Thursday, July 10, 2025
Subscribe
Home Blog Page 80

Ghost Bites (African Rainbow Minerals | Capital & Regional | Capitec | Caxton | Fortress | MC Mining | Mondi | Mpact | Quantum Foods)

The Finance Ghost
-
0
Ghost Bites (African Rainbow Minerals | Capital & Regional | Capitec | Caxton | Fortress | MC Mining | Mondi | Mpact | Quantum Foods)

Get the latest recap of JSE news in the Ghost Wrap podcast, brought to you by Mazars:

Commodity prices and inflation hit African Rainbow Minerals (JSE: ARI)

Earnings fell sharply in the latest period

African Rainbow Minerals released results for the six months to December 2023 and they tell a story of a very painful period for the company. Mining is exceptionally cyclical, with profits rising and falling due to factors completely outside of the control of the company.

Headline earnings per share fell by 43% to R15.07 per share. The interim dividend is down from R14 to R6 per share, so the payout ratio has decreased as the company takes a more cautious approach.

This just shows how important it is for our infrastructure to work consistently. In the comparable period when commodity prices were higher, Transnet was terrible. Goodness knows Transnet is still bad, but at least there wasn’t industrial action in this period. Sadly, commodity prices had already fallen by then, so an improvement in volumes couldn’t offset the loss of revenue due to lower prices on key commodities. The pain was at least mitigated to some extent by the weaker rand and higher average realised export iron ore prices.

On top of this, unit production costs were a struggle because of lower production volumes, higher electricity costs and general inflationary pressures, contributing to the drop in HEPS.

There are a number of operations in the group, with ARM Platinum worth highlighting for a momentous negative swing from headline earnings of R1.33 billion to a headline loss of R282 million.

Capital & Regional grows its dividend (JSE: CRP)

Footfall moved higher and new leases are at higher rates than before

Capital & Regional is a REIT focused on the UK market and specifically community shopping centres. The audit for the year ended December 2023 is still being finalised, but the group has released an update on key metrics in the meantime.

New lettings were achieved at a 6.8% premium to the previous rent, so that’s very good news indeed. Footfall is up 1.5%, yet is still only 86.7% of the levels seen in 2019. Occupancy declined slightly from 94.1% to 93.4%. Adjusted profit was over 23% higher for the year, which is a great outcome.

Like-for-like property valuations increased 2.6% for the year, with the Gyle property up 4.0% as the company paid a good price for it and there have already been strong renewals there.

The Gyle acquisition did impact the balance sheet, with the loan to value up from 40.6% as at December 2022 to 43.6% as at December 2023. The other impact is that the EPRA NTA per share (a measure of net asset value per share) dropped from 103p to 89p because of the additional shares in issue from the equity raise in September that funded the Gyle acquisition.

The total dividend for the year came in 8.6% higher.

Capitec achieved further earnings growth (JSE: CPI)

As we saw at Nedbank, the credit loss ratio improved recently

Capitec has released a voluntary trading statement. This is because although earnings are higher, they aren’t more than 20% up (the level that triggers a trading statement). Group HEPS will be between 14% and 16% higher for the year ended February 2024, which is still a solid outcome.

The second half of the financial year was a strong performance, particularly thanks to tighter credit granting criteria that led to an improved credit experience in the second half of the year. Although loan book growth is obviously a core part of Capitec’s strategy, the performance was boosted by double-digit growth in net transaction and commission income based on client transactional activity.

Results are due to be released on 23 April.

This hasn’t been a great period for Caxton (JSE: CAT)

The silver lining is the balance sheet

For the six months to December 2023, revenue at Caxton and CTP Publishers and Printers fell by 3.3% and profit for the period was a down by a rather ugly 30.8%. The drop in HEPS was far less severe, with a 6.2% decrease. Like in the comparable interim period, there’s no dividend per share.

We need to dig deeper to understand the result. For example, revenue would actually have been slightly up were it not for the closure of a subsidiary, so the top line result isn’t as bad as it looks. Having said that, a constrained consumer environment isn’t good news for Caxton’s community newspapers, as media advertising drops in this environment. Notably, advertising revenue in Johannesburg showed a sharp decline.

