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Ghost Bites (Boxer | CMH | Emira | HCI | MC Mining | PSG Financial Services | Vukile)

The Finance Ghost
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Ghost Bites (Boxer | CMH | Emira | HCI | MC Mining | PSG Financial Services | Vukile)

Boxer enjoyed stronger sales growth in the past couple of months (JSE: BOX)

Momentum into the end of a period is what investors want to see

If you speak to any successful entrepreneur, they will tell you that they carefully manage the numbers every single month. If there’s any kind of slowdown or acceleration, they want to understand exactly why.

Listed companies are no different, but investors don’t get to see that level of detail. Instead, we see reports that cover six months at a time, making it difficult to see when things are accelerating or decelerating. This is why I’m a big fan of quarterly reporting in the US!

Sometimes, companies allow us to take a look at more granular numbers. Of course, they usually only do this when there’s a happy story to tell. That’s how minimum disclosure tends to work in practice: companies only go above and beyond when it’s in their interest to do so.

Other times, companies take the approach of giving more regular trading updates regardless of performance. I appreciate this, as more information is always better for investors than less information.

At Boxer, they previously indicated sales growth for the 17 weeks to 29 June 2025. They’ve now released a trading statement dealing with the 26 weeks to 31 August 2025, representing the first half of the financial year. Things got better in July and August, lifting like-for-like sales from 3.9% to 5.3%. Note that 5.3% is for the full 26-week period, so the final two months must’ve been really good to achieve that overall uplift. This is particularly impressive when you consider that food inflation for the 26-week period was -0.7%, so they managed this purely from volumes.

Boxer’s broader store rollout plan is still alive and well, with total turnover growth of 13.9% for the 26-week period. The difference between total growth and like-for-like growth is attributed to the increase in the number of stores.

The picture is very different at HEPS level, mainly due to the IPO structure that led to many new shares being in issue. There are also the incremental costs of being a separately listed entity. This will be in the base going forwards, so year-on-year growth should normalise.

For now though, headline earnings will move by between 0% and 9% because of the cost impact. Once you take into account the additional shares and look at HEPS, you get an ugly move of -28% to -34%.

The share price performance has been remarkably choppy, so this is something that traders could consider looking at. It might rip your face off, but at least you’ve got volatility to work with:

CMH is expecting a significant jump in earnings (JSE: CMH)

The company seems to have adjusted to the popularity of Chinese cars on our roads

Combined Motor Holdings, or CMH as it is more commonly referred to, released a trading statement dealing with the six months to August 2025. They expect HEPS to increase by between 20% and 25%, an excellent result in a difficult environment.

Keep an eye on this share price on Tuesday morning, as the trading statement came out just before market close and the share price is still slightly in the red year-to-date. It’s hard to see how it will stay in the red with numbers like these!

Emira is on track to achieve its goals this year (JSE: EMI)

But the underlying portfolio is dealing with some struggles

Emira released an update for the four months ended July 2025, giving investors a helpful update before interims come out in November. The overall summary is that the fund is “on track to achieve its objectives” this year. Of course, that’s not the same thing as “the fund is killing it out there” – not every property portfolio is doing well at the moment.

The South African commercial portfolio (i.e. everything other than residential) enjoyed an improvement in vacancies, but negative reversions of -6.3% are worse than in the prior year (-5.6%).

If we dig deeper into this, retail vacancies increased from 4.2% to 5.1% and negative reversions were -3.3% vs. -1.2% in the prior year. That’s unfortunate negative momentum in the portfolio of 12 retail properties, most of which are grocer-anchored neighbourhood shopping centres. I wonder to what extent on-demand fulfilment from grocery stores is hurting footfall at these centres.

The office portfolio saw a slight uptick in vacancies (8.8% vs. 8.4%) and negative reversions of -7.8% (vs. -9.3% in the prior period). Across the 10 properties, most of which are P- and A-grade (i.e. of the highest quality), Emira is struggling to achieve much improvement.

The industrial portfolio saw a substantial improvement in vacancies from 7.9% to 2.0%, a typically lumpy move where one tenant takes up a large warehouse. Negative reversions were -7.1%, worse than -9.9% in the prior year. Emira has 19 industrial properties of varying sizes.

It’s concerning that not a single sub-category in the South African portfolio is achieving positive reversions. But it’s hard to know for sure what the impact on earnings will be this year, as many funds are currently in a similar boat and yet are still achieving earnings growth ahead of inflation because of the escalations in the underlying leases.

Moving on, the residential portfolio is down to 2,248 units (vs. 3,347 units as at March this year). They reckon another 289 units will transfer by December 2025 as they follow a value unlock strategy.

Emira also has a US-based portfolio of 11 investments in open-air centres. Vacancies increased from 4.6% to 6.2% due to an underlying tenant failure. The portfolio is performing in line with Emira’s expectations.

Bringing the portfolio review to a close, Emira has a 45% interest in DL Invest, a developer and owner of properties in Poland. This means that DL Invest has a valuable land bank for future development, as well as a portfolio of 39 income-generating properties. Poland continues to be a strong story, with vacancies down from 3.1% to 2.9% and strong support in the European debt markets for this business.

Finally, the loan-to-value ratio as at the end of August was 37.1%, which is higher than 36.3% at at March.

It feels like a mixed set of numbers overall. I’ll reserve judgment until we see the net impact on distributable earnings, as reversions aren’t the best indicator of overall current performance. My biggest worry would be the disappointing performance of the local retail portfolio at a time when many property funds are doing well.

HCI is jumping through hoops to help SACTWU (JSE: HCI)

This deal is getting more complex by the day

With HCI’s share price down 34% in the past year, the market isn’t exactly falling over itself to own these shares. The underlying exposure to the gaming industry is causing a lot of concern, particularly as part of a portfolio that includes assets that are cash hungry and more developmental in nature.

Ideally, when sentiment has soured, companies should be doing everything possible to simplify things and manage shareholder relationships. It therefore only adds to the concerns in the market that HCI is giving so much headspace to the cash flow needs of SACTWU as the B-BBEE shareholders.

There’s a lot of history here between the HCI management team and the union. This leads to a situation where other minority shareholders find themselves in the position of frustrated kids in the back of the car, while the adults in front are trying to navigate difficult country roads that were unnecessary in the first place vs. just staying on the highway.

As is the case with many detours, the road is getting more treacherous by the minute. HCI has been trying to figure out a way to repurchase shares from SACTWU and sell them a bunch of properties, thereby putting an ongoing revenue stream in the hands of the union and avoiding ongoing selling of shares in the market. In theory, that’s probably a decent outcome for HCI shareholders, but it doesn’t make the journey in the back of the car any less disconcerting.

A further detour is now necessary, as HCI has now come to the conclusion that this deal is too painful for HCI’s B-BBEE credentials, which are critical to the underlying business licences. They are uncomfortable with losing so much Black Ownership at listed company level.

To try and solve the puzzle, they are reworking the deal in such a way that SACTWU will have a controlling stake in Squirewood (the entity that holds the HCI properties that were being sold to SACTWU) and Squirewood will in turn hold around 25.3% of the issued shares in HCI. The details will come out in the circular, but the TL;DR is that instead of offloading the properties in SACTWU in exchange for shares in HCI (a decent outcome for shareholders), they are now only partially executing that deal.

It sounds to me like it’s a good day to be the attorneys billing for this deal, as it keeps getting more complicated and thus costly. As for the HCI share price, it barely moved in response to the announcement, possibly because it took the market the remaining few hours of the trading day just to wade through the content!

It’s not every day that you’ll see a gross loss, yet here we are at MC Mining (JSE: MCZ)

Naturally, things only get worse further down the income statement

A company making a loss is nothing new of course, but a gross loss (i.e. sales minus cost of sales) is highly unusual. In theory, this means that the company should rather have just stayed in bed for the period and incurred only its fixed costs!

At MC Mining, the year ended June 2025 includes revenue of $17.5 million and cost of sales of $24.1 million. That’s a gross loss of $6.6 million, which manages to be even worse than the gross profit of nil in the prior period.

Although administrative expenses fell by 55% to $6.9 million, there’s no way to rescue the income statement when it starts with a gross loss. There were impairments and finance costs, so the whole thing is just ugly.

Luckily, there’s a silver lining: the Makhado Project, which is really the only reason why MC Mining has a future. They’ve attracted strategic investment from Kinetic Development Group (KDG) for the project, with funding still to flow in various tranches. With all said and done, KDG will own 51% in MC Mining. This has come with a change in management as well.

