The six resources stocks among South Africa’s “Magnificent 10” are shining on the back of gold and platinum strength, but can the rally withstand US inflation, China’s demand shifts and local logistics woes?
Host Jeremy Maggs asks Osa Mazwai, investment strategist at Investec Wealth & Investment International and Campbell Parry, commodities and natural resources analyst at Investec Investment Management in this episode of No Ordinary Wednesday.
Hosted by seasoned broadcaster, Jeremy Maggs, the No Ordinary Wednesday podcast unpacks the latest economic, business and political news in South Africa, with an all-star cast of investment and wealth managers, economists and financial planners from Investec. Listen in every second Wednesday for an in-depth look at what’s moving markets, shaping the economy, and changing the game for your wallet and your business.
A really tough period for African Rainbow Minerals (JSE: ARI)
But why is the trading statement comingout the day before earnings?
African Rainbow Minerals released a trading statement dealing with the year ended June 2025. It’s been an ugly time for them, with HEPS down by between 45% and 55% vs. the prior year.
The problem is mainly the decrease in the average realised export USD iron ore price, along with increased mechanised development costs at Bokoni.
Full details will be available on 5th September – yes, the day after the trading statement was released. It’s really disappointing when companies release trading statements so close to the release of results. A trading statement is supposed to be an early warning system for moves of over 20%, not a “whoops we forgot” the day before.
Not good enough.
Anglo American is out of Valterra Platinum (JSE: AGL | JSE: VAL)
Such is the power of deep public markets
You’ll often hear about how small-caps (and even some mid-caps) struggle for liquidity in their stock, with thin trade (i.e. low volumes) and wide bid-offer spreads that can be very problematic to solve. At the other end of the spectrum, we find the largest companies on the market and the immensely deep capital markets that they enjoy.
Not there that was ever any doubt, but the results of the accelerated bookbuild involving Anglo American’s stake in Valterra Platinum shows us that Valterra is firmly in the latter bucket. Anglo hired several banks to make sure that the placement was a success and would attract the best pricing possible.
So, speaking of price, just how hard was Anglo American pushed by the investors? The answer is: fairly hard actually. Valterra Platinum closed at R895 on the day and Anglo sold its remaining 19.9% stake at R845 per share. That’s a 5.6% discount to the closing price on the day.
This raised R44.1 billion for Anglo American. To be clear, the deal may involve Valterra shares, but the proceeds from the sale don’t go to Valterra.
Ascendis released its first numbers as an investment holding company (JSE: ASC)
The share price is trading at a relative modest discount to NAV
After a lot of noise around the shareholder register and a potential take-private of Ascendis that didn’t happen in the end, the company has now released results for the year ended June 2025. They have changed their accounting approach to one of investment holding company accounting, which means they value the underlying portfolio of assets rather than produce consolidated accounts with all the individual line items in the income statement and balance sheet.
This severely limits comparability with the prior year’s numbers. So, we can focus instead on the the new line in the sand (tangible net asset value per share of 100 cents) and the management narrative. By the way, the share price is trading at R0.85, so that’s a discount to TNAV of only 15% – that’s small by investment holding company standards.
The Medical Devices business seems to be enjoying growth in demand, but they are struggling to get paid by some public hospitals. Surprise surprise. If there’s one thing government really hates doing, it’s paying on time. In the Consumer Health business, they get paid by their customers, but they don’t have enough customers thanks to macroeconomic pressures.
It’s clearly a grind at the moment, but they are grinding in the right direction overall. Such is life in South Africa.
Dipula taps the market for R500 million (JSE: DIB)
And so the capital raising trend continues
There’s been a clear uptick in the number of property funds raising equity capital. This makes sense, as valuations of these companies have moved higher in recent years (certainly vs. pandemic levels) and it is always better to raise capital from a strong market rather than a weak one.
I don’t believe we are there yet, but eventually we could reach a point where these raises are happening practically weekly in the sector. That’s when we’ve hit danger zone for valuations.
The latest raise is by Dipula for the sum of R500 million, which they will achieve through an accelerated bookbuild process.
The capital will be used for the acquisition of Protea Gardens Mall and other recently announced deals. This type of activity is precisely why property funds are listed, as the markets give them access to substantial capital.
Solid growth at Fortress Real Estate and expectations for it to continue (JSE: FFB)
The sector is enjoying stronger support from investors
As mentioned in the Dipula section above, the property sector is in a much better place this year and companies are raising capital accordingly. This sentiment comes through clearly in the Fortress Real Estate results for the year ended June 2025, where the total dividend per share was up 7.1%. Aside from growth in income from the properties to fund this dividend, Fortress enjoyed a 6.5% like-for-like increase in property valuations.
I’ll say it for the millionth time: there is no world in which I would own a buy-to-let investment with all its headaches instead of listed property shares. I would buy my forever home, but only so I can live in it. Property as an investment is a dish best served on public markets in my opinion.
Fortress has given guidance for the 2026 financial year that suggests more of the same returns to shareholders, with expected growth in distributable earnings per share of between 6.0% and 7.5%. Their balance sheet is in great shape heading into the new year, with a loan-to-value ratio of 39.1%.
One thing to note is that you must always look at earnings growth on a per-share basis, especially in a climate where many property funds are now issuing shares. The narrative will often be around “total earnings growth” rather than “total earnings per share growth” – and the former tends to be much higher than the latter in an environment of capital raising. For example, Fortress notes that the total distribution was up 9.4% for the year, but doing the maths on a per-share basis reveals growth of 7.1%.
Speaking of the dividend, shareholders have the choice to receive the dividend in cash or in the form of NEPI Rockcastle (JSE: NRP) shares, with Fortress still holding a substantial stake in the Central and Eastern European giant.
Pan African Resources worked out well this year in the end (JSE: PAN)
I bought the market panic in February and I’m glad I did
The market can sometimes throw you a Lululemon (IYKYK), while at other times it gives you a gift like the silly market response to Pan African Resources‘ interim earnings back in February. I was looking for a gold position and I jumped in at the time. I’m up 85% on that position, so that’s worked out well!
The thesis was that although Pan African had a disappointing interim period, they were looking to bounce back strongly in the second half. I’ll wait for full details in the earnings, but it looks as though they had a solid finish to the year. A trading statement dealing with the year ended June reflects a jump in revenue of 44.5% and in HEPS of between 37% and 47%.
The revenue growth was thanks to a 6.5% increase in gold sales and a 35.7% increase in the average USD gold price.
Importantly, the group’s legacy gold price hedges fully rolled off the book by the end of June, so they are now enjoying the full benefit of the gold price. That benefit isn’t in these numbers, but will come through in the next interim numbers.
I’m holding. I think it’s hard to justify having zero gold exposure in the current environment.
Strong underlying growth in Sanlam, but not at HEPS level (JSE: SLM)
The return on shareholders’ fund is a huge component of earnings
There’s an interesting shape to Sanlam’s earnings for the six months to June. The core business did well, with the net result from financial services up by 14%. Despite this, HEPS was actually down 2%. I’m not sure why, but Sanlam doesn’t make it obvious that this is HEPS from total operations, rather than continuing operations. You have to really dig to find that HEPS from continuing operations was up 1.3%.
That’s still obviously much lower than the result from financial services, with a few reasons for this including a substantial negative trend in the return on shareholders’ funds (the other major component of earnings for the insurance group).
There’s some very complex stuff that sits inside that move, including the “asset mismatch reserve” that I’m sure gives a few actuaries a daily headache. The point is that the return on shareholders’ funds won’t move in a straight line, as it reflects a huge number of global market factors.
To judge the maintainable performance of Sanlam, it’s helpful to look at the net result from financial services and its underlying drivers. For example, total new business volumes were up across all the major insurance offerings, although value of new business margins did come under pressure.
There were a few detractors from performance in the life insurance business, like changes made to Glacier and the cessation of the Capitec joint venture. Heading into the second half of the year, Sanlam is hoping that strategies like the Assupol integration will help close the gap.
As we saw when Santam (JSE: SNT) released results and certainly at its competitors as well, short-term insurance has been having a great time. This has also been reflected in Sanlam’s Pan-African and Asian short-term insurance businesses.
It’s great to see that net cash client inflows in the investment management business were positive, thanks to Satrix and the multi-management businesses.