If you can’t see the decay everywhere in Joburg and the clear trend, then I can’t help you. The money is moving to the coast and at frenetic pace.

The packaging business was therefore the highlight for this period, with turnover growth of 8.1%. Although this sounds strong, margins came under pressure here.

In response to the difficult conditions, Caxton focused on reducing costs. If we exclude the closure of a subsidiary, staff costs were up 3.3% and operating costs increased 4.4%. Although this is below inflation, it looks like the group still struggled to maintain margins even if we exclude the closure.

The cash is the highlight here, up by 59% over 12 months. It’s slightly down since June 2023 (the last year-end) but this is due to seasonality. The current cash balance is already R360 million higher than it was at the end of December 2023. With high interest rates, this is driving much higher net finance income.

Of course, Caxton shouldn’t be making money for shareholders by putting cash on deposit. Investors are looking for far more than that. Caxton is sitting on significant firepower and there are multiple pressures in the market. This does create a recipe for some acquisitive activity, but there’s nothing confirmed yet.

Finally, there’s a dividend at Fortress Real Estate (JSE: FFB)

Sorting out the share class structure led to a significantly smaller holding in NEPI Rockcastle

Fortress has released results for the six months to December 2023 and they reflect a major shift at the company, as the share class structure has been simplified and that is shown in these results. This makes per-share comparability completely useless, as there is now only one class of shares vs. two. The other impact is that the shareholding in NEPI Rockcastle has reduced from 24.2% to 16.2%, as NEPI shares were used to achieve the collapse of two share classes into one.

This means that there is finally a dividend, coming in at 81.44 cents per share for the interim period. For reference, the share price is R16.39. On an SA REIT Best Practice disclosure basis, the NAV per share is R16.24 but as an eagle-eyed reader pointed out to me, that includes the previous FFB shares in the calculation. The NAV today is quite a lot higher, so there is a discount to NAV that is more in line with what we usually see on the market. Another important consideration is that the dividend is taxed as a dividend rather than as income, as Fortress is not a REIT.

If we dig into the portfolio itself, the good news is that net operating income grew by 9.2% in South Africa and 14.3% in the logistics portfolio in Central and Eastern Europe. The loan-to-value ratio is 34.2%.

Note: the Fortress sector has been updated after engagement with a reader who picked up the NAV issue

There’s a bidding war underway for MC Mining (JSE: MCZ)

This is when things can get exciting

The independent board of MC Mining must be feeling rather smug right now, having advised shareholders to not accept the offer of A$0.16 per share from Goldway Capital Investment. Out of nowhere, a competing bid has come in from Vulcan Resources (which owns the largest steelmaking coking coal mine in Africa) for between A$0.17 and A$0.20 per share.

This offer range is subject to a due diligence, but at least we know that the range is higher than the Goldway offer. At this point the independent board obviously cannot give a view on the Vulcan offer as nothing binding has been received yet.

This is usually where things can get exciting for shareholders. The ball is now in Goldway’s court to consider increasing its offer!

Mondi and DS Smith are proposing a merger (JSE: MNP)

Mondi shareholders would own 54% of the enlarged group

Difficult markets frequently lead to a consolidation strategy in which major players look to join forces to become more competitive. This is the route that Mondi looks to be taking, with a proposal to acquire DS Smith in exchange for shares to be issued by Mondi. The net result would be that existing Mondi shareholders would own 54% of the enlarged group and DS Smith shareholders would have 46%.

The groups have of course identified a number of synergies, like the combined geographic footprint and the strength in the value chain for products like containerboard. The groups will need to publish an estimate of the synergies that the merger can realise, so I can guarantee that there are some very highly paid people currently running around trying to figure that out.

I must also tell you that most mergers fail hopelessly to deliver on the promised synergies, so be sensible and apply a significant haircut to whatever number the companies put forward. Spreadsheets are easy; real life is hard.

Mondi has until 4 April 2024 to either announce a firm intention to make an offer for DS Smith or to announce that it does not intend to make an offer. The UK Takeover Code doesn’t allow things to hang in the air forever.

