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The man who sold a country that didn’t exist

Dominique Olivier
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The man who sold a country that didn’t exist

The rise and fall of a nation that existed only on paper, and the man who convinced thousands it was real.

If you were to look upon Gregor MacGregor’s 19th-century map of Poyais, with its turquoise coastline shimmering like a travel brochure and its lush interior forests promising both shade and prosperity, you might feel a brief flicker of wanderlust. Here lay a Caribbean kingdom, tucked neatly between Nicaragua and Honduras, poised on the Mosquito Coast like a pearl waiting to be discovered.

There’s just one small complication: Poyais never existed. But that didn’t stop hundreds of people from buying land in it.

It also didn’t stop Gregor MacGregor – Scottish war veteran, charismatic charlatan, and all-round overachiever in the category “crimes requiring incredible confidence” – from building one of the most ambitious frauds in human history. His scheme involved everything from fabricated currencies to fake guidebooks to seven shiploads of settlers who genuinely believed they were sailing toward a life of prosperity, not a damp, mosquito-ridden jungle with no potable water and no MacGregorian monarchy waiting to greet them.

If this all sounds too preposterous to be true, allow me to introduce the man behind the mirage.

A family tradition of bad financial decisions

To understand why Gregor MacGregor attempted to sell a fictional country, it helps to know that he came from a line of men who made spectacularly poor financial choices.

His grandfather – also Gregor MacGregor – was among the many unfortunate souls wiped out by the South Sea Bubble of 1720 (sound familiar? I wrote about that one last week). That bubble, in its own infamous way, was the prototype for every future speculative fiasco: dazzling promises, mounting hype, national hysteria, and the inevitable financial face-plant. The elder MacGregor lost his fortune, his dignity, and presumably any capacity to hear the phrase “once-in-a-lifetime investment opportunity” without breaking into hives.

The younger Gregor appears to have learned exactly one lesson from this family tragedy: if you can’t beat a scam, be the scam.

And so, at sixteen, he sailed off to the Americas with the British Army, apparently convinced that the most efficient way to escape a financially cursed lineage was to collect new enemies on a new continent.

Soldier of fortune (and questionable judgement)

MacGregor spent his youth building a résumé that would make both a colonial administrator and a modern HR department break into a cold sweat.

He fought for Simón Bolívar, the Venezuelan revolutionary hero known as El Libertador. Along the way, MacGregor did the sorts of things young men do when they’re drunk on idealism and proximity to political icons: he left his wife, courted Bolívar’s famously beautiful cousin Josefa Antonia Andrea Aristeguieta y Lovera, and – naturally – invaded Spanish Florida.

His conquest of Amelia Island in 1817 remains one of history’s most baffling military operations. He arrived with a few hundred armed men, discovered almost nobody was there to oppose him, and immediately… invented a country. Instead of fortifying the island or preparing for Spanish retaliation, MacGregor spent his time designing flags, printing stamps, and issuing currency that worked entirely on the honour system. The Spanish, unamused by this new micro-nation emerging on their real estate, removed him promptly and without much effort.

But Amelia Island lit a spark in MacGregor’s imagination. If he could create a country accidentally, what might happen if he tried on purpose?

Welcome to Poyais. Population: zero

In London, MacGregor unveiled his magnum opus: Poyais, a Central American paradise so seductive it was almost plausible. Almost.

He claimed to be the “Cazique” – a title that sounded delightfully exotic to British ears – of an 8-million-acre kingdom blessed with gold-flecked rivers, fertile land, natural harbours, and Indigenous inhabitants who (very conveniently) adored British colonists and would gladly assist in their settlement.

MacGregor produced maps. He produced uniforms. He produced certificates of nobility. He produced Poyais dollars, which legitimate prospective settlers could purchase with their very real British pounds. He even wrote an entire guidebook under the pseudonym Thomas Strangeway, describing everything from the architecture of government buildings to the local climate.

His attention to detail was staggering. It also served an important psychological purpose: when someone lies to you with this much effort, you don’t question their sincerity – you question your own sanity. And so, in 1822, travelers boarded ships in Scotland clutching their Poyais guidebooks like golden tickets to a new life. One ship alone (the Edinburgh Castle) carried 250 immigrants. Most would never come home.

The jungle, the horror, and the terrible realisation

When the settlers arrived on the Mosquito Coast, they discovered the sort of scene that really should have tipped someone off during the planning phase: no port. No town. No Cazique. No currency. No anything.

The “nation” of Poyais turned out to be a swampy wilderness inhabited only by bewildered locals who had never heard of Gregor MacGregor, much less pledged allegiance to him.

The settlers tried to survive on whatever they could, but inevitably disease spread and supply ships failed to arrive. The lush forests MacGregor had rhapsodised about turned out to be impenetrable, wet, and filled with things that bite. Over two years, most of the colonists that attempted to find the mystical land of Poyais died.

In one of history’s most astonishing demonstrations of psychological loyalty, nearly forty survivors returned to Britain and defended MacGregor in court, insisting that they must have simply landed in the wrong place or misinterpreted their guidebooks. 

The power of branding, ladies and gentlemen.

When London gets suspicious, try Paris

By late 1823, even the British (who were by then veterans of multiple financial catastrophes) began to suspect something was amiss. Questions were raised, documents were examined, and investors frowned in unison.

MacGregor did what any self-respecting con artist does under scrutiny: he took his act on tour. In Paris, he raised nearly £300,000 promoting Poyais as the next great investment destination. The French, perhaps feeling competitive after missing out on the Mississippi Bubble a century earlier, swallowed his story enthusiastically. But even Paris has limits. In 1826, French authorities attempted to convict him of fraud. MacGregor, slippery as ever, wiggled free and promptly boomeranged back to London. What’s that adage about try, try and trying again?

Here, the reception was a little chillier than it had been the first time around, and the Poyais scheme eventually sputtered out. As public enthusiasm waned, the imaginary kingdom faded from polite conversation. Not that it mattered to MacGregor. By then, he had decamped to Caracas, where he lived comfortably – wealthily, even – until his death at 58.

The man who got away with it

Despite engineering one of the most audacious cons in world history, Gregor MacGregor was never properly brought to justice.

The blame landed not on the charismatic fraudster with the impeccable tailoring and exotic title, but on the middlemen, organisers, and unlucky captains of those doomed voyages. People simply could not bring themselves to believe that MacGregor – the hero of Bolívar, the Cazique of Poyais, the dignified gentleman who spoke of civic plans and national infrastructure – had fabricated an entire country.

The victims preferred the story where they were unlucky, misled, or geographically confused instead of facing the truth: they had been duped by a man whose greatest skill was confidence.

That map of Poyais, recently acquired by rare-book dealer Daniel Crouch, is part historical curiosity and part monument to human credulity. A beautifully drawn example of how a lie, told with enough conviction, can take on the weight and shape of reality.

The echoes of Poyais

Modern readers may wonder how anyone could fall for such an absurd fabrication. But the truth is embarrassingly simple: people have always been seduced by the promise of a fresh start, a guaranteed return, a better life just beyond the horizon. Whether it’s a bubble, a memecoin on the blockchain, a revolutionary technology, or (on the rarest and most spectacular occasions) a country that does not physically exist, the pattern repeats.

The only real difference between Poyais and the speculative frenzies of today is that the survivors of the modern manias rarely return home insisting the CEO was a misunderstood visionary who simply misplaced the product. Also, we now have the internet, which makes it harder for the MacGregors of this world to get away with it.

Then again, we did have the Fyre Festival…

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 (Accelerate Property Fund | Deneb | eMedia | Frontier Transport | Growthpoint | HCI | KAL | Life Healthcare | Nampak | Novus | Sirius Real Estate | Tsogo Sun)

The Finance Ghost
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Ghost Bites (Accelerate Property Fund | Deneb | eMedia | Frontier Transport | Growthpoint | HCI | KAL | Life Healthcare | Nampak | Novus | Sirius Real Estate | Tsogo Sun)

Accelerate Property Fund flags positive distributable earnings (JSE: APF)

There’s been some strong recent momentum in the share price

In the past 30 days, Accelerate Property Fund is up 40%. That’s rather lovely from my perspective, as I went long recently based on what struck me as a turnaround story being ignored by the market. The release of the circular for the disposal of Portside was what gave me the comfort to go long. There had been a weird delay in the release of the circular that spooked the market, but eventually it came out. Dealing with the debt is absolutely key to this story and the sale of Portside will certainly help with that.

I also went and checked out Fourways Mall on my recent trip to Joburg, the “white elephant” mall that the fund is trying to turn into something that works. They will have their work cut out for them, but the macro story is a tailwind rather than a headwind at the moment.

To add to the positivity, a trading statement for the six months to September notes that the fund will swing from a distributable loss to distributable earnings of between R56 million and R58 million. Although there’s still no dividend (as one would expect), at least the fund is no longer going backwards!

Deneb’s earnings more than doubled (JSE: DNB)

Revenue growth has been seen across the group

Here’s a positive story around South African business conditions: Deneb grew revenue by 22.4%. Although some of this growth was in the lower margin segments (and hence gross profit was only up by 14.2%), that’s still a great outcome. Operating costs increased just 2.7% on a like-for-like basis and 8% overall.

Numbers like these can only mean one thing: a great performance in operating profit, up 37.2%. Once you include the interest cost savings of a lower average debt balance and less onerous interest rates, you get to HEPS growth of 101%. Yes, HEPS more than doubled!

The Branded Product segment was where you’ll find the excitement, with revenue up 81%. This is also where you’ll find the substantial mix effect on gross margin, as IT products (hardware and software) were the biggest source of growth. Gross profit was up 19.6% and operating profit rose by a rather ridiculous 368% in this segment to R34 million.

In the Manufacturing segment, they managed to improve operating profit by 27.5% despite a 1% drop in revenue. That’s just as well, as this is the most important segment with operating profit of R99 million.