Still, we can’t ignore the group trend, which was a significant dip in adjusted return on group equity value per share from 22.5% to 15.4%. Sanlam’s share price fell 3.5% on the day, taking the year-to-date drop to 4%.
More tough numbers at Trellidor, but the balance sheet looks much better (JSE: TRL)
There’s even a dividend!
Trellidor has had a really difficult few years. There are signs of recovery, with the share price up 27% year-to-date. The problem is that it all happened in February, with choppy sideways trading since then.
Life isn’t easy for small caps, especially those with a negative earnings trajectory. For the year ended June 2025, Trellidor suffered a drop in HEPS of 14% to 31.5 cents. The share price closed at R2.05 on Thursday, which means a Price/Earnings multiple of 6.5x – hardly a bargain when earnings are dropping.
What is the market seeing here that is supporting the share price? The answer can be found on the balance sheet, where net debt has been reduced by 38.4%. This drove a 30.3% reduction in finance costs. This was made possible by a 30.1% increase in cash generated from operations.
That’s all good and well, but the company is still suffering a demand problem. Right here in South Africa, revenue fell by 7.8%, with a particularly weak finish to the year. In the UK, due to the timing of a once-off project in the base, revenue was down 14.7%. If you exclude projects, revenue was up 55% on last year in the UK.
In a manufacturing business, when revenue drops, profits come under substantial pressure due to the presence of fixed costs in the manufacturing base. Or, put another way, operating leverage works against you.
Can they get things to head in the right direction? With the decision to sell Taylor and NMC to focus the group and unlock a further R51.9 million, they will be sitting on a balance sheet that should let them sleep peacefully at night – such is the brand promise of Trellidor’s products! But those products themselves are the worry these days, as they need to quickly change the trajectory of the business to avoid getting into trouble once more.
As a show of confidence, a dividend of 12 cents per share has been declared. I understand that they are trying to put on a brave face here about the underlying business, but I think that caution might still be the best approach when it comes to capital allocation. Once the dividend returns, investors expect to see it every year.
Nibbles:
Director dealings:
The CEO of RCL Foods (JSE: RCL) bought shares worth nearly R530k. That’s a strong show of faith based on the recent results.
An associate of the chairman of KAP (JSE: KAP) bought shares worth just under R200k.
Blu Label (JSE: BLU) – note the new spelling and shortened name – released an update on the restructuring of Cell C. They’ve achieved a critical milestone in the form of the Competition Tribunal granting conditional approval for the acquisition by Blu Label’s subsidiary of a further 4.04% stake in Cell C. This takes the stake from 49.53% to 53.57%, which makes Blue Label the controlling shareholder. Importantly, the conditions that form the basis of the Competition Tribunal approval are acceptable to Blu Label.
Texton (JSE: TEX) has previously taken the approach of investing excess capital in offshore funds rather than doing share buybacks, even when its stock has traded at a deep discount to net asset value. This has been going on since 2022. The company has made the decision to fully exit the offshore fund, which means R111 million will flow back to them. Adjusting for dividends and last year’s redemptions, the total return over 3 years is just over 30% – or below 10% a year on a compound basis. They refer to this as a “strong overall return profile” – I personally prefer to invest in management teams who don’t aim for government bond returns as “strong” uses of capital.
Nampak (JSE: NPK) has announced that COO Andrew Hood, who was appointed earlier this year as part of a succession plan to replace Phil Roux as CEO, has resigned from the company for personal family reasons. This has led to the extension of Roux’s term as CEO (the announcement doesn’t specify to what extent), as the company now needs to start again with finding a suitable successor.
Before you wonder where on earth a new company in your portfolio suddenly popped out from, Capital Appreciation Limited (JSE: CTA) will change its name to Araxi Limited with effect from 6 October. The new share code will be JSE: AXX.
I’m not sure how much can be read into this from a succession planning perspective, but Bell Equipment (JSE: BEL) announced that Stephen Jones (business development and sales executive) has been appointed as alternative executive director to CEO Ashley Bell. Avishkar Goordeen is therefore no longer the alternate director to the CEO, but will be the alternate to the group finance director instead. The company says that the changes are to align the director positions with their areas of expertise and responsibility.
Shuka Minerals (JSE: SKA) had to release a rather awkward announcement about the acquisition of Leopard Exploration and Mining and the Kabwe Zinc Mine in Zambia. The company announced on 1 July that the conditions to complete the acquisition had been met, leading to a notice to draw down funds from Gathoni Muchai Investments (GMI), the entity providing the $1.35 million in funding to complete the deal. GMI has now informed the company that the funds have been delayed due to administrative matters and regulatory clearances in Kenya. GMI hopes to solve this (with either the existing approach or a new one) within 10 business days. GMI has stressed that this is purely an admin thing, not a reflection of their capacity to meet their obligations. Separately, the company noted that it is still working on a sale of the 60,000 tonnes of fines that have been stockpiled at the Rukwa operation in Tanzania. So, lots of uncertainty and things going on here, as is pretty much always the case when it comes to mining in Africa.
The total value of M&A deals captured for the continent during H1 2025 (excluding South Africa) was a mere US$4,66 billion, down 16% year-on-year, and 61% off the levels seen in H1 2022.
Deal volumes echoed this decline – down 21% on 2024 deal flow, and 68% off levels registered in 2022. Two deals in the energy sector topped the deal table by value for the period at $2,16 billion – almost half the total deal value for H1.
Analysis of private equity investment in Africa over the past four years mirrors this steady decline, amid challenges brought about by a mix of global macro pressures, regional risks, and shifts in investor strategy.
While not unique to Africa, rising global interest rates, a strong US dollar and geopolitical uncertainty have seen international investors retreat to safer, higher-yielding markets. For Africa, where private equity funds remain heavily reliant on offshore capital, this has translated into weaker fundraising and a more selective deployment of capital.
Currency volatility, energy insecurity, and political uncertainty in key economies such as Nigeria have added to the caution. African institutional capital remains underdeveloped, with African GPs heavily reliant of foreign backers. Subdued IPO markets, together with limited trade buyer activity, continue to constrain exit opportunities – a critical factor in investor appetite.
Added to this has been the correction in technology and fintech valuations; these sectors were central to the surge in 2022. The shift in global sentiment and a redirecting of attention to more defensive opportunities in healthcare, agriculture, food value chains and logistics has cooled valuations and deal appetite, reflected in the lower deal volume.
However, on a positive note, the long-term story remains intact, and the cycle will turn. Africa’s demographic dividend, rapid urbanisation, and the pressing need for investment in energy transition, infrastructure and healthcare continue to underpin opportunity. All that is needed is patient capital, and Africa’s fundamentals will ensure it remains firmly on the radar, with the current environment presenting entry points at more attractive valuations.
The latest magazine can be accessed and downloaded from the DealMakers AFRICA website
Prosus Ventures has led a US$12,5 million Series A round in Intella, a leader in dialectal Arabic speech intelligence. 500 Global, Waed Ventures, Hala Ventures, Idrisi Ventures and HearstLab also participated in the round alongside Prosus. The investment will accelerate Intella’s mission to power a digital AI workforce across the Arabic-speaking world. The engine can transcribe speech from 25 different Arabic dialects with a 95.7% accuracy rate.
Invicta via its subsidiary Invicta Global is to acquire 100% of the Spaldings Group of Companies. Spaldings is a distributor of agricultural and ground care components in the UK, known for its extensive range of high-quality replacement parts and machinery. The purchase consideration payable is £11,86 million (R282,16 million) – the deal is a category 2 transaction and as such does not require shareholder approval.
Blu Label Unlimited, as it is now known, has released details of the intended restructuring of its operations with the end goal of listing Cell C. Via its wholly-owned subsidiary The Prepaid Company (TPC) which, pre-restructure, holds a 49.53% stake in Cell C, Blu Label will implement a series of agreements which will see the conversion of debt claims to equity valued at R3,68 billion; the transfer of Comms Equipment Company to Cell C in exchange for Cell C shares to the value of R2,15 billion; the transfer of airtime with a value of c.R7,4 billion and; the acquisition by TPC of Cell C shares held by SPV4 and SPV5 of 10.47% and 10% respectively in relation to debt obligations to TPC with a value of R563 million. The final step will see the remaining Cell C shareholders dispose of these shares to Cell C ListCo in return for the issuing of ListCo shares. TPC will, simultaneously to the Cell C ListCo listing, sell-down its shareholding to qualifying investors such that TPC will hold not less than 26% of Cell C Listco. Following the detailed announcement, Blu Label has received conditional approval from the Competition Tribunal to acquire an additional 4.04% shareholding in Cell C from Cedar Cellular Investments 1 (RF) for an undisclosed sum. This increases TPC’s shareholding in Cell C from 49.53% to 53.57%, establishing TPC as the controlling shareholder.
