product ideas, optimal marketing and operational strategies, and proposing new business models, enabling integration teams to move beyond simply merging operations to driving a sustainable company.

ii. Generative AI can simulate numerous “what if” scenarios during post-merger integration, using historical data and predictive models to evaluate different potential strategies and their potential outcomes to help make informed decisions.

iii. Natural language processing tools can analyse employee communications and feedback to detect shifts in sentiment and flag potential morale issues early, allowing leaders to address concerns before they escalate.

CHALLENGES OF AI IN M&A

Despite its potential, several challenges hinder the adoption of AI in mergers and acquisitions. These include:

i. Data privacy: the deal cycle often involves handling sensitive and proprietary information about the target company. Firms using AI must implement stringent data protection measures, including data anonymisation and full compliance with relevant data protection regulations.

ii. Data inaccuracy: The effectiveness of AI systems is largely dependent on the quality of the data they analyse. When data is incomplete or contains errors, it can result in misleading analyses, which creates significant risks. This is especially relevant in the African context, which is discussed further below.

iii. High implementation costs: Deploying AI technologies often demands substantial financial resources, including investments in advanced technology, supporting infrastructure and specialised talent. These considerable initial expenses can pose significant barriers, particularly for smaller firms seeking to leverage these technologies.

Additionally, cultural and qualitative factors, such as leadership alignment, employee engagement and stakeholder relationships remain difficult for AI to fully evaluate, underscoring the continued importance of human judgment alongside AI insights.

THE AFRICAN CONTEXT

As AI becomes increasingly embedded in the M&A process, Africa faces the unique challenge of AI recolonisation, due to the reliance on foreign-developed AI technologies. Most AI tools used across the continent are created and controlled by entities outside Africa, often trained on non-African data, and developed with limited understanding of local markets. In the M&A context, this creates a significant barrier, as tools that are not trained on African-specific data are less likely to deliver accurate insights. To overcome this, there must be a deliberate effort to develop locally relevant AI capabilities supported by robust, context-specific data infrastructure. This is not simply a technical requirement, but a strategic imperative for unlocking AI’s full potential in identifying suitable acquisition targets, assessing risks accurately, and guiding post-merger integration within Africa’s M&A landscape.

CONCLUSION

As we enter the era of Industry 5.0, marked by closer human-machine collaboration, AI is set to become an essential partner in the M&A process. Rather than replacing professionals, AI tools are designed to amplify human judgment, streamline decision-making, and unlock deeper strategic insights across every stage of a transaction. In leveraging AI in the M&A process, maintaining human oversight is crucial to ensure the validity and accuracy of AI-generated insights. In this early stage of AI adoption, practitioners must take full responsibility for thoroughly reviewing and verifying all analyses and findings produced by AI before finalising any deal. Successful integration will depend on how effectively organisations combine AI’s analytical power with human experience and intuition. Those who adopt this balanced approach will be better positioned to navigate complexity, reduce risk, and create long-term value in an increasingly competitive deal environment.

Njeri Wagacha is a Director and Wambui Kimamo a Trainee Lawyer | CDH Kenya

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

Ghost Bites (Growthpoint | Metair | Old Mutual | Pan African Resources | Remgro)

The Finance Ghost
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Ghost Bites (Growthpoint | Metair | Old Mutual | Pan African Resources | Remgro)

The jewel in Growthpoint’s crown is still the V&A Waterfront (JSE: GRT)

They have plenty to think about elsewhere

Growthpoint has released results for the year ended June 2025. The company is an excellent barometer for the property sector at large, such is the sheer size and reach of their portfolio. But even within that extensive exposure, there’s a small area at the tip of Africa that shines the brightest.

Like-for-like net property income at the V&A Waterfront increased by 12.7%, driven mainly by tourism. It’s an indication of what can actually be achieved in this country when our beautiful natural scenery is accompanied by better governance and private investment. In this particular period, Growthpoint’s 50% share of distributable income from the iconic property increased by only 4.5%, as there were significant external borrowings that drove higher net finance costs. It’s important to remember that the balance sheet / funding strategy for a property is distinct from how the underlying property is performing.

Unlike at the V&A, the overall approach in the group is one of debt reduction. The group loan-to-value improved from 42.3% to 40.1%, with the proceeds of various disposals (including Capital & Regional) used to reduce debt.