Deneb is also in the process of reducing its property exposure. If they can reallocate capital into areas that are capable of producing this kind of growth, then that will be the right decision for shareholders.

Despite pressure on revenue, eMedia grew earnings (JSE: EMH)

Advertising revenue is in decline

Traditional TV businesses aren’t easy to manage. Although eMedia tends to outperform the market for advertising revenue, they are still swimming upstream in that market. This is why revenue is down 3.2% for the six months to September.

Thankfully for investors, they’ve done a great job of reducing expenses. Although there are some once-offs in these savings, they still deserve credit for operating profit growth of 5.2% and HEPS growth of 20.9%. As a cautionary tale though, the dividend is flat at 14 cents per share.

In an effort to diversify beyond this reliance on advertising revenue, eMedia is executing transactions like the acquisition of a stake in Pristine World. They want to collaborate on international projects and earn more revenue from the content production industry. It sounds good in theory, although I remain concerned about the valuation behind that deal.

eMedia is a value investor favourite as the stock trades on a very low multiple. This reflects concerns around the trajectory of the underlying industry, as cost reductions can’t make up for revenue pressure every year. The share price closed 7% higher on the day of these numbers, but it remains over 30% down year-to-date.

Frontier Transport: earnings down, dividend up (JSE: FTH)

Golden Arrow Bus Services has been having a tough time

Frontier Transport is one of those JSE-listed companies that generally releases solid results, even though the underlying operations aren’t exactly what you would describe as a sexy business. But in the six months to September, the growth story ran out of road.

Revenue has dropped by 5.7% as Golden Arrow contended with substantial competition in passenger volumes from Metrorail lines and new taxi licences. There’s also a great line in the results about how bus passengers bear the brunt of roadworks and traffic, while taxis use “questionable driving behaviour” to get passengers through the traffic faster! Although there are other segments in the group, a bad time for Golden Arrow is almost certainly a bad time for shareholders as well.

Concerningly, the group’s operating expenses increased by 6% despite the drop in revenue. There doesn’t seem to be much flexibility to constrain expense growth during a period of weak revenue.

Once you add on the higher debt levels from the investment in electric buses, HEPS fell by a nasty 13.7%.

The only silver lining here is a 6.9% increase in cash dividends. I would view this cautiously though, as that dividend trajectory clearly isn’t sustainable if earnings continue to suffer.

The portfolio tilt continues at Growthpoint (JSE: GRT)

Of course, the V&A Waterfront remains the jewel in the crown

Growthpoint released an update covering the three months to September 2025. It includes a number of interesting strategic and operational elements.

The company previously set a target to offload assets of R3.5 billion in the year ending June 2026, with the main goal being to reduce exposure to B-grade offices and other non-core properties in the retail and industrial sectors. They are looking at getting out of deteriorating CBDs as well. In other words, the Growthpoint strategy can be described as a flight to quality, supported by the capital deployment strategy that will focus on the Western Cape and development pipeline opportunities at the V&A Waterfront in the next three to five years.

In this quarter, sales worth R391.6 million were achieved at a very slight discount to book value. They expect to get to R3.6 billion in disposals for the year, ahead of the original target.

In the South African portfolio, vacancies came down from 8.2% to 7.4% – the lowest level since June 2019! That’s a positive story for the economy as a whole. In the retail portfolio, footfall was up 3% and trading density increased by 5% on a last-twelve-months basis (at least, I think they are talking about a twelve-month period – the disclosure isn’t 100% clear).

The office sector vacancies are steady at 14.6%, although the regional trends are incredible: the Western Cape vacancies are just 3.3%, while Gauteng sits on an ugly 19.2% and KZN is on just 1.3%.

In the logistics and industrial sector, the vacancy rate has improved from 4.1% to 2.5%, the lowest level in over a decade. The regional picture is much more consistent here, showing how Gauteng is still an economic workhorse despite having such a severe supply-demand imbalance in office property.

The announcement goes into tons of detail around capital deployment opportunities, including the strategic partnership with Cape Winelands Airport to co-develop and manage a mixed-use aviation precinct in the Western Cape. Again, this speaks directly to the current capital allocation strategy.

As for the all-important V&A Waterfront, EBIT grew by 5% – a subdued performance due to the decommissioning and redevelopment of The Table Bay Hotel. Like-for-like EBIT growth was 16% though, with tourism as a major boost to the property.

Naturally, Growthpoint benefits from lower interest rates, with the weighted average cost of funding improving by 30 basis points to 8.6%. A decrease in rates helps the entire REIT sector.

Much as there are exciting moves in the underlying portfolio, Growthpoint still has exposure to many difficult assets in South Africa. This is why distributable income per share is expected to grow by between 3% and 5% for FY26. Hopefully this will improve over time as the shape of the portfolio changes.

Coal mining: the unexpected hero at Hosken Consolidated Investments (JSE: HCI)

Much smaller losses in oil and gas had an even bigger impact

HCI is the mothership for a number of business interests that include a few of the other companies referenced in Ghost Bites today (Deneb / eMedia / Frontier Transport / Tsogo Sun). I therefore won’t go into any further details on these areas as they are covered elsewhere. HCI also has extensive other business interests, like coal mining and oil and gas, so I’ll focus there in this section.

Before we get into the details, we can deal with the most important news: HEPS has jumped by a juicy 74% for the six months to September. The dividend is up 20%, so not all of this is coming through in cash, but it’s still a great story for investors. The net asset value per share is up by 4%.

Looking at the segments, there’s no “bad” news in this period like we saw in the last period. Almost every segment has improved year-on-year, in some cases by a huge margin. Some of these are non-cash items related to revaluations, like the oil and gas prospecting business which recorded a headline loss of R22.2 million vs. a huge loss of R264 million in the comparable period. Another important move is in the coal business, which speaks directly to cash earnings. Thanks to better sales volumes and operational gains from quality improvements, headline earnings increased by 173% in coal to R103 million.

My concern around HCI hasn’t changed though: over half of group headline earnings is derived from the gaming industry. As you’ll see lower down in Tsogo Sun, that’s a tough space.

KAL Group’s revenue hurt by fuel deflation, but profits look good (JSE: KAL)

Agrimark did the heavy lifting in this period

KAL Group released results for the year ended September. Although revenue was down 6.6%, the vast majority of this decline was thanks to fuel price deflation. That’s great news for consumers and not such good news for owners of forecourts.

Thanks to a significant improvement in group gross margin, gross profit was up 3.9% and EBITDA increased 7.5%. HEPS was up 10.6% and the dividend increased by 16.7%, a remarkable outcome in the context of that revenue drop.

Looking deeper, the Agrimark business grew revenue by 6.4% and enjoyed a 70 basis points increase in gross profit margin to 11.4%. Although operating expenses grew by 7.5% (and thus ahead of revenue), the gross profit margin gains were enough to take profit before tax growth to 12.8%.

The other interesting segment worth looking at is PEG, where the impact of fuel deflation was felt the most, with fuel revenue dropping by around 15%. The retail business grew revenue by 1.4%, so the savings at the pumps didn’t really translate into more spend at the forecourt shops. Still, the relatively lower contribution of fuel means that gross profit margin was up from 13.4% to 15.2%, mitigating some of the pain. Attributable recurring headline earnings fell by nearly 7%.

KAL’s share price has been volatile this year, currently down around 8% for the year.

If you look through the complicated numbers, Life Healthcare is growing (JSE: LHC)

Sometimes, normalised earnings really are necessary

Life Healthcare recently sold Life Molecular Imaging (LMI), locking in a post-tax profit that wouldn’t be included in continuing operations. But due to an agterskot-type payment due to the previous owners of LMI based on the selling price achieved, a liability gets recognised and then adjusted through continuing operations. This creates an accounting distortion that makes the numbers harder to work with.

Revenue is thankfully unaffected, so revenue growth from continuing operations of 6.0% (boosted by paid patient days increased by 1.1%) is a helpful number. Normalised earnings per share increased by 10.1%, so there’s some margin expansion there. And perhaps most importantly, the final cash dividend is up 12.9%, so that gives some credence to the double-digit growth story.

Other than the amount owed to the previous owners of LMI, the group has almost no debt on the balance sheet. This puts them in a strong position going forwards, with various capex projects on the table to expand the group.

Nampak’s earnings more than tripled (JSE: NPK)

This is yet another great turnaround story on the local market

Nampak has released a trading statement dealing with the year ended September 2025. Brace yourself: the numbers are rather spectacular.

At the halfway mark this year, Nampak’s HEPS from continuing operations was up by 5%. But for the full year, this metric has more than tripled! Interestingly, it’s not that the second half of FY25 has been insanely good. If you look at the numbers, Nampak’s interim HEPS was R56.84 and the expected full year number is between R101.00 and R107.00. This means that the second half this year was actually softer than the first half, with wild distortions in the base period driving this much higher year-on-year growth for the full year vs. the interim period.

HEPS from total operations is an even more volatile story, coming in at between R119.50 and R122.00 this year vs. just R13.78 in FY24.

There are clearly some significant distortions in the year-on-year comparison, so the better thing to focus on here would be the guided earnings range rather than the percentage move. If we use continuing operations (the correct thing to do), then the Price/Earnings multiple is around 5.3x. The stock is trading at close to the 52-week high and it might push higher based on these numbers.

Novus dragged down by the Education segment (JSE: NVS)

Doing business with the government isn’t fun

Novus released results for the six months to September. Revenue was up by just 1% and operating profit almost halved to R102.5 million. HEPS was down 55%, so profitability really took a dive in this period. As per last year, there’s no interim dividend for shareholders.

The problems sit in the Education segment, where revenue fell by 64.9% thanks to delays in the Department of Basic Education (DBE) finalising the foundation phase catalogue. So far, the Maskew Miller Learning acquisition isn’t working out well, but perhaps lumpy revenue is coming down the line when the DBE finally gets its act together.

