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Ghost Bites (AVI | MultiChoice | Purple Group | Sappi | Transaction Capital)

The Finance Ghost
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Ghost Bites (AVI | MultiChoice | Purple Group | Sappi | Transaction Capital)

If you enjoy Ghost Bites, then make sure you’re on the mailing list for a daily dose of market insights in Ghost Mail. It’s free! SIGN UP >>>

AVI inches forwards despite tough conditions

After a rollercoaster year in the share price, performance is flat year-to-date

AVI released the chairman’s comment that was made at the AGM on Tuesday. It starts with the usual bad news (consumer pressure / load shedding / Transnet) and ends off with a positive, albeit modest story at operating profit level.

Revenue for the quarter ended September increased by 9.7% year-on-year, a strong result driven by price increases. Revenue growth was achieved in all categories except I&J which was impacted by poor catch rates and an unfavourable abalone sales mix. The group focused on protecting margins even where volumes were impacted, which is the mature (and painful) approach to take.

In the footwear and apparel business, the year-on-year numbers were flattered by the disruption from civil unrest in the base period.

Group gross profit margin fell slightly as not all cost pressures could be recovered. Operating expenses increased at a rate above inflation, mainly because of exposure to fuel prices among other costs. Consolidated operating profit increased by just 2.1%. If we exclude I&J, the branded consumer business grew operating profit by 9.5%.

The share price closed 2.5% higher on a day where the ALSI closed 1.5% higher.

MultiChoice reports results ahead of the FIFA World Cup

Sport is big business and the group has invested heavily ahead of the soccer

In the six months ended September, MultiChoice reported growth in the user base of 5%. There are now 13 million households in Rest of Africa and 9.1 million households in South Africa that have DSTV. Both segments are still growing, although the average revenue per user (ARPU) is much higher in South Africa (R290) than in Rest of Africa (R183).

Subscription revenues were up 8% year-on-year, with Rest of Africa growing far more quickly with 27% growth. Advertising revenue only increased by 5%, which isn’t bad in this consumer environment. As we can see from tech company results in the US, there has been a normalisation of advertising spend as sport has returned. Advertising contributes around 7% of MultiChoice’s revenues.

Irdeto reported a 13% decline in revenue, which was more than offset by 19% growth in insurance premiums and other revenue.

Earnings and cash flow were impacted by the investment ahead of the FIFA World Cup. With significant anticipated subscriber growth, the group isn’t taking any chances with global chip shortages. The investment in decoder subsidies reduced trading profit by R0.7 billion and free cash flow by R0.8 billion, particularly in Rest of Africa. The opportunity is clear though: SuperSport is the only place to watch every match of the FIFA World Cup in an African time zone across 50 markets.

With a reduction in losses in Rest of Africa, group trading profit increased 2%. The impact on margin of the decoder investment is expected to unwind in the second half of the year, delivering even more positive operating leverage.

Consolidated free cash flow fell by 44% because of the investment in decoders. The balance sheet is still strong, boasting R7.5 billion in net assets including R7 billion in cash.

A key competitive advantage for MultiChoice vs. the likes of Netflix is the investment in local content. 48% of general entertainment spend was on local content, something that international streamers really struggle to compete with.

A challenge faced by the company lies in repatriation of cash from African countries and especially Nigeria. This is something that investors keep a close eye on.

Purple Group is still profitable in a tough market

The share price has lost 40% this year as markets cooled down

For the year ended August, Purple Group expects to report a drop in earnings per share of between 10% and 20%. This includes substantial fair value adjustments. Most investors look at headline earnings per share (HEPS) to ignore these adjustments, in which case the drop is between 67% and 77%.

This is a year-on-year movement and markets were absurd during the pandemic, so I’m not surprised to see a drop. The announcement came out after market close, so the share price hasn’t had an opportunity to react to this news. Selling pressure is likely on Friday.

If we look at EasyEquities specifically, the group’s operating profit before tax of between R29.8 million and R33.0 million demonstrates that a sustainable business has been built. This is a drop of between 31.3% and 38.0%, which is as expected in this market. Client numbers increased but so did expenses, up by 56.5% in the development of future revenue opportunities.

EasyEquities is still a startup at heart and needs to invest in the future. Leaving aside my appreciation for what they’ve done for South African investors, I think being profitable in this environment is an achievement of note.

The fair value gain relates to the shareholding in the RISE business. EasyEquities previously held a 50% stake and then acquired the remaining 50%, leading to a revaluation of the original stake to a value in line with the price paid for the rest. This led to a positive fair value adjustment of R48.9 million. The company paid for the stake by issuing shares at R2.50, which looks like a good deal based on the current traded price.

In the prior period, there was a fair value adjustment of R50 million related to EasyCrypto. This means the fair value adjustments are consistent year-on-year.

Looking at other business units, GT247.com achieved an incredible turnaround. After a loss of R8.7 million in the prior period, profits are now between R13.4 million and R14.8 million. This is a huge swing achieved through a revenue recovery to historic levels.

Emperor Asset Management went the other way, with a loss of between R5.6 million and R6.2 million vs. a profit of R0.9 million in the prior period. The loss includes an impairment adjustment of R3.8 million.

The head office and investments segment recorded a significantly lower loss of between R3.4 million and R3.8 million, an improvement of 54% to 59%. This includes the investment in Real People Investment Holdings.

My view hasn’t changed. Purple Group has a great business and a very overvalued share price. I’ve been consistent in that view throughout the pandemic and the chart this year supports it. At the right price, I can’t wait to invest in Purple and get exposure to the global expansion of EasyEquities.

Sappi reports another record quarter

Take note: the company has given a sobering market outlook

In a cyclical industry, you have to be very careful in extrapolating earnings. A great quarter can become a distant memory if things turn quickly enough.

In the quarter ended September, Sappi reported a 35% jump in sales and 121% increase in EBITDA excluding special items. HEPS was 311% higher, although “special items” means that reported profit was 26% lower.

Importantly, net debt is down 40% year-on-year and the net asset value is up by 19%.

Excluding special items, this was a record quarter for EBITDA, driven primarily by improved profitability for the pulp segment and a strong performance in North America that offset the cost challenges in Europe.

Graphic paper sales saw order activity slow down towards the end of the quarter, with Sappi noting that this is an industry in terminal decline. At the end of the quarter, Sappi agreed to sell three European mills to Aurelius Investment Lux One, reducing exposure to this market. Proceeds will be used to reduce debt.