Mpact moved forward in a very tough environment (JSE: MPT)

The group has focused on margins and working capital management

Mpact has released results for the year ended December 2023. Revenue increased by 3.6%, despite sales volumes being 10.7% lower. This tells you that pricing increases saved the day, which also benefits margins. This led to a record result for cash generated from operations of R2 billion, which is literally double the 2022 number.

The paper business grew revenue by 3.3%, with an 11.2% reduction in volumes due to subdued demand and a decrease in fruit exports because of the weather. Mpact helped manage its working capital by choosing downtime of around 16% of total capacity at Felixton and Mkhondo Mills. This is to avoid being in an overstocked situation. The paper business grew underlying operating profit from R1.1 billion to R1.2 billion.

The plastics business grew revenue by 5.9%, with sales volumes down 3.8%. Underlying operating profit moved in the wrong direction unfortunately, from R198 million down to R189 million.

Due to higher average net debt and interest rates, net finance costs increased from R183.8 million to R284 million. Ned debt at the end of the period was R2.67 billion, up from R2.33 billion.

HEPS increased by 8% from total operations and just 3% from continuing operations. It’s very much a game of inches out there, especially with debt on the balance sheet. The total dividend for the year was 4% higher.

Despite this, Mpact believes in the core business in South Africa and continues to invest. Due to the difficulties in 2023, return on capital employed for continuing operations fell from 18.5% to 16.6%. Shareholders will want to see an improvement in this metric.

With the sale of Versapak (the discontinued operation) still in progress, Mpact is looking forward to improved conditions in the fruit sector, with the caveat being that port infrastructure could hurt exports. The containerboard side is less exciting, with an oversupply globally and ongoing risk of being overstocked that Mpact needs to manage. The plastics business looks set to be a mixed bag, with significant improvement in some areas and lower sales in others.

There’s activity on the Quantum Foods shareholder register (JSE: QFH)

Country Bird Holdings swooped in on a few shareholders, including Astral

There was some crazy activity in the Quantum Foods share price during the week. I’m not exaggerating. Take a look at this share price chart:

The activity was driven by the news that Astral Foods sold its entire interest in the company. What we now know is that the buyer is Country Bird Holdings, which acquired a 9.77% stake directly from Astral for R7.25 per share. Quantum had no knowledge of this.

Country Bird Holdings seems to be negotiating with other shareholders as well, with various prices being offered for the shares – all of which are below R9.50 per share based on the disclosure in the Quantum Foods announcement. Where Quantum is aware of discussions, including with other potential buyers, the price being put forward is R7.75.

At this stage, no formal offer or even notification of a potential offer for shares has been received from Country Bird Holdings. Quantum notes that Country Bird holds 15.8% in the company. The other two major shareholders are Aristotle Africa with 34.2% and Braemar Trading at 30.8%.

Little Bites:

  • Director dealings:
    • The company secretary of NEPI Rockcastle (JSE: NRP) has sold shares in the company worth R1.75 million.
    • Two directors of Sasol (JSE: SOL) (one of the group company and one of the South African subsidiary) sold shares worth a collective R888k.
    • A director of a subsidiary of AVI (JSE: AVI) received shares under the company incentive scheme and sold the entire lot for R818k.
    • A director of Harmony Gold (JSE: HAR) sold shares worth over R321k.
    • The wife of the CIO of Primary Health Properties (JSE: PHP) has bought shares worth £9.9k.
  • Things are tough at Pick n Pay (JSE: PIK), with the company releasing an announcement related to the group company giving financial assistance to subsidiaries in relation to the loan facilities with FirstRand and RMB. This isn’t really anything new, but it shows that the negotiations with banks are happening in the background as the banks waive the covenants and debate the terms and conditions with Pick n Pay.
  • Maria Ramos is retiring as chairman and director at AngloGold Ashanti (JSE: ANG), with existing director Jochen Tilk appointed unanimously by the board as her replacement.
  • The Schwegmann family has increased its interest slightly in Stefanutti Stocks (JSE: SSK). The reason we know this is because of the move through the 10% mark for one of the family members, which triggers an announcement.
  • Life Healthcare (JSE: LHC) has obtained SARB approval for the special dividend. It will be paid on 8 April.
  • Tiny little Telemasters (JSE: TLM) released a trading statement that expects a more than 100% improvement in headline earnings per share for the six months ended December 2023. Considering that the comparable period was a headline loss per share of -1.02 cents, this means a swing into the green.
  • In a good reminder of just how terrible things can get for a company, Afristrat (JSE: ATI) can’t move ahead with a voluntary liquidation application because a creditor liquidation application is awaiting a new date for the matter to be head. It’s over, we just don’t know how yet.