Santam has acquired a 51% stake in Avatar, a new UK-based start-up with a unique technology platform that can underwrite and price mid-sized corporate risks more efficiently than traditional methods. The price tag of £3 million was funded from the group’s available cash resources. Santam will not initially deploy any underwriting capacity to Avatar but depending on a successful track record being established, the startup may become a source of future new business for Santam.
Fortress Real Estate Investments has entered into an agreement to acquire an industrial property in Wroclaw, Poland for €49 million.
The finalising of the acquisition of Leopard Exploration and Mining and the Kabwe Zinc mine by Shuka Minerals, announced in July 2025, has been hindered due to the delay in the remittance of funds in the form of a loan from Gathoni Muchai Investments. Obtaining the required regulatory clearances in Kenya is the reason given for the delay. Alternative means are being explored to expedite payment, with the sellers remaining supportive of progressing the acquisition to completion.
In September 2024 Shoprite announced the disposal of its furniture businesses operating in SA, Botswana, Lesotho, Namibia, Eswatini and Zambia to Pepkor for c.R3,2 billion. The proposed transaction was approved by all relevant authorities in the applicable non-South African territories, and a positive recommendation was made by the South African Competition Commission to the South African Competition Tribunal. However, subsequently Lewis was granted the rights to intervene in the matter. This has resulted in a delay of the proposed transaction with Lewis lodging an appeal with the Competition Appeal Court.
Barloworld’s standby offer has now received the Botswana Competition and Consumer Authority approval for the implementation of the offer with the only outstanding approvals required from COMESA and in Angola and Namibia. Should these not be received by 11 September, the longstop date will automatically be extended by three calendar months. The offer remains open for acceptance by Barloworld ordinary shareholders.
Accelerate Property Fund has been granted by the JSE, an extension for the issuing of the circular for the Portside Transaction announced in April 2025 – a category 1 transaction. The circular must be distributed by 15 October 2025.
Dipula Properties has launched an equity raise of c.R500 million, implemented through an accelerated bookbuild process. The equity raise will be offered, in the first instance, by way of a vender consideration placing of new ordinary shares and potentially, in the second instance, in terms of its existing general authority to issue shares for cash. The equity raise will fund acquisitions, which include the Protea Gardens Mall in Soweto, announced on 19 August 2025 for R478,1 million.
Following the demerger of Valterra Platinum earlier this year from the Anglo American stable, Anglo retained a 19.9% shareholding subject to an on-market sales lock up period of 90 days. This week Anglo undertook an accelerated bookbuild offering of c.52,2 million Valterra ordinary shares. The shares were placed at a price of R845 per share raising proceeds of R44,1 billion (US$2,5 billion). The disposal represents Anglo’s entire remaining stake in the platinum miner.
Marshall Monteagle is to undertake a renounceable rights offer to raise US$10,7 million (R 191,4 million), the proceeds of which will be used to increase the size of the company’s investment portfolio and to support the growth of its physical trading business without taking on debt. 8,964,377 shares will be issued at a Rights Offer price of $1.20 (R21.34), representing a discount of c.28% as at the date of announcement. The shares will be issued in the ratio of 1 Rights Offer Share for every 4 ordinary shares held. Participating shareholders will be offered an unlisted warrant which is convertible into new Marshall shares at an issue price of $1.20 in the ratio of 1 warrant for every 2 Rights Offer Shares allocated until the exercise period of the warrants expire on 31 October 2030. This will necessitate an increase in authorised capital from 40 million to 100 million. Shareholders will vote on this on 6 October 2025.
Texton Property Fund has exited its exposure to Blackstone Real Estate Income Trust iCapital Offshore Access Fund. The remaining 4,945.4466 shares were redeemed at R110,76 million which compares with the average acquisition price of R98,37 million. The investment yielded a return during the holding period of 31.37%.
In terms of the revised offer to Assura plc shareholders by Primary Health Properties plc (PHP), a further 29,556,535 new PHP shares listed this week. The revised offer remains open for acceptances until 13h00 on 10 September 2025.
In an off-market transaction, Italtile has acquired 675,000 shares held by Italtile Ceramics at a price of R9.91 per share for a total transaction value of R6,69 million.
Salungano, which was suspended in August 2023 for failure to publish its audited financial results for the year ended 31 March 2023, will remain suspended as it has once again pushed out the revised timeline for publication of its FY2024 and FY2025 results. The company, although said to be e progressing on finalising its financial reporting, is unable to pinpoint a date of release.
Sebeta did not release its results for the year ended March 2025 on 29 August 2025 as previously communicated citing a delay in the technical review of the Inzalo Capital transactions. Updates on the timeline would be provided in due course.
Shareholders voted in support of the change in name of Capital Appreciation to Araxi. The share will trade under the new name from 1 October 2025 referenced by the JSE share code AXX.
In a slight name change, Mantengu Mining will drop the reference to mining and trade Mantengu from 10 September 2025.
This week the following companies announced the repurchase of shares:
Schroder European Real Estate Trust plc acquired a further 101,400 shares this week at a price of 65 pence per share for an aggregate £65,863. The shares will be held in Treasury.
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 696,357 shares were repurchased for an aggregate cost of A$1,85 million.
On March 6, 2025, Ninety One plc announced that it would undertake a repurchase programme of up to £30 million. The shares will be purchased on the open market and cancelled to reduce the Company’s ordinary share capital. This week the company repurchased a further 347,523 ordinary shares at an average price of 189 pence for an aggregate £654,327.
Investec ltd commenced its share purchase and buy-back programme of up to R2,5 billion (£100 million). Over the period 27 August to 2 September 2025, Investec ltd purchased on the LSE, 1,183,024 Investec plc ordinary share at an average price of £5.4699 per share and 883,589 Investec plc shares on the JSE at an average price of R130.2376 per share. Over the same period Investec ltd repurchased 629,936 of its shares at an average price per share of R127.60. The Investec ltd shares will be cancelled, and the Investec plc shares will be treated as if they were treasury shares in the consolidated annual financial statements of the Investec Group.
The purpose of Bytes Technology’s share repurchase programme, of up to a maximum aggregate consideration of £25 million, is to reduce Bytes’ share capital. This week 525,00 shares were repurchased at an average price per share of £4.03 for an aggregate £2,12 million.
Glencore plc’s current share buy-back programme plans to acquire shares of an aggregate value of up to US$1 billion. The shares will be repurchased on the LSE, BATS, Chi-X and Aquis exchanges and is expected to be completed in February 2026. This week 8,022,682 million shares were repurchased at an average price of £2.94 per share for an aggregate £23,53 million.
In May 2025 Tharisa plc announced it would undertake a repurchase programme of up to US$5 million. Shares have been trading at a significant discount, having been negatively impacted by the global commodity pricing environment, geo-political events and market volatility. Over the period 25 to 29 August 2025, the company repurchased 33,990 shares at an average price of R21.37 on the JSE and 162,500 shares at 91.36 pence per share on the LSE.
In May 2025, British American Tobacco plc extended its share buyback programme by a further £200 million, taking the total amount to be repurchased by 31 December 2025 to £1,1 billion. The extended programme is being funded using the net proceeds of the block trade of shares in ITC to institutional investors. This week the company repurchased a further 606,407 shares at an average price of £41.30 per share for an aggregate £25,04 million.
During the period 25 to 29 August 2025, Prosus repurchased a further 1,341,852 Prosus shares for an aggregate €70,23 million and Naspers, a further 113,829 Naspers shares for a total consideration of R665,81 million.
Four companies issued profit warnings this week: Super Group, Bell Equipment, AfroCentric Investment Corporation and African Rainbow Minerals.
During the week two companies issued or withdrew a cautionary notice: Blu Label Unlimited and Trustco.