The Print segment managed growth of 0.5%, which barely touches sides in terms of offsetting problems elsewhere. The group structure includes the Print, Publishing and Distribution segment for the first time, which is why they specifically carved out the revenue in Print to give a sense of the legacy performance. This is an industry in flux, as evidenced by newspaper tonnage collapsing by 44.5%!

Just to add insult to injury, the Packaging segment experienced a drop in revenue of 6.2%.

The group has R741.7 million on the balance sheet, of which R309.4 million is ring-fenced for the mandatory offer to Mustek (JSE: MST) shareholders that has been such a tenuous process with the regulator. The TRP investigation is ongoing.

Sirius Real Estate locks in another acquisition in Germany (JSE: SRE)

This is the fund’s fifth business park in Hamburg

The capital deployment journey continues at Sirius Real Estate, with the latest deal being the acquisition of a multi-tenant business park in Hamburg, Germany for €31.9 million. The fund notes that they have other properties in the region, so there are some operational synergies from having properties fairly close together (although the closest one is a 30-minute drive).

The EPRA Net Initial Yield for the deal is 6.1%. As you would expect from a Sirius acquisition, there’s upside from actively managing the property. The current occupancy rate is 89%, so they have the opportunity to fill the remaining space. There are also smaller tenants on shorter-dated leases (as usual), so that’s another opportunity for rental uplift. As for the anchors, there are two tenants contributing over 20% of the rent roll and the tenants are from a wide variety of sectors.

This takes the acquisition tally to over €340 million in calendar year 2025!

Looking ahead to 2026, Sirius expects the focus to be on deals in Germany rather than in the UK.

The slow burn continues at Tsogo Sun (JSE: TSG)

The casino business is a struggle

The rise of online betting / gambling has been a major discussion point this year. The biggest loser in this regard is the casinos, with spend on gambling being redirected from poker tables and slot machines to smartphone screens. These are large assets with extensive fixed costs, so pressure on volumes and footfall is really tough to manage.

For the six months to September 2025, Tsogo Sun’s income fell by 1%. Operating costs were kept flat, so adjusted EBITDA decreased by “only” 3% and adjusted EBITDA margin contracted by 80 basis points. Thanks to a decrease in net finance costs, HEPS actually increased by 1%. Talk about a sideways story!

As part of ongoing efforts to prioritise debt repayments and share buybacks, the interim dividend fell by 50%. They have little choice I think, as net debt has to come down when the demand environment is so weak. This is why the fund’s remaining 3.2% stake in City Lodge (JSE: CLH) is expected to be sold within a year or so, as those proceeds will go towards debt reduction. They are also selling off non-core assets where possible, like casinos in outlying areas.

Looking at the segmental performance, the fact that they start with the Online Betting division in the report really speaks volumes. Tsogo Sun has been struggling in this space, but things do seem to have improved considerably and they are now profitable in this space. Brace yourself though: they’ve sent a warning that profits may come under pressure due to the marketing and technology investment required to compete in this market.

In Casino and Hotel Precincts, revenue was down 0.8% and adjusted EBITDA fell by 4.4%. There aren’t exactly many highlights here, but at least they’ve received approval to develop a casino in Somerset West. They expect to allocate R1.29 billion in capex for that project.

Limited Payout Machines did well, with revenue up 4% and adjusted EBITDA up 5%. This division contributes 16% of the group’s EBITDA, so seeing an improvement in that space is helpful.

Along with a worrying regulatory environment that presents even more risks to the traditional casino model, I remain bearish on this space.

Nibbles:

  • Director dealings:
    • Supermarket Income REIT (JSE: SRI) announced that three directors bought shares worth a total of almost R2.4 million.
    • A director of Cashbuild (JSE: CSB) bought shares worth R236k.
    • An associate of an independent non-executive director of Spear REIT (JSE: SEA) bought shares worth R230k.
  • Renergen (JSE: REN) and ASP Isotopes (JSE: ISO) announced that the date for fulfilment of remaining conditions has been extended to 30 January 2026. At least the Competition Commission approval is behind them, which allows the company to plan integration processes and start collaborating in the meantime.
  • Exxaro (JSE: EXX) is acquiring majority stakes in two operational renewable energy assets, along with the company responsible for the operations and maintenance. The purchase price is R1.7 billion – R1.8 billion, so this is a large transaction despite being outside of the traditional mining business! Essentially, they are trying to offset the coal business from a “green” perspective by holding renewable energy businesses as well.
  • Pan African Resources (JSE: PAN) has completed work on feasibility and prefeasibility studies to process the Soweto cluster tailings storage facilities, acquired by the group in 2021 as part of the Mintails SA transaction. They looked at two potential approaches, with the preferred one being an integrated expansion circuit that has a lower capital requirement and superior returns. They need to just finish the definitive feasibility study for this approach, something they hope to do by June 2026. The capital cost is around R2.8 billion and the estimated real ungeared IRR is a lovely 29.4% at $2,800/oz for gold. If they use $3,500/oz, the return is 40.2%! In further happy news, the group expects to be debt-free by February 2026 thanks to high gold prices. They are also expanding capacity through the optimisation of operations at the Mogale Tailings Retreatment (MTR) complex.
  • African Media Entertainment (JSE: AME) is a really interesting business because of the underlying radio and media assets that consumers will recognise. There’s very little liquidity in the stock unfortunately. For the six months to September, revenue was up 17% and operating profit increased by 10%, so they are in the green but also dealing with some margin pressures. HEPS is up 15% – a strong outcome. The dividend was flat at 120 cents per share though, with a slight dip in the cash balance due mainly to repayments made on the Absa loan.
  • Huge Group (JSE: HUG) released results for the six months to August. The company uses investment entity accounting rules, which means they apply their own fair value lens to all their assets. The net asset value per share has dropped by over 3% in the past year, although the gap between the NAV per share and the share price is the thing that is truly huge: the company trades at a discount of over 85% to the NAV! It takes only a few minutes of digging to figure out why: as I’ve noted many times before, the biggest individual position is the preference shares held in Huge Connect, which the company somehow values on a required rate of return of 11.5%. The drop in SA government bond yields has made this more palatable than before (the current yield is 8.6%), but the market is still sending a clear message to management about how inflated the balance sheet values seem to be vs. what the market is willing to pay for them. The share price is down 40% year-to-date.
  • Nutun (JSE: NTU) – the business process outsourcing remains of the old Transaction Capital structure – released a trading statement for the year ended September. They’ve been on a two-year restructuring process, so they are guiding for improved profitability going forwards. But in the meantime, investors have to suffer the sight of a headline loss of R108 million to R117 million for the year ended September. At least that’s better than the headline loss of R170 million in the comparable period!
  • The game of ping-pong at Labat Africa (JSE: LAB) continues. In the disposal of their healthcare segment, they’ve now gone back to 64P Investments after negotiations with All Trading fell over. They are only selling some of the subsidiaries in the healthcare segment now, with a price on the table of R10 million for a segment with NAV of R5.3 million. Previous negotiations were to sell off the entire segment for R23 million. At least they are getting rid of some of the legacy assets, with these particular assets having suffered a loss of R323k for the period ended May.
  • On a busy day, Acsion’s (JSE: ACS) results get bumped to the Nibbles section because of relatively low liquidity in the company’s stock. The fund has a market cap of R3 billion, reminding us that liquidity is a function of how tightly held the shares are vs. the size of the company. For the six months to August, revenue was up 8% and HEPS increased by a juicy 45%. The interim dividend increased by 22%. To add to the happiness, the NAV per share increased by 14% to R31.81. The share price is trading at just R7.60, so the market is clearly giving very little credit to that NAV.
  • Copper 360 (JSE: CPR) also lands down here on a busy day, mainly because the focus is more on the capital raise rather than the broken underlying story. For the six months to August, revenue was down 3% and total operating expenses increased 15%, so you can already tell that the bottom of the income statement won’t be pretty. Sure enough, the loss for the period severely worsened from R78 million in the comparable period to R132 million in this period.
  • Optasia (JSE: OPA) announced that no further stabilisation transactions will take place, as the stabilisation manager (Standard Bank) feels that the current performance of the freshly listed shares in the market is adequate.

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

Exxaro Resources, through its wholly owned subsidiary Cennergi Holdings, has acquired from ACCIONA Energia majority stakes in two operational renewable assets generating a combined gross 213 MW of energy. For a purchase price of between R1,7 billion and R1,8 billion, Exxaro will acquire 100% of Acciona Energy South Africa which owns a 54.9% stake in each of Gouda Wind Far and Sishen Solar Photovoltaic Farm in the Western Cape and the Northern Cape respectively. In addition, Exxaro will take ownership of an 80% stake in Acciona Energy South Africa O&M, the associated entity for operation and maintenance of the assets. The purchase consideration will be discharged in cash through Exxaro’s existing cash reserves and undrawn bank facilities.

Sirius Real Estate has acquired a multi-tenant business park located in Hamburg-Rothenburgsort, northern Germany’s largest continuous industrial area. For a purchase consideration of €31,9 million, the EPRA Net Yield is 6.1% with the park currently generating annualised rent of €2,15 million, with an 89% occupancy.

Hammerson has acquired the remaining 50% interest in The Oracle, Reading, from its joint venture parter, a subsidiary of Abu Dhabi Investment Authority. Hammerson will pay a headline price of £104,5 million for the stake which is expected to be c.5% accretive to the Group’s financial 2026 earnings. In line with its growth strategy, this is the fourth joint venture buyout in just over a year.

In line with its strategy to reduce debt by 50% by de-leveraging its balance sheet through the disposal of non-fishing assets, Sea Harvest has disposed of Ladismith Cheese Company to a subsidiary of Woodlands Dairy which is 74.99% owned by Gutsche Family Investments. The purchase consideration, to be determined on its enterprise value of R840 million will be adjusted in terms of the agreement. Prior to the implementation of the disposal, Sea Havest will implement a restructure of the shareholding of Ladismith Cheese in terms of which Ladismith Cheese and its subsidiaries Ladismith Powder and Mooivallei will become direct subsidiaries of Sea Harvest rather than a subsidiary of Cape Harvest Food. The disposal constitutes a category 2 transaction.