Bad business and the bother with boycotts

Dominique Olivier
-
1
Bad business and the bother with boycotts

Nestlé has been the largest publicly-held food company in the world, measured by revenue and other metrics, since 2014. It is also the company on the receiving end of the longest continuous boycott in history. What do these two facts tell us about supersized businesses and the consequences of behaving badly?

I don’t have many vices, but one of the few that I’ve had since childhood is a hot cup of Milo on a chilly day. In my opinion, there is no other malted drink that compares in taste (sorry, team Ovaltine). This is a tough thing for me to deal with, because while I love that signature Milo flavour, I’m deeply conflicted about the business practices of its parent company, Nestlé.

You might attempt to solve this moral conundrum for me by suggesting that if I feel so strongly about Nestlé’s practices, then I should avoid buying their products. A reasonable idea, but much harder to execute than you might imagine, considering the vast amount of brands and products that Nestlé owns. Besides, when you look at Nestlé’s market share, you really have to ask yourself: is a boycott even remotely worth it?

Source: https://donegood.co/blogs/news/what-companies-does-nestle-own-and-can-you-avoid-them

How Nestlé got on the naughty list

In 1974, a document was published that would change public perception of the Nestlé brand forever. Titled “The Baby Killer”, this investigation by journalist Mike Muller was an unflinching exposé of the dodgy tactics used to market baby formula in third-world countries, particularly Africa. While the piece was directed at formula makers in general, there was no escaping the implication that Nestlé was one of the biggest culprits, with the company’s “Mother’s book” (a booklet handed out to new mothers in maternity wards, for free) referenced multiple times in the report.

From a marketing perspective, these tactics seem clever and effective. Scores of Nestlé brand representatives, dressed in nurse’s uniforms, were sent into maternity wards across Africa, Chile, India, Jordan and Jamaica, armed with free samples of baby formula. In the wards, they would speak to new mothers about the benefits of infant formula, a modern Western innovation that, according to them, far surpassed ordinary breastmilk in terms of nutritional value.

Impressed, many of these new mothers would test the formula sample on their babies, unaware that the milk in their own breasts would dry up by the time the sample tin was finished. Now imagine the tin is empty, the baby has become accustomed to the taste of formula, and the mother has no breastmilk left to offer as a substitute. There is no choice but to keep purchasing the product, despite its high cost (in Nigeria at the time, the cost of formula-feeding a 3 month old infant was approximately 30% of the minimum urban wage). Desperate mothers, trying to “stretch” the amount of formula in the tin, would stray from package guidelines, over-diluting their formula by adding as much as three times the amount of water required. Despite the fact that they were feeding their babies regularly, they were filling their tummies with mostly water, which cannot provide the calories or protein that a growing infant needs to thrive.

Water, of course, is the other massively overlooked problem in the formula recipe. Anyone who has ever had the experience of bottle-feeding a baby will know the tedious sterilisation routine required at almost every step of the process. In a West African hospital, a new mother has access to boiled water whenever she asks for it. Back home in her village, access to water is limited, as is the ability to boil it every time a bottle needs to be made. In some instances, baby formula is mixed with water collected from the nearest river. In young infants who were not yet of age to receive vaccinations against these diseases, this led to an uptick in cases of diphtheria, dysentery and typhoid, many of which are fatal.

Over-diluted formula, unsanitised bottles and unclean water led to the sickness, underdevelopment and eventual malnutrition of a huge amount of babies in third-world countries between the 1970s and 80s. Where third-world mothers had a perfectly nutritious, convenient and free resource available to them and their babies in the form of breastmilk, they were deliberately convinced of its inferiority in order to get them to make the commitment to formula.