Nigerian agritech platform, Babban Gona, has secured a US$7,5 million debt investment from British International Investment to boost food security and climate resilience for smallholder farmers in Northern Nigeria.
Moroccan e-commerce platform, Justyol, has raised US$1 million in funding and financing, consists of S$400,000 in equity investment from an angel investor and US$600,000 in inventory financing from Turkey’s Danis Group. The cross-border e-commerce platform focuses on connecting Turkish fashion and lifestyle products with target consumers in North Africa, particularly Morocco.
Africa-focused renewable energy refrigeration company Koolboks has closed an US$11 million Series A debt and equity funding round. The round was led by KawiSafi Ventures and Aruwa Capital (who is making a follow-on investment). All On also participated in the equity round with FCMB, FFEM, and bpifrance providing debt funding. The raise was further backed by grants from FFEM/AFD, PREO, Efficiency for Access, and Innovate UK, as well as Results-Based Financing partners including BGFA (Uganda), CEI Africa, and Shell Foundation. Part of the funding will support the setup of the company’s first local assembly plant in Nigeria aimed at job creation and cost reduction for end users.
AgDevCo, a specialist impact investor operating exclusively in the agriculture sector in Africa, has announced a follow-on investment in EFAfrica Group, headquartered in Mauritius, with operations in Tanzania, Kenya and Zambia. EFAfrica is an equipment leasing company focused on small and medium-sized enterprises and farmers in Africa. This latest investment is structured as a long-term loan totalling US$7,2 million, which will allow EFAfrica to offer larger leases to agribusiness corporates and farming services providers.
Egyptian fintech, Munify, has raised a US$3 million seed round led by Y Combinator, with participation from BYLD and Digital Currency Group. Munify is building a cross-border digital bank tailored to Egyptians abroad. Its platform offers instant, low-cost remittances to Egypt, the ability to open U.S. bank accounts, issue debit cards, and tools to hedge against local currency volatility.
Planting Naturals, a producer of sustainable organic palm oil in Sierra Leone has received a US$7 million investment from specialist impact investor, AgDevCo. Planting Naturals operates a vertically integrated model, sourcing fruits from both its own plantations and a growing network of smallholder farmers, to produce organic crude palm oil and palm kernel oil for export.
Boardrooms are no longer insulated sanctuaries where a handful of executives set the course for an entire company. In South Africa and around the globe, shareholders are stepping out of the shadows and demanding a voice – not only in financial outcomes, but in matters of ethics, transparency and governance. The proposed R23bn Barloworld Limited (Barloworld) buy-out has brought this tension into sharp focus. Despite a premium offer and professional guidance, shareholders flexed their power, sending a clear message: trust and good governance cannot be bought. In an era where investors are becoming activists, boards must recognise that meaningful engagement is non-negotiable. The Barloworld saga is not an anomaly, but a warning shot for any boardroom that underestimates the collective clout of its shareholders.
The Barloworld board sought professional advice on handling the buy-out offer by a consortium led by CEO Dominic Sewela, acting through his family trust, and the Saudi-based Zahid Group, which aimed to acquire all the remaining Barloworld shares (except for excluded shareholders) and delist the company from the JSE.
Management buy-outs like this are not uncommon and, often, it is beneficial to align management and acquirer interests for the future growth of a company. However, shareholder consent for the scheme of arrangement for the Barloworld buy-out was not obtained, with over 60% voting against the proposal. This raises the question: what went wrong?
In order to mitigate the conflict between a director’s fiduciary duty to the company and their personal interest in a management buy-out, section 75 of the Companies Act 71 of 2008 provides rules to ensure that directors always act in the company’s best interests. But leading up to the shareholder vote on the buy-out, media reports highlighted conflict of interest concerns regarding Sewela’s involvement in the buy-out, through his family trust’s interest in the consortium, particularly the timing of his disclosure to the board and the decision to allow him to remain as CEO of Barloworld during the buy-out process.
It is clear from the media reports and the unprecedented media release issued on 28 February 2025 by the Public Investment Corporation (PIC) – a shareholder of about 21.97% of the shares in Barloworld – that the shareholders had been significantly dissatisfied with the board prior to the annual general meeting (AGM) held on 21 February 2025.
This dissatisfaction is evident by the results of the AGM, where the re-election of directors and audit committee members was approved by only 56%-57% of the votes, meaning that just under half of the shareholders (42%-43%) rejected the resolutions.
In its media release, the PIC confirmed that it was one of the shareholders who voted against the re-election of board members at the AGM, expressing concerns about corporate governance standards and the steps the board followed in respect of the buy-out.
All these factors paint a picture of a general lack of trust between the shareholders and the board regarding the management of the business leading up to the buy-out vote. The outcome of the AGM was a clear message of no confidence by the shareholders to the board.
The consortium’s offer to the shareholders was made at a premium to the fair value of Barloworld, i.e. an 87% premium, and within the range recommended by the independent valuer, Rothschild. But interestingly, in this case, the gold did not trump.
The truth is that no matter how much professional advice is sought for a buy-out, and regardless of whether the process has been run to the letter of the law, without shareholders’ trust in the board, a company will essentially experience an adaptive failure in its operations. In today’s world, shareholders are looking for more than just monetary compensation from their investments. They have power, and intend to use it to demand transparency, address conflicts of interest, and hold management to account. This is exactly what 63% of Barloworld’s shareholders did. They said no to a R23bn deal.
The ability to exert influence on the strategy and governance of a board and challenge management decisions is termed shareholder activism. This movement is particularly potent in instances of misalignment between the management team and the shareholders.
Shareholder activism is not a new concept in South Africa, but local companies are still coming to terms with its growing influence and the full impact of such activism. Shareholder activism in South Africa started as early as the mid-80s, when General Motors and over 200 public companies were pressured by investors to withdraw from South Africa as a result of the unjust apartheid regime, a move that contributed to its fall. The decision of the General Motors shareholders illustrates how influential shareholder activism can be, especially when collaborative. More recently, minority shareholders at Sasol Limited, holding as little as 5% of the shares, took over the AGM in protest of the company’s climate stance, resulting in the cancellation of the meeting.
Shareholder activism typically arises when issues related to corporate governance, board independence, remuneration, business performance, trust and diversity are at stake. Shareholder activists can be individuals, institutional investors, or non-profit organisations, and they generally champion two main causes: economic issues and governance.
Economic activists focus on enhancing shareholder returns and improving financial performance. Governance activists, on the other hand, are more concerned with the company’s reputation and its societal impact. They seek to enforce changes in corporate governance practices, and drive initiatives related to inclusion, diversity, equity, and environmental, social and governance standards.
Shareholder activists often employ both legal and extra-judicial tactics to pursue their causes. These tactics are robust, dynamic, often public, and sometimes even hostile. South African legislation plays a fundamental role in supporting shareholder activism, as it encourages and promotes accountability and transparency. For instance, some of the legal tactics used by activists are found in the Companies Act. Section 61(3) empowers shareholders holding as little as 10% of the company’s shares to requisition a shareholders’ meeting. Section 65(3) allows any two shareholders to propose a resolution on matters where they are entitled to exercise voting rights. Additionally, following the enactment of certain provisions of the Companies Amendment Bills, section 26 of the Companies Act allows any person to request access to the company’s records, including its memorandum of incorporation, annual financial statements and securities register.
Other South African legislation also supports shareholder activism. The Promotion of Access to Information Act 2 of 2000 allows individuals to access information held by the state and private bodies when required for the exercise or protection of any rights. The Listing Requirements regulate the fair and equal treatment of shareholders, access to information, voting thresholds for certain corporate actions, pre-emptive rights, and related-party transactions. Both the Companies Act and the King IV Report on Corporate Governance for South Africa 2016 advocate for and enable shareholder activism, providing a platform from which activists derive their powers.
Shareholder activism often emerges when shareholders feel ignored or aggrieved by board decisions, especially where transparency and trust are lacking, and social media is now an important tool for activists to mobilise support and shape public opinion. Open communication and transparency are essential for boards to understand and address shareholder concerns. Without this, shareholder action can stall or derail corporate plans.