To give you an idea of how cyclical this industry is, net cash generated for the year of $506 million is vastly higher than just $29 million last year. This is how the business managed to reduce debt to such a large extent.

The strong balance sheet will be needed, as the outlook section notes that macroeconomic uncertainty has increased considerably in recent weeks. Order activity in dissolving pulp and graphic paper has declined, with destocking across the vale chain. On the plus side, demand for packaging and speciality papers is more resilient in a downturn.

Further good news is that North American demand is robust and Sappi is investing $418 million at Somerset Mill to respond to this demand, with an expected completion date in 2025. Capital expenditure for FY23 is estimated to be $430 million, of which $70 million relates to next year’s spend on Somerset.

Despite rising input costs that are a concern for production efficiencies, Sappi expects EBITDA for Q1’23 to be ahead of Q1’22.

A dividend of 267.28155 cents per share will be paid in January.

Transaction Capital is growing in the high teens

It’s tricky to know which earnings measure to focus on

Having studied accounting, I can tell you with certainty that most of it is ignored by the market. People look at key metrics and ignore the noise, as many accounting standards have become so complicated that they just aren’t useful.

One of the big wins on the JSE is that companies need to report headline earnings per share (HEPS), a standardised metric designed to improve comparability. It works well.

In Transaction Capital’s trading statement for the year ended September, my favourite local company reported HEPS growth of 49% to 54% from all operations and 51% to 55% from continuing operations. To show you how distorted numbers can become, basic earnings per share (EPS) is down 34% to 30%.

To help make sense of it all, the company suggests using core EPS from continuing operations to assess performance. This metric excludes adjustments on put and call option structures, once-off transaction costs and other non-core items.

With an increase of 15% to 19%, this means that the group is growing in the high teens.

I look forward to the release of full results on 15 November so that I can see how things are going at SA Taxi in particular.

Little Bites:

  • Director dealings:
    • Des de Beer has bought another R2.4m worth of Lighthouse Properties shares
    • A prescribed officer of Impala Platinum has disposed of shares worth nearly R996k
    • Associates of Piet Viljoen and Jan van Niekerk have acquired Astoria shares worth R1m and R66k respectively
    • The family trust of the CEO of Altron has bought more shares in the company, this time worth over R50k
    • An associate of directors of Octodec has acquired shares worth R1.06m
    • An associate of Jacob Wiese has bought shares in Shoprite worth R695k
  • Sephaku Holdings released a trading statement for the six months ended September 2022. The group expects headline earnings per share to jump by between 58% and 66%, coming in at between 11.11 cents and 11.67 cents. There’s a slight timing complication in the group results as one of the subsidiaries as a different year-end to the holding company.
  • There’s yet more drama in the Northam Platinum / Royal Bafokeng Platinum story. Back in April, the CEO and COO of Royal Bafokeng retired and the company concluded new fixed term contracts with those executives. This led to accelerated vesting of shares, a move which Northam complained about to the TRP as a frustrating action under the Companies Act. After the TRP dismissed Northam’s claim, a subsequent appeal to the Takeover Special Committee (TSC) was successful. The TSC found that the share issuance contravened the Companies Act and that Royal Bafokeng must correct this contravention. Royal Bafokeng believes that the ruling is “legally and factually flawed” and will be consulting with advisors re: next steps. Interestingly, the TSC further ordered the TRP to investigate Northam’s full complaint in its entirety as expeditiously as possible.
  • In further platinum news, Eastern Platinum announced a pipeline finance agreement with Investec. The credit facility was reduced from R150 million to R110 million and will be used for working capital purposes and the restart of the Zandfontein underground section of the Crocodile River Mine. This renewable 12-month revolving commodity finance facility is secured by PGM production from the tailing storage facility at the mine. A hedging structure on the underlying minerals means that the commodity pricing is guaranteed.
  • Montauk Renewables released quarterly results for the period ended September. Net income increase from $8.9 million to $11 million. If you are keen to see what US reporting looks like (as the company has a secondary listing on the JSE and reports under US rules), you’ll find it at this link.
  • If you are a shareholder in BHP, you may be interested in the presentation and the speech from the AGM that you’ll find at this link.
  • Advanced Health Limited reminded the market that a strategic review of the business is still ongoing. Approaches from several parties re: a potential acquisition of Presmed Australia have been received. The board is evaluating the proposals with its advisors.
  • I quite enjoyed the outcome of the Quilter vote on the resolution authorising political donations or expenditure. The company says that the resolution is to avoid inadvertent breaches of the law, as it doesn’t actually make donations. Still, shareholders on the South African register only gave it 63.77% vs. 99.94% support on the UK register. We are well aware in SA of what “political donations” actually means.
  • Libstar has announced that the acquisition of Cape Foods has become unconditional.

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

Resource counters were in the spotlight this week making the headlines on two occasions

Northam Platinum announced on Wednesday, exactly one year to the day after the announcement of the initial acquisition of a 32.8% stake in Royal Bafokeng Platinum (RBPlat), that it would bid for control of RBPlat in a voluntary offer worth R31,7 billion. The offer of R172.70 per RBPlat share is on the same terms as its acquisition made in November last year, less the dividend paid out by RBPlats. The offer (cash and shares) is significantly higher than that of Impala Platinum of R150 per share (R90 per share plus 0.3 shares in Impala). The minimum cash consideration offered by Northam is R54.40 assuming full acceptance of the offer, however, if acceptance rates are low, then the full amount will be paid in cash. Northam currently owns 34.52% of RBPlats (37.8% if call options granted are exercised) with Impala having secured 40.71%. The Public Investment Corporation stake of 9.42% makes it an important cog in this bidding war. As a category one transaction in terms of the JSE Listing Requirements, Northam plans to issue a circular by December 7 with shareholder approval required in due course.

Gold Fields has terminated its proposed acquisition of Yamana Gold following the recommendation by the Yamana Board to its own shareholders to accept the recently announced competing bid from Pan American Silver and Agnico Eagle Mines. One can’t help feeling that Gold Fields has dodged a bullet – for months Gold Fields has been trying, with limited success, to persuade its shareholders that it was not overpaying for the Canadian assets. Had shareholders not voted in favour of the $6,7bn deal later this month, Gold Fields would have had to pay Yamana a break fee of $300 million – the turn of events will see Gold Fields and its shareholders benefitting from Yamana’s termination fee.