Last week Labat Africa informed shareholders it had re-engaged with All Trading, a company owned by two directors of Labat following the failed deal announced in October with 64P Investment. This week the proposed deal with All Trading which entailed the disposal by Labat of its Healthcare assets comprising shareholdings in CannAfrica, Sweetwaters, BioData, The Highly Creative, African Cannabis Enterprises and Labat Healthcare for a purchase consideration of R23 million has also been terminated. Following the withdrawal by All Trading, Labat has accepted an improved offer from 64P Investments for some of the subsidiaries in the Healthcare segment.

Vodacom’s 2021 announcement of the acquisition of a 30% stake in Maziv, has received the final outstanding approval from ICASA. The transaction will be implemented on 1 December 2025.

Metrofile shareholders approved the scheme of arrangement which will see the company delist on 20 January 2026. Shareholders were offered a cash consideration of R3.25 per offer share valuing the take private of the company at R1,37 billion.

At the general meeting shareholders approved the offer by Safari Investments RSA to acquire a 38.72% stake in the company (excluding the 59.2% stake held by Heriot REIT) for R791,88 million, representing R8.00 per share. The company is expected to be delisted on 23 December 2025.

Unlisted Companies

Ata Fund II (Ata Capital) has successfully exited its investment in Novare, a Johannesburg-based diversified financial services company providing investment solutions with operations across the African continent. The 26% stake was sold to management for an undisclosed sum.

Managed ICT and IoT solutions provider Metacom, has acquired Isenzo Broadcasting, a developer of software applications for digital signage and customer engagement and the architect behind the Metacom Multimedia Centre. The acquisition builds on a seven-year collaboration between the two companies. Financial details were undisclosed.

Competition Commission approval has been granted for the acquisition by US luxury apparel group Ralp Lauren to acquire the Polo brand in South Africa owned by South African company LA Group. The deal brings an end to decades of trademark legal cases between the two entities.

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

OUTsurance (OGL) has issued 388,661 shares to shareholders holding 890,130 OUTsurance Holding (OHL) shares valued at R28,15 million. This increases OGL’s stake in OHL to 92.78% with the remaining 7.22% stake held by directors and management.

Tiger Brands has given R4,4 billion to shareholders by way of a final special dividend of R27.10 per share, declared out of income reserves. This, together with the interim special dividend of R12.16 per share, bring the total special dividend for the year to R39.26 per share.

Investec ltd has, in line with its share purchase and buy-back programme of up to R2,5 billion (£100 million), announced further transactions. Over the period 20 – 25 November 2025, Investec ltd purchased on the LSE, 804,882 Investec plc ordinary share at an average price of £5.4409 per share and 485,811 Investec plc shares on the JSE at an average price of R123.7518 per share. Over the same period Investec ltd repurchased 3321,635 of its own shares at an average price per share of R123.7917. The Investec ltd shares will be cancelled, and the Investec plc shares will be treated as if they were treasury shares in the consolidated annual financial statements of the Investec Group.

Africa Bitcoin commenced trading in the US on the OTCQB Venture Market on 26 November 2025. This provides investors globally with an additional channel to access the shares. Trading on this platform has no foreign share register, no depositary receipt structure and no offshore custodial arrangement. Shares traded in this market remain settled and held within South Africa via the JSE and Strate systems.

Cell C placed 102 million shares, representing one-third of its shares in a pre-listing private placement raising R2,7 billion with shares priced at R26.50, below the price range of R29.50 to R35.50 per share in the pre-listing document. The company listed 340 million shares in the Telecommunications Services sector on the Main Board of the JSE on 27 November, with share price closing the day R27.50, giving the company a market capitalisation of R9,3 billion. This compares with MTN (R301,5 billion) Vodacom (R285,1 billion) and Telkom (R25,7 billion).

As set out in the Optasia pre-listing statement Standard Bank, as stabilisation manager, was required to sell up to an additional 44,665,332 shares representing (at the Offer Price) an aggregate amount of R849 million, in connection with any stabilisation potentially required to support the market price of the shares to the extent it fell below the Offer Price during the Stabilisation Period. A total of 8,852, 556 shares, comprising 19.82% of the Overallotment Option, have been purchased which will be distributed to the overallotment shareholders.

This week the following companies announced the repurchase of shares:

In October 2025, Tsogo Sun commenced with a share buy-back programme and has acquired 9 million shares to the value of R59,7 million. The repurchased shares have been cancelled and delisted.

In May 2025 Tharisa 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 17 to 21 November 2025, the company repurchased 10,400 shares at an average price of R21.66 on the JSE and 313,375 shares at 95.84 pence per share on the LSE.

In October 2024, Anheuser-Busch InBev announced a US$2 billion share buy-back programme to be executed within the next 12 months which will result in the repurchase of c.31,7 million shares. The shares acquired will be kept as treasury shares to fulfil future share delivery commitments under the group’s stock ownership plans. During the period 17 to 21 November 2025, the group repurchased 697,413 shares for €37,11 million.

On 19 February 2025, Glencore announced the commencement of a new US$1 billion share buyback programme, with the intended completion by the time of the Group’s interim results announcement in August 2025. This week the company repurchased 9,600,000 shares at an average price per share of £3.57 for an aggregate £34,32 million.

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 1,666,634 shares were repurchased for an aggregate cost of A$5,25 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 222,215 shares were repurchased at an average price per share of £3.43 for an aggregate £761,359.

In May 2025, British American Tobacco 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 629,180 shares at an average price of £42.40 per share for an aggregate £26,66 million.

During the period 17 to 21 November 2025, Prosus repurchased a further 1,069,070 Prosus shares for an aggregate €69 million and Naspers, a further 413,705 Naspers shares for a total consideration of R494,1 million.

Eight companies issued a profit warning this week: Spar, Cilo Cybin, Copper 360, Novus, Mantengu, Trematon Capital Investments, Nutun and Accelerate Property Fund.

Five companies issued or withdrew a cautionary notice: Ascendis Health, Trustco, MTN Zakhele Futhi (RF), Mantengu and Labat 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

African Originals, the Nairobi craft-drinks producer, has reportedly secured a KES129,6 million (US$1 million) investment from Phoenix Beverages to expand local manufacturing and accelerate product development. This is the second injection into African Originals by Phoenix Beverages, which first acquired a minority stake in the company in 2023. The funds will be used to upgrade production facilities and strengthen its cider, spirits and ready-to-drink cocktail lines.

Proparco has completed an investment in BasiGo, a Nairobi-based e-mobility start-up providing electric bus solutions for public transport operators in Kenya and Rwanda. The company locally assembles electric buses, develops and operates charging infrastructure, and partners with bus operators to offer a cost-effective electric alternative to diesel for mass public transport in African cities. The size of the investment was not disclosed.

Safaricom has launched the first tranche of its KES15 billion Tax-Exempt Green Bond under its KES40 Billion Domestic Note Programme, with an option to raise an extra KES5 billion if demand exceeds. Proceeds from the Green Bond will finance and/or refinance the portfolio of eligible green projects, reinforcing Safaricom’s sustainability agenda. Under Kenyan law, interest earned on these green bonds is tax-exempt, allowing investors to enjoy the full benefit of their returns and maximising value.

Nigeria’s Champion Breweries Plc opened its ₦15.91 billion rights issue to qualified shareholders on November 24. The programme, which was approved at the company’s Extraordinary General Meeting on July 24, 2025, covers 994,221,766 ordinary shares at ₦16 per share. Eligible shareholders may apply for one new share for every nine shares held as of September 4, 2025. Champion Breweries said the rights issue is intended to strengthen its capital position and support ongoing operational and strategic plans.

Kalahari Cement, the largest shareholder in East Africa Portland Cement (EAPC), has agreed to acquire the 27% stake held by Kenya’s National Social Security Fund (NSSF) for KES1.6billion (US$12.33 million). Kalahari said it had signed a share purchase agreement on 25 November 2025 to buy NSSF’s 23,4 million shares at KES66 each, valuing the transaction at KES1.604 billion.

Cairo-based HR tech startup specialising in workforce management solutions, bluworks, has closed a US$1 million seed funding round led by A15, Enza Capital, Beltone Venture Capital, Acasia Ventures and strategic angel investors. The platform addresses blue-collar workforce management challenges through employee scheduling, attendance tracking, payroll processing, real-time salary disbursement, and compliance management tailored for Egyptian regulatory requirements.

The Mauritius Commercial Bank has granted a strategic financing package to Invictus Investment Company PLC, an agro-food enterprise in the Middle East and Africa. The financing package is structured as an acquisition finance and revolving credit facility and will support Invictus Investment’s expansion into new markets while also strengthening its working capital position as it continues to scale its operations.

Falcon Corporation, an indigenous player in Nigeria’s energy and gas sector, has announced that Energy& LLP, a subsidiary of EverCorp Industries, has acquired an equity stake in Falcon Corporation from BKM & S Konsult. Financial terms were not disclosed.

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

Business Rescue Practitioners: the dealmakers of the future

Tobie Jordaan and Jess Osmond
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Business Rescue Practitioners: the dealmakers of the future

For many years, “business rescue” has been a phrase that made company directors and lenders uneasy. It carried the sense of failure, of a business reaching a dead end. In boardrooms, its mention often brought to mind job losses, creditor disputes and liquidation sales.

But that perception is changing. In South Africa, business rescue has evolved into one of the most effective and creative tools for restructuring and dealmaking. It is no longer merely a defensive measure to delay collapse; it has become a strategic process for unlocking value, facilitating acquisitions, and preserving businesses that would otherwise be lost.

At the heart of this shift is a new breed of professional: business rescue practitioners who are not traditional insolvency specialists, but restructuring specialists. They bring commercial and financial insight into distressed situations, often shaping outcomes that deliver real value. Increasingly, they are becoming the dealmakers of the future; professionals who can turn moments of financial distress into structured opportunities for investors, creditors and employees alike.