Bring on the boycott

You can imagine the absolute uproar that this exposé was met with in the first-world. Boycotts were launched against Nestlé products in numerous countries, and an international marketing code (the ‘WHO Code’) was developed to prevent the comparison of manufactured baby milk with breastmilk. In response to the clamour (and perhaps in an effort to save some face), Nestlé introduced its own policy based on the code during the 1980s.

Unsatisfied that these steps were enough to curb irresponsible marketing, a UK-based group called Baby Milk Action has been running a boycott of Nestlé products since 1988. To date, this is the longest-running continuous boycott that the world has ever seen. Baby Milk Action has grown from a movement to a serious organisation with a network of over 348 citizen groups in more than 108 countries, all of whom encourage their members to boycott Nestlé’s products.

Idealistically, you would think that this is a real thorn in the side of Nestlé. Not only is that not the case (certainly not as far as the company’s market share is concerned), but it hasn’t even done that much to get Nestlé to change its ways.

In 2019, Nestlé’s own report found 107 instances of non-compliance with the baby milk marketing policy that it wrote for itself. A Changing Markets Foundation report from the same year found that Nestlé was still comparing its own products with human milk.

Too big to be held responsible?

I wish I could tell you that the formula debacle is the only questionable course of action that Nestlé has been involved in, but that’s not the case. From their memorable attempt to argue that water is not a human right (a useful win for a company that sells bottled water) to their decades-long entanglement with child slave labour in the plantations that supply their cacao, this company has proven time and time again where humans fall in their hierarchy of priorities.

While consumers like you and I aim to wield significant influence by voting with our spending, the uncomfortable truth is that the outcome of a boycott often hinges on the brand’s resilience, rather than consumer sentiment. Brands that are easily substituted are more susceptible to boycott pressure. Conversely, companies with substantial market dominance present a formidable challenge for the consumer-led movements that aim to impact their profits.

That’s because the fundamental obstacle for most boycotts lies in the intrinsic value companies imbue in their products, cultivating a perception of indispensability in consumers’ daily lives. In the case of Nestlé, an added complication is that the company is so big and owns so many brands that it takes a lot of legwork for even the most conscientious consumers to identify and avoid all of them.

So if we accept that individual purchasing decisions may not make that big of a difference to Nestlé’s bottom line, does that mean that the company is simply beyond reproach? I don’t think so. In the case of Nestlé, we’ve already seen how the original boycott in the 1980s led to the institution of the international marketing code.

Perhaps what’s needed is less consumer action and more rules that keep these mega-corporates in line.

About the author:

Dominique Olivier is a fine arts graduate who recently learnt what HEPS means. Although she’s really enjoying learning about the markets, she still doesn’t regret studying art instead.

She brings her love of storytelling and trivia to Ghost Mail, with The Finance Ghost adding a sprinkling of investment knowledge to her work.

Dominique is a freelance writer at Wordy Girl Writes and can be reached on LinkedIn here.

Satrix March Newsletter | One Small Step for Markets

Sponsored Content
-
0
Satrix March Newsletter | One Small Step for Markets

What Difference Did the Extra Day Make?

The South African rand weakened to the US dollar by 3.1% in February , despite the strong start shown on 1 February. The Budget Speech delivered on 21 February also didn’t seem to arrest the slide, with the rand weakening sharply a day after the annual Budget. Domestic markets followed this trend, with the FTSE/JSE All Share Index (ALSI) ending the month down -2.44% after a sharp increase immediately after the Budget Speech, followed by an even sharper decline two trading days later.

Following back-to-back ALSI monthly declines of more than 2% each in 2024, local equity losses were almost entirely concentrated to Resource companies in February, with the Resource index declining 7.17% for the month. The Property index was up 0.8%, with Financials and Industrials indices marginally down -0.84 and -0.69% respectively. Local investors with offshore exposure saw some reprieve, with the MSCI World Index up 7,5% in rand terms (buoyed by its high exposure to US companies), and the S&P 500 Index returning 8.65% in rand terms.