Murray & Roberts (M&R) has signed an agreement with Webuild, an Italian construction a civil engineering group, to dispose of its interests in Australian company Clough, which has for some time experienced acute working capital pressures. Although the business is valued c.A$350 million, the cancellation of an outstanding intercompany loan account will see M&R receiving just A$500,00 in cash.

GMB Liquidity has made a mandatory offer to minority shareholders of Grand Parade Investments (GPL) at an offer price of R3.33 per share – in line with the current market price. The recent on-market acquisition of GPL shares by GMB increased its stake to 35.14%, over the 35% threshold requiring GMB to make mandatory offer. It is however, not GMB’s intention to apply for the delisting of the company from the JSE.

African Equity Empowerment Investments has entered into a small, related party transaction with majority shareholder (66%) Sekunjalo Investments to dispose of 1,188,916 ordinary shares in Sygnia.

Unlisted Companies

In a statement released this week, the Competition Commission has prohibited the proposed deal by Amsterdam-based AkzoNobel to acquire Kansai Plascon Africa and Kansai Plascon East Africa saying it would substantially lessen competition in the manufacturing and supply coatings market.

DealMakers is SA’s 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

MC Mining has concluded its fully underwritten renounceable rights offer. The company raised A$40 million with the sub-underwriters taking up the shortfall of 200,026,719 shares.

Buffalo Coal has announced a rights offering. If all rights are exercised, an additional 421,352,596 shares will be issued. The company intends to use the net proceeds to settle its debt with Investec.

Hyprop Investments will issue 16,127,649 new shares in terms of its scrip distribution alternative resulting in a capitalisation of distributable retained profits of R500 million.

New listings on A2X continues to gain ground with Attacq joining its growing list of companies taking secondary listings on its platform. Attacq shares will commence trading on November 16, 2022.

The trading of Trustco shares has been suspended on the JSE following the ruling by the High Court which dismissed the company’s application with costs. The ruling reinstates the JSE’s decision in November 2020 to suspend the company’s shares for failing to comply with the Listing Requirements in relation to its Annual Financial Statements.

A number of companies listed on one of South Africa’s Stock Exchanges have initiated share buyback programmes and each week update shareholders. They are:

Capital & Counties Properties has repurchased 783,854 shares for a total consideration of £857,933 in accordance with the authority granted by shareholders at its annual general meeting in June 2022.

Glencore this week repurchased 17,840,000 shares for a total consideration of £93,71 million. The share repurchases form part of the second phase of the Company’s existing buy-back programme which is expected to be completed by February 2023.

South32 has this week repurchased a further 4,016,123 shares at an aggregate cost of A$14,98 million.

Prosus and Naspers continued with their open-ended share repurchase programmes. During the period October 31 to November 4, a further 5,549,485 Prosus shares were repurchased for an aggregate €261,79 million and a further 507,887 Naspers shares for a total consideration of R997,91 million.

British American Tobacco repurchased a further 555,949 shares this week for a total of £18,67 million. Following the purchase of these shares, the company holds 216,027,057 of its shares in Treasury.

Three companies issued profit warnings this week: Quantum Foods, Invicta and Novus.

Six companies issued or withdrew cautionary notices. The companies were:
Alviva, Murray & Roberts, Ellies, Pembury Lifestyle, Grand Parade Investments and Premier Fishing & Brands.

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

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

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

DealMakers AFRICA

X-ERA, a UAE-based logistics services provider, has completed its acquisition of SPEED, announced in July, for an undisclosed sum. Egypt-based SPEED is a B2B marketplace platform connecting FMCG suppliers with small to medium-sized merchants and retailers.

IXAfrica Data Centre, a developer and operator of hyperscale-ready data centres in East Africa, has received US$50 million in investment from Helios Investment Partners to accelerate the development of IXAfrica’s Nairobi Campus.

Egyptian foodtech startup Brotinni, a dark butcher solutions startup, has raised US$600,000 in a seed funding round led by Innlife Investments. The platform offers to-order hand-cut, farm-sourced and vacuumed-sealed fresh meat and poultry as well as frozen and ready-to-cook products. Funds will be used to scale operations and invest in marketing.

In its fourth funding round, Morocco-based fintech startup WafR, has raised US$120,000 from First Circle Capital. The startup aims to digitize cashback and in-store rewards allowing retailers and FMCG brands to boost their customer loyalty.

Sendy, a Nairobi-based on demand logistics platform, has secured undisclosed funding from MOL PLUS Co, the corporate venture capital arm of Mitsui O.S.K Lines. Sendy connects consumer goods manufacturers and e-commerce companies with customers. The funds will be used to scale services in Kenya, Uganda, Nigeria and Côte d’Ivoire with the aim of improving logistic supply chain inefficiencies across the continent.

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

Thorts: The business case for producing biofuel from sugar cane in SA

Aimee te Riele
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Thorts: The business case for producing biofuel from sugar cane in SA

Not too long ago, South Africa’s sugar industry was counted amongst the top cost competitive producers of high quality sugar in the world.

While the outputs from the industry were small compared to those of leading global sugar producers like Brazil and India, the job creation and contribution of sugar producers to the SA economy was significant. In fact, the South African sugar industry creates one of the highest number of job opportunities per R1m in capital investment.

In recent years, however, annual sugar production has declined rapidly. Today, around 25% less sugar is being produced in South Africa than was the case 20 years ago. Unsurprisingly, a major consequence of this production decline has been a reduction in employment opportunities. Of equal concern is the fact that, despite lower production figures, flagging demand for sugar, driven by, amongst others, the Health Promotion Levy (HPL) on sweetened beverages, and a highly competitive import environment, there is still a large annual excess of sugar cane that is either rolled forward to the next sugar season or destroyed. Adding to the problem is the country’s limited milling capacity, which is dominated by a few large players, resulting in profitability challenges for smaller scale farmers where input costs are already high. While there have been efforts by government to address the situation, such as the development of the Master Sugar Plan, there has also been a fair amount of shortsightedness, as evidenced by the HPL, which cost the industry well over a billion rand in the 2018/19 sugar season. It is becoming clear that restoring the relevance and importance of sugar cane growth and processing to South Africa’s economy is going to require lateral thinking and an innovative approach.