Recent South African examples illustrate this evolution. The restructurings of Rebosis Property Fund, the sale of West Pack Lifestyle, and the earlier turnaround of AutoTrader show how business rescue can act as a bridge between crisis and opportunity. These are not stories of collapse, but of reinvention – of brands surviving and thriving under new ownership. They show how business rescue can serve both as a lifeline for struggling companies, and as a springboard for investors looking for structured opportunities in the distressed market.

Business rescue provides a legal and commercial “safe harbour” for companies facing financial pressure – a chance to pull off the highway, take stock, and chart a new route before getting back on the road. It gives management the space to reorganise, while protecting against creditor action and creating a stable environment for negotiations. For investors, this creates a unique opportunity. Deals can be structured within a regulated framework, with defined timelines and transparent processes. Buyers can often acquire assets free from legacy liabilities, allowing the business to restart cleanly and sustainably. Because the process is governed by statute and subject to court oversight, outcomes carry enforceability and certainty rarely found in informal restructurings.

Unlike liquidation, where value is eroded and operations cease, business rescue is designed to preserve going-concern value. It protects employees, maintains business continuity, and supports competitive sale processes that help achieve better recoveries for creditors. In an economy marked by volatility, weak demand and tight liquidity, that structure and predictability are invaluable.

The role of the business rescue practitioner has also changed significantly. Today’s practitioners act as strategists, negotiators and facilitators – coordinating stakeholders, engaging investors, and managing the commercial process from stabilisation through to exit. Empowered by the provisions of Chapter 6 of the Companies Act, business rescue practitioners are uniquely positioned to design and execute transactions that balance competing interests and unlock value. Supported by legal representation, they are financial advisors who, through the business rescue process, are also able to act, in many respects, as investment bankers — the glue that holds complex restructurings together.

In many ways, they are the navigators who help distressed companies find a new path when the road ahead seems blocked. By bridging the gap between law and commerce, practitioners have become key enablers of South Africa’s modern restructuring ecosystem.

Business rescue also offers features that make it particularly suited to structured transactions. Outcomes are guided by a statutory plan and subject to oversight, which reduces the risk of challenge or reversal. Buyers often acquire businesses free from old liabilities, providing a clean foundation for growth. The process itself is controlled and transparent, giving stakeholders visibility and confidence, while structured and accelerated sale processes typically attract more bidders and deliver better value than informal distressed sales.

Two mechanisms stand out as powerful levers in this environment: post-commencement finance (PCF), and the acquisition of secured claims. PCF keeps a business trading through the rescue process, and gives financiers both repayment priority and influence over key decisions. For investors, providing PCF is often the best way to gain a seat at the table and help shape the direction of the restructuring. Similarly, acquiring secured claims – as seen in the Murray & Roberts restructuring – allows investors to step into the position of major creditors. With that voting power comes the ability to drive outcomes that preserve value and create long-term strategic advantage.

The message for boards and investors is clear: business rescue is not the end of the road; it is a reset button. It creates the space for reinvention, the structure for credible transactions, and the framework for real value recovery. Those who learn to engage early – by identifying distressed assets, providing PCF, acquiring claims, and partnering with practitioners – will be best placed to seize the opportunities that these processes create.

When the market begins to see business rescue through this positive lens, business rescue practitioners will rightly be recognised as the dealmakers of the future; the professionals who help turn financial dead ends into new routes, and guide South African businesses back onto the road to recovery.

Tobie Jordaan is a Partner and Jess Osmond a Senior Associate | Bowmans South Africa

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

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

South Africa’s retail revolution

Ben Lowther and Mike Adams
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South Africa’s retail revolution

In the shadow of South Africa’s sluggish economic recovery, where GDP growth has hovered below 1% for several years and total retail sales growth has been anaemic, the retail sector is undergoing a seismic transformation.

Gone are the days of siloed shopping experiences; in their place, a bold revolution is unfolding. South African retailers, no longer content with capturing a single sale transaction, are now engineering comprehensive customer ecosystems that weave together shopping, delivery, financial services and loyalty into seamless digital portals.

This isn’t mere convenience; it’s a calculated bid to dominate the “share of wallet” in a low-growth environment, where every rand counts. This shift is not just reshaping consumer habits – it is likely to fuel a wave of mergers, acquisitions and collaborations that could redefine the power dynamics across the retail, banking and cellular sectors.

The ecosystem builders

At the vanguard are South Africa’s major retailers, leveraging unique strengths to build multifaceted platforms and vying with SA’s banking giants, cellular operators, and fintech players to capture spend.

Shoprite, via Checkers Sixty60, pivoted from high-velocity essentials to a full-service retail hub. What began as ultrafast grocery delivery now includes meal planning, exclusive deals and financial nudges, capitalising on the 20 million-plus daily customer touchpoints the group commands.

Meanwhile, The Foschini Group (TFG) has deployed Bash to unify its retail portfolio (apparel, homeware and sportswear) into a lifestyle companion. Bash is a personalised curator of fashion, styling advice, credit offerings and rewards benefits, drawing on TFG’s expertise to enhance customer retention.

E-commerce leader, Takealot has transcended pure retail by integrating its proprietary fleet and the Mr D food platform, resulting in an unparalleled logistics business. It is now expanding its suite of solutions to include a marketplace and fulfilment product to support other merchants’ e-commerce offerings.

Weaver Fintech, having put financial services at the core of its business, leveraged its Homechoice retail legacy to build a two-sided marketplace. It now serves consumers with integrated retail and financial services (PayJustNow® Buy now, pay later (BNPL) and FinChoice credit), while expanding the e-commerce reach of over 3,300 merchants.

Starved of organic growth due to macroeconomic headwinds and high interest rates, retailers are aggressively encroaching on adjacent territories. Financial services, once exclusive to banks, are a lucrative expansion, with retailers eyeing BNPL, cryptocurrencies, embedded micro-loans and insurance to boost wallet share and lifetime value.

Accelerants and AI

The revolution is not happening in a vacuum.

It’s propelled by South Africa’s high smartphone penetration (surging past 90% of adults), which has turned every pocket into a storefront.

The real accelerants are infrastructural leaps. Delivery ecosystems have matured dramatically, especially in groceries, where same-day or even same-hour fulfilment is standard. Checkers Sixty60 boasts sub-60 minute delivery in urban hubs, far exceeding the capability and reliability of a decade ago. Fintech advancements complement this: Peach Payments and PayU enable diverse, convenient payment options (including payments spread over time), while embedded insurance via platforms like Pineapple or Naked streamlines coverage.

Loyalty programmes have levelled up from punch-card relics to sophisticated engines of stickiness. Retailers have established branded Mobile Virtual Network Operators (MVNOs), adding products that offer airtime as a new loyalty currency. Integrated across apps, they offer tiered rewards, cashback, and personalised perks. TFG’s Rewards programme syncs with Bash, offering cross-category bonuses. This sophistication is a moat against discounters and pure-play e-tailers (like Shein and Temu), turning browsers into evangelists.

The emergence of Artificial Intelligence (AI) supercharges this by allowing retailers to build bespoke credit scoring solutions from transaction data, automatically match customers with financial products, manage large support volumes, and monitor for fraud.

Risks and collaborative imperatives

The evolution is intriguing due to incumbents attacking from divergent flanks, each informed by their DNA. Shoprite’s edge is its grocery fortress: over 2,800 stores and private labels fund Sixty60, which mines data from frequent, low-value interactions to predict needs. TFG thrives on its diversified stable (Foschini, @Home and Sportscene), using Bash to curate “shop the look” experiences that blend online discovery with in-store try-ons. Takealot, the digital native, leads with scale and convenience: its 2024 marketplace, GMV, topped R50bn, bolstered by a fleet handling 10 million parcels annually, positioning it as a logistics backbone.

Yet, this ambition carries risks and opportunities for adjacent sectors.

Retailers’ finance foray poses a credible threat to banks, given their massive, overlapping customer bases. Shoprite alone serves 25 million shoppers monthly; imagine those distribution touchpoints laced with instant credit or savings tools, with zero incremental acquisition cost. Banks, with entrenched legacy infrastructure, must contend with “shoppertainment” apps that erode transactional primacy. Retailers, however, tread warily.

Unfamiliar with the labyrinth of financial sector regulations, and coupled with a cautious Reserve Bank, retailers risk missteps in compliance-heavy domains like lending or insurance. Fintech players, such as Weaver Fintech and Shop2Shop, are also providing services that may soon face heavier regulation.

We’re witnessing a proliferation of cross-sector pacts, blending retail’s reach with finance’s rigor. FNB’s eBucks partners with Pick n Pay (PnP) and Spar to amplify rewards (eBucks users spend 30% more). Shoprite’s tie-up with Absa embeds banking services (account openings, remittances) directly into its app, leveraging Absa’s regulatory expertise. Takealot collaborates with PnP on hyperlocal deliveries, merging e-commerce with physical store pickups. The latest is Dis-Chem’s partnership with Capitec to link financial rewards with health behaviour (Better Rewards).

These alliances are strategic imperatives. Retailers gain finance credibility and scale without building from scratch; banks tap granular consumer data. For dealmakers, it’s a greenfield for advisory: structuring collaborations demands navigating commercial objectives, revenue/profit shares, administrative hurdles (like POPIA compliance), and anticipating antitrust scrutiny from the Competition Commission.

M&A and the future

Beyond partnerships, the revolution demands portfolio recalibration.

Retailers are divesting non-core assets to fund complementary bets: fintech stacks, AI-driven personalisation, and last-mile tech. Omnichannel mastery is non-negotiable: e-commerce must sync with bricks-and-mortar, as seen in TFG’s “buy online, pick up in-store” surge, which boosted conversion by 25% last year. Investments in drone deliveries (piloted by Takealot) and blockchain signal a future where efficiency trumps volume.

This convergence will likely drive cross-sectoral M&A activity. Scale begets scale: expect consolidation among mid-tier players, with leaders like Shoprite eyeing tuck-in acquisitions for fintechs or logistics startups.