In the context of the Barloworld buy-out, the decision to pursue the vote on 26 February 2025 was hasty. Through their vote, two large shareholders had expressed dissatisfaction with the board at the AGM, making it suboptimal to hold the buy-out vote just five days later. In fact, when the board was queried by shareholders on the buy-out at the AGM, it was reported that the board responded with “not appropriate”. There were clearly grievances with the board that needed to be addressed with the shareholders prior to the vote. While some may view the rejection of the buy-out as surprising, proper engagement with the shareholders might have led to a different outcome.
With the buy-out offer rejected, the standby offer remains open. It appears that the Barloworld board has now decided to listen and engage with their shareholders, starting with the PIC, which has now committed to backing the standby offer. The latest commitment pushes the total support for the standby offer to 46.93% of Barloworld’s ordinary shares, excluding treasury stock. This figure includes commitments from other shareholders, as well as holdings by the consortium and the Barloworld Foundation.
So, what does it mean to listen and engage with shareholders? In the PIC media release of 28 February 2025, the PIC expressed support for the employment of previously disadvantaged groups in South Africa and emphasised their preference for transactions that are inclusive and broad-based. They highlighted that the benefits of empowerment in any transaction should extend to a wide range of stakeholders. Recognising these concerns, it is understood that the consortium engaged with the PIC and other shareholders to address their issues. This engagement led to the announcement on 23 April 2025 that the consortium had agreed to implement a broad-based black economic empowerment (BEE) transaction as part of the proposed takeover and delisting of Barloworld. This 13.5% BEE deal, which will be rolled out after Barloworld is removed from the JSE and A2X, aims to address the PIC’s broader public interest concerns tied to the R23bn offer.
So, there it is: shareholder activism in all its glory. It is undeniably a powerful and transformative tool. Companies must recognise that in today’s world, shareholders are not just passive investors; they are active and engaged, demanding more than just financial returns. The Barloworld case highlights the significant power that shareholders wield to hold the board accountable, insisting on transparency and meaningful engagement. Let this be a lesson for future corporate transactions – never underestimate the influence of shareholders, especially when backed by legislation that promotes and fosters shareholder activism. In South Africa, shareholder activism resonates deeply due to our historical context, and it will continue to be, in many instances, more rewarding than cash for some shareholders.
Lydia Shadrach-Razzino is a Partner, Carine Pick a Director Designate and Limani Mangoliso a Candidate Attorney in M&A | Baker McKenzie (Johannesburg)
This article first appeared in DealMakers, SA’s quarterly M&A publication.
Companies often face the choice of deciding to grow organically or through mergers and acquisitions (M&A). Although organic growth typically involves less risk, it takes longer; while growing by acquiring or merging businesses enables targeted and faster growth, but entails risk. While different approaches can be utilised for growth, this article focuses on M&A as part of a growth strategy.
M&A can be a powerful strategy for business growth, particularly for a company aiming to gain access to new customers, expand its geographic markets and/or advance its competitive edge. For instance, an acquirer may be looking to obtain a new product line, add more facilities, or gain expertise and intellectual property as part of its growth.
The example of Disney, through its acquisition of leading production companies like Pixar, Marvel, Lucasfilm and 20th Century Fox, over time, shows that a well-planned and executed M&A strategy can be highly effective in yielding business growth. Notable African examples include MTN Group, which has grown significantly through strategic acquisitions and mergers across Africa and the Middle East, and Shoprite, which has expanded its footprint across Africa through both organic growth and strategic acquisitions, becoming one of the largest grocery retailers on the continent.
A company embarking on M&A must be intentional and prepared, as bringing two businesses together – from conceptualisation and pre-deal engagements to valuation, execution and post-merger integration – is an enormous endeavour. Therefore, several factors, including those discussed below, must be considered for a successful acquisition or merger as a growth strategy.
During the pre-deal due diligence phase, it is crucial for the deal team to comprehend where synergies and integration opportunities exist within the businesses. Furthermore, the related complexities, timelines and costs to implement the transaction need to be understood to enable the business to make informed decisions during the deal approval process.
Leveraging synergies
Synergies are of the utmost importance when utilising M&A to generate growth. M&A, if initiated as part of a planned growth strategy, can result in synergies that offer value creation for both parties. From a cost-cutting perspective, parties could take advantage of overlapping operations or resources by consolidating them. But beyond this, effective strategic synergies can alter the competitive balance of power and create opportunities to change market dynamics in a company’s favour.
Companies can take advantage of revenue synergies, such as cross-selling products or services. In addition, when the products or services of the two companies complement each other, the merged entity can offer more comprehensive solutions to its customers. This was seen in Microsoft’s acquisition of LinkedIn, where the latter’s professional network complemented Microsoft’s suite of productivity tools. A notable African example includes Access Bank’s Acquisition of Diamond Bank in Nigeria, which combined Access Bank’s corporate banking strengths with Diamond Bank’s retail and digital banking capabilities. This acquisition enabled cross-selling of products to a broader, more diverse customer base, and accelerated digital adoption.
Beyond financial metrics, it must be considered how the acquisition aligns with the acquirer’s long-term growth strategy. When performing a valuation of the target, the acquirer needs to factor in synergies without overestimating their impact, while taking into account potential risks. Synergy projections should be based on a detailed understanding of both businesses’ operations. For instance, can the acquirer eliminate redundant functions without impacting service quality? Is there a real opportunity to cross-sell, or are the markets too different?
Opportunities for growth by filling in gaps
When the marketplace changes in response to external factors or regulatory development, it can create a gap in a company’s critical offerings. It may then be a prime opportunity for a company to engage in M&A to address such gaps and remain competitive in the market. For instance:
a telecommunications provider might acquire a regional operator with a spectrum licence to fast-track its 5G rollout in key urban hubs;
a company may react to shifts in consumer preferences. By way of example, an FMCG company may acquire a plant-based food manufacturer in response to an increasing demand for vegan products, while also benefiting from a lower carbon footprint compared to traditional meat-based offerings;
new environmental regulations may require companies to adopt greener technologies. A company could address this by acquiring a business that owns the necessary technology, to enable it to be compliant; and
changes in trade policies, such as tariffs or import restrictions, can necessitate strategic acquisitions to localise production.
Go big or go home?
On the contrary, smaller deals are often the sweet spot. It is not always a choice between going big or going home; in fact, smaller deals often have a higher likelihood of success due to several key factors. These deals often succeed because they are strategically focused, involve clear synergies, and are easier to integrate. They might also have reduced financial risk. The financial commitment in smaller deals is generally lower, reducing the overall financial risk for the acquiring company. As part of its growth strategy, a company may engage in small, strategic acquisitions to acquire innovative startups, enhancing its product offerings and remaining competitive without the risk and complexity of larger deals. However, even small-scale transactions are not a “slam dunk” and may involve risk.
The downside
While M&A may bring significant benefit, it comes with inherent risks and requires careful planning and execution to maximise the chance of success. Despite a solid M&A strategy, many deals fail in their implementation.
History shows that M&A deals can destroy value, instead of creating it. Daimler-Benz’s acquisition of Chrysler was intended to create a transatlantic automotive powerhouse. However, the deal suffered from cultural differences and strategic disagreements, leading to significant financial losses. Daimler eventually sold Chrysler at a substantial loss. Cultural integration must be prioritised to prevent disruptions and maintain operational efficiency. Different corporate cultures can create friction that impedes integration. When looking at potential M&A targets, it is important to assess a company’s strategy, values, leadership style and decision-making processes.
Companies pursuing growth through M&A in Africa must also take into account a range of broader strategic and operational considerations beyond the transaction itself. A key consideration is the regulatory and political environment of the target jurisdictions. Africa is not a homogenous market. Each country presents unique legal, compliance and governance frameworks that can materially impact deal feasibility and execution timelines. Regulatory approvals, foreign ownership restrictions, local content requirements and competition laws must all be navigated carefully.
In addition, macroeconomic factors such as currency volatility, inflation and fluctuating interest rates introduce further complexity into deal structuring and valuation. These dynamics can affect not only the purchase price, but also the ongoing financial performance of the combined entity post-acquisition. As such, acquirers should consider incorporating robust hedging strategies, and conduct comprehensive sensitivity and scenario analyses as part of their financial modelling. Properly anticipating and planning for these variables is critical to achieving sustainable value creation from cross-border M&A on the continent. A thorough due diligence investigation is paramount to ensure the envisaged growth is sustainable. It can also inform the valuation of the target. Furthermore, developing a post-merger integration plan with actionable steps and clear timelines is crucial.