The second part of loan-to-value is of course the value, at which point we find some pressure from asset write-downs at Growthpoint Properties Australia. I don’t know what it is about that country, but South African businesses should just stay away. The Melbourne office portfolio is suffering, driving a decrease in Growthpoint’s net asset value per share of 1.6% to R19.88.

This is a timely reminder that simpler exposure is better, particularly in markets that are easier to understand. Growthpoint has reached this conclusion themselves and they are selling non-core assets in South Africa, with 24 properties sold this year. They still have a long way to go, with 40% of the domestic portfolio exposed to the office sector. It takes a very long time to change this, as the exposure was 46% all the way back in FY15 when Sandton was the most exciting place to work in the country. In case you’re curious, retail has remained at 39% over the past decade and the industrial and logistics portfolio has increased from 15% to 20%.

It’s not just a shift in exposure by type of property. Growthpoint is now focusing their capital expenditure and development on the Western Cape, which has much better property fundamentals than any other province. I’ll say it again: if you want to see fixed capital formation, you need good governance that supports a long-term view.

Another interesting shift is offshore vs. local, with Growthpoint earning 28.7% of distributable income per share from offshore sources this period. That’s down from 32.4% in the prior year as they shift the mix back towards South Africa.

Clearly, there’s a lot going on at Growthpoint. The net result is that distributable income per share increased by 3.1% for the year to June 2025, while the dividend per share increased by 6.1% as the payout ratio moved higher.

Looking ahead, Growthpoint’s office exposure remains a serious headache, particularly in Gauteng. The overall group story is a mixed bag, yet they expect distributable income per share to grow by between 3% and 5% for FY26, with the distribution per share up by between 6% and 8%. In other words, they are guiding for a further increase in the payout ratio.

Metair is fighting hard for a turnaround (JSE: MTA)

This is a particularly difficult sector

Metair released results for the six months to June 2025 that are filled with things that distort the trend, like the consolidation of Hesto and the addition of AutoZone. You can therefore safely ignore the revenue increase of 53%, as this is no indication at all of how the underlying business is performing.

They don’t make it simple to find the information you need to judge that performance, let me tell you. Deep in the management commentary, you can eventually find nuggets like a note that revenue from vehicle OEMs (Metair supplies parts to local manufacturers) increased by 8% if you adjust for Hesto, with EBIT margins from 5% to 6.6%. That’s a good story, so why is it as hard to find as your keys when you drop them between the front seats?

AutoZone is still a loss-making business as expected, with negative EBIT of R24 million for the six months. This is why revenue in the aftermarket parts and retail segment grew by 33%, but EBIT fell by 32%. If you exclude AutoZone, the segment achieved an EBIT margin of 6.1%, which is in line with management expectations.

So, the underlying theme here is one of resilience. Despite the US tariffs and all the other reasons why the local OEMs should be performing terribly, they’ve actually been decent. This is great news for Metair and the entire value chain. Notably, group HEPS from continuing operations was down 8% to 71 cents, so things are still tough out there.

On the balance sheet, the consolidation of Hesto’s debt and working capital requirements, as well as an overall reduction in cash, led to group net debt jumping from R2.7 billion to R5.1 billion. All covenants on the debt restructuring were met in this period, with the group taking a highly conservative approach to capital expenditure while they look to further improve the balance sheet.

Metair also included this rather juicy nugget about ArcelorMittal (JSE: ACL): “ArcelorMittal South Africa announced at the end of August that they will be closing their long steel business at the end of September 2025. Despite commitments made to produce the steel orders that we required for the remainder of the year, this did not happen. Metair is working closely with our customers on the alternative steel supplier that we have been engaging with for some time to ensure our supply commitments are met.”

It’s pretty disappointing to read this in the context of the amount of money that was thrown at the ArcelorMittal Longs business to try and save it.

FY26 is going to bring further challenges, like changes to the model ranges at major customers. Metair is such a difficult business to run, as they are largely beholder to the decisions made by the OEMs who manufacture vehicles here. This is exactly why they’ve taken steps like the AutoZone deal, as they want to have more control over their own destiny.