This points to a deeper principle that seasoned investors abide by: having exposure to different assets, industries, and geographies. International funds solve this through country-specific exposure or by achieving an assortment of countries in one basket, ensuring that even if the rand slides, the investor stands to gain.

Growth in Leaps and Bounds

All international indices tracked by Satrix realised positive growth in dollar terms last month, including the MSCI China Index (up 11.8%% in rands), which we highlighted as an underperformer in our last two newsletters. The MSCI India Index returned 5.9% in rands, while the broader MSCI Emerging Markets Index, of which China makes up a quarter, climbed 8.05% in rand terms.

The newly listed Satrix MSCI ACWI ETF, which includes both developed and emerging market indices and is one of the most diversified indices, also achieved positive growth in February 2024, climbing 0.98% since listing on 22 February.

International investors will be hoping that 2024 bucks the historical trend of the US market contracting by 2% during leap years. According to CNN, leap years have returned 10.8% on the S&P versus non-leap year returns of 12.8%, on average. Locally, the ALSI has returned, on average, 18.8% annually since 1996 during non-leap years, while returning a pedestrian 3.5% average return during leap years (granted, 2008 was a leap year too). But before we leap to any conclusions, perhaps this year will be different.

A New Tax-Free Season

March 1 marked the beginning of the new tax season, which means a new opportunity to make the most of your investments by harnessing the benefits of the tax-free savings account (TFSA). Your TFSA allows you to invest in funds without having to pay income, interest, or capital gains tax to SARS on any returns you may earn (provided you stay within the legislated contribution limits across all of your tax-free savings accounts.

For more information about how the TFSA works and its opportunities, click here. 

Satrix Logo

SatrixNOW is a no-minimum online investing platform from Satrix that allows you to buy and sell ETFs directly.

Ghost Wrap #64 (Mustek | Curro | Sea Harvest | Quilter)

The Finance Ghost
-
0
Ghost Wrap #64 (Mustek | Curro | Sea Harvest | Quilter)

The Ghost Wrap podcast is proudly brought to you by Mazars, a leading international audit, tax and advisory firm with a national footprint within South Africa. Visit the Mazars website for more information.

In this episode of Ghost Wrap, I covered these important stories on the local market:

  • Mustek is a lesson in two things: the danger of a value trap and the threat of competition in lucrative sector.
  • Curro is telling the market that it wants to fill its schools, yet the company increased fees by a much higher rate than inflation in 2023.
  • Sea Harvest is another good example of a corporate that saw a sharp rise in net finance costs, yet the dividend payout ratio moved higher.
  • Quilter is an offshore business that is doing a great job of growing its operations in the UK, making it a compelling rand hedge for South African investors. 

Ghost Stories #32: The Investec Nikkei 225 Autocall

The Finance Ghost
-
0
Ghost Stories #32: The Investec Nikkei 225 Autocall

Brian McMillan of the Structured Products team at Investec is back on Ghost Stories, this time to talk about the Investec Nikkei 225 Autocall.

This product is designed to give investors exposure to the Nikkei 225 index over a period of up to five years with an enhanced return of up to 17% per annum in ZAR or 11.5% per annum in USD. Importantly, there is 100% capital protection provided the index does not drop by more than 30%.

To help you understand this opportunity, the topics covered include:

  • The history of the Nikkei 225 over the past three decades and how it became ignored by investors, with the narrative having improved significantly in recent times.
  • Reasons why the Nikkei 225 could be a compelling investment going forward.
  • The structure of an “autocall” product and exactly how it works over the time period of the instrument.
  • The way the upside works on this instrument, with a fixed return provided the index closes above the starting level.
  • The underlying credit risk in the instrument.
  • The liquidity in the note and the extent to which it is tradeable during the term.
  • The minimum investment amount required and how the fees work.
  • Confirmation of the types of investors allowed to participate.

The investment tranche is available until the 5th of April 2024.

As always you must do your own research and speak to your financial advisor before investing in a product like this. You can find all the information you need on the Investec website at this link.