Conclusion
Each company and each deal are different, whether large or small. The use of corporate advisers familiar with the African M&A landscape is essential to tailor the advice to an individual situation because, when executed correctly, there is little that can beat M&A for long-term growth and value creation.
Thandiwe Nhlapho is a Corporate Financier | PSG Capital
This article first appeared in DealMakers AFRICA, the continent’s quarterly M&A publication.
Anglo American is ready to sell everything it still has in Valterra Platinum (JSE: AGL | JSE: VAL)
Given Anglo’s previous market timing, this is probably bullish for PGMs
Anglo American doesn’t have an amazing reputation for timing the market, I’ve gotta tell you. Or perhaps they do, but for timing it in the wrong direction! You may recall Thungela (JSE: TGA), which Anglo unbundled in 2021. Thankfully, Anglo shareholders got the benefit of the subsequent rally (well, those who didn’t run away from the asset while wildly waving the ESG flag), but Anglo as a corporate did not. Given all the challenges they’ve had since then, I bet they would’ve preferred to keep some Thungela shares and sell them down over time!
Obviously, hindsight is perfect. But it will be interesting to see whether a similar mistake is being made with Valterra Platinum, as Anglo has decided to sell the remaining 19.9% stake in the company after the rest was unbundled to shareholders as part of the demerger of what was then called Anglo American Platinum.
This decision comes pretty soon after the separate listing of Valterra, so Anglo American is either (1) bearish on PGMs from these levels onwards or (2) badly in need of the capital. Or a bit of both, of course. Naturally, the corporate narrative includes all kinds of lovely comments about Valterra and the PGM sector, yet Anglo is selling anyway.
Selling off a stake of that size is only possible through an accelerated bookbuild, which means that bookrunners will phone up institutions and gauge their interest in taking up stock. There are no fewer than five local and international banks involved, so it will be a case of calling all pockets here.
Aspen’s share price is still sliding (JSE: APN)
The release of results did nothing to shift the momentum
Aspen had an awful year. There’s really no other way to put it. For the year ended June 2025, revenue fell by 3% as reported and HEPS tanked by 42%. If you prefer to look at normalised HEPS, that’s down by 29%. The dividend per share is down 41%, so perhaps that’s a good guide on whether to consider reported or normalised HEPS.
There were a number of issues, all of which were simply too much for the otherwise good performance of Commercial Pharmaceuticals to offset. The most frightening issue is the contractual dispute dealing with mRNA products, leading to normalised EBITDA in the Manufacturing business dropping by 62%. To add insult to considerable injury, there were negative impacts like changes to tax legislation.
Despite a great operating cash conversion rate, net debt was R1.2 billion higher than at the halfway mark this year, coming in at R31.2 billion. Together with weak EBITDA, this puts the leverage ratio on an uncomfortably high 3.2x.
Heading into 2026, Aspen is telling a positive story around its strategy for diabetes and weight loss management, including on the GLP-1 front. On a currency neutral basis, the company expects double-digit growth in normalised headline earnings. Remember, this is coming off an incredibly depressed base, hence why the market isn’t excited by this story.
Where is the bottom here?
Cashbuild just has to keep grinding away (JSE: CSB)
Progress is slow, but steady
Cashbuild is forced to play life on hard mode, with the South African economy giving them almost no breathing room. Every sale is a slog, with stubbornly high interest rates and very little economic growth. Under the circumstances, I think it’s pretty good that revenue was up 5% on a 52-week adjusted basis (the prior period had an extra week). Expenses were also up 5% on that basis if we exclude prior period impairments.
Thanks to other moves on the income statement, HEPS increased by 10% for the year. Double-digit growth in this environment is a decent outcome.
In the first 7 weeks of the new financial year, sales are up 6%. That’s an extra 100 basis points of growth that will be most welcomed. I hope expense growth is being kept at levels below that.
With a 27% increase in the final dividend per share, management seems to be more confident. They are still telling a story of a tough market though and an overall approach of caution.
I loved this slide from the investor presentation, as it shows how incredibly lucrative it was when everybody was investing heavily in their homes during softer lockdowns and in a period of very low interest rates:
It looks to me like things have started to turn higher here, but patience will be needed.
Discovery shows strong growth – and the first profitable six-month period for Discovery Bank (JSE: DSY)
This is why the share price has had an excellent 12 months
The Discovery share price had a number of false starts in the past five years, with decent rallies and then ugly examples of return-to-sender on the chart. But in the past year, the share price has broken higher in what looks like a sustainable way:
The reasons for this can be found in the trading statement dealing with the year ended June 2025, in which normalised headline earnings is expected to increase by between 27% and 32%. That’s juicy!
Most importantly, the growth is being seen across practically every business unit. The mature businesses (Discovery Health and arguably Vitality Network) managed single-digit growth, while other areas like Discovery Insure had a spectacular year in which profits more than tripled. It really has been an exceptional year for the short-term insurance industry.
But here’s perhaps the most interesting news of all: Discovery Bank reduced its loss for the year by between 82% and 87%, which means it is nearly break-even. In the second half of the year, it generated a profit. It’s therefore very likely that Discovery Bank will be profitable in the coming financial year. The question now is how long it takes for the J-curve to work its magic and what the eventual return will be on the immense capital allocated to that project.
Woolworths dragged down under by the Aussie business (JSE: WHL)
But Woolworths Food is taking the fight to Checkers
Woolworths just released results for the 52 weeks ended 29 June 2025. The prior period was a 53-week period, so the adjustment for that week is important.
On an adjusted basis, turnover and concession sales increased by 6.1%. Alas, that’s where the good news ends at group level, with HEPS down by 23.9%. The dividend is 29% lower. Return on Capital Employed fell from 18.7% to 16.4%.
The problem? Quite simply, Australia. Country Road Group is now picking up where David Jones left off, with sales down 6.8% on a comparable store basis and gross margin dropping by 390 basis points. Adjusted EBITDA fell by 41.1% and they were actually loss-making at adjusted EBIT level. Things look pretty dire there.
Thankfully, the South African business is doing its best to offset the thunder down under. Woolworths South Africa grew turnover and concession sales by 9.4% and adjusted EBITDA by 6.8%, with promising second half momentum as well. But where did they really make their money?
Digging deeper, Woolworths Food grew turnover and concession sales by 11.0%, with an impressive 7.7% on a comparable store basis. We do need to adjust for Absolute Pets though. Here’s something interesting: excluding Absolute Pets, sales growth in the second half was 10.6%. Shoprite (JSE: SHP) experienced quite a slowdown in its Supermarkets RSA business in the second half. Is this because Woolworths is successfully fighting back against Checkers?
To add to the good news in Woolworths Food, gross profit margin was up 20 basis points. It seems as though they are clawing back lost ground there, one packet of organic nuts at a time.
Fashion, Beauty and Home (FBH) isn’t doing as well as Food. Turnover and concession sales were up 5.1% on a comparable store basis, with improved momentum in the second half as we’ve observed elsewhere in the group. The really encouraging story is Beauty, which grew sales by a delightful 14.7%. An interesting fact is that Beauty is margin dilutive in FBH, mainly because they had a strong proportion of full-price sales in the clothing business. This led to a decline in gross margin of 120 basis points to 47.3%. This doesn’t mean that Beauty isn’t profitable, it just means that it wouldn’t be great long-term if the F and H in FBH fell over and B was the only thing that worked.
Net trading space in FBH decreased by 2.3% and online sales were up 22.8%. I’ll say it again: digital is top-of-mind in the retail space. Businesses that are ignoring omnichannel are going to find themselves in serious trouble.
Unfortunately, full year adjusted EBITDA was down 0.4% in FBH and adjusted EBIT declined by 9.1%. Things were much better in the second half, with slightly positive adjusted EBIT growth.
Due to the significant problems in Australia, the Woolworths share price is down 14% over 12 months.
Nibbles:
Director dealings:
An associate of a director of a major subsidiary of eMedia Holdings (JSE: EMH | JSE: EMN) bought N shares worth R48k and ordinary shares worth R36k.
A director of a major subsidiary of PBT Group (JSE: PBG) bought shares worth R4.4k.