One alternative that appears to have the potential to achieve the desired outcomes of industry recovery and sustainability, and meaningful job creation and protection, lies in the still largely unexplored area of biofuels production.

While there has been some preliminary research done into the viability of biofuel production from sugar cane by the Cane Growers Association and other industry players, there still appears to be a lack of industry partnership aimed at laying the groundwork for a South African biofuel made from sugar cane.

This is somewhat puzzling, given the positive economic impacts – over and above the aforementioned industry revitalisation and job creation – that a thriving and growing biofuel sector would undoubtedly deliver. As has been the case with the country’s burgeoning renewable energy sector, biofuels present the potential to unlock massive cost-efficiencies (particularly in a high oil-price environment), unlock opportunities for meaningful publicprivate partnerships, create more employment opportunities, and deliver numerous secondary industries, all of which would contribute greatly to long-term economic growth.

In addition to all of these positive spin-offs, a growing biofuel industry is also likely to deliver tax revenues similar to those that the sugar industry currently does, so the transition should not have any negative implications for the national fiscus. In fact, given the likelihood of a continued decline in demand for sugar in the coming years, an investment today into building a thriving ‘biofuels from sugar cane’ industry in this country will likely deliver far more appealing long-term returns in the form of tax revenues and sustainable economic contributions.

Of course, achieving a viable ‘biofuels from sugar cane’ industry is not without its challenges. For one, the current mills would need to add on facilities to enable biofuel production, or new dedicated biofuel processing plants would need to be built. However, the potential returns of a high-functioning biofuels industry would be well worth the investment required to set it up. The European Union is suggesting that 2% of sustainable aviation fuel should be available at EU airports by 2025. This is to increase to 37% in 2040. Furthermore, South Africa is in a position to benefit from industry profitability with little to no competition from imported sustainable fuels, as the environmental benefit of using sustainable fuels is eroded by the transportation of it.

Biofuels may also be used for road transport by blending them with petrol and diesel. However, this will require willingness from government to implement compelling biofuel subsidies and incentives. The USA offers a good example of how such incentives, coupled with a commitment by government to leveraging biofuels as an alternative to transportation fuels produced from fossil fuels, can drive incremental growth in biofuel usage and demand. Given South Africa’s commitment to reducing fossil fuel-based energy as part of its just transition, a similar approach can and should be adopted in this country. And the result could well be a significant turnaround in the fortunes of existing cane growers, a return to sugar cane farming by those who have sought alternatives in recent years, and a significant injection of employment opportunities, given the highly labour-intensive nature of sugar cane growing and processing.

Possibly most significantly though, a strong biofuels sector, and the associated supply chains and secondary industries, would almost certainly present an appealing proposition for local and international investors. And given the dire need for such investment inflows into South Africa in order to kick-start its economic recovery, that single benefit in itself makes for a very compelling ‘biofuels from sugar cane’ business case.

Aimee te Riele is an Associate, Corporate Finance | Nedbank CIB

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

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

Ghost Bites (Grand Parade | Lesaka | Northam Platinum | Novus | TWK)

The Finance Ghost
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Ghost Bites (Grand Parade | Lesaka | Northam Platinum | Novus | TWK)

If you enjoy Ghost Bites, then make sure you’re on the mailing list for a daily dose of market insights in Ghost Mail. It’s free! SIGN UP >>>

Grand Parade Investments gets a mandatory offer

Don’t get too excited – the price is in line with the current traded price

A mandatory offer is triggered when a shareholder moves above the 35% threshold. In such a case, an offer must be made to all other shareholders and the offeror needs to be in a financial position to make such an offer.

GMB Liquidity Corporation has moved to a 35.14% stake in Grand Parade Investments and has thus triggered a mandatory offer at a price of R3.33 per share. The rule is that a mandatory offer must be made at the higher price paid for a share in the six months before the commencement of the offer period.

The offeror doesn’t intend to apply for a delisting of the company.

Grand Parade had previously alerted the market to the potential sale of shares in the company or its underlying assets as part of a value unlock strategy. The announcement makes it clear that the GMB offer is independent of that process.

In fact, GMB is building up its stake because of that process and what it believes can be achieved. Weirdly, the cautionary announcements by Grand Parade (which supposedly have nothing to do with GMB) have now been withdrawn. It may be the case that whoever was negotiating with Grand Parade has now walked away because of GMB.

In case you’re wondering who GMB is, the sole director is Gregory Bortz who has also invested in horse racing in the Western Cape. He is the chairperson of Kenilworth Racing.

His latest horse to back is clearly Grand Parade. With an offer price in line with the current market price, the only acceptances will likely come from holders of large blocks of shares who are looking for a liquidity event that is otherwise difficult to achieve on the market in an illiquid stock.

Lesaka Technologies reports results at the upper end of guidance

The Connect acquisition is outperforming expectations but there’s plenty of debt

Lesaka Technologies (which used to be called Net1) has released results for the first quarter of 2023. The year-on-year numbers are pretty meaningless as this result includes the Connect acquisition and the base period doesn’t.

Despite revenue of R2.1 billion and adjusted EBITDA of R111 million, the group is still making an operating loss of R80 million.

Through cost optimisation initiatives and modest revenue growth, the Consumer segment reported a smaller adjusted loss of R24 million vs. a loss of R137 million in the comparable quarter. The group hopes to achieve break-even in the Consumer business in the next quarter.

The problem is the level of debt, with a net interest charge of R62 million in this quarter because of the borrowings to fund the Connect acquisition. The group has cash on the balance sheet of around R540 million of which $9.2 million is held in dollars.

Northam finally swoops in with a higher offer

An offer has been made to acquire the remaining shares in Royal Bafokeng Platinum

Just one day after the M&A drama in the gold sector was put behind us, the PGM sector burst into life.

After a protracted process at the Competition Tribunal in an effort to block Impala Platinum from taking control of Royal Bafokeng Platinum, Northam Platinum has finally made an offer to all remaining shareholders.

A considerably higher offer than Impala’s offer, I might add.

Those who have followed the Royal Bafokeng story will know that Northam recently acquired a 34.52% stake in the company from Royal Bafokeng Holdings (and a few other shareholders) at a price of R180.50 per share. There’s also an option structure that gives Northam the opportunity to acquire more shares that would take the stake to 37.80%.