There’s a lot to be done here, not least of all in stemming the losses at Uitkomst Colliery while they deliver on the big dreams at Makhado.

PSG Financial Services just can’t stop growing (JSE: KST)

The strength of the distribution model keeps shining through

PSG Financial Services released a trading statement dealing with the results for the six months to August 2025. The numbers are strong to say the least, with an expected increase in HEPS and recurring HEPS of between 19% and 22%.

Results will be released on 16 October, so they’ve also done a great job of giving investors a couple of weeks to digest this growth guidance. The share price is up 15% year-to-date and 24% over the past year, reflecting the ongoing strength in the business.

From strength to strength at Vukile, one of the best local REITs (JSE: VKE)

The market can’t get enough of this story

There are many highlights at Vukile, but the support from the debt market is certainly worth mentioning before we dive into the portfolio updates. With a recently upgraded credit rating of AA+(ZA), Vukile’s R500 million bond issuance was 6 times oversubscribed and achieved the lowest margin (i.e. most efficient cost of debt) since the bond programme was launched in 2012. Impressive to say the least and critical for any property fund of course, as debt is such a core ingredient for the business model!

Why are investors so happy with the story? It certainly doesn’t hurt that the first half of the year is expected to see net operating income growth of 10.1% in the South African retail portfolio, ahead of the budgeted 9.1%. On a like-for-like basis, growth is 8% vs. 6.4% in FY24. They are even achieving positive reversions at the moment, with strong demand for space in the township, rural and value centres.

I always really enjoy the bubble chart that Vukile puts out in the pre-close update, showing the relative size and growth of the underlying retail categories:

In a world that keeps talking about a reduction in alcohol consumption, there’s certainly no evidence of that where Vukile operates. And just look at that growth in cell phones!

In the Castellana portfolio in Spain and Portugal, footfall was up 3% and sales increased 5.1%. The group seems to be happy with the underlying portfolio performance, particularly when you make some adjustments like the recovery process at Bonaire SC after flood damage.

Overall, Vukile expects to achieve the current guidance of at least 8% growth in funds from operations per share and the dividend per share. Updated guidance will be given when interim results are released, which suggests that things might be getting even better.

Vukile enjoys one of the strongest valuations in the sector. Despite this demanding valuation, the share price is up 14% year-to-date.

Nibbles:

  • Director dealings:
    • A director of Richemont (JSE: CFR) sold shares worth R5.2 million.
    • A director of Northam Platinum (JSE: NPH) sold shares worth R4.3 million.
    • Des de Beer is back at it, with a purchase of shares in Lighthouse Properties (JSE: LTE) worth R4.2 million.
    • A director of Sabvest Capital (JSE: SBP) bought shares worth R216k.
    • The company secretary of eMedia Holdings (JSE: EMH) bought shares worth R49k.
  • Exemplar REITail (JSE: EXP) has given us yet another positive data point in the property sector, with a trading statement for the six months to August 2025 suggesting an increase in distribution per share of between 18.2% and 22.4%. The stock is very illiquid, so there are other far more practical ways to take a view on the sector. Nevertheless, it’s another useful example of positive momentum in the sector.
  • Nampak (JSE: NPK) has lifted the lid on its succession plan, announcing that Riaan Heyl will become CEO with effect from 1 February 2026. His most recent role was as CEO of Pepsico SA, which acquired Pioneer Foods in 2020. He knows current Nampak CEO Phil Roux from the Pioneer days, so there will hopefully be a smooth transition.
  • Corporates with bond programmes often make use of tender offers. This has nothing to do with Valentine’s Day and everything to do with early redemptions of debt, as the offer is made to holders of the debt to tender their instruments for redemption. It’s a pretty big deal for MAS (JSE: MSP) to be taking this route though, given how much work has gone into managing the refinancing risk for the company. MAS is willing to redeem €120 million of the outstanding principal amount of €172 million on the notes due 2026.
  • KAL Group (JSE: KAL) announced the disposal of Tego Plastics as part of the broader plan to simplify the group and focus on other businesses. KAL Group will remain a customer of Tego going forwards. The announcement doesn’t mention the buyer or the purchase price, as the deal is so small that this is only a voluntary announcement rather than a categorisable transaction.
  • Hulamin (JSE: HLM) has renewed the cautionary announcement regarding the potential disposal of Hulamin Extrusions. This are still in discussions regarding this possible transaction and nothing is certain at this stage.
  • There’s more progress at Orion Minerals (JSE: ORN) in the wake of the company signing an all-important non-binding term sheet with Glencore (JSE: GLN) for funding and offtake to support the Prieska project. Orion has appointed an experienced project director as part of the plan to achieve first concentrate production from the Uppers at Prieska by Christmas 2026.
  • Southern Palladium (JSE: SDL) has experienced a sudden jump in its share price, leading to a price query letter from the Australian Stock Exchange. The company had to confirm that there is no non-public information that could explain the move, with the Australian regulators obviously concerned that something important may have leaked.
  • Breede Coalitions (Pty) Ltd, a vehicle spearheaded by activist investor Albie Cilliers, now has a stake of 15.04% in RMB Holdings (JSE: RMH). There’s certainly value to be extracted there, but getting it out is anything but easy because of the nature and structure of the underlying property holdings.
  • AYO Technology (JSE: AYO) announced that shareholders strongly supported the resolution related to the offer by Sekunjalo and its concert parties of 52 cents per share. AYO is therefore headed for the exit from the JSE.
  • If you’re an ESG enthusiast, you might enjoy the latest “governance roadshow” presentation by Exxaro (JSE: EXX). It includes all the typical ESG stuff, along with slides on executive remuneration. You can find it here.
  • Penny stock Visual International (JSE: VIS) was in the news recently for a potential share subscription that implies a much higher value than the company is currently trading at. In the meantime, the company has released results for the six months to August 2025. It’s an extremely scrappy story, with going concern commentary that is almost as long as the rest of the director commentary! Property development is very difficult with an insufficient balance sheet, as funding or project delays can very quickly hurt a company or even sink it. Visual is currently seen as a going concern, but one of the reasons is that the remaining creditors are “close to the group” and continue to support it. The business has a small asset base of properties and very little cash. Perhaps the planned capital raising activity will breathe some life into this one. But when the website gave a 404 error when I tried to access it, you know it’s bad.

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.

Public comment deadline looms for Crypto-Asset Reporting Framework (CARF)

Wiehann Olivier, Forvis Mazars in South Africa
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Public comment deadline looms for Crypto-Asset Reporting Framework (CARF)

This article is brought to you by Forvis Mazars in South Africa and features insights from Wiehann Olivier, Partner and Fintech, Digital Assets & Private Equity Lead. You can connect with Wiehann on LinkedIn here and learn more about his services at Forvis Mazars in South Africa here.

On 15 September 2025, the South African Revenue Service (SARS) released the draft Crypto-Asset Reporting Framework (CARF) regulations for public comment, marking a significant step in aligning South Africa with the global push for transparency in crypto-asset transactions.

The deadline for public comment is 3 October 2025, giving stakeholders limited time to engage with the draft and prepare for its implications.

The Organisation for Economic Co-operation and Development (OECD) developed CARF to address the growing use of crypto-assets in cross-border transactions and prevent tax evasion.

“South Africa’s adoption of this framework signals its commitment to international standards in financial transparency and digital asset regulation,” asserts Wiehann Olivier, a Partner and FinTech & Digital Assets Lead at Forvis Mazars in South Africa.

“This development will reshape the operational, compliance, and strategic priorities of Crypto-Asset Service Providers (CASPs), while also ushering in a new era of accountability for taxpayers.”

CASPs: From Innovation to Regulation

The draft regulations place CASPs at the centre of the compliance framework. These entities, which include exchanges, brokers, and wallet providers, will be required to collect and report detailed information on crypto transactions, including acquisitions, disposals, transfers, and valuations.

“The scope is broad, covering not only traditional cryptocurrencies but also stablecoins and certain NFTs,” explains Olivier.

While CASPs already operate under Financial Intelligence Centre (FIC) obligations and FATF Travel Rule standards, CARF introduces additional tax-specific due diligence requirements. These include verifying tax residency and identifying reportable persons under the OECD framework.