Marshall Monteagle (JSE: MMP) is one of the more obscure names on the JSE, so I’m only giving the latest news a mention down here. The company is pursuing a rights offer to raise up to $10.7 million. There’s quite a discount on this rights offer, with a price of R21.35 vs. the closing price on the shares of R29.50. When a rights offer is deeply discounted, it’s because the company really wants shareholders to follow their rights. Sometimes you see rights offers with a strategic underwriter who actually wants to get a big stake, in which case the rights offer is priced at a modest discount as they don’t want shareholders to follow their rights. The Marshall Monteagle rights offer is not underwritten, hence the discounted pricing strategy. They are also allowing excess applications, another good example of a strategy to help ensure a successful raise from existing shareholders. The market cap is just over R1 billion, so this is a meaty rights offer of nearly 20% of the market cap.
Southern Palladium (JSE: SDL) has commenced the drill programme at the Bengwenyama PGM project, with four drill rigs on site and more coming in October. This is part of the next phase of work towards the Definitive Feasibility Study (DFS), the next milestone after the recently completed Pre-Feasibility Study.
Spear REIT (JSE: SEA) announced that the acquisition of Maynard Mall in Wynberg has been given unconditional approval by the Competition Commission. This is an important milestone for the deal. There is still a condition precedent in the agreement that needs to be met, with registration of transfer of the property expected to be in January 2026.
Putprop (JSE: PPR) is experiencing a complete change to top management, with both the CEO and CFO retiring. The new CEO is Darryl Mayers, with previous experience as joint CEO of Investec Property Fund. He joins the group on 1 November 2025. The new CFO is Alicia Nolte, an internal promotion that shows some succession planning coming through.
If you would like to refresh your memory on the current strategy at Orion Minerals (JSE: ORN) or just get to know the company better, then you can check out the presentation from the African Downunder Conference.
Conduit Capital (JSE: CND) continues to navigate a difficult legal situation around Constantia Insurance Company Limited (CICL), a former subsidiary. The joint liquidators of CICL are going after an alleged loan of R37.4 million between the company and CICL. Conduit will defend the litigation. They say that it isn’t material at this stage, which I find surprising given how broken Conduit Capital is overall. Even if there’s a remote chance of success for this litigation, it feels like everything is material to them at the moment.
Trustco (JSE: TTO) has renewed the cautionary around the planned delisting from the JSE, Namibian Stock Exchange and OTC market in the US. This is all part of the broader plan to go to the Nasdaq. The JSE isn’t 100% happy with the experience of the appointed independent expert, with Trustco engaging with the JSE accordingly. There are also approvals needed regarding the audit.
AfroCentric’s revenue growth is non-existent (JSE: ACT)
But profits seem to have stabilised
Let me begin by saying that I admire company disclosure that is consistent and transparent even when the underlying story is negative. These charts at AfroCentric are a perfect example, as no investor wants to see this combination of flat revenue and decreasing profits:
In this particular period, revenue dipped because of lower private patient scripts (they lost the designated service provider contracts in Pharmacy Direct) and the loss of margin in hospital projects. The Retail Cluster is where you’ll find these issues, with a 14.2% reduction in revenue and a 13.2% decrease in operating earnings.
The Services Cluster is a lot more encouraging, with an 8.7% increase in revenue. This only translated into a 3.7% increase in earnings though, so that’s a concern around margins.
The silver lining on those charts is that the drop in profits seems to have stopped. They’ve stabilised at the current level. Whether they will now move higher will come down to the relationship with Sanlam (JSE: SLM). Sanlam has a controlling stake in the company after a deal finalised a couple of years ago, so there’s no shortage of alignment there in making it a success.
ArcelorMittal has begun preparations to close the Longs business (JSE: ACL)
If there’s a hero out there, tell them that we’ve reached the 11th hour
The ArcelorMittal situation with the Longs business is a difficult one. The social cost of business failure is obvious and can get very ugly, but you also can’t have a situation where a business loses a fortune forever. This eventually makes it reliant on government and thus taxpayers.
This isn’t to say that ArcelorMittal and government haven’t tried to find solutions. We will never know exactly what has happened behind closed doors in terms of government’s strategy to try and save the Longs business and how seriously they actually took it, but the official company narrative is that “significant effort” was put into considering structural interventions.
Unfortunately, making an effort isn’t enough. There either needed to be huge changes (ideally in terms of both regulations and funding to protect the local industry) or the show is over. The IDC due diligence process is ongoing, so there’s still a sliver of hope for the people being impacted.
The planned closure date is 30 September, so there are still a few weeks left for a miracle to happen. In the meantime, ArcelorMittal has to start the process to shut things down, as it doesn’t happen overnight. For example, the Newcastle blast furnace has been placed into care and maintenance and further steps are now being taken towards the closure of the Longs business.
ASP Isotopes ships Ytterbium-176 and Silicon-28 (JSE: ISO)
Long story short: the commercialisation of the business has begun
In very high-tech businesses that sound like Iron Man was involved somewhere, it takes a while to get from the R&D phase to the commercial phase. But once they get there, the pain of the journey becomes the width of the moat.
At ASP Isotopes, a letter to shareholders has confirmed that the company has shipped the first samples of both Ytterbium-176 and Silicon-28. This is a hugely important step, with the company looking to fulfil customer demand of $50 million to $70 million in revenue during 2026 and 2027 just from these isotopes.
This business is all about a long-term view, with the company also planning to construct four new laser production plants starting in the first quarter of 2026. These will be used for four other isotopes where customers have indicated significant interest.
Within the ASP Isotopes stable, they are incubating a company called Quantum Leap Energy that they plan to spin-out later this year. My understanding is that this will focus on HALEU and Lithium isotopes, with the idea being to construct a critical materials plant in the US. Essentially, ASP’s strategy seems to be focused on developing routes to market and taking advantage of the current geopolitical mood in the US – not a bad approach at all.
Don’t forget PET Labs, a business that describes itself as operating in “precision oncology” – and as a particular highlight, treatments to children under 18 are free of charge. I love that.
The Renergen merger is on track to close this quarter, with just one regulatory approval outstanding. Thanks to the capital that flowed in from ASP Isotopes as part of the deal, there are now seven active drilling units on site at Renergen and the expectation is for at least $20 million in revenues during 2026. This is expected to put the business in a cash flow positive state. The conclusion of the Renergen deal should also create liquidity in the ASP Isotopes shares.
The group goal is over $300 million in EBITDA in 2030. The company is planning an analyst event in November where they will provide details on the financial plan to get there.
Here’s another fun fact about the company to finish off: 20% of the 170 employees have a PhD. 20%!
Barloworld gets through a major deal condition (JSE: BAW)
The investigation into potential US sanctions violations has been completed
Barloworld announced that the investigation into potential violations of US export regulations is done. The company needed to submit a final narrative account of voluntary self-disclosure to the US Department of Commerce, Bureau of Industry and Security (BIS).
The good news is that they didn’t find any violations of US sanctions. The bad news is that they did identify apparent violations of US export controls. The company is busy addressing these issues. That sounds like more good news than bad at this stage, but I’m definitely no expert on this stuff.
What it does mean is that the deal condition related to this matter has been fulfilled. The remaining conditions for the standby offer are competition approvals by COMESA and in Angola and Namibia. The standby offer remains open for acceptance by Barloworld shareholders.
Invicta acquires Spaldings in the UK (JSE: IVT)
The offshore growth strategy continues
Invicta has announced the acquisition of 100% of Spaldings, a distributor of agricultural products in the UK. The business has been going for roughly 70 years, so there’s plenty of track record here.
Aside from the strength of the business on a standalone basis, Invicta has been attracted to the procurement synergies that could be unlocked through collaboration between Spaldings and the rest of Invicta’s business. Buying 100% in the company right off the bat suggests that they will put in quite the integration effort, something that is more difficult when there are still minority shareholders.
The deal value is R282 million (based on current exchange rates), with an adjustment made for changes to the net asset value. There is a cap on the purchase price of roughly R322 million. Roughly 90% of the purchase price is payable on closing of the deal and the remaining 10% is held in escrow for 18 months to cover any warranty risks.
The sustainable net profit for 2025 is expected to be between R32.2 million and R36.8 million (again, at current exchange rates). The Price/Earnings multiple for the deal is therefore around 8.2x at the midpoint.