And there’s still the overhang of the European Competition Commission’s investigation into European automotive battery manufactures, including Metair’s business Rombat…

Old Mutual is further proof that short-term insurance was the rising tide for all boats in this period (JSE: OMU)

The “right to win” for the bank is one of four strategic priorities

Old Mutual has released results for the six months to June 2025. The company needs to close the long-term performance gap to arch-rival Sanlam (JSE: SLM), with Old Mutual’s share price having made a sharp move upwards in recent months:

This rally has been driven by the market’s expectations and now confirmed knowledge of Old Mutual’s recent performance, with results for the six months to June reflecting adjusted headline earnings growth of 29%. As we’ve seen across the sector, the positive underwriting performance (margin up 270 basis points to 7.1%) in Old Mutual Insure was a substantial boost.

To bring that growth down to earth, the interim dividend was up 9%. Still strong, but certainly not 29%. They have announced a substantial share buyback programme as well.

In case you’re wondering about the adjustment to headline earnings, look no further than Zimbabwe. The transition of the functional currency from Zimbabwe Gold to the US Dollar actually took group headline earnings lower, so the adjustment makes a huge difference here.

The life insurance business also has plenty of work to do, with life sales up just 1% and the present value of new business premiums down 7%. The past year was very much a story of short-term insurance, not life insurance.

Another issue is net client cash flows. Although Old Mutual is quick to point out the 7% increase in gross flows, you have to read through the detail to find that net outflows more than doubled year-on-year. Ouch.

I remain very skeptical of the plan to establish a bank. It’s an incredibly tough space and I don’t really see what Old Mutual is going to do differently, with most of their strategic messaging being around their distribution potential through existing Old Mutual branches and financial advisors. I’ve gotta tell you, all the legacy banks have a branch network, so what exactly is the key differentiator here? Even with all its strategic differentiation and the strength of Vitality, it took Discovery (JSE: DSY) ages to finally break even in their bank in recent months.

Perhaps Old Mutual will surprise me.

MTR drives record production at Pan African Resources (JSE: PAN)

And there is more growth in production to come

Pan African Resources has been very good to me this year. As I’ve written a few times, I took advantage of the market panic in early February and loaded up on gold exposure, as it looked to me as though the market was overreacting to a disappointing interim period.

It’s hard to pick the absolute winner in any given sector, but I’m certainly not upset that my capital has more than doubled since then. Shiny indeed!

Thanks to the Mogale Tailings Retreatment (MTR) operation, Pan African Resources achieved record production in the year ended June 2025. There’s more to come, with Tennant Mines achieving its inaugural gold pour in May 2025. If gold prices remain favourable, Pan African Resources should keep glowing. The bulk of the production uplift is expected to happen in the second half next year, will full-year guidance of 275,000 ounces to 292,000 ounces vs. 196,527 ounces in the year just ended.

It was by no means a perfect year for Pan African though. All-in sustaining costs (AISC) came in at $1,600/oz, up 18% year-on-year and above the upper end of guidance of $1,575/oz. The increased production next year is expected to improve unit costs, with guidance for AISC of between $1,525/oz and $1,575/oz in FY26.

With all said and done, revenue was up 44.5% for the year and HEPS increased by 46.7%. It certainly would’ve been nice to see some margin expansion on the HEPS line, but hopefully that will come through in the next financial year. Notably, although net debt jumped from $106.4 million to $150.5 million over 12 months based on expansion, it’s actually down dramatically from $228.5 million at the half-year thanks to cash generation in the second half.

The group expects to be fully degeared from a net debt perspective in the next financial year. They’ve also approved a share buyback programme in anticipation of having more flexibility on the balance sheet.

I remain a happy shareholder and I look forward to my record final dividend of 37 cents per share, up 68% year-on-year.

As a final comment, I appreciated this statement from CEO Cobus Loots as the very first sentence in the CEO narrative: “I believe any chief executive officer’s report in our sector at present has to start with some commentary on the
gold price.”

There are far too many mining execs who try and take credit for a year in which the main thing that went right is the commodity price. The price is completely out of their hands and it’s great to see acknowledgement of the role that luck plays alongside the decisions taken by management.

Remgro’s HEPS is much better (JSE: REM)

This relates to the scheme of arrangement at R75 per share

When it comes to investment holding companies, HEPS is problematic. The reason is that the way you account for stakes of different sizes (e.g. control vs. significant minority vs. less than 20%) differs considerably. When you move through any of these thresholds, it causes all kinds of accounting complications. Try as it might, the concept of headline earnings cannot catch all the distortions.