“CASPs will need to ensure their systems can support both regulatory and tax reporting obligations in parallel. The reputational and financial risks of non-compliance are significant,” continues Olivier.

“SARS has made it clear that failure to meet reporting obligations will result in penalties and enforcement actions under the Tax Administration Act. CASPs that do not adapt may face market exclusion or consolidation.”

Taxpayers: No More Grey Areas

For taxpayers, the CARF regulations eliminate the ambiguity that has long surrounded crypto taxation.

“With SARS set to receive granular transaction-level data, under-declaration and omission will become increasingly risky,” warns Olivier.

“Taxpayers, especially those with significant crypto holdings, must now ensure that their records are accurate, complete, and defensible. This includes reconciling historical transactions, calculating gains, and understanding the tax implications of staking, lending, and other crypto activities.

The days of informal recordkeeping and selective disclosure are over. Crypto-assets must now be treated with the same level of diligence as traditional financial instruments.”

In cases where taxpayers have omitted crypto-related income from previous tax returns, SARS’ Voluntary Disclosure Programme (VDP) offers a structured and legally protected route to regularise their affairs.

“The VDP allows individuals and entities to disclose previously undeclared income voluntarily, potentially avoiding hefty penalties and criminal prosecution. Forvis Mazars encourages taxpayers who may be affected to consider this route before SARS begins enforcement based on CARF data,” explains Olivier.

A Cultural Shift in Tax Compliance

Beyond the technical requirements, CARF represents a cultural shift in how digital assets are perceived.

“Crypto is no longer a fringe asset class. It is now subject to the same scrutiny as traditional financial instruments,” asserts Olivier.

“This shift will influence investor behaviour, platform design, and product innovation. We expect to see increased demand for tax-efficient crypto investment structures, formalised reporting and better integration between crypto platforms and traditional financial institutions.”

A New Chapter in Crypto Governance

According to Olivier, the draft CARF regulations released by SARS are more than a compliance requirement.

“They are a catalyst for modernisation, transparency, and trust in the crypto ecosystem. For CASPs, taxpayers, and regulators, this is a defining moment. South Africa is stepping into the global spotlight on crypto governance. The question now is not whether stakeholders will comply, but how quickly and effectively they will adapt,” he concludes.

Prosus: OLX Group to acquire La Centrale in France for €1.1 billion

Prosus
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Prosus: OLX Group to acquire La Centrale in France for €1.1 billion

La Centrale is a leading motor classifieds platform in France

“La Centrale strengthens our lifestyle ecommerce ecosystem in Europe and highlights our commitment to invest in the people and platforms shaping the future of ecommerce in the region. La Centrale will expand our footprint into one of Europe’s most dynamic technology markets and unlock new opportunities to innovate, scale and deliver even greater value to consumers and partners through AI. I expect to invest more in AI technology in France.”

Fabricio Bloisi, CEO of Prosus

OLX Group (“OLX”), a global online classifieds leader wholly-owned by Prosus, announced it has entered into an agreement to acquire La Centrale, a leading French autos classifieds platform, from Providence Equity Partners L.L.C. for EUR1.1 billion. Closing is expected by year-end, subject to a customary employee consultation process.

OLX operates fast-growing and highly profitable online marketplaces for motors, real estate, jobs and goods, with 29 million monthly users in eight countries, primarily in Central and Eastern Europe. The acquisition marks OLX’s entry into Western Europe and France’s structurally attractive autos market.

La Centrale is recognised as France’s most specialised autos platform, with strength in higher-value vehicles and deep trust among sellers and consumers.

The transaction combines two proven leaders in classifieds, strengthening OLX’s European autos portfolio in a compelling and attractive market while bringing on a strong leadership team to help build Prosus’s ambition to become the leading European ecommerce ecosystem.

The Case for OLX + La Centrale

  • Strengthens OLX’s European motors portfolio: La Centrale is a leading French vertical motors classifieds platform with strong brand recognition and scale (c.4.5 million monthly unique visitors and ~350k listings), which complements OLX’s leading motors portfolio in Central and Eastern Europe, comprising 4 brands spanning 5 markets.
  • A compelling market opportunity: The French car market is healthy and resilient, with solid growth potential in the dealer segment. The ongoing shift of the used cars market towards professional sellers presents significant upside as the dealership landscape matures and consolidates. Professional dealers currently account for ~36% of used car sales, compared with ~70% in Germany, and the average value per dealer transaction sits below European benchmarks. At the same time, margins on new cars are tightening, EV adoption is reshaping supply, and consumers are increasingly turning to trusted digital platforms for transparency and choice. Classifieds platforms like La Centrale are well-positioned
    to capture this opportunity by connecting professional sellers with a growing
    pool of value-conscious buyers.
  • Backs a strong leadership team: La Centrale’s leadership has revitalised the brand in recent years. It has undergone a successful restructuring, strengthening its technology, user experience and overall market position, closing ground with its competitors. This led to an improved financial performance, with classifieds revenues growing at a 12% CAGR.
  • Enhances Prosus’s European ecosystem strategy: Prosus is building the leading
    European technology ecosystem, which will lead in consumer platforms and AI.
    Our ecosystem approach will drive user engagement and customer loyalty, strengthen AI capabilities, and help to optimise costs for our businesses. Prosus’s investment in AI is already reinventing ecommerce, from intelligent dispatching to hyper-personalised ordering, and we’re building Large Commerce Models – AI systems, which are the new operating systems for ecommerce. Following on the heels of Prosus’s planned acquisition of Just Eat Takeaway.com, La Centrale further strengthens Prosus’s European ambition.

Prosus values the Ghost Mail reader base and has thus included the entire announcement below for ease of reference. You can also get more information here.

JOB000000-Prosus-OLX-purchase-ad-300x490_V2_MP

Please note that as always, I have included my views on this transaction in Ghost Bites.

Ghost Bites (Africa Bitcoin Corporation | Finbond | Gemfields | Heriot REIT | Prosus – Naspers | Texton)

The Finance Ghost
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Ghost Bites (Africa Bitcoin Corporation | Finbond | Gemfields | Heriot REIT | Prosus – Naspers | Texton)

Africa Bitcoin Corporation is now also raising money for their credit fund (JSE: BAC | JSE: BACC)

These are small numbers in the context of the greater market, but it will be an interesting test of investor appetite for the new name and strategy

Africa Bitcoin Corporation – previously Altvest – has received approval for a secondary listing of the ordinary shares and the preferred C ordinary shares on the Namibian Stock Exchange. This is important, as it means that capital raising activities are being extended to Namibian investors as well.

The company is currently busy with a raise of up to R11 million at holding company level, with a closing date for the equity raise of 23 October. We knew about this raise already as part of the announcement of the change of name and strategy.

The new news is a Class C capital raise of up to R20 million. Those who follow the company will know that Class C shares refer to the Altvest Credit Opportunities Fund (ACOF), by far the most scalable business they currently have. If the capital raise goes ahead to the full extent, Class C shareholders will increase their stake from 27% to 35% in ACOF and Altvest as the holding company will dilute its stake from 73% to 65%.

I must note that although ACOF is a scalable business, the value of net assets was R38.8 million as at February 2025 and the loss after tax was R12.6 million. These numbers are outdated by several months and it’s always better to raise equity using fresh numbers, as it’s very hard to know how ACOF has performed over the past 6 months or so.

Although volumes remain very thin, the recent change of name from Altvest to Africa Bitcoin Corporation certainly got some attention in the market, with the share price up more than 40% since early August when there was little or no activity in the stock.

Finbond is acquiring a controlling stake in Benefits Bouquet (JSE: FGL)

This is a good example of a company that does what it says on the tin

Benefits Bouquet is a South African business that provides (you guessed it) a range of benefits to consumers, with everything from discount coupons through to legal advisory services, trauma and HIV support and funeral assistance. It therefore sounds like a plug-and-play for a financial services group like Finbond, with the obvious synergy of being able to bundle the benefits with financial products.

Importantly for where Finbond currently is in its lifecycle, Benefits Bouquet is profitable and ready to wash its own face from day 1. The company generated total profit after tax of R24.6 million in the six months to August. The announcement doesn’t give an indication of seasonality, so we have to make the simplifying assumption that the business makes close to R50 million over 12 months.