Under the original deal, Royal Bafokeng Holdings acquired an 8.67% stake in Northam as payment for the shares. This aligned the parties going forward.

Northam has now made an offer to all other shareholders for R172.70 per share. This is the price paid to Royal Bafokeng Holdings, less dividends paid by Royal Bafokeng Platinum since that date.

The Impala Platinum offer is R90 per share plus 0.3 shares in Impala. Based on the current Impala share price, that’s an offer of around R150.40 per share. As you can see, the Northam offer is a lot higher than that – almost 15% higher in fact!

The minimum cash component of the Northam offer is R54.40, with the rest settled in Northam shares. If acceptance rates for the offer are low, then the full amount will be paid in cash.

In a clever bit of corporate finance, Northam points out that if Impala Platinum doesn’t accept the offer, then the cash consideration will be at least R152.42 for other shareholders and the remainder will be settled in shares. This would take the cash component above what Impala Platinum is offering in total.

If Impala does want to step away from the asset and make a profit on its stake by accepting the Northam offer, it would end up being a relatively small cash component with a huge chunk of Northam shares to settle the purchase price. This would leave Impala as a significant shareholder in a company where I don’t think the two CEOs are golf buddies.

Time for a bidding war?

As is the norm in these situations, the Northam share price fell sharply (-6%) and Royal Bafokeng Platinum rallied more than 10% to R167.

If previous deals are anything to go by, the likeliest winner in this process is Northam’s corporate advisor. The advisory fees are usually quite extraordinary.

Novus nosedives 12.7% on release of a trading statement

The group has been squeezed by pulp and paper shortages

Let’s just get the ugliness of the Novus numbers out of the way: headline earnings per share (HEPS) is expected to drop by between 82.4% and 97.4% in the six months ended September. That’s a rather spectacular collapse in profitability. On the plus side, as least there are still profits.

Global pulp and paper shortages with high price increases and logistical challenges have had a massive negative impact on the Novus business. Despite making the decision to increase the stockholding to mitigate some of the risks, it just wasn’t enough of a buffer against market conditions.

To add to the pain, there were once-off costs in this period like the transaction costs for the acquisition of a 75% stake in Pearson South Africa.

Detailed results will be released on 18 November for your reading pleasure. Or pain.

TWK delivers solid results

I’m looking forward to unlocking this stock

TWK Investments is listed on the Cape Town Stock Exchange, so if you only follow JSE news then you wouldn’t have seen these numbers.

For the year ended August 2022, revenue was up by 17.8% and EBITDA jumped by more than 27.5%. As always, when the growth rate in EBITDA is higher than in revenue, you know there’s been margin expansion.

It gets better the further down you go, with HEPS up by 45% to 863 cents. The net asset value per share is up nearly 13.4% to R52.55.

The largest segment is Retail and Mechanisation, in which revenue increased by 27.8% thanks to high fertiliser prices that more than offset sales volume pressure. EBITDA margin increased nicely from 3.83% to 4.54%.

The next largest is Timber, which achieved revenue growth of nearly 16.7%. EBITDA margin increased from 14.67% to 14.93%, so you can see how wildly the operating margins can vary in each segment. This is the benefit of having a diversified portfolio, as some business models simply carry structurally higher margins than others.

If you’re reading this before 12pm on Thursday 10 November, you still have time to register for the Unlock the Stock presentation at this link. The TWK management team will be taking your questions. If you miss it, look out for the recording in Ghost Mail.

Little Bites:

  • Director dealings:
    • Another day, another major purchase of Lighthouse Properties shares by Des de Beer – this time for a whopping R31.4 million!
    • A director of a major subsidiary of African Rainbow Minerals has sold shares in the company worth nearly R2.3 million.
    • A director of a major subsidiary of Santova has sold shares worth R610k.
    • The CFO of Spear REIT has bought shares in the fund worth R77k.
  • Europa Metals released further drilling results from the Toral asset in Spain. The company is very excited about the 5.25m@23.24% ZnEq(PbAg) that it found. No, that doesn’t mean anything to me either. The bit I did understand was the CEO’s comments that this is the “highest grade intersection that the company has drilled to date at Toral” – clearly good news.
  • Universal Partners released financial statements for the quarter ended September. This Mauritian-listed company holds an interesting portfolio of businesses in Europe and the UK. The dental business in the UK is being sold and competition approval is outstanding. The rest of the portfolio ranges from debt collection through to water efficient toilets (no, really). The net asset value per share is just under R30 at current exchange rates and the share price is R20.99.
  • Having lost more than half its value this year, Ellies has renewed the cautionary announcement that was issued in September. The company is in negotiations to pursue acquisitions in sectors like solar, uninterrupted power supply and renewable energy. This is key to the corporate plan to diversify.
  • As expected, Renergen’s trading halt on the ASX has been lifted.
  • The Rebosis business rescue plan is expected to be released on 1 December after creditors approved another extension.

US stocks webinar with EasyEquities

The Finance Ghost
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US stocks webinar with EasyEquities

With the dust settling after the release of results by the biggest tech companies in the world, I joined Carly Barnes to talk about some of the big names and what I’m doing in my portfolio.

The tech sector has come under enormous pressure this year. It’s been a perfect storm of crazy valuations coming into 2022, pressure from macroeconomics, the strength of the dollar and a sharp decrease in free cash flows. To make it worse, some companies are taking huge risks on building out new parts of the business.

In this webinar, Carly Barnes and I dug into Apple, Meta, Netflix and Microsoft.

If you’re ready to invest with more confidence in your USD portfolio, then this webinar is for you.

Remember that you can get my very best work alongside Mohammed Nalla in Magic Markets Premium for just R99/month or R990/year. We focus on bringing you top quality research on global stocks. Subscribe here if you’re ready to take your knowledge to the next level.

In the meantime, enjoy the webinar:

Disney is taking the mickey

The Finance Ghost
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Disney is taking the mickey

My Disney position is going from bad to worse. For some reason, the management team is tone deaf to macroeconomic conditions and is prepared to make incredible losses in streaming.

As I shake my head in disbelief at the Disney share price drop, Toddler Ghost is asking me about the “tractor” scene in Cars. It’s an improvement on Cocomelon, I’ll tell you that much.

Cars came out in 2006 and is just as brilliant today as it was back then. After three movies, multiple spin-offs and endless merchandise, Disney made plenty of money from Lightning McQueen and deservedly so.