Portfolio refinement will drive additions and divestitures (e.g., Pepkor’s acquisition of Retailability’s Legit and other brands). Collaborations will proliferate, blending retail with telco spectrum (Vodacom/Mr D Food) or insurtech innovators.

As macroeconomic clouds linger, those who master these ecosystems will own the wallet.

The question is not if more deals will flow, but who will orchestrate them.

Ben Lowther is Lead Transactor and Mike Adams is Head of Tech, Media & Telecom M&A | RMB

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

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

The era of indiscriminate capital deployment in Africa is over

Teurai Nyazema
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The era of indiscriminate capital deployment in Africa is over

A new age of focused, strategic and value-accretive dealmaking is reshaping the continent’s investment landscape.

Despite a wave of headline-making exits across parts of Africa by multinational corporations and institutional investors, international interest in the continent remains resolutely intact. Rather than signalling a wholesale retreat, these exits reflect a rebalancing of portfolios, as investors recalibrate strategies to focus on scalable, high-growth opportunities, better-aligned partnerships, and regional integration plays.

Over the past decade, several international corporates have exited African markets that were once deemed essential to their growth plans. Yet these exits are not indicators of fading interest. In most cases, they reflect the operational realities of certain territories – currency volatility, regulatory challenges or subscale operations – and a pivot towards core larger and scalable markets or higher-performing regions. In parallel, many multinational investors are doubling down in countries like Kenya, Nigeria, Egypt, South Africa and Morocco, where underlying fundamentals remain robust, and consumption-driven growth continues to accelerate.

An example of the maturity of Africa’s investment landscape is evident through the example of LeapFrog Investments’ full exit from Goodlife Pharmacy, East Africa’s largest retail pharmacy chain. In July 2025, LeapFrog sold its remaining stake in Goodlife to CFAO Healthcare, a subsidiary of Toyota Tsusho Corporation and one of the most active healthcare distribution networks on the continent. This was no ordinary exit. LeapFrog had invested in Goodlife in 2017, when the business operated just 19 stores. Over the course of its investment, LeapFrog helped scale the platform to over 150 outlets across Kenya and Uganda, building the region’s most trusted branded pharmacy network.

The business now serves more than 2 million customers annually, and has become a case study in how strategic capital, operational discipline and impact-led governance can generate both outsized returns and systemic healthcare value.

CFAO Healthcare’s acquisition reflects the growing appetite from international strategic buyers to expand into Africa via ready-made scalable platforms. As a distributor with reach across over 40 African countries, CFAO gains a direct-to-consumer presence and a vertically integrated foothold in the pharmacy retail segment – a segment that is formalising rapidly across the continent. LeapFrog, in turn, successfully exited to a long-term operator capable of taking the platform to the next stage of growth.

The lesson from transactions like Goodlife is clear: international players are still interested in Africa, but their approach is more targeted. They seek assets that are scalable, well governed, and regionally relevant. Increasingly, they are acquiring not greenfield operations, but platforms that include businesses that have been de-risked, have been professionally managed, and demonstrate a clear path to expansion.

Africa’s consumer story remains intact. With over 1,4 billion people and a significant and growing middle class, the demand for quality healthcare, food, financial services, digital connectivity and logistics infrastructure continues to rise. Global players from Japan, France, the United States, Saudi Arabia, the United Kingdom, the United Arab Emirates and India are actively evaluating acquisition opportunities in these sectors across the continent. The increasing interest in both digital infrastructure and logistics infrastructure in Africa by players from these regions shows the appreciation for the current ongoing African economic energy, as well as the future growth to be achieved from the investment taking place today.

At the same time, private equity investors and development finance institutions (DFIs) are focusing on exit mobilisation, transitioning their portfolios to long-term operators or strategic buyers. The recycling of capital from LeapFrog into CFAO is precisely the kind of liquidity event that reinforces confidence in Africa’s private capital ecosystem.
International interest in African assets is not waning – it is evolving. Investors are being more selective, favouring markets with political stability, rising urbanisation, and proven business models. Local knowledge, experienced advisers and credible partnerships will be key to unlocking continued capital flows.

Local knowledge and partnerships are proving to be a vital part of the strategy of international acquirers when evaluating various African platform opportunities. The ability to navigate, operate and understand the nuances of local and regional markets brings its own value to companies on the continent. While many African businesses still possess strong family shareholdings, this has been shown to provide comfort and reassurance to international partners.

The next wave of mergers and acquisitions across Africa will see a major refocus of all parties involved in the deal-making landscape, with a keen focus by PEs and DFIs on potential exit routes of new investments, while international players have a much more focused strategy and eye on the long-term future of the African businesses within their portfolios.

Teurai Nyazema is an Associate Principal: Corporate Finance | Nedbank CIB.

This article first appeared in DealMakers AFRICA, the continent’s quarterly M&A publication.

DealMakers AFRICA is a quarterly M&A publication
www.dealmakersafrica.com

Ghost Bites (Araxi | Fortress Real Estate | Octodec | Tiger Brands | Vukile Property Fund)

The Finance Ghost
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Ghost Bites (Araxi | Fortress Real Estate | Octodec | Tiger Brands | Vukile Property Fund)

Araxi will try convince investors to use normalised numbers (JSE: AXX)

It won’t be easy – accounting results are restated for a reason

Araxi (previously Capital Appreciation) released a trading statement for the six months to September. They changed some accounting policies and this led to a significant restatement of the prior period and a boost to those profits, which created a more demanding base period for comparison purposes.

Here’s where it gets interesting: HEPS only increased by between 0.9% and 2.0% against the restated base. It was up by between 30.5% and 31.8% vs. the previously reported numbers, but you can’t have your cake and eat it by having accounting policies in one period and not the other.

Despite this, Araxi is trying hard to have that cake. They say that investors should use the previously published numbers as the base period for the best measure of performance. Convincing the market to use growth of over 30% instead of less than 2% will be no easy feat.

When results are released on 2 December, they will release normalised numbers in an attempt to explain where shareholders should look. Things like once-off retrenchment costs are worth considering as a normalisation adjustment, but I would be skeptical of anything related to accounting policies. The rule of thumb is that you should have the same policies in both periods – and that’s exactly why IFRS rules force companies to restate the comparatives for a change in policy.

Fortress Real Estate slightly increases FY26 guidance (JSE: FFB)

The interest rate cut and solid underlying portfolio performance have led to this outcome

Fortress Real Estate released a pre-close update to bring the market up to speed on the performance since the year ended June 2025. In this case, the “pre-close” description refers to the six months ending December 2025.

The logistics portfolio remains the highlight, with a vacancy rate of just 0.3% in South Africa and an improvement in the vacancy rate in the logistics portfolio in Central and Eastern Europe (CEE) from 15.1% to 9.9%. Logistics vacancies can be very lumpy, as there are typically only a handful of tenants occupying large spaces. They are making progress on sorting out the remaining vacancies in the CEE portfolio.

The development pipeline is impressive, with the next three years expected to see development in South Africa worth R2.6 billion and in CEE worth R2.4 billion. It’s going to be interesting to see how they fund this pipeline. It’s worth remembering that the fund’s current stake in NEPI Rockcastle (JSE: NRP) is worth a casual R14.8 billion, so there’s no shortage of money running around.

The retail portfolio has a vacancy rate of 0.6% and achieved like-for-like tenant turnover growth of 3.9%, so that’s also looking decent.

In terms of capital recycling, the fund sold assets worth R271.5 million year-to-date at a premium to book value of 4.9%. Selling at a premium to book is really helpful in justifying the valuation to the market. It would also be great if they could get rid of the non-core office properties, with that portfolio experiencing a nasty increase in vacancies from 21.3% to 25.8%. Thankfully, the office portfolio is less than 1.5% of the fund’s total assets.

Thanks to the solid performance and the recent interest rate cut in South Africa, they’ve increased their FY26 forecast for distributable earnings by around 1.2%. In terms of year-on-year growth, this implies a range of 7.3% to 8.8% growth. If there’s one thing property funds just love, it’s a drop in interest rates.

Octodec flags limited distribution per share growth in the coming year (JSE: OCT)

At least FY25 growth was well ahead of inflation

Thank you very much to the eagle-eyed reader who left a comment on Ghost Bites yesterday pointing out that I had missed Octodec. I guess it was bound to happen at some point that I would make a mistake with missing a SENS announcement! My apologies for this, it was certainly not intentional. I’m therefore including it here to make sure Octodec is covered off this week.

For the year ended August, Octodec achieved 7.6% growth in the distribution per share. Inflation-beating growth is exactly what investors in this sector are looking for. It also helps when there’s some growth in net asset value (NAV) per share on top, in this case by 2.4%.

FY26 is going to be harder though. There are some significant vacancies coming in the portfolio, with Octodec looking at opportunities to convert offices to affordable residential offerings. They are also getting tighter on which properties they view as core vs. non-core, so you can expect to see more disposals coming.

These vacancies and the associated timing lag in being able to do something about them has led to disappointing guidance for FY26 of between 0.0% and 4.0% growth in distributable income per share. They do at least expect the payout ratio to be consistent.

The share price didn’t seem to be too fussed by this, with the recent interest rate cut no doubt helping with sentiment in this sector.

Tiger Brands makes investors feel special (JSE: TBS)

There’s nothing quite like a R4 billion special dividend during a turnaround – and that’s just one part of the cash bonanza

Tiger Brands has been an exceptional story to follow. The share price is doing incredibly well and with good reason, as management has made excellent decisions around simplifying the group. The overarching principle is that they are focusing on products where they believe they have a right to win. There are many large companies that could learn from this.

Chasing revenue growth like some kind of vanity metric isn’t sensible. Profits are what count. This is why the market isn’t unhappy with Tiger’s revenue growth of 2.7% in the year ended September, as this has been accompanied by an increase of 35% in group operating income.