It’s far more sensible to use net asset value (NAV) per share, with the management building up trust in the market over time by being consistent in how they value the underlying assets (in theory, at least).

Have you ever heard anyone talk about the Price/Earnings ratio at the likes of Remgro, or do they focus on the discount to NAV? My case rests.

Despite this, there are still a couple of investment holding companies that insist on using HEPS as the basis for a trading statement. Remgro is one of them, with the company guiding that HEPS for the year ended June will be up by between 33% and 43%.

Directionally, it tells us that NAV probably did good things. The market liked it, with the share price up 2.3% on the day. But it would be so much more useful if they gave a range for NAV instead.

We just have to be patient until 23 September.

Nibbles:

  • Director dealings:
    • There’s been a transfer of Goldrush (JSE: GRSP) shares worth R10.7 million among associate entities of directors. Through this process, two directors of Goldrush have increased their effective stake in the group.
    • There’s yet more buying of Sabvest Capital (JSE: SBP) shares by the group CFO, this time to the value of R908k.
    • The CEO of RCL Foods (JSE: RCL) bought shares worth R474k.
  • Universal Partners (JSE: UPL) has very little liquidity in its stock, so I’ll just give the results for the year ended June 2025 a passing mention in the Nibbles. For those who love to live under the illusion that the grass is always greener on the other side, I must point out that the underlying businesses in the UK are struggling with a weak environment. It’s a pretty scrappy portfolio of businesses and most of them are having a tough time, hence why the NAV per share fell by 9%.
  • Here’s something interesting: the founding CEO and chairman of Copper 360 (JSE: CPR), Jan Nelson, has resigned from the board. Graham Briggs was already announced as his successor in the CEO role several months ago, but Nelson has now left the board entirely. Copper 360 has unfortunately not been a success, with the company now going through a capital raise that includes a conversion of various debt instruments to equity.
  • Based on Altvest’s (JSE: ALV) recent announcement of a rebranding and a shift to being a bitcoin treasury company, it’s not a surprise that the company has appointed Stafford Masie (the current independent chairman and in-house bitcoin champion) to the role of executive chairman. The idea here is to give him the ability to drive the execution of the bitcoin treasury strategy. He certainly brings tons of technology experience to the role. As the company now has an executive chairman, they need a lead independent director. Norma Sephuma has been appointed to that role. And in case you’re wondering, the vote to change the name was a resounding success, with literally unanimous approval from those in attendance at the meeting. It’s either going to be the best or the worst decision they ever made. I don’t think there’s much of a middleground here!
  • Richemont (JSE: CFR) has confirmed both the exchange rate and the tax position regarding its dividend. For shareholders who aren’t exempt from South African tax, the net dividend is R39.50 per share. This is after a 5% withholding tax in South Africa and a 35% withholding tax in Switzerland.

Note: Ghost Bites is my journal of each day’s news on SENS. It reflects my own opinions and analysis and should only be one part of your research process. Nothing you read here is financial advice. E&OE. Disclaimer.

Ghost Bites (Adcock Ingram | Anglo American | BHP | Newpark REIT | SPAR | Super Group | WBHO)

The Finance Ghost
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Ghost Bites (Adcock Ingram | Anglo American | BHP | Newpark REIT | SPAR | Super Group | WBHO)

Adcock Ingram released the circular for the Natco Pharma deal (JSE: AIP)

This relates to the scheme of arrangement at R75 per share

Natco Pharma is an Indian pharmaceutical manufacturer that has been around since 1981. They’ve built a seriously impressive footprint across over 50 countries, including developed and emerging markets. And now, they would very much like to own more shares in Adcock Ingram.

Note, I said more rather than all of the shares, as Bidvest (JSE: BVT) is coming along for the ride on this one and sticking around as the controlling shareholder. They are acting in concert with Natco Pharma on this deal. When all is said and done, the expectation is that Bidvest will hold 64.25% and Natco Pharma will have 35.75%.

The scheme price of R75 per share is a 49.6% premium to the 30-day VWAP before the first cautionary went out in July. This is because of the small free float and low liquidity, conditions that typically lead to a higher premium than average for these types of deals.