The market seemed to like it, with the share price up 2.4% on an otherwise red day for the JSE.
iOCO is on a firm footing these days (JSE: IOC)
Now we wait and see whether they can grow revenue
After a long and very difficult path to clean up the mess that was EOH and to emerge as iOCO in its new form, the company has released a trading update for the year ended July 2025 that will create plenty of smiles.
EBITDA is up by between 60% and 70% and HEPS is expected to be in a range of 35 cents to 45 cents. That’s a pretty wild swing from a loss of 10 cents for the prior year.
The share price is currently R4.20, so the mid-point of that range suggests a Price/Earnings multiple of over 10x. That seems pretty fully valued to me unless they can find significant revenue growth.
The balance sheet is also in good shape at least, with net debt to EBITDA improving from 2.7x to below 1x.
Detailed results will be released on 28 October.
Motus boosted by lower finance costs (JSE: MTH)
But market share has dipped in South Africa
If you just look around you on the road, you’ll see that things have changed in the South African car market. Chinese brands are everywhere, which means there have been substantial changes to market share at brand level. For the large companies in this space, like Motus, the change in overall group market share depends on the exact underlying mix of brands.
The disruption to the market means that Motus has seen its South African market share drop from 21.6% as at June 2024 to 20.1% in the latest period. That may not sound like much, but it’s a trend that needs to be watched carefully, particularly as the South African business contributes 56% to group revenue and 65% to EBITDA.
A mitigating factor here is that non-vehicle revenue contributed 55% to EBITDA, so the group isn’t just reliant on car sales. Their aftermarkets parts business is an important earnings underpin.
Speaking of the group, overall revenue was down 1% and operating profit was flat. It’s interesting to see that new vehicle sales suffered a 6% drop in revenue (primarily in the international businesses), while pre-owned vehicle sales were up 6%. A sign of the times?
Despite the tough results at the top of the income statement, Motus managed to grow HEPS by 5% thanks to a significant drop in net finance costs. Automotive businesses are particularly exposed to interest rates as they affect not just affordability for consumers, but also the cost of floorplan finance for the dealers. In this case though, the drop in finance costs was thanks to a reduction in debt (net debt to EBITDA improved from 1.9x to 1.5x) rather than the effect of lower interest rates.
Cash quality of earnings is strong here, with the dividend up by 6%. The confidence to maintain the payout ratio would’ve come from the performance in the second half of the year, which was much better than the first half. Momentum is a powerful thing.
More excellent numbers at Shoprite (JSE: SHP)
What more can they possibly do for the share price to start heading higher again?
Shoprite took an interesting approach in the narrative for the results for the 52 weeks ended 29 June 2025. Instead of just mentioning the percentage growth in sales as most companies do, they’ve highlighted the rand value of sales growth. I guess when another R20.6 billion is going through your tills to take you past the R250 billion revenue milestone, that’s worth shouting about.
R6.5 billion of that growth is from Shoprite and Usave, with a sales increase of 5.9%. Pricing inflation in this part of the business was below 2%, which shows just how hard it is to compete with Shoprite for their highly price sensitive customers. Despite this, they managed to move the dial in the right direction on gross margin!
Checkers was even more impressive, as has been the case for a while. An additional R11.6 billion in sales translates to growth of 13.8%. The phenomenon that is Sixty60 is still going strong, with sales up 47.7% (an incredible follow-on vs. sales growth of 58.1% in the prior year). If there are any retail executives out there in the market who still don’t think that digital is the battle that needs to be won, then it’s time for them to retire. Omnichannel isn’t the future – it’s the present. Sixty60 is now servicing customers from 694 stores, up from 539 stores in the prior period. I have confirmed with Shoprite’s CEO that when they consider opening new stores, they now wear an omnichannel hat that sees them as fulfilment centres, not just new in-store opportunities.
The strength in digital and omnichannel retail has driven growth in marketing and media revenue of 36.8%, taking it to R647 million for the period and second only to commissions received when it comes to alternative revenue. This is an important driver of gross margin.
Looking at group numbers (which includes several other businesses as well), sales were up 8.9%, gross margin expanded from 23.9% to 24.3% and trading profit increased by 16.6% thanks to expense growth being contained at 7.4% despite some substantial underlying pressures like energy costs. By the time you reach HEPS, growth was 15.8%. Interestingly, dividend per share growth was nowhere near as exciting, coming in at 9.7%.
Speaking of less exciting businesses, sales in Supermarkets non-RSA only increased by 6.4%, which is well below the 9.5% in Supermarkets RSA. In constant currency terms though, sales were up 14.2% in Supermarkets non-RSA, so there’s a currency effect here. Shoprite’s business outside of South Africa is focused on seven countries, all of which are within SADC. They are taking a low risk strategy when it comes to the rest of Africa.
Are there any reasons for concern? Well, the sale momentum in Supermarkets RSA isn’t great. Like-for-like sales increased by 6.1% in the first half and 3.6% in the second half, which means full-year growth of 4.8%.
Here’s a fun fact for you: private label participation (i.e. the percentage of sales in Supermarkets RSA from house brands) decreased from 21.3% to 20.5%. Grocery stores want to see this go up rather than down, with the negative trend explained by Shoprite having to change its chicken procurement strategy based on the closure of a local supplier in the second half of the year. If you ever wondered just how important chicken is, now you know.
The “adjacent businesses” get a lot of attention in the media, as this includes initiatives like Petshop Science, UNIQ and others. Sales grew by a substantial 39.1% in this segment, reflecting the rollout of stores in addition to underlying growth. They remain absolutely tiny in the grand scheme of things, contributing just 0.5% of Supermarkets RSA sales. But watch this space…
Shoprite’s sale of the furniture business to Pepkor (JSE: PPH) is ongoing, with regulatory approval delays at the Competition Commission due to the regulator allowing Lewis (JSE: LEW) to intervene in the deal. It’s uncertain how this will play out and what the timing will be. I think the disposal is the right strategy for Shoprite, as they need to focus on businesses where they have natural competency. Furniture is always going to be more of a credit play than anything else, hence why Pepkor is a better owner of that business.
In terms of the outlook for the new financial year, the overall flavour is one of cautious optimism. Shoprite has reminded the market of how strong its competitive positioning is, while also pointing out the tough environment. They have a trading margin target of 6% (vs 5.9% in FY25) and there are plans to keep rolling out plenty of new stores, so it’s probably silly to bet against them.
If anything, the bear case here is that the valuation is demanding in the South African context. But is it really? HEPS just grew by 15.8% and the Price/Earnings multiple is below 19x if you include the discontinued operations, or almost 20x if you exclude them. The share price has been heading steadily lower for the past year now. It feels like it’s probably due an upswing.
Nibbles:
Sirius Real Estate (JSE: SRE) has completed the previously announced acquisitions of business parks in Dresden (Germany) and Southampton (UK). The Dresden property was acquired on a net initial yield of 9.13% and is the fourth asset held by Sirius in that area. They’ve already started the repositioning as a multi-tenanted business park. The Southampton business park was acquired on a net initial yield of 5.5% and includes adjacent development land, with discussions underway with a prospective tenant for the property.
If you’re a shareholder in EPE Capital Partners (JSE: EPE) – which everyone calls Ethos Capital – or if you are curious about the Optasia business, then be aware that Optasia has released a corporate presentation that is available here. Ethos Capital will release results on 25 September. The reason why they are highlighting Optasia in the meantime is that Optasia is around 50% of the company’s last reported NAV.
In the extremely unlikely scenario that you are Deutsche Konsum (JSE: DKR) shareholder, then you’ll want to check out the details of the capital restructuring plan for the company. It will include a debt-to-equity swap, the disposal of properties and an equity raise from shareholders. An extraordinary general meeting will be scheduled for October for this.
Here’s another incredibly obscure property name: Globe Trade Centre (JSE: GTC). The company released results for the six months to June 2025. Although revenue was up 9%, the net tangible asset value per share was flat over six months. The net loan-to-value (LTV) improved from 52.7% as at December 2024 to 51.8% as at June 2025.
AYO Technology (JSE: AYO) announced that its auditors resigned due to “capacity constraints within the firm” – this comes after 5 years of Crowe JHB acting as auditor. SkX Protiviti has been appointed as the new auditor.
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