Of course, he’s watching it on Disney+ on our TV, so Disney is still using the movie to generate revenue, this time through the power of distribution. The trouble is that a generational hit like Cars is hard to come by. In the content game, the costs just keep on coming.

The content treadmill

If you can imagine setting a treadmill at your local gym to the steepest setting and putting it at 15km/h, then you’ve got the right idea of how it feels to be running a streaming business in this environment. Every single month, there’s someone else releasing new content and trying to steal your subscribers.

Netflix. Disney. Amazon. The list goes on and the budgets are huge.

The winner in all of this? Undoubtedly the consumer. We have more choice than ever before. We can have an entire bouquet of streaming platforms and still be spending far less than a full DSTV subscription. Of course, live sport remains a competitive edge for MultiChoice, as does the strong slate of regional content. Broadband affordability is another challenge for the streamers.

With Disney’s share price down over 40% this year, the blame can be laid squarely at the feet of the streaming business and management’s insistence on throwing the kitchen sink and all the fairy tale creatures at the problem.

They better be right

Management is promising that the streaming business will be profitable by 2024. If it isn’t, the market is going to punish Disney even further.

With Q4 and therefore full year 2022 results now in the wild, we know that Disney’s streaming operations (called Direct-to-Consumer) lost a spectacular $4 billion this year. That’s a whole lotta money.

This drove a 42% drop in operating income for the broader Media and Entertainment Distribution segment, which includes all the other media businesses in the group (and there are many). The Q4 result is even worse, with a 91% drop in operating income in that segment.

The parks did well – but shareholders didn’t benefit

The thesis in Disney was a recovery in the theme parks as Covid retreated into the shadows. When I invested, I knew management would invest some money in the streaming business. I just didn’t expect them to pull a Zuck on me and build their own version of the Metaverse.

The recovery in that segment came in with a vengeance. Operating income recovered sharply from just $471 million last year to $7.9 billion this year.

This was enough to achieve a 56% increase in group operating income, which would’ve been MUCH higher if any degree of sanity prevailed in the media business.

The Q4 growth (or lack thereof) is what has really spooked the market. Group operating income is flat year-on-year despite a 9% increase in revenue, so the margin is collapsing as losses mount in the media business.

Where to from here?

I’ve been wrong on Disney’s short-term capital allocation decisions. Much like at Meta, I’m hoping that they will start to tone it down now.

If the company is right and the streaming business turns profitable in FY24, then Disney remains interesting and I’ll consider adding to my position once I’ve had time to fully unpack these results.

If it doesn’t work out, the pain in the share price will get a lot worse until management abandons the investment in Direct-to-Consumer (a very unlikely outcome).

For now, I’m holding. I think we might see another drop after the next quarter, which could be a catalyst to add to the position.

Magic Markets Premium

We’ve covered Disney twice in Magic Markets Premium.

Our approach is always to present a bull case and a bear case, empowering our subscribers to trade and invest with more confidence. A market is all about people reaching different conclusions with the same information, which is why we give a balanced view.

In our most recent work on Disney (August 2022), we noted that management is accelerating the investment in streaming and that this looked bearish over the short-term. We were right (sadly). I opted not to add to my position, as I felt things could get worse before they get better.

Well, they got worse alright.

If you are interested in the most iconic companies in the world and learning more about how to critically analyse them from an investing perspective, a Magic Markets Premium subscription is something that you’ll never regret.

For just R99/month or R990/year, you get a weekly report and podcast covering a global stock, presented by yours truly and my partner Mohammed Nalla (a highly experienced financial professional).

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Ghost Bites (Aspen | Gold Fields | Hammerson | Murray & Roberts | Redefine)

The Finance Ghost
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Ghost Bites (Aspen | Gold Fields | Hammerson | Murray & Roberts | Redefine)

If you enjoy Ghost Bites, then make sure you’re on the mailing list for a daily dose of market insights in Ghost Mail. It’s free! SIGN UP >>>

Aspen closes a €1.26bn syndicated loan facility

The 2018 facility has been successfully refinanced

When dealing with international groups, the debt structures become extremely complicated.

Aspen’s 2018 facility was a multi-currency facility that included EUR, ZAR and AUD facilities with tenors of three to four years, with extension options available.

The facilities have now been consolidated into a single facility agreement. Through a syndication process, other banks took some of the debt and allowed the initial lenders to take money back off the table. This is how large banks earn delicious fees on debt structuring.

The lead arrangers were Citi, RMB, MUFG Bank (Europe) and Nedbank. There were eighteen lenders who committed to the facilities from various countries. These were banks with which Aspen already held relationships.

Yamana Gold’s board changed its recommendation

The $300 million break fee is now receivable (around 3.6% of Gold Fields’ market cap)

After months of Gold Fields working the market to try and drum up shareholder support for a transaction, this deal has fallen over in the space of a couple of days. Welcome to the joy and pain of M&A.

If you have been reading Ghost Bites this week, you’ll know that the Yamana Gold board told the market that the competing bid for the company is a superior offer to what Gold Fields had put forward. Despite this, the Yamana board hadn’t changed its recommendation to shareholders to vote in favour of the deal.

At 4pm on Tuesday afternoon, Gold Fields announced that Yamana’s board had changed its stance on the deal. Shareholders were now being told to rather vote against the Gold Fields transaction. At 5:50pm after the market closed, Gold Fields announced the termination of the deal with Yamana and the triggering of the $300 million break fee.

With Gold Fields’ market cap at R137 billion, that’s a rather juicy 3.6% of the market cap just in the break fee. We will find out on Wednesday morning whether the share price will shoot back up to pre-transaction levels.

I have a decent chunk of money in Gold Fields and I’m sincerely hoping that this will be the case.

Hammerson’s trading update looks promising

The primarily British property fund is enjoying strong tenant demand

Hammerson released a Q3 trading, operational and rent collection update. It was enough to send the share price more than 7% higher.

The company expects FY22 adjusted earnings to be at least £100 million. Thus far this year, gross rental income is up 11% in this inflationary environment.

There’s an improvement in footfall in UK and Ireland to 90% of 2019 levels. France is at 95%. Due to changed shopping habits (higher spend per visit) and the inflation we are seeing in the market, sales are above 2019 levels.

Demand for prime space is still high, with group occupancy at 95%. The pipeline for Q4 is strong. More than half of leasing activity this year has been to non-fashion categories, although fashion remains core to Hammerson’s offering.