Assisted by the independent expert, the independent board’s opinion is that the deal is both fair and reasonable to Adcock Ingram shareholders.

If you would like to see what a deal circular looks like, then you’ll find it here.

From Anglo American to Anglo Teck – with Anglo shareholders to hold the majority stake (JSE: AGL)

It’s incredible just how much has changed at Anglo American

The announcement for the merger of Anglo American and Teck Resources set the market on fire – and in a good way. Mergers often lead to pressure on a share price, but the market seemed to love this one. Anglo closed 9% higher on the day.

The structure of the deal is that Anglo American will issue 1.3301 ordinary shares to existing Teck shareholders in exchange for each Teck class A common share and class B subordinate voting share. In other words, it’s an all-share deal.

The companies refer to this as a merger of equals, yet Anglo American shareholders will have around 62.4% of the merged entity and Teck shareholders will have 37.6%. The word “equal” is working rather hard here. Part of getting the deal across the line is the payment of a special dividend of $4.5 billion by Anglo American to its shareholders. They are doing this for “more balanced participation” in the deal, which is a nice way of saying that Anglo is currently too big for the deal to make sense for Teck.

Again, equal?

Another word that deserves to get paid more for its efforts is “synergies” – something that you’ll see in practically every merger announcement. This is the irritating cliché of “1 + 1 must be more than 2” and is much easier said than done to implement. The companies have noted an expectation of $800 million in pre-tax recurring annual synergies, with 80% to be achieved within two years after the deal. A further $1.4 billion annual EBITDA uplift from 2030 onwards based on the plans for the copper businesses.

Speaking of copper, Anglo Teck (as it will be known) will offer more than 70% copper exposure and will be a top five global copper producer. Find someone who looks at you the way the mining sector looks at copper.

Not that we needed any further reminders of just how far we’ve slipped on the global stage as a serious mining destination, but it’s worth noting that the new company structure will be firmly headquartered in Canada. This isn’t just a corporate domicile thing – the top execs will be based there, with various other corporate offices around the world.

It takes a long time to get deals like these across the line. It’s therefore not impossible that other bidders might emerge for either asset. The mining sector has seen many bidding wars in its time.

And in case you’re wondering, the plan is still to sell De Beers (good luck) and finalise the exit from steelmaking coal and nickel.

I’m old enough to remember when Anglo American didn’t want to entertain the BHP (JSE: BHG) deal because it was all too difficult. Since then, Anglo has done a bunch of things that look a lot like what BHP was looking for anyway. They’ve now agreed to do a deal that is at least as complex as the original BHP proposal, if not more.

Interesting.

BHP removes another legal overhang (JSE: BHG)

The Samarco Australian class action has been settled

A decade after the disaster happened, BHP is still cleaning up the mess that was the Fundão Dam failure. As one of the worst environmental disasters in Brazil’s history, this failure led to loss of life and displaced thousands of people.

As you can imagine, this resulted in extensive legal proceedings in various jurisdictions. There were many people who suffered losses from this event, including families who paid the ultimate price.

The latest update relates to a loss of the financial kind, with a class action suit brought by shareholders who acquired shares before the failure. This legal action has taken place in Australia where BHP is domiciled.

In an effort to just remove the overhang and get this particular legal action ticked off the list, BHP has agreed to pay the applicants A$110 million as a final settlement with no admission of liability. BHP expects to recover the majority of this amount from its insurers.

Newpark REIT is selling Crown Mines (JSE: NRL)

The deal is worth R101.4 million

Newpark REIT is one of the more obscure property names on the JSE. The portfolio is extremely concentrated, with literally only a handful of buildings in it (including my old haunts like 24 Central in Sandton and the JSE building). It’s about to get even more concentrated, as Newpark has announced the disposal of Crown Mines to an unrelated buyer.

The selling price is R101.4 million, with the valuation supported by the underlying triple net lease with Bidvest Afcom as the tenant. The lease expires at the end of 2029. The directors have noted in the announcement that they believe that the selling price is reflective of fair market value. The value of the property in the February 2025 accounts was R99.7 million, so they’ve sold it a a price that is ever so slightly above that valuation. The attributable profit was R11.2 million, so the buyer has picked this property up on an 11% yield. As a single tenant property in Joburg, that’s probably about right.