Finbond is buying a 74% stake for R116 million, which implies a total value of R157 million. The business has therefore been valued on a P/E multiple of just over 3x for a controlling stake, which feels very low and makes me question whether the recent profitability is maintainable and can indeed be doubled to get to an annual view. The net asset value (NAV) is R227 million, so the purchase price also implies a substantial discount to NAV.

The deal will be done in two tranches, with R78.6 million payable almost immediately for the first 50% and R37.7 million payable when the other 24% changes changes in September 2026. In other words, they’ve locked in part of the price a year ahead, so it looks even cheaper when you adjust for that.

Either there’s much more than meets the eye here, or Finbond has done a smart deal. Without more detail on the financial performance of the target company, it’s hard to know for sure.

Gemfields reports the full extent of its troubles (JSE: GML)

A loss at EBITDA level is not what you want to see

Gemfields has been having a tough time out there. The company has a difficult business to run, with great uncertainty around the quality of rubies and emeralds that come out the ground and what they might be worth at auctions. This makes revenue even trickier to predict than for most mining groups, yet Gemfields faces similar capex pressures to mining companies that take more dependable resources out of the ground. A further layer in this risk cake comes in the form of geopolitical risk in Mozambique and Zambia, ranging from tax changes through to regional violence.

TL;DR: this isn’t a glamorous or easy business, despite how pretty the products are.

Management at Gemfields seems to have accepted that they ran the balance sheet too hot in recent years, culminating in the need to ask shareholders for money. In the chairman’s statement for the six months to June 2025, Gemfields acknowledges that they paid high dividends between 2022 and 2024 relative to the capex treadmill they were on. I think that’s a sign that things will be run more conservatively going forwards in terms of cash returns to shareholders, despite the worst of the capex programme now being behind them.

They certainly can’t allow the balance sheet to break again, as they’ve now played the rights issue card and it will be much harder to do it again. They’ve also found a buyer for Fabergé for $50 million, taking an economically unattractive asset off their balance sheet and giving them more headroom.

But if things don’t improve in the business, then a further deterioration in the balance sheet is exactly what will happen. There are good reasons why this was an awful period, ranging from government silliness in Zambia through to major capex programmes in Mozambique. Still, revenue fell by a nasty 47% and EBITDA swung from a profit of $50 million to a loss of $4.9 million. Free cash flow was negative, coming in at -$22 million as net debt ballooned to $61.2 million from $44.4 million. These numbers are horrendous before we even consider them on a per-share basis in the wake of the $32.3 million rights issue (forex movements gave them a helping hand there, as the rights issue was expected to be $30 million). The Fabergé disposal proceeds will make a big difference to the net debt number.

It’s all about the second half of the year. One thing we know for sure is that it cannot look anything like the first half, otherwise Gemfields will be headed for disaster.

Heriot REIT’s growth is very high, but you need to adjust for the Thibault acquisition (JSE: HET)

You always have to be careful when there have been major deals

When a company makes a major acquisition, looking at total growth gives a skewed answer in terms of how the business is performing. There’s a simple reason for this: depending on the timing of the deal, recent earnings (including the acquired asset) aren’t directly comparable to prior period earnings (excluding the asset).

In the case of Heriot REIT, the timing of the recent deal is such that we are dealing with maximum skew here. The Thibault acquisition took place on 28 June 2024, so it was in the prior period for literally a couple of days before being included in full in the latest period. This explains why Heriot has reported huge growth numbers, like a 26.1% increase in distributable earnings.

Of the R389.2 million in distributable earnings, R61.9 million was from Thibault. If you strip that out entirely and then compare distributable earnings to the base period, you find growth of 6%. But before you latch onto that number, it’s important to know that there are other distortions, including the investment in Safari Investments (JSE: SAR). Safari changed its year-end in the prior period, so the current period is comparing 12 months of earnings to 15 months of earnings.

Instead of focusing on the year-on-year moves, it’s probably better to just consider the NAV per share of R17.53 vs. the share price of R16.00, reflecting one of the smaller discounts to NAV in the sector. The distribution per share was 121.91 cents, so the stock is trading on a yield of 7.6%.

But here’s the catch: the word “trading” is working very hard here, as there’s almost no trade in this stock. I’ve just included it in this section as an important reminder to always look at the impact of acquisitions on year-on-year growth. This is especially true when the growth numbers look odd to you, or very different to sector peers.

Prosus announces an acquisition in France (JSE: PRX | JSE: NPN)

The company isn’t shy to invest in Western Europe, with a strategy of using AI to enhance growth

When it comes to technology, the US is seen as the centre of the Western world. This is where the big innovations have come from in recent years, with Europe lagging horribly behind. Despite this, Prosus (and thus Naspers) has positioned itself as a technology giant outside of the US, with exposure to both emerging markets and Europe. Goodness knows that Europe isn’t a bastion of growth right now, but the company reckons that the use of AI in its platform businesses can change that.

The latest example is the acquisition of 100% of La Centrale for €1.1 billion, a deal that Prosus will execute through its OLX platform. La Centrale is a French motor classifieds platform, which immediately tells you that (1) there’s a lot of data here, and (2) better use of that data could increase engagement and thus value. Sounds like the typical Prosus strategy, doesn’t it?

This deal is OLX’s entry into Western Europe. OLX is accustomed to higher growth markets in Central and Eastern Europe, so this will be an adjustment for them. One of the important drivers of growth is the opportunity to increase the portion of car sales in France that involve a dealer, as it looks like the French market has a much higher proportion of private sales than countries like Germany. It therefore seems that La Centrale is closer in spirit to a business like AutoTrader in South Africa, where most of the cars for sale are listed by dealers.

The seller is Providence Equity Partners, so the asset has already been through a journey of professional ownership. This is important, as it irons out some of the issues that face founder-owned businesses when they try and integrate into a corporate.

Prosus values the Ghost Mail audience and has included the detailed announcement here, including their strategic rationale.

Texton’s results reflect the simplification of its exposure (JSE: TEX)

This means the movement in NAV per share is more nuanced than usual

Texton Property Fund hasn’t been shy to hold an unusual portfolio of assets. They’ve played around with exposure to US property funds and in the end it seems like they achieved a decent outcome, even though I have a fundamental issue with corporate management teams acting like asset managers. The job of a corporate management team is to allocate capital in places that investors can’t access in any other way, like in direct properties or in controlling stakes offshore, not just units in an offshore fund.

Perhaps the message eventually landed, as Texton has taken steps to sell non-core properties and even the BREIT and SREIT units (the offshore property funds). This is why we’ve seen significant returns of contributed tax capital in addition to dividends. The move in the net asset value per share of 8% and even in distributable earnings or 7.6% has been impacted by these simplification decisions.

Frustratingly, the management commentary refers to “like-for-like” performance in South Africa being flat, despite property sales. The whole point of giving like-for-like commentary is that it should adjust for any portfolio changes!

The net asset value per share is 574.61 cents and Texton is currently trading at R3.00, so there’s a substantial discount there. The right thing to do in my view would be share buybacks to help close the gap.

Nibbles:

  • Director dealings:
    • Des de Beer bought shares worth R4.2 million in Lighthouse Properties (JSE: LTE).
    • A trust, of which a director of Valterra Platinum (JSE: VAL) is a beneficiary, has sold shares in the company worth R420k.
    • Oopsies do happen in the market – a director of Southern Palladium (JSE: SDL) placed a share order in September during a closed period. Although he quickly tried to cancel the orders, a small trade worth just over R1k went through. Of course, the bigger concern is how a director was blissfully unaware of the closed period rule. The company will need to get tighter on this.
  • Gold Fields (JSE: GFI) announced that the deal to acquire Gold Road Resources has met all conditions, with the shareholders of the target approving the scheme. After adjustments, the final deal value is roughly A$3.3 billion. The enterprise value (which adjusts for the cash in the business and therefore focuses only on the operations) is $2.6 billion. Part of the transaction sees Gold Fields acquire a stake in Northern Star Resources, with a deal already done with JPMorgan to sell that stake for A$1.1 billion. Those proceeds will be applied towards the acquisition bridge facility. In other words, the deal included an asset they don’t actually want to own, hence they’ve locked in a sale of that asset and taken some pressure off the debt required for the total purchase price.
  • SAB Zenzele Kabili (JSE: SZK) released earnings for the six months to June 2025. They are incredibly volatile because of the leveraged underlying exposure to listed shares in AB InBev (JSE: ANH). This is how earnings can swing to a profit of R1.1 billion in the latest period vs. a loss of R690 million in the comparable period! The dividend is up 32% and the net asset value (NAV) per share increased by 8% to R77.05. The share price is languishing at a substantial discount to NAV, trading at R35.93.
  • Southern Palladium (JSE: SDL) is firmly in exploration phase, so the financials reflect the typical losses that you’ll see in junior mining. For the year ended June 2025, the headline loss per share was A$0.053, worse than A$0.075 in the comparable period. The cash balance is up to A$9.9 million thanks to A$8 million in equity that was raised during the year.
  • Wesizwe Platinum (JSE: WEZ) is very behind on its financials, hence the stock is suspended from trading. They’ve now released a trading statement dealing with the year ended December 2024 (yes, 2024) in which they’ve flagged a headline loss per share of between 12.78 cents and 12.94 cents, which is much worse than the headline loss in the comparable period of 1.55 cents. Ouch.
  • In a small related parties transaction, RCL Foods (JSE: RCL) has agreed to extend the management services agreement with Siqalo Foods. This is a related party matter as Remgro (JSE: REM) is the common denominator here. The contract has been extended until 31 October 2027, with Siqalo paying RCL Foods R188 million per financial year for services across various operating functions. BDO Corporate Finance was asked to assess the contract for fairness and they have opined that it is fair.
  • Cilo Cybin Holdings (JSE: CCC) is successfully transitioning to the General Segment of the JSE Main Board. This is the regulatory framework that a number of smaller companies recently chose to use when it was launched, as it creates a somewhat less onerous compliance environment for listed companies.
  • Labat Africa (JSE: LAB) has elected to change its auditors based on the difficulties in meeting the required reporting timelines. This is the challenge when moving beyond the leading firms in the market (there are really only a handful of them), as smaller firms can struggle to meet the needs of listed companies. Labat is sticking with smaller firms though, giving P Mapfumo Accountants and Auditors a try as the new auditors.

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.

9 out of 10 doctors agree – for now, at least

Dominique Olivier
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9 out of 10 doctors agree – for now, at least

When science gets tangled with money and politics, certainty is the first casualty. Just ask the cigarette-smoking doctors of the 1940s, or perhaps the Tylenol debaters of today.

On Monday morning, President Donald Trump stood at a podium and confidently made a claim that set the world buzzing: Tylenol, the everyday painkiller that’s earned pride of place in bathroom cabinets and first aid kits for generations, could cause autism in an unborn child if taken during pregnancy. The ingredient believed to be at the root of the problem is acetaminophen, the pain-and-fever-reliever we usually find in the form of Panado, Calpol or Grandpa tablets here in South Africa. President Trump went on to say that the Food and Drug Administration was beginning the process of updating safety labels for acetaminophen, citing research that supposedly links prenatal use to autism and ADHD.

It may sound like a breakthrough, but the science behind the claim looks shaky at best. The FDA’s own guidance remains cautious, advising doctors to “exercise their best judgement” rather than imposing a ban. That hesitation is deliberate, since acetaminophen is still the only over-the-counter drug approved for treating fevers during pregnancy. While the potential risks of Tylenol remain hotly debated, the danger of high fevers in expectant mothers is well established and far less ambiguous.

Just days after Trump’s Tylenol claim, news broke that one of the papers cited by the president as irrevocable proof of the link between acetaminophen and autism was authored by Dr. Andrea Baccarelli of Harvard’s T.H. Chan School of Public Health – the same Dr. Baccarelli that various media outlets reported as being paid at least $150,000 in 2023 to serve as an expert witness in lawsuits against Tylenol’s former manufacturer. These lawsuits were ultimately dismissed by a federal judge for lack of reliable scientific evidence, despite Dr. Baccarelli’s paid-for testimony. 

The whole messy situation raises a thorny question: when medical research is wrapped up in politics, litigation, and big paychecks, whose conclusions can we trust? It’s a modern problem with a familiar echo. To hear it, you only have to roll back the clock to a time when doctors weren’t warning patients about risk, but actively selling it.

When doctors lit up

In the 1930s and 40s, lung cancer cases were spiking worldwide, but no one was sure why. Certainly nobody suspected the cause could be the cigarettes that were everywhere – tucked into soldiers’ rations, clutched between movie stars’ fingers, even passed around hospital waiting rooms. Doctors smoked them. Patients smoked them. Sure, some smokers complained about symptoms like throat irritation and mouth sores, but science hadn’t yet drawn a clear line between smoking and cancer. Tobacco companies seized the opportunity to turn uncertainty into a marketing edge.

Their strategy was simple: if you want credibility, borrow a white coat.

American Tobacco led the charge in 1930 with Lucky Strike. Picking up the trend around throat irritation, its headline bragged: “20,679 physicians say Luckies are less irritating”.  That oddly precise number didn’t come from lab work or clinical trials, either. It came from cartons of free cigarettes mailed to doctors along with a leading question: aren’t Luckies easier on the throat? Many doctors responded positively to this biased, leading question (probably while puffing on their free cigarettes), and Lucky Strike ads used their answers to imply their cigarettes must be medically superior.

Other companies soon rushed to copy the tactic. In 1937, Philip Morris ran a Saturday Evening Post spread claiming doctors had conducted a study proving throat irritation cleared “completely and definitely” when smokers switched to their brand. What the ad conveniently left out was that Philip Morris had funded the study in the first place.

More doctors smoke Camels

By the 1940s, the game had gone pro. R.J. Reynolds, maker of Camel cigarettes, went so far as to establish a Medical Relations Division dedicated to courting physicians and publishing studies. In 1946, they launched what would become one of the most infamous cigarette ad campaigns of the century: “More doctors smoke Camels than any other cigarette”.

How did they arrive at that conclusion? By handing out cartons of Camels to doctors and then asking them which brand they smoked. Unsurprisingly, a doctor given a month’s supply of free Camels was smoking Camels.

But it worked. For nearly a decade, ads featured kindly physicians puffing away, assuring readers that Camels soothed throats, steadied nerves, and got medical approval. Smoking was framed as not just harmless, but practically good for you. 

A frank statement and a crumbling facade

By the early 1950s, though, the tide was turning. Independent studies (as in, the kind not paid for by tobacco companies) were stacking up and showing that smoking wasn’t soothing throats or nerves; in fact, it was killing people at pace. Lung cancer rates were rising too sharply to ignore. The industry, desperate to keep its customers calm, tried a new tactic, which was to admit just enough doubt to delay the reckoning.

In 1954, America’s leading cigarette companies took out full-page ads in more than 400 newspapers under the banner “A Frank Statement to Cigarette Smokers”. They acknowledged that some research was “alarming”, but insisted the science wasn’t conclusive. To demonstrate good faith, they announced the creation of the Tobacco Industry Research Committee. Its purpose, they said, was to fund independent studies and get to the bottom of the controversy.

I’ll leave it to you to decide if there can be such a thing as an independent study paid for by the company whose products are being studied.

Of course, the committee wasn’t designed to resolve the question – it was designed to perpetuate it. By keeping the science “unsettled,” the companies bought themselves another decade of profit. But the white coat strategy was finished. Doctors, once reliable pro-tobacco spokesmen, were fast becoming whistleblowers. By 1964, the US Surgeon General’s landmark report made it official that smoking caused lung cancer, laryngeal cancer, and chronic bronchitis.

And just like that, the image of the cigarette-smoking doctor went up in smoke.

The Harvard connection

This brings us back to Tylenol. Dr. Andrea Baccarelli, the Harvard researcher whose work is now being cited by Trump and federal health officials, is no paid actor in a Camel ad. But his dual role – both as a scientist conducting studies and as a well-compensated expert witness for plaintiffs in lawsuits – draws uncomfortable parallels to the past. Just as tobacco executives once used selective surveys and industry-funded research to prop up their claims, today’s political figures are leaning on research that has its own tangled financial interests.

To be clear, acetaminophen is not cigarettes. The evidence against smoking is overwhelming and settled, while the evidence on Tylenol and autism is disputed and, by most accounts, inconclusive. But the strategy feels familiar: spotlight research that aligns with your message, downplay the conflicts of interest, and present the conclusion with absolute certainty.

Back in the 1930s, a free carton of Camels could buy a doctor’s loyalty. In 2025, the public should use history as a warning and question not just what the science says, but who’s paying to say it.