With rent collections at 93%, the company expects rates to improve further by the end of the full year.

In terms of property valuations, yields were stable this quarter. That’s a bit different to what we saw in the Capital & Counties update, for example.

As is the case with so many property funds, Hammerson is busy with disposals of non-core assets.

Murray & Roberts pops 17% on news of a sale of Clough

The proposed sale of Clough Limited solves a lot of problems

As we recently learnt, the major challenges in the business that have taken Murray & Roberts into a loss-making position are found in the Energy, Resources and Infrastructure platform. This platform comprises “substantially” the group’s interest in Clough Limited, the Australian business in the group.

Murray & Roberts has agreed to sell 100% of Clough to Webuild, a multinational Italian industrial group that is clearly very brave. The Italians have worked with Clough on many projects over the years.

This is a get-out-of-jail deal that pays a modest amount to Murray & Roberts for the business. The value placed on the business is around R4 billion but Murray & Roberts will only receive around R5.5 million in cash. The rest of the price is discharged through the cancellation of an outstanding intercompany loan account.

Webuild will extend an interim loan facility of A$30 million to Clough.

The net result is no residual exposure to Clough. Murray & Roberts’ only remaining exposure to Australia will be through RUC Cementation Mining.

This is a Category 1 transaction for Murray & Roberts and shareholders will therefore need to vote to approve the deal.

Murray & Roberts invested in Clough in 2003, so this has been a long-standing relationship. In 2013, Murray & Roberts bought out the remaining 38.4% interest in Clough at a valuation of A$1.13 billion (R12.7 billion at today’s exchange rate).

If anyone from Murray & Roberts needs to drown their sorrows at a bar, there are many other South African execs ready to share war stories of value destruction in Australia.

Redefine guides modest growth for FY23

The share price is down around 8.5% this year

I must apologise for missing Redefine’s results in Monday’s edition of Ghost Bites. I’m covering it here to make sure you’ve seen them. In other words, this news is outdated by one day.

Redefine is focused on the South African and Polish markets. The local assets are valued at R58.9 billion and the offshore assets are R30 billion, representing a third of total exposure.

Within the South African portfolio, 41% is in retail, 38% in office and 20% in industrial property. There’s 1% sitting in specialised properties. Office vacancies remain a significant worry, up from 12.9% in August 2021 to 14.4% in August 2022.

In support of the balance sheet and to reduce loan-to-value (LTV), Redefine has been selling off non-core properties. The LTV has improved from 42.4% to 40.2% year-on-year. With interest rates rising, this is critical. The average cost of rand-denominated funding has increased from 8.1% to 8.7%.

For the year ended August, group distributable income grew by 26.1%. On a per share basis though, it only increased by 1.4%. The dividend per share is 28.5% lower in this period.

Guidance for next year is distributable income per share of between 54.2 cents and 56.4 cents. This is modest growth of the FY22 number of 53.71 cents. A payout ratio of between 80% and 90% is expected.

Little Bites:

  • Director dealings:
    • A prescribed officer of Sibanye has entered into a derivative structure with a value of R49.5 million. It looks like a structure that protects against volatility in the position rather than taking a view on a specific direction.
    • Des de Beer has acquired a further R255k in Lighthouse Properties.
    • A director of Impala Platinum has disposed of shares worth R30k.
    • Value Capital Partners has bought another R117k worth of ADvTECH shares (they have board representation at the company).
  • Renergen’s stock was halted from trading on the ASX based on a non-material capital raise that the company was contemplating. Renergen notes that it had already decided not to proceed with the raise by the time the trading halt was implemented, so the company applied to the ASX for the trading halt to be lifted and expects normal trading to resume on Wednesday.
  • Between 31 October and 4 November, Naspers repurchased nearly R1 billion worth of shares and Prosus repurchased €262 million in shares.
  • An employee at Harmony Gold’s Tshepong North mine tragically lost his life in a fall of ground incident. This is another reminder that mining is still a dangerous industry, despite all the precautions taken by mining companies.
  • Attacq is the latest company to implement a secondary listing on A2X. The primary listing on the JSE is unchanged.

Ghost Bites (Gold Fields | Invicta | MultiChoice | Quantum Foods | Raubex)

The Finance Ghost
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Ghost Bites (Gold Fields | Invicta | MultiChoice | Quantum Foods | Raubex)

If you enjoy Ghost Bites, then make sure you’re on the mailing list for a daily dose of market insights in Ghost Mail. It’s free! SIGN UP >>>

Gold Fields keeps a cool head

The board is listening to what the market has been been saying

If you look at the Gold Fields share price action this year, you’ll quickly see that the market didn’t love the proposed merger with Yamana Gold. The resultant drop in the Gold Fields share price had the effect of lessening the appeal of the Gold Fields offer to Yamana shareholders, as there is no cash underpin to the Gold Fields offer. This is an all-share offer based on a fixed exchange ratio.

This opened the door for a competing offer to arrive on the scene, a development which was covered earlier this week in Ghost Bites.

Gold Fields has the right to improve its offer to convince the Yamana board that Gold Fields should be called the superior offer. The local gold mining house has elected not to do so, demonstrating deal discipline that is always great to see in management teams.

Gold Fields believes that its offer is both strategically and financially superior to the competing offer. This is based on the long-term strategic fit of the assets, which shareholders of both companies would be exposed to in an all-share merger.

There’s an interesting twist in this tale that I didn’t pick up in the Yamana announcement earlier this week. Despite defining the competing offer as a superior offer, the Yamana board has not changed its recommendation to shareholders. I’m not sure if this is to avoid triggering the hefty break fee in this deal. Either way, the board is technically still recommending that shareholders vote in favour of the Gold Fields offer.

It all comes down to the shareholder vote scheduled on 22 November.

Invicta reports a solid jump in earnings

The market responded with a 9% rally

Invicta released a trading statement for the six months ended September. There were some major once-off earnings in the comparable period, so earnings per share (EPS) is expected to be much lower.

This is exactly why headline earnings per share (HEPS) exists as a measure. HEPS is designed to exclude once-offs in the numbers that distort year-on-year comparisons.

Investors should ignore the EPS number and instead concentrate on HEPS, which in this case is expected to increase by between 38% and 48% vs. the prior comparable period.