The numbers get pretty crazy when we dig into the segmentals. The Milling and Baking business achieved operating profit growth of 27%. As strong as that is, it pales in comparison to the 236% jump achieved in the Grains business! Such is the growth in that segment that Grains is now almost as big as Milling and Baking from a profitability perspective.

Given the significant changes made to the business, there’s quite a gap between HEPS from total operations (up 15%) and HEPS from continuing operations (up 31%). The market will always focus on continuing operations.

Such has been the extent of disposals of non-core operations that Tiger Brands generated R5 billion in the process. Not only did they pay a special dividend in the interim period of R1.8 billion, but they are doing it again for the full year. This additional R4 billion special dividend takes the total for the year to R5.8 billion in special dividends alone! To add to the cash bonanza, the total ordinary dividend was R2.4 billion, boosted by a far less conservative payout ratio. On top of all this, there have been share buybacks of R1.5 billion in this period, as well as R1.5 billion since the end of September.

Cash is raining from the sky at Tiger Brands. Despite all the payments to shareholders, the income statement also boasts net finance income of R65 million vs. net finance costs of R287 million last year. To make it even more impressive, they are achieving this in an environment of price deflation. If this is what they can do with modest sales growth, we can only imagine what might happen if the economy improves!

In case you needed any further reasons to believe in this turnaround, the second half of the year was much stronger than the first half. Operating margin was 11.1% for the full year, but the second half was 14.6% vs. the first half of 5.6%. If they can maintain this exit velocity, then it feels like the cash flows are barely getting warmed up.

And with a goal of achieving revenue growth in line with inflation and operating margins closer to 20%, management seems to think that they have plenty of runway for further growth in profits.

Vukile Property Fund delivers 9% dividend growth (JSE: VKE)

There are strong contributions locally and in Spain / Portugal

The Iberian Peninsula has become quite the hotbed for JSE-listed property funds. Vukile has been playing that game for a long time, while others have only recently started pushing into that region. Aside from being firmly on my travel bucket list, the region seems to do a great job of delivering shareholder returns.

Vukile’s results for the six months to September feature far more than just reliance on offshore earnings. The South African portfolio achieved like-for-like retail net operating income (NOI) growth of 10%, while the properties in Spain and Portugal were good for 8.7% growth in that metric. This allowed the group to increase the dividend per share by a juicy 9%.

The growth on a per-share basis will be interesting to follow in the next period, as Vukile raised R2.65 billion in an equity issuance in October. Whenever property funds issue more shares, you have to watch out for the dilutionary impact of the lag in capital deployment. If they pick up the pace in raising capital, this risk goes up.

The balance sheet is in good shape to support ongoing growth, with a loan-to-value of 41.6% as at 30 September (before the equity raise). The credit rating was recently upgraded for both Vukile and its Spanish subsidiary Castellana.

There are no signs of any per-share growth issues in the guidance. In fact, Vukile has raised guidance for FFO per share and the dividend per share, with both expected to grow by at least 9% in FY26.

This is thanks to not just the like-for-like portfolio, but also the recent acquisitions. This is one of the ways that funds can mitigate any dilution in per-share earnings when they issue capital. If the prior period’s acquisitions are now bearing fruit, then it makes up for the new share capital that hasn’t been deployed yet. It works very well until the music stops and the quality of capital deployment drops. Thankfully, Vukile is one of the best funds on the local market, so the risk of this happening is quite low in my view.

Nibbles:

  • Director dealings:
    • The two brothers who built Blu Label (JSE: BLU) have EACH bought shares worth R57 million. Yes, that’s a casual R114 million in total!
    • The CFO of AngloGold Ashanti (JSE: ANG) sold shares worth over R31 million.
    • The CFO of Lewis (JSE: LEW) sold shares worth R5.3 million. I always have a chuckle when companies include commentary that this is a “rebalancing of the director’s portfolio” – a sale is a sale.
    • A senior executive of ADvTECH (JSE: ADH) sold shares worth almost R2.8 million.
    • Supermarket Income REIT (JSE: SRI) announced that an executive director bought shares worth over R1.1 million.
  • Here’s some happy news for Vodacom (JSE: VOD) and Remgro (JSE: REM): the acquisition of a 30% interest in Maziv has received approval from ICASA, which means that all conditions have been met and the deal can close on 1 December.
  • Trematon (JSE: TMT) has released a trading statement that looks rough at first blush. I will reserve comment until full details come out on 5 December, as I want to understand exactly why the intrinsic net asset value (INAV) per share has dropped by between 51% and 54%. The company has paid large dividends this year based on asset disposals, so the payment of cash to shareholders is one of the reasons why the INAV per share would be down. Distinguishing between that impact and the movement in the underlying assets is key. Although the share price has fallen 48% this year, the total return (i.e. including the dividend paid) is “only” a decrease of 14%.
  • Mantengu (JSE: MTU) has renewed the cautionary announcement for the potential acquisition of Kilken Platinum. There are legal disagreements in the background around the percentage held in Kilken by the entity that Mantengu is looking to acquire. It’s pretty hard to do a deal if you can’t even be sure what percentage you would be buying. The due diligence continues and there’s no certainty yet of a deal agreement being reached.
  • Brikor (JSE: BIK) has very little liquidity in its stock. They are now loss-making, with results for the six months to August reflecting an unfortunate swing from HEPS of 1.1 cents to a headline loss per share of 1.9 cents. Revenue was down 24.4% and things only got worse from there, with the company citing weak demand and lower coal production volumes.
  • OUTsurance (JSE: OUT) continues to encourage shareholders in OUTsurance Holdings to swap their shares for listed shares in OUTsurance Group. Based on the latest transactions, OUTsurance has increased its stake in its key subsidiary from 92.75% to 92.78%.
  • Africa Bitcoin Corporation (JSE: BAC) will begin trading on the OTCQB Venture Market in the US. This isn’t a separate listing, but rather a way to trade via US market makers.

Ghost Bites (Attacq | Mantengu | Nedbank | Pepkor | Sea Harvest | Stefanutti Stocks | Zeda)

The Finance Ghost
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Ghost Bites (Attacq | Mantengu | Nedbank | Pepkor | Sea Harvest | Stefanutti Stocks | Zeda)

Attacq is on track to meet growth guidance (JSE: ATT)

The office properties are still a headache though

Attacq has released a pre-close update dealing with the six months to December 2025. Their full year goal for distributable income per share is growth of 7% to 10% and they believe that they are on track for this.

Encouragingly, the overall occupancy rate has increased from 91.6% to 92.6%. The total reversion is negative 1.8%, with the collaboration hubs (their fancy word for office properties) dragging things lower with negative reversions of 8.6%. The retail properties had positive reversions of 1.3%.

There’s a very interesting slide from the update showing the gap between turnover growth and foot count growth. Although most of this gap is of course explained by inflation and changes in average basket size, there’s no doubt in my mind that an element of online shopping adoption is contributing to the gap:

To keep people coming to the properties (and especially the Waterfall district), there’s an extensive development pipeline. It’s actually quite amazing to just take a step back and consider the sheer extent of development that has taken place around the Mall of Africa.

Looking at the balance sheet, the weighted average cost of debt has improved by around 30 basis points since June 2025. The credit rating is in good shape. The company is considering a further issuance under the DMTN programme, which is currently only 11% of the total debt on the balance sheet:

Things look solid overall, with the main caveat being around the ongoing pressure on rental renewal rates in the office sector.

Mantengu flags significant losses (JSE: MTU)

Flooding and winter Eskom tariffs are a reminder of how hard this sector is

I genuinely cringe when Mantengu releases a SENS announcement, mainly because I’m worried about the pending headspace disaster on X from dealing with the CEO and his extremely misinformed opinions on my business. But my brand promise to you as a Ghost Mail reader is to write about every single company on the JSE, regardless of how they behave in response. It would be very unfair for me to write in an unbiased way about negative news from companies that behave like professionals, while giving a free pass to others who behave poorly.

So, here goes:

Mantengu released a trading statement dealing with the six months to August 2025. They have swung from HEPS of 2 cents to a headline loss per share of 28 cents. The share price fell nearly 14% on this news, now trading at R0.50. If you annualise the loss (which you have to be very careful doing, as there are specific events affecting the numbers), then the P/E of the company is worse than -1.

Junior mining results can be really volatile though, so they might swing back to profits in the second half, hence my caution about annualising numbers in this space. Still, it’s clear as day that all is not well in the financial health of this company. When detailed results come out later this week, the balance sheet will need a careful review.

Mantengu’s chrome production was impacted by flooding this year, an issue that has plagued many mining houses around the world. Remember how bad the flooding was for Sibanye-Stillwater (JSE: SSW) in their ironically-named Stillwater business in the US? Unfortunately, mining companies are subject to the whims of Mother Nature herself. This is why mining is seen as risky, as companies typically have only a handful of operating facilities that carry concentration risk in terms of natural forces.

From September 2024 to February 2025, average monthly chrome production was 13,520 tonnes per month. From March 2025 to August 2025, they only exceeded that number in two months. The average for this period is 11,505 tonnes per month, or a drop of 15% vs. the preceding six months. In addition to the flooding problems from March to May, they also had drilling and blasting issues in August that have since been sorted out.

We now arrive at the silicon carbide segment, the Sublime Technologies business that Mantengu acquired for almost nothing. This is the acquisition that created the very large “bargain purchase gain” in the financials – the converse of “goodwill” under accounting rules.

Production of silicon carbide looked fine in March and April before dropping sharply in May. The company took the decision to shut production in June and perform maintenance over the winter period when Eskom tariffs are much higher. We’ve seen similar strategies in the winter months at Merafe (JSE: MRF), where they are having a really hard time in the ferrochrome sector.

This is objectively an ugly set of numbers that would typically send management teams on a PR offensive to convince the market that there’s more value here than one might think based on these losses. Let’s see what the management outlook statements say when full results are released.