The cost of confusion

The danger isn’t only in the pill or the smoke – it’s in the erosion of trust. When credibility is bought, the public loses confidence in the institutions meant to guide them. Cigarette companies learned this the hard way when lawsuits, regulation, and science finally caught up to them. But when the message gets massaged by marketing, litigation, or politics, the truth has a way of being the last thing to arrive.

And like those early cigarette ads, the consequences of who we choose to believe could linger for generations.

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 (Barloworld | Capital Appreciation | Ethos Capital | Fairvest | Tsogo Sun)

The Finance Ghost
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Ghost Bites (Barloworld | Capital Appreciation | Ethos Capital | Fairvest | Tsogo Sun)

Another difficult year for Barloworld (JSE: BAW)

Revenue and profits have decreased

As a reminder, Barloworld is currently under offer from a consortium of investors that includes the CEO. There are two competition approvals outstanding in Africa before the offer becomes unconditional. The longstop date to meet the conditions has been extended to 11 December 2025. Thus far, acceptances have been received from holders of 41.1% of the shares in Barloworld, which would take the consortium and the Barloworld Foundation to a holding of 64.5% assuming all the conditions are met. The offer price is R120.

This means that there are a number of shareholders who are sitting on the fence, waiting for the conditions to be met before deciding whether to accept the offer or not. The underlying numbers at Barloworld continue to deteriorate, so that will no doubt influence the decision. As I’ve opined several times, shareholders should be careful of being too greedy here in this cyclical business. The now defunct Bell Equipment offer (JSE: BEL) is a cautionary tale of how shareholders can be left with egg on their faces if they push too hard.

For the 11 months to August 2025, Barloworld suffered a 10% decline in revenue and 9% decline in group EBITDA. Somehow, despite the drop in revenue, the group managed to increase EBITDA ever so slightly from 11.1% to 11.2%. As for operating margin though, it fell from 8.0% to 7.5%.

Digging deeper, Equipment Southern Africa experienced a 3.9% drop in revenue, or 1.5% in constant currency. Aftersales revenue struggled relative to new sales, leading to EBITDA margin dipping from 11.8% to 10.7%. The order book is up from R2.4 billion to R3.2 billion, which is obviously positive. Another positive is that Bartrac has improved in the second half of the year, although it remains down year-on-year.

Barloworld Mongolia has been the recent source of strength in the group, but the nature of cyclical businesses is that the good times tend to disappear as quickly as they arrived. New sales were under pressure and aftermarket sales did relatively well, with a net decline in revenue of 8.5%. They managed to improve EBITDA margin from 18.8% to 21.2%, although this includes the distortion of an earnout payment in the prior period. The biggest worry by far is the order book, down substantially from $76.8 million to $14.2 million.

In Russia, VT’s revenue fell by 54% and EBITDA declined by 22.5%. This means that margins were up, despite the sharp drop in revenue. All that Barloworld really cares about here is that Russia is profitable and self-sufficient in terms of funding, as that’s the most they can hope for in this geopolitical environment.

Moving on to the Consumer Industries side, Ingrain saw revenue decline by 2.1% and EBITDA drop by 9.9%. With EBITDA of R635 million, Ingrain is definitely big enough that its negative performance impacts the group numbers.

Net debt in the group has increased by R1.9 billion to R5.4 billion. They are still happy with the overall flexibility on the balance sheet.

Full year results are due for release on 17 November.

Capital Appreciation’s Dariel Solutions acquisition missed its earn-out target by a long way (JSE: CTA)

At least the deal is cheaper than expected for Capital Appreciation

In acquisitions, it’s very common to see an earn-out payment. In South Africa, you’ll often hear this referred to as an agterskot. This gives protection to the buyer of an asset by deferring some of the payment for the business until certain profit targets have been met. This is because the valuation of businesses is easy to get wrong and forecasts are uncertain, especially in private companies. An earn-out is a way to remove much of the valuation risk, as the eventual value of the deal gets adjusted based on the actual earnings achieved. An acquisition without an earn-out should be seen as a bright red flag, as it means that the buyer is asleep at the wheel and isn’t negotiating hard enough for protections.

Capital Appreciation’s acquisition of Dariel Solutions in 2023 included a significant deferred payment linked to a profit warranty target. The target was R62.2 million EBITDA for the 24 months from April 2023 to March 2025. As we know, the software business at Capital Appreciation is struggling, with Dariel only managing EBITDA of R34.9 million (or 56% of the target).

Some earn-out structures are all-or-nothing for the seller, like flicking a switch, which should obviously be avoided by sellers as far as possible. This deal allowed for a adjustment to the earn-out payment based on the percentage of the target achieved (think of a dimmer switch vs. on/off), so the sellers are receiving R14.2 million in cash and shares worth R13.9 million, a total of just over R28 million. The maximum amount had the earn-out target been met was R45.9 million.

This was a fair outcome for all involved and a good example of how earn-outs should be structured.

Ethos Capital has enjoyed a sharp increase in the NAV (JSE: EPE)

Optasia is the key asset

Ethos Capital has released results for the year ended June 2025. They enjoyed an increase in the adjusted net asset value per share (which excludes the unbundled Brait shares) of 30.2%. Shareholders have done even better, as the discount to NAV has closed significantly over the past year.

The largest and thus most important asset is Optasia, contributing over 50% of the portfolio value. Optasia’s EBITDA increased by 55%, with useful contributions coming in from other assets like Vertice, Primedia and e4. There were some wins in the listed portfolio as well, like the Brait exchangeable bonds and the MTN Zakhele Futhi stake.

The unbundling of the Brait exchangeable bonds is expected to take place in November 2025, so that’s another step towards value realisation for shareholders in Ethos Capital.

It’s easy to forget that Ethos Capital has an investment in TymeBank that comprises 5% of the fund’s total assets. When they are done with the unbundling of the exchangeable bonds, that proportion will be slightly higher.

As a final comment, then a company has been unbundling assets, remember that just looking at a share price chart doesn’t tell the full story. To calculate the total return, you would need to take into account the value of the assets that were unbundled to shareholders and therefore no longer reflected in the share price.

Fairvest’s portfolio might not be glamorous, but it absolutely gets the job done (JSE: FTA | JSE: FTB)

Fairvest B shareholders are having a great year

Fairvest has released a pre-close update for the year ending September 2025. The highlight is that they expect to exceed the upper end of guided growth in the distribution per B share of 8% to 10%. The B shares represent the residual profits after the A shares (a lower-risk profile for investors) have been serviced. In other words, Fairvest is doing well at the moment.

The portfolio is skewed heavily towards the lower-income demographic opportunity in South Africa, which just so happens to be a great source of growth at the moment. 70.9% of Fairvest’s revenue is from the retail portfolio, with 18.2% from office and 10.9% from industrial. Importantly, the entire portfolio is skewed towards Gauteng, which means it reflects the traditional centres of economic power in South Africa rather than the recent trend towards the Western Cape.

Interestingly, recent acquisitions have been focused on the coastal areas, but especially in KwaZulu-Natal. They’ve been buying up retail centres on a yield of around 9.8%.

Another particularly interesting deal is the investment of R486 million in Onepath Investments, which provides fibre internet infrastructure in townships. This is very much a play on improving and learning more about the communities around Fairvest’s properties. These communities are valuable to the retail tenants, as Fairvest achieved positive rental reversions of 4.6% in the retail portfolio in the period under review.

Here’s another interesting nugget: the office portfolio also managed positive rental reversions! The reversion of 4.7% is softer than the 6.9% we saw in the interim period, but that’s still much better than many other funds are managing at the moment. The industrial portfolio was even better, with positive reversions of 8.1%.

Fairvest’s balance sheet is expected to achieve a loan-to-value of below 30% by the end of September, with fixed debt of over 85%. Given the SARB’s clear reluctance to lower rates, that’s probably a good thing.

When you look at these numbers, it’s no surprise that both of Fairvest’s equity capital raises during the financial year were oversubscribed. They are clearly getting things right in their portfolio at the moment.

If you look at Fairvest, be careful with whether you’re looking at the A shares (aimed at investors who are looking for inflation protection and nothing more) or the B shares (the residual profits). The B shares have been outperforming the A shares, indicating that recent times have been good:

Some good news for Tsogo Sun at last (JSE: TSG)

The development of a casino in Somerset West can go ahead

The recent news for the casino companies has been negative to say the least. The shift in consumer behaviour towards online gambling (and sports betting) has been a disaster for the casino groups, leaving them with expensive and underutilised fixed assets.