There is one related party consideration here though, with a fee of R507k payable to an associate of the CEO. This is a legacy agreement prior to the CEO becoming a director of Newpark. Although the board followed the right approach here for the deal (the CEO recused himself from voting on it), it did create a situation where the CEO didn’t vote on what is clearly an important deal for Newpark (a Category 2 transaction under JSE rules). This is why legacy related party arrangements like these should ideally be sorted out when boards change.

SPAR is heading for the exit from Switzerland while they still can (JSE: SPP)

And once again, they are incurring more pain just to get out

If you’ve been following the SPAR story for a while, then you might remember that they basically paid someone to drag the business in Poland away. I’m not exaggerating – they literally had to recapitalise the thing to get rid of it.

Thankfully, a lesson has been learnt from that about cutting losses and moving on. The business in Switzerland has been showing a worrying trajectory and SPAR has taken action, with a deal to sell it for just over R1 billion to Tannenwald Holding AG. There are also potential earn-out payments of up to R660 million due at the end of 2027 based on the performance in FY26 and FY27.

Unfortunately, there’s a catch – a pretty big catch. Yes folks, once again, SPAR has had to suffer a cash outflow just to make it go away. How is that possible?

Back in 2016 when every South African management team was desperately seeking offshore assets, SPAR acquired a 60% stake in SPAR Switzerland for R685 million. There was a put option for the remaining 40% that was exercised in 2021 for R920.4 million, with SPAR raising offshore debt to settle that amount. At the time they still owed plenty of money on the initial price, with total acquisition-related debt sitting at R1.455 billion. The trajectory of the rand over the past decade also doesn’t help.

Now, you might have noticed that the selling price of around R1 billion is well off that level. Indeed, SPAR needs to first pay R430 million towards the debt, with the buyer of the business taking on the rest of the debt as settlement of the purchase price. In other words, to be clear, there is a cash outflow for SPAR to get rid of SPAR Switzerland.

In return, SPAR is done with the debt and all guarantees issued by the SPAR group in relation to this business have thus been released. They also have the potential to receive earn-out payments.

If you can believe it, things still get worse. There’s another R253 million outflow to settle the Swiss Competition Commission investigation that led to a fine of this amount being imposed. SPAR initially wanted to appeal the ruling, but now they just want to get out of the country as quickly as possible. This tells you a lot about the prospects of the underlying business.

The offshore value destruction is truly breathtaking. But at least it’s over, which means that SPAR can now focus on the South African business (a competitive bloodbath) and the remaining exposure to the UK. Sigh.

A tough period for Super Group in which they tried to limit the pain (JSE: SPG)

The SG Fleet disposal was definitely the silver lining

Super Group has released results for the year ended June 2025. This period included the sale of SG Fleet that unlocked capital of R7.47 billion, of which R5.54 billion was distributed to shareholders as a special dividend. It also included some very tricky conditions in the rest of the business, with Super Group exposed to an automotive sector in flux. But there was also pressure in Supply Chain Africa, as you’ll soon find out. The group is forced to play life on hard mode at the moment.

From continuing operations, revenue dipped by 1.4% and EBITDA was down 2.4%. HEPS fell by 1.2%. It could certainly have been much worse under the circumstances, so this was a case of trying to minimise the pressure of a difficult environment.

Aside from the special dividend related to the SG Fleet disposal, that deal also did wonders for the Super Group balance sheet. Net debt to EBITDA is down from 2.96x to 0.75x, a huge improvement at a time when they really needed it.

Looking at the segmentals, it’s very important to note that the pressure was felt across more than just the automotive businesses. Supply Chain Africa saw revenue fall by 1.1% and operating profit by 7.6%, with various underlying drivers including lower export volumes of coal and copper. Supply Chain Europe reported another small trading loss and a dip in revenue by 0.1%, so that business is proving to be a real drag on return on assets.

The Dealerships South Africa business suffered a 6.7% drop in new vehicle sales, with disaster averted through a 5.6% increase in used car sales. We saw a similar trend at Motus (JSE: MTH) when they released earnings earlier this week. Here’s the trend that really counts: there’s a 2.5% decrease in luxury brand volumes and 20.8% growth in volumes of Asian manufacturers. All you have to do is look around on the road to see this in action.