MultiChoice is ticking over

The company is priced for dividends, not growth – is the market getting it right?

The MultiChoice trading statement needs a careful read. There’s an important difference between core headline earnings per share (HEPS) and reported HEPS, primarily relating to commentary around foreign exchange losses that I found a bit confusing.

Let’s start with the simpler stuff.

For the six months to September 2022, MultiChoice achieved subscriber growth (a big deal for DSTV given the level of competition in the market) and reduced trading losses in Rest of Africa. A cost optimisation programme further contributed to profitability.

As a partial offset, the group spent R0.7bn in decoder subsidies ahead of the FIFA World Cup. If customers can’t afford decoders, they can’t become subscribers. This is another example of how difficult things have become for MultiChoice. You won’t read about Netflix subsidising people’s fibre bills. MultiChoice is competing in a market that has changed substantially and it’s only going to get tougher from here.

We now get to the measures of profitability. There are two of them that MultiChoice wants you to focus on. The first is organic trading profit (up between 2% and 7%) and the second is core HEPS (up between 1% and 5%). Core HEPS includes the impact of realised foreign exchange losses. It does not consider unrealised and/or non-recurring foreign exchange losses.

Once those forex movements come into play, the profitability changes dramatically. In fact, MultiChoice will slip into a headline loss for this interim period of between -50 and -64 cents per share.

The reasons? Unrealised losses on translating USD-denominated debt into ZAR and the impact of repatriating cash from Nigeria at the “parallel rate” – an unofficial market rate because getting dollars is hard in Nigeria. MultiChoice notes that these are temporary losses.

I understand the temporary difference in the context of the translation of debt, as the dollar is incredibly strong and is unlikely to stay there long term. One can never be sure, of course.

I don’t understand it in the context of repatriated cash. Once cash has been repatriated and exchanged into another currency, that rate is locked in and those losses are permanent. It’s possible that MultiChoice is recognising some kind of forex provision based on the expected rate for future repatriations. Even if that is the case, there’s no guarantee at all that the parallel rate will get closer to the official rate. It could just as easily move further away.

The temporary nature of these issues is debatable.

The share price is trading at similar levels to three years ago and has been trending sideways. In the meantime, investors have been collecting dividends.

Quantum Foods warns of a sharp drop in profits

Times are tough in the poultry business

Quantum Foods is a R1bn market cap company providing diversified animal feeds and poultry products to the South African and selected African markets. The company is best known for being the largest producer of eggs in South Africa.

Profitability has cracked for the year ended September 2022, with headline earnings per share (HEPS) falling by between 68% and 78% vs. the 52.2 cents reported in the comparable period.

We heard from Astral a couple of weeks ago that the short-term outlook for the poultry sector is bleak. The pressure has already hit Quantum’s business which is focused on a different part of the poultry value chain.

Raubex Group grows its earnings and dividend

Yes, construction groups CAN make money

For the six months ended August, Raubex put in a performance that looks excellent. Revenue was up by 23.2% and operating profit increased by 26.4%, so there was operating margin expansion to go along with the strong top-line result.

The story gets even better on the balance sheet, where cash generated from operations jumped by 145.7% to R589.3 million thanks to increased profits at Bauba and the Beitbridge Border Post project in Zimbabwe. Due to acquisitions of subsidiaries and general mine capex, there was a net outflow for the period.

This helped support an increase in the interim dividend of 12.8% to 53 cents per share.

Looking deeper, margins came under pressure in Materials Handling and Mining, with a substantial revenue increase not translating into an uplift in operating profits. Construction Materials went in the wrong direction on the margin line as well, dropping from 9.1% to 6.2%. In Roads and Earthworks as well as Infrastructure, margins were higher.

If there’s one metric that investors might want to keep an eye on, it’s the decrease in order book from R17.14 billion to R16.40 billion. Still, the commentary in the outlook section is very positive.

Little Bites:

  • Director dealings:
    • The CEO of Altron has bought shares in the company worth R715k
    • Des de Beer has bought even more shares in Lighthouse Properties, this time worth R3.2m
  • With an attractive dividend reinvestment price of R31 per share, I’m not surprised that 84.4% of Hyprop shareholders elected the dividend reinvestment alternative. Shareholders received a pro-rata application as demand exceeded supply of available shares under this alternative. This allowed Hyprop to retain around R500 million in equity.
  • Delta Property Fund released results for the six months period ended August 2022. Key metrics have all gone the wrong way, with vacancies up to 33.9% and rental income down 12.7%. The loan-to-value ratio has increased to 58.2% and the debt is more expensive, with an all-in cost of 8.1% vs. 7.4% in the comparable period. Delta transferred one property for R74 million in this period and has signed agreements for a further R232 million across nine properties. Those proceeds will be used to reduce debt. The NAV per share is R4.27 and the funds from operations came in at 9.2 cents. The share price is at R0.31.
  • After a long fight going back to 2020, Trustco’s JSE listing has finally been suspended. The company fought the regulator at the Financial Services Tribunal and in court, but to no avail. The company’s application to the High Court has now been dismissed with costs, which means that the JSE’s original decision to suspend the listing can be implemented. It all relates to an approach taken in the 2019 financial statements which the JSE doesn’t believe was in line with IFRS standards. Trustco had taken advice that the treatment met the standards. The judge recognised Trustco’s approach in engaging with experts but still ruled that the JSE’s regulatory framework ultimately governs listings on the exchange, thus the JSE’s view must stand. Trustco will need to restate its financial statements to the JSE’s satisfaction in order for the suspension to be lifted.
  • Fitch has reaffirmed Sirius’ BBB investment grade credit rating and stable outlook. This is based on the occupancy and collection rates in the portfolio and the in-house marketing capability that reduces reliance on brokers. A solid credit rating helps keep the cost of debt low but doesn’t give an indication of expected equity returns.
  • In further ratings news, Fitch has upgraded NEPI Rockcastle from BBB with a positive outlook to BBB+ with a stable outlook. This is based on operational metrics and the share price. As above, a credit rating upgrade doesn’t tell you anything about equity returns.
  • Castleview Property Fund has released results for the six months ended August 2022. This obscure fund only owns two shopping centres. The net asset value per share has increased by 34.26% to 610.13 cents. Despite a decent trading period, the company hasn’t declared a distribution. The company is busy with a reverse takeover, so there is far more to come from this listed structure as many more assets will be injected into it.
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