Listen to the show using this podcast player:

Ghost Bites (Exxaro | Grindrod | Lighthouse Properties | OUTsurance | Sanlam | STADIO | Sun International | Trellidor)

The Finance Ghost
-
0
Ghost Bites (Exxaro | Grindrod | Lighthouse Properties | OUTsurance | Sanlam | STADIO | Sun International | Trellidor)

Get the latest recap of JSE news in the Ghost Wrap podcast, brought to you by Mazars:

Exxaro’s earnings dropped in 2023 (JSE: EXX)

Lower export sales prices hurt the business

Exxaro is a coal operation that for some reason also owns a wind energy business. I’m not kidding. Sadly, improved wind conditions in 2023 (no, really) couldn’t offset the knock taken by the coal business, so earnings are down for the year.

The major challenge was in export sales prices, which couldn’t be fully offset by improved domestic prices and the weaker rand. The net result is that EBITDA is expected to be between 23% and 37% lower for the year.

At HEPS level, the expected drop is 16% to 30%.

A year to remember for Grindrod (JSE: GND)

The core business is flying

Grindrod has released its results for the year ended December 2023 and they look great. The core business could only grow revenue by 1%, but EBITDA jumped by 16% and headline earnings from this part of the group grew by 29%.

Talk about doing a lot with a little.

In case you’re wondering, the revenue issue was because of reduced value added services mineral export sales and charters. Within the broader business, an operation like the port in Maputo did exceptionally well (record volumes up by 28% vs. the prior period).

The non-core business is far less positive, with fair value losses on the private equity portfolio and and property loans in KZN.

At group level, HEPS was up 18%. The full year dividend was up by a whopping 84% for the year.

Lighthouse Properties acquires a mall in Spain (JSE: LTE)

The deal is worth EUR 121 million

Lighthouse has been telling the market that the focus is on direct property acquisitions. They haven’t wasted any time, entering into an agreement to acquire Centro Comercial H2O in Spain for EUR 121 million.

This mall is in Madrid and opened in 2007. It has a strong offering of tenants, which is probably why bank debt of EUR 61.5 million is available to support the deal. The purchase price is a net initial yield of 7.5% and the forecast distributable profit for the 12 months ending December 2025 is EUR 5.233 million.

This increases Lighthouse’s exposure to Spain, with the Iberian portfolio now constituting 66% of the value of Lighthouse’s directly held properties.

OUTsurance had a wild ride at segmental level (JSE: OUT)

At group level, it’s a sideways story

OUTsurance released a voluntary trading update for the six months ended December 2023. It’s voluntary because group earnings won’t differ by more than 20%. As for segmentals, buckle up.

OUTsurance Ireland is rather funny, with the R2 million loss in the prior worsening by 2,800%. You read that correctly. Of course, the percentage is nonsensical. The story here is that they are setting up the Irish business and incurring start-up losses.

The South African short-term business expects normalised earnings to be between -8% and 2% different to the comparable period. That suggests a negative mid-point.

Youi Group in Australia is expected to be down by between -20% and -10%, reflecting higher “natural perils” claims particularly in Australia. I presume this excludes all the spiders and snakes.

The highlight is the life insurance business, which casually grew earnings by 400% off a low base. I warned you that the segmentals are a bit wild.

With all said and done, group normalised earnings will be between -5% and 5% different to the comparable year. In other words, a mid-point of flat earnings. HEPS is expected to be a -6% to 4% difference.

Sanlam had a great time in 2023 (JSE: SLM)

The dividend for the year grew 11%

Sanlam enjoyed a significant improvement in its fortunes in 2023. There are many numbers you could look at here, but the cash net result from financial services (up 18%) is one of the better choices. You could also consider HEPS being 48% higher as a solid indication of how the year went.

Perhaps the best indication of all is the growth in the full year dividend per share, which was 11%.

Some of the major drivers of this performance include the better life insurance risk experience, improved investment market levels and general growth in the books at Sanlam. They also highlight the credit business in India as a useful contributor.

There’s a lot of positive sentiment towards India at the moment as growth comes under pressure in China. Sanlam seems to be well positioned for that.

Earnings growth continues at STADIO (JSE: SDO)

Tertiary education is a lucrative business

For the year ended December 2023, STADIO achieved a set of numbers that shareholders won’t be upset about. At a time when most South African companies are treading water in terms of earnings growth, STADIO achieved an increase in HEPS of between 17.6% and 27.6%. Core HEPS was between 14.1% and 24.1% higher.