Where Dealerships South Africa managed to stem the bleeding at a drop in operating profit of just 1.1%, there was no such joy for Dealerships UK where operating profit tanked by 49%. New vehicle sales were down 7.9% and used vehicles were up 10.3%, with key brands like Ford really suffering. As a sign of the times, Omoda and Jaecoo has been introduced at various Ford dealerships in the UK. What a time to be alive!

The business that went in the right direction was Fleet Africa, with operating profit up 11.3% thanks to a revenue increase of 9.7%.

Despite the numerous challenges, Super Group still expects to grow earnings in the coming year. There are loads of factors at play here, with the Southern African commodity supply chain as a particularly sensitive area that has numerous external variables.

WBHO proves that construction can actually make money (JSE: WBO)

This makes a nice change for the sector

When a construction sector update pops up on the market, investors brace themselves for a story of tough conditions and usually a major contract somewhere that has led to vast losses. Thankfully, WBHO isn’t here to add to that nightmare. In fact, they’ve gone firmly in the right direction in the year ended June 2025 and they have the dividends to prove it!

Revenue from continuing operations increased by 3.5% and operating profit was up 13.5%. HEPS from continuing operations increased by 12.7%. The order book is up 22.9%, so things are looking good for the coming year as well.

South Africa contributed revenue growth of 1%, while Rest of Africa was up 14.6%. The South African business is much larger though, hence why the group number comes out where it does. The UK business also did well, with revenue up 5%. Notably, one of the drags in performance in the South African business was a lack of building projects in Gauteng. That tells you something about investment in fixed assets in what is supposedly the economic powerhouse of the country.

WBHO’s management team feel confident enough to have declared a final dividend of 300 cents, taking the full-year dividend to 620 cents. That’s significantly higher than the prior year at 460 cents. Despite this, the share price is down 19% over the past 12 months.

Construction, hey. It’s not for me.

Nibbles:

  • Director dealings:
    • Des de Beer has bought another R2 million worth of shares in Lighthouse Properties (JSE: LTE).
    • Although it comes through as a director dealing, pledges of shares aren’t a dealing in the traditional sense. They are merely the use of shares as security on a loan, which means there may never be an actual dealing. Disclosure requirements bring such pledges into the net though, giving the market an indication of how directors are using their shares as security. At Stor-Age (JSE: SSS), directors have been renegotiating their loan facilities with Investec and this has led to a reduction of the shares that have been pledged as security.
  • In July this year, Sibanye-Stillwater (JSE: SSE) announced the acquisition of Metallix Refining. At that time, the estimated purchase price for the equity was $82 million. All conditions for the deal have now been satisfied and so it has gone ahead. Due to working capital movements since June, the eventual price was $78 million in cash. This values the business at $129 million on a debt-free business. This deal strengthens Sibanye’s market position in recycling in the US.
  • Here’s something interesting: Barloworld (JSE: BAW) announced that Silchester (the minority shareholder that has made tons of noise about the offer by the consortium) has reduced its stake in the company to 14.754%. Meanwhile, Absa Capital Securities has moved up to 8%, a stake held on behalf of clients. And no, I’m not quite sure what is going on here. There are a few different permutations and I would prefer not to speculate. We will just keep an eye on it.
  • Hammerson (JSE: HMN) announced that Rob Wilkinson will come in as CEO from 1 January 2026. This means that Rita-Rose Gagné will see out the rest of the year in the CEO role, retiring after roughly five years in the role. Hammerson is certainly doing a lot better these days, having been through a tough time in recent years.
  • Brikor (JSE: BIK) announced two new coal off-take agreements. The first is to Eskom’s Grootvlei Power Station for three years and the second is to a private company for one year. This relates to the structure through which Brikor earns an agreed margin on off-take, with a minimum monthly goal of 150,000 tons.
  • Murray & Roberts Holdings (JSE: MUR) announced that the court has granted an order to a creditor that places the company under provisional liquidation. The end is nigh for the listed holding company. As for its downstream subsidiary, Murray & Roberts Limited, that entity remains in business rescue.

Note: Ghost Bites is my journal of each day’s news on SENS. It reflects my own opinions and analysis and should only be one part of your research process. Nothing you read here is financial advice. E&OE. Disclaimer.

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