The Western Cape is a particular anomaly actually. The only casino anywhere near the Cape Town metropole is GrandWest, yet the results of Grand Parade Investments (JSE: GPI) the other day confirmed that even GrandWest isn’t avoiding the disruption that is plaguing the industry.

I’m not sure what will turn the tide here, but Tsogo Sun is finally going to be allowed to have a go at developing a casino in the Somerset West area. The Western Cape Gambling and Racing Board has approved the move of The Caledon casino licence to Somerset West, which means that Tsogo Sun can invest in brand new gaming and hospitality facilities. It’s not exactly high-stakes poker at the V&A, but it’s something.

With everything they’ve learnt about the shift in consumer preferences, I’ll be very interested to see what route Tsogo Sun takes here with the new facility. It feels like it needs to be heavier on entertainment and lighter on slot machines. Time will tell.

Nibbles:

  • Director dealings:
    • The CEO of Choppies (JSE: CHP) bought shares worth R17.7 million and a key exec bought a small number of shares for around R10k.
    • The CEO of Sirius Real Estate (JSE: SRE) sold shares held in his own name worth R11.4 million and an associated trust sold shares worth R500k. In addition to this, a senior executive sold shares worth over R4.5 million.
    • The CEO of Pan African Resources (JSE: PAN) has further reduced his stake, selling shares worth R4 million and closing a long CFD position for a profit on the trade of R2.8 million.
    • Des de Beer bought shares in Lighthouse Properties (JSE: LTE) for R5 million.
    • A director of OUTsurance (JSE: OUT) sold shares worth R102k.
  • Visual International Holdings (JSE: VIS), a penny stock in every sense of the word with a share price of R0.03, released a trading statement for the year ended August 2025. The headline loss per share was 0.21 cents, which is actually an improvement vs. the headline loss per share of 0.93 cents in the comparable period.
  • There’s just about no liquidity in the stock of Rex Trueform (JSE: RTO) and parent company African and Overseas Enterprises (JSE: AOO), so I’ll just mention their results down here. For the year ended June, Rex Trueform saw revenue dip by 1.9% and gross profit margin increase substantially, which means operating profit jumped by 127.4% an HEPS came in much higher at 129 cents vs. 37.5 cents in the prior period. HEPS at African and Overseas Enterprises was up 77% to 110 cents.
  • Telemasters (JSE: TLM) is another name in the “no liquidity” bucket, with many days where there is no trade at all in the shares. For the year ended June 2025, the company saw an increase in HEPS of 58.82% to 1.08 cents.
  • For those interested in the debt markets, NEPI Rockcastle (JSE: NRP) has priced a €500 million green bond maturing in 2033. It was heavily oversubscribed, with orders of over €4 billion from more than 200 investors. With a 3.785% fixed coupon, the issue price was 99.353% (in other words, the market priced it very close to the fixed coupon). The company will use the proceeds to fund the 2026 and 2027 bonds currently being repurchased from the market, with the residual being used for green projects.
  • MultiChoice (JSE: MCG) announced that a number of executives, as well as the trust holding shares for future equity awards to staff, sold shares to Canal+ as part of the R125 per share deal.
  • There’s a change to the board at Astoria (JSE: ARA), with Piet Viljoen resigning as a non-executive director to pursue other personal and business interests.
  • MC Mining (JSE: MCZ) announced that Christine He, currently the interim Managing Director and CEO, has been appointed to the role on a permanent basis.
  • Choppies (JSE: CHP) had to set the record straight on SENS regarding inaccurate reporting across various media publications. Choppies South Africa has sold a portfolio of retail stores, but that South African entity has nothing whatsoever to do with the Botswana listed entity anymore. Choppies as a listed entity sold its South African operations in 2019.

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.

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

KAL Group via its wholly owned subsidiary Agrimark Operations, has entered into an agreement with Agriplas Holdings, an investment holding company owned by Sana Partners Fund 2, to dispose of Agriplas ltd and the Stikland property on which the Agriplas manufacturing facility is based. The disposal forms part of KAL’s strategy to exit its non-core manufacturing operations and to focus its resources on its retail and ancillary offering. The purchase consideration for the sale equity is R155 million while the purchase consideration for the property is R67,5 million. KAL will use the proceeds to reduce debt and strengthen the balance sheet for future investment opportunities.

Mustek has acquired a 51% stake in Business AI, a local startup for R7 million. Business AI specialises in building a dedicated business-to-business marketplace for artificial intelligence. It will provide enterprises with a single, trusted environment to access vetted AI vendors, products, platforms, solution providers and data centres.

MultiChoice and Canal+ have released an updated timetable in respect of the implementation of the mandatory offer. The offer closes on 10 October 2025 with the results due to be published on 14 October 2025.

Unlisted Companies

Local integrated digital identity and e-KYC platform Contactable, has secured US$13,5 million in new capital from a round led by Venture Capitalworks along with co-investors including Fireball Capital, Ke Nako Capital and MAVOVO. The investment will be used to accelerate its African expansion strategy and to commercialise its next generation of technologies.

South African fintech company Street Wallet has announced the acquisition of Digitip, a local startup enabling informal workers to receive digital tips. The acquisition, financial details of which were not disclosed, expands the company’s footprint into KZN and underscores its broader strategy of embedding informal workers into the digital economy financial ecosystem.

Black-owned Shingai Itai consortium led by Shingai Retail Investments, is to acquire the Jwayelani chain from Choppies Supermarkets South Africa. The acquirers aim to relaunch the supermarkets as a neighbourhood discount chain while creating a food platform for black-owned producers, farmers and suppliers.

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

In the release of its financials for the year ended 30 June 2025, Remgro reported it had, during September, sold its entire stake in British American Tobacco (1,252,712 BAT shares at an average price of R967.18 per share) for a gross consideration of R1,21 billion. Shareholders will receive a special dividend of 200 cents per share with the R1,41 billion declared out of income reserves.

Capital Appreciation will trade under its new name Araxi and share code AXX from commencement of trade on Wednesday 1 October 2025.

As previously reported, Sebeta did not release its results for the year ended March 2025 on 29 August 2025 citing a delay in the technical review of the Inzalo Capital transactions. The auditors are now finalising the necessary consultations required to enable them to express an audit opinion on the results which are now expected to be released by 15 October 2025.

Pan African Resources plc expects to move the trading of its shares from AIM to the Main Market of the LSE in late October. The admission remains subject to the approval by the Financial Conduct Authority.

This week the following companies announced the repurchase of shares:

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 382,991 shares were repurchased for an aggregate cost of A$1 million.

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 550,000 shares were repurchased at an average price per share of £3.94 for an aggregate £2,17 million.

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 8 million shares were repurchased at an average price of 3.09 per share for an aggregate £24,77 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 15 to 19 September 2025, the company repurchased 2,988 shares at an average price of R21.88 on the JSE and 5,000 shares at 92.70 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 621,894 shares at an average price of £39.96 per share for an aggregate £24,84 million.

During the period 5 to 19 September 2025, Prosus repurchased a further 2,067,689 Prosus shares for an aggregate €115,6 million and Naspers, a further 132,635 Naspers shares for a total consideration of R794,59 million.

Three companies issued profit warnings this week: Renergen, Gemfields and Visual International.

During the week one company issued or withdrew a cautionary notice:
ArcelorMittal South Africa.

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

Enegex Limited announced that it has entered into binding agreements to acquire Famien Resources – which holds a portfolio of prospective 100%-owned gold exploration projects in Côte d’Ivoire. The portfolio includes seven granted exploration permits and four permit applications, covering an area of more than 3,700km². The Gogo and Tougbe permits represent the most advanced exploration projects within the portfolio and will be the focus of initial exploration efforts, with reconnaissance drill programmes expected to commence in the coming months.

Wildcat Petroleum Plc has terminated all discussions relating to the signing of a Memorandum of Understanding for the acquisition of 100% of Wildcat Gold & Mining Trading & Multi Activities Company based in Sudan due to rebel activity in the area.

Nigerian asset management company, Royal Exchange Plc, received notification that Nexamont Company had acquired 1,770,499,535 shares (approximately 21.4%) in the company. The value of the transaction was not disclosed. At the closing share price of ₦2.04, the deal would have been valued at ₦3,6 billion. Nexamont has made no official statement detailing any future plans for Royal Exchange.