Whichever way you cut it, that’s good.

Adjusted HEPS is up slightly at Sun International (JSE: SUI)

Some parts of the business are doing better than others

Sun International has released a trading statement dealing with the year ended December 2023. It’s a mixed bag at divisional level, with only some commentary to go on at the moment rather than actual numbers. SunBet is achieving record income, the resorts and hotels had an “exceptional year” and the urban casinos and Sun Slots “demonstrated resilience” – so there were clearly pressures there.

Overall, adjusted HEPS for the year is expected to come in between 4% and 9% higher. This implies a level of between 456 cents and 478 cents per share.

If we look at HEPS without adjustments, there’s a wild swing that sees an increase of between 82% and 92%. This is due to adjustments related to a put option liability, transaction costs on the Peermont acquisition and the devaluation of the naira. Perhaps the range is more important than the percentage here, as HEPS would be between 412 cents and 434 cents per share.

Importantly, South African debt has reduced from R5.9 billion to R5.7 billion, despite the company paying R985 million in dividends. South African debt to adjusted EBITDA is 1.7 times.

Things seem to be improving at Trellidor (JSE: TRL)

HEPS is down but so is net debt

Trellidor has been through a really tough time. It’s good to see that they are making progress on two major initiatives: international revenue (now 28.2% of the group total) and reduction of net debt (down from R140.3 million to R116.8 million).

Profitability is still a challenge, with HEPS dropping by 16.1% despite group revenue increasing by 6.9%. This is because borrowing costs are putting the group under pressure, which is why there is still no dividend as the group prioritises the reduction of debt.

Little Bites:

  • Director dealings:
    • The CEO of Bidcorp (JSE: BID) has sold shares in the company worth R11.7 million. This time around, the announcement specifies that this is to settle tax obligations.
    • The CEO Designate of Primary Health Properties (JSE: PMP) has bought shares worth £92.4k.
  • Nobody knows what the cluck is going on at Quantum Foods (JSE: QFH), with the share price closing 73% higher today on big volumes. The only announcement in the market was that Astral Foods (JSE: ARL) has sold its 9.77% stake in the company.
  • Curro (JSE: COH) has repurchased shares worth R211 million between 15 June 2023 and 6 March 2024. The average price paid is R9.96, which compares favourably to the current market price of R11.35.
  • Heriot REIT (JSE: HET) has acquired shares in Safari Investments (JSE: SAR) from Reya Gola Investments, a related party, to the value of R4.5 million. The purchase price is R5.60 per share which is in line with the current market price. Reya Gola is an entity related to Steven Herring.
  • Hillie Meyer just can’t get enough of Momentum Metropolitan (JSE: MTM) and they can’t get enough of him. He was CEO from 1996 to 2005. Then he was CEO once more from 2018 to 2023. He has now been appointed as a non-executive director of the group.
  • After the resignation of the CFO at Texton (JSE: TEX) announced all the way back in December 2022, the group has appointed the CEO of Texton as part-time Financial Director until a permanent appointment is made. If the capital allocation policy of the company isn’t enough to worry you, perhaps the governance is.
  • Labat Africa (JSE: LAB) announced the resignation of its financial director with effect from 31 March 2024. The company still hasn’t appointed an auditor but has received proposals from a number of audit firms. The audit committee is due to consider the appointment of an auditor this month.
  • Mantengu Mining (JSE: MTU) has issued shares to settle creditors with total debt of R7.45 million. The creditors were willing to accept shares at a price of R1.50 per share, which is much higher than the current price of R0.85.
  • Astoria Investments (JSE: ARA) has renewed the cautionary announcement that was first issued in July 2023. Negotiations are still ongoing in respect of a potential acquisition.

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

Marylou Greig
-
0
Who’s doing what this week in the South African M&A space?

Exchange-Listed Companies

The RCL Foods board has given its preliminary approval for the unbundling and listing of Rainbow Chicken, a move first mooted some years ago. The move will allow the company to focus on its branded foods business.

Lighthouse Properties, through its wholly-owned Spanish