Nedbank to pay R600 million to Transnet (JSE: NED)

This is going to sting for shareholders

Nedbank and Transnet have been fighting over interest rate swap transactions that go back to 2015 / 2016 as part of the broader state capture debacles. The bank maintains its innocence, but that doesn’t mean that drawn out proceedings are worth going through. Aside from them being very expensive, it also impacts the opportunity to do more work with Transnet.

Without admission of any liability, Nedbank has agreed to pay R600 million to Transnet to make this problem go away. The initial lawsuit was for around R2.8 billion, a truly bonkers number that would’ve implied that it was surely the most profitable (and corrupt) deal in the bank’s history. R600 million is also a fat number, but at least it brings closure. The broader problem here is that the legal process incentivises the use of gigantic claims in the hope of using anchoring bias to achieve a lucrative settlement.

Nedbank also noted that financial performance is in line with expectations for the 10 months to October, provided you exclude this settlement of course. To give more context to this number, headline earnings for the six months to June was R8.4 billion.

Pepkor has released a great set of numbers (JSE: PPH)

And they are starting a bank to take advantage of their distribution power

Pepkor released results for the year ended September. They’ve showed the market what is possible in the apparel space when you are resonating with customers and offering a mix of value-added services that get the job done.

Revenue increased by 12%, gross profit margin was up 150 basis points to 39.8% and operating profit jumped by 13.2%. That’s a fantastic set of numbers, with the cherry on top being that HEPS from continuing operations was up by 14.8% as reported, or 23.4% on a normalised basis.

As for the dividend though, the increase was only 9.2%. HEPS from total operations was only up by 8.4%, so that might give us a clue.

If we dig into the underlying business, we find group merchandise sales growth of 8.8% for the year, along with like-for-like sales of 6.5%. Southern Africa (which excludes PEP Africa and Avenida) grew like-for-like sales by 7.4%. If you exclude Southern Africa (i.e. only PEP Africa and Avenida), like-for-like sales were up 8.9% in constant currency, but down 3.1% in rand terms because our currency has had a strong year.

Avenida has had a fairly iffy start in the Pepkor stable, although there’s recently been some improvement. Like-for-like sales increased by 1.8% for the period, with a solid acceleration in the fourth quarter of 8.8%.

Within the retail segments, PEP was the leader with like-for-like sales of 9.3% and total sales growth of 10.8% thanks to a growing footprint. Ackermans grew like-for-like sales by 7.1%, a similar performance to total sales growth of 7.2%. The Speciality division was good for like-for-like growth of 3.0% and overall sales of 8.3%.

The overlay of the fintech segment is really important, with revenue up by 31.1%. Gross profit margin increased by 840 basis points to 56.4%. Operating profit jumped by 52.3% in this exciting growth engine to R2.2 billion.

Although there is much focus on the credit interoperability strategy at Pepkor, credit sales are only 16% of total sales. The rest is in cool, hard cash. Still, that’s enough of an opportunity here for credit sales to be the underpin of the fintech segment, with the Flash business as another really important contributor. Insurance is also a winner.

Here’s a stat that is always amazing to read: Pepkor sells 8 out of 10 new prepaid cellphones in South Africa. Mindboggling stuff.

The group has significant expansion plans, with acquisitions across home and adultwear categories. Here’s a particularly interesting nugget: the company is looking to establish a banking presence in South Africa, taking advantage of the massive distribution footprint across the country. The Prudential Authority gave them a Section 13(1) approval in November, so this banking push is very real.

The group is in really strong shape. It’s worth remembering that the start of the financial year was boosted by two-pot withdrawals, with that distortion now creating a very demanding base for the new financial year. For the 7 weeks to 15 November, group sales were up 5.3%. The prior period saw 14.6% growth in those weeks, so the two-year stack is still excellent.

Sea Harvest’s focus on hake has paid off (JSE: SHG)

HEPS has more than tripled!

Here’s a fascinating trading statement, particularly after we saw such tough numbers from sector peer Oceana (JSE: OCE) the other day. Within those Oceana numbers, the hake business was the highlight and global fish oil prices dragged them down. Over at Sea Harvest, the hake business is the focus area and hence they’ve had a great time in the year ending December 2025.

Yes, we are still over a month away from the end of this period, yet the company feels confident enough to issue a trading statement highlighting a huge move in HEPS of at least 200%. This means that HEPS will more than triple!

Better catch rates and pricing in the hake business were accompanied by efficiency gains. The positive outcome of this combination is clear to see. And as a reminder, a trading statement going out this early means that the guidance is probably conservative. In other words, profits may be even better than this guidance would suggest.

Much higher profits at Stefanutti Stocks, but still work to do on the balance sheet (JSE: SSK)

The company also recently announced a settlement with Eskom

Stefanutti Stocks has been on a wild ride. Get this: the share price is up 1,420% over 5 years! That is absolutely insane. I should also point out that despite these gains, the share price is only back to where it was in 2017. It also happens to be more than 80% down vs. the pre-FIFA World Cup construction bubble.

Some stocks are like old dogs that snore gently in the corner of the kitchen and wag their tails when the treat cupboard gets opened. Others are bucking broncos that attract only the brave.

The recent share price run at the company has been the result of restructuring activities designed to save the balance sheet. Current liabilities exceed current assets by R1.2 billion, so the company is on a knife’s edge. The share price performance is a function of progress made in areas like the Kusile Power Project claim against Eskom, leading to a settlement of R580 million that must be paid to Stefanutti Stocks by 12 December. This will take some of the heat off, but not all of it.

There are also disposals in process for the businesses in Mozambique and Mauritius. This will be a further boost to the balance sheet, but won’t fully solve the problem.

The performance from continuing operations is thus relevant, with revenue from continuing operations up 1% and operating profit up 22%. Profit from continuing operations has jumped by 53%. Combined with a much stronger order book, this has allowed the company to keep the banks at bay while the important corporate actions are concluded.

Has the market finally woken up on Zeda? (JSE: ZZD)

Or will this be a short-lived uplift?

Mobility company Zeda released results for the year ended September 2025. The share price closed 11% higher on the day, taking the year-to-date increase to 6% after a long and frustrating sideways period. Buying so-called “cheap” shares on the JSE is an exercise in patience. I don’t usually dabble in value stocks on the JSE and I made an exception for Zeda, but it really is taking forever to rerate higher.

Although HEPS may be up by 15.7%, the truth of it is that the underlying story isn’t very exciting. Revenue increased by only 1.7%. EBITDA was flat, while operating profit increased by 10.8%. I would far rather see the growth in earnings before depreciation, not after it!

The depreciation is an even bigger sticking point than you might think. Because of pressure on used car prices in the market, Zeda decided to keep vehicles in their fleet for longer. In other words, they extended the useful lives of rental vehicles. This hurt revenue from sales of vehicles, but it boosted margins. It’s just clearly not sustainable, as people renting cars are expecting to climb into vehicles in excellent condition, not something that looks ready to become an UberX.

The good news is that there’s a dividend that pays you to wait around. This is a core part of my investment thesis in this company. The dividend for the year of 181 cents is a yield of 15.3% on my in-price of R11.84. That makes me feel a lot better about the overall position! Even on the current price of R13.75, that’s a trailing yield of 13%.

Return on Equity (ROE) may have dipped from 23.1% to 21.9%, but that’s still a solid number that is well in excess of their cost of capital. There’s no shortage of debt to help boost ROE, with a net debt to EBITDA ratio of 1.5x (up from 1.4x in the prior period).

I suspect that it won’t be long until the rental fleet has a large contingent of Chinese cars. I also worry that there might be some painful financial results during that transition. For this reason, I’m not sure that the market will rerate the multiples when much of the current growth came from changes to depreciation, but at least there’s a fat dividend for those with patience.

Nibbles:

  • Director dealings:
    • A trust related to an independent non-executive director of Blu Label (JSE: BLU) bought shares worth nearly R2 million.
    • The CEO of Sirius Real Estate (JSE: SRE) bought shares worth R1.08 million.
    • A director of a major subsidiary of Sasol (JSE: SOL) sold shares worth R215k.
    • A director of Visual International (JSE: VIS) sold shares worth R40k.
  • Copper 360 (JSE: CPR) has financial woes that have been well documented, so it’s not a huge surprise that losses have gotten much worse. As we so often see in the risky junior mining space, the company just hasn’t lived up to expectations. A reset is in process at the company, with a significant restructuring of the balance sheet and the raising of fresh equity capital. The market is very unforgiving, so this feels like the last roll of the dice for them in terms of public markets. They simply have to make it work.
  • The final steps in the MTN Zakhele Futhi (JSE: MTNZF) dance are upon us. A scheme of arrangement will be used to execute the final payment to shareholders of 15 cents per share. It’s important to remember that this comes after a return of capital of R20.00 and a dividend of R4.20 per share. This is why the net asset value per share is now so low. It was a great outcome in the end for shareholders, particularly compared to where it was trading last year.
  • RH Bophelo (JSE: RHB) has very little liquidity in its stock, so the results for the six months to August just get a passing mention down here. Net asset value per share grew by 4%, an important metric for what is essentially an investment holding company. There was unfortunately an 18% decrease in investment income due to delayed dividend income. That impact is much more severe when you consider the components of investment income. Of the R44 million in this period, a whopping R41 million was thanks to fair value moves and only R3.3 million was in the form of interest income. There was no dividend income. In the prior period, interest income was R4.4 million and dividend income was R9.4 million. Thankfully, cash on the balance sheet has only decreased from R32.3 million to R29.5 million.
  • Ascendis Health (JSE: ASC) reminded the market that the offer closing date is Friday, 28 November. There is a maximum acceptances condition to the offer, so it’s not clear yet whether it will go through. For this reason, the cautionary announcement has been renewed.
  • Ethos Capital Partners (JSE: EPE) released the final details for their planned unbundling of the Brait Exchangeable Bonds (JSE: BIHLEB). The total value of the bonds being unbundled is R175.5 million. The unbundling ratio is 0.00086 Brait bonds for each A ordinary share in Ethos Capital.
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