Tanzanian agritech, MazaoHub has closed a US$2 million oversubscribed seed round, comprised of $1.5 million in equity led by Catalyst Fund with participation from Nordic Impact Fund, Mercy Corps Ventures, elea Foundation, Impacc, and DOB Equity, and $500,000 in non-dilutive capital from the Livelihood Impact Fund. The new capital will be used to accelerate production of MazaoHub’s low-cost soil kits and sensors, expand their network of Farmer Excellence Centres, and finance the rollout of CropSupply.com, which began piloting earlier this year.

Yango Ventures has made an undisclosed investment in Kenyan fintech platform, Zanifu. The platform offers digital inventory financing to small retailers who are typically excluded from formal credit systems due to lack of collateral, structured accounting records, or asset-based guarantees.

Savannah Energy EA has signed an agreement to acquire Norfund’s stake in a portfolio of hydropower assets for up to US$65,4 million. The assets include an indirect 13.6% interest in the operating 255 MW Bujagali run-of-river hydropower plant in Uganda; an indirect 12.3% interest in the 361 MW Mpatamanga hydropower development project in Malawi; and an indirect 9.8% interest in the 206 MW Ruzizi III hydropower development project spanning Burundi, the Democratic Republic of the Congo and Rwanda.

ARC Ride, a leading electric mobility company in Kenya, has secured a commitment of up to US$10 million in senior secured debt from Mirova. The transaction is Mirova Gigaton Fund’s first Electric Vehicles (EV) investment in sub-Saharan Africa, supporting the large-scale deployment of electric two-wheelers (E2Ws) and battery-swapping infrastructure in Kenya. The $10 million facility is designed to fund over 600 battery-swapping cabinets and 25,000 batteries, structured as senior secured debt with a five-year tenor.

Nigerian e-waste recycling company, Hinckley E-Waste Recycling, has secured a strategic equity investment of US$1,5 million from impact investment company, All On. The investment will enable Hinckley to establish state-of-the-art Lithium-ion Battery Recycling and Reuse as well as Used Lead Acid Battery Recycling facilities, the first of their kind in Nigeria. These facilities will address the growing global demand for solar batteries and the urgent need to manage electronic waste sustainably.

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

Navigating the challenges of renewable asset valuation

Willem du Toit
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Navigating the challenges of renewable asset valuation

Merger and acquisition (M&A) activity in the renewable energy sector is growing, but precise asset valuation is essential for successful investing.

Valuing renewable energy assets requires analytical rigour and qualitative insight. A structured approach – as well as an in-depth understanding of key value drivers in renewables – is required to establish an informed view of project cash flows, ancillary revenues and optimisation potential. A tailored valuation approach that aligns with specific investor risk appetite is essential to avoid mispricing and ensure the long-term success of renewable energy investments.

Renewable energy investments offer stable, long-term returns, hedge against fossil fuel volatility, and enhance environmental, social and governance (ESG) credentials. Investor interest in the sector continues to grow, driving increased capital inflows and investment activity. As a result, M&A activity in the sector is accelerating, fuelled by capital recycling, as well as new investors and alternative pools of capital entering the sector. In South Africa, M&A activity in renewable energy is gaining momentum as companies seek to diversify portfolios and scale operating capacity amid grid constraints and project delays, positioning acquisitions as a strategic route to meet clean energy targets.

Operational assets versus development pipelines

Renewable investments typically fall into two categories: operational assets and development pipelines. Valuing operational assets carries less risk, as these projects are supported by established power purchase agreements (PPAs) and underpinned by predictable cash flows. These assets are typically valued using discounted cash flow (DCF) analysis, applying an equity discount rate aligned with the asset’s risk profile.

Development pipelines, by contrast, generally comprise pre-financial close projects that are not yet operational and carry varying degrees of risk. The likelihood of a development project reaching financial close is primarily determined by its stage in the lifecycle, and the strength of its underlying fundamentals, such as technical feasibility, permitting status, offtake certainty, location, and grid access. The valuation of development pipelines is complex, and highly sensitive to the market dynamics that drive key inputs.

Valuation methodologies

The DCF methodology is the primary valuation approach for operational and under construction assets. It projects future cash flows, covering revenue, operating expenses, working capital, finance costs, taxes and capital expenditure, and discounts these cash flows to present value using an equity discount rate aligned with the asset’s risk profile. For operational utility-scale renewable assets in South Africa, the ZAR-denominated cost of equity typically falls in the low teens.

When valuing vertically integrated Independent Power Producers (IPPs), additional complexities arise beyond standalone project valuation. Intragroup cash flows from Operations and Maintenance (O&M), EPC, asset management, and development fees (typically costs at the SPV level, but revenues at the HoldCo or AssetCo level) must be carefully assessed. Valuing an integrated platform on a sum-of-the-parts basis is essential to accurately reflect its component contributions, with profit margins validated through due diligence and by comparing against relevant market benchmarks. Crucially, different owners may be able to extract different levels of valuation upside, meaning the same asset could hold fundamentally different value depending on the investor’s strategic positioning, capabilities, and operational synergies.

Multiples-based valuation

Market-based approaches like EV/EBITDA or ZAR per megawatt of generation capacity offer valuation benchmarks to cross-check DCF results. However, they may overlook nuances in the local market, such as regulation or grid constraints.

Valuing development assets requires a tailored approach, as each stage – from early concept to near financial close – carries distinct risks that call for stage-specific discounting and probability adjustments. Grouping projects by key milestones (e.g. grid connection or permitting) provides a practical framework for assessing pipeline value. Development premiums vary based on factors such as technology, location, grid access, and whether the project is acquired as a standalone asset or as part of an integrated IPP group with a project pipeline.

Debt refinancing

Debt refinancing can unlock valuation upside. Projects that are performing and exceeding modelled benchmarks often qualify for upsized facilities, enabling incremental debt to support dividend recapitalisations. Additional value levers associated with debt refinancing include lower interest rate margins, reserve releases, and extended tenors. Refinancing REIPPPP project debt requires DMRE approval, which is typically contingent on a gain-share mechanism where part of the refinancing benefit is shared with Eskom through a tariff reduction mechanism.

Post-PPA cash flows and valuation considerations

Including post-PPA cash flows in a project valuation requires a thorough assessment of life extension capex. Financial projections must incorporate an appropriate level of annual maintenance expenditure to prevent major component failures, maximise plant availability, and extend the asset’s operational life. When determining appropriate post-PPA tariffs, it’s important to consider the broader shift from long-term fixed pricing to market-based pricing dynamics. This transition will expose projects to real-time electricity prices and increase revenue volatility, underscoring the need for tariff assumptions that are grounded in robust market analysis.

For onshore wind, life extension capex (like blade repairs, bolt replacements and foundation checks) should be weighed against the higher cost-option of repowering, although the repowering alternative will substantially enhance performance, capacity and output.

In the case of utility-scale solar PV, life extension often means replacing inverters, motors, and/or trackers. A cost-benefit analysis should determine whether panel replacement or refurbishment delivers more value on a net present value basis.

Battery Energy Storage System (BESS) retrofits can enhance grid integration and unlock value through load shifting, namely storing excess energy for discharge during peak pricing. A BESS solution will also reduce clipping losses by capturing surplus DC power that would otherwise be wasted, helping to maximise yield and the overall performance of a solar PV plant.

Intangible value and strategic considerations

Beyond financial metrics, human capital is a critical value driver in renewable energy platforms. Expertise across development, permitting, grid connection, structuring and financing can materially enhance platform value, as skilled teams convert pipelines into operational assets, optimise performance, and oversee all aspects of plant operations.

M&A as an enabler of growth

In South Africa’s congested grid environment, where competition for sites is fierce, greenfield developments face mounting competition and uncertainty. This dynamic is driving M&A activity in the sector, as it is increasingly viewed as a strategic pathway to scale operational megawatts. In addition, M&A can facilitate portfolio diversification and balance risk by combining cash-generative operational assets with high-growth pipelines to improve capital efficiency and reduce earnings volatility.

Valuing renewable energy assets is a complex and highly technical process that demands specialised experience and deep domain knowledge. As a result, there is a heightened risk of mispricing and overpaying for assets. Engaging an experienced adviser when evaluating a renewable energy M&A transaction is a sound strategic decision.

Willem Du Toit is Senior Vice President, Advisory, Investment Banking | Standard Bank CIB

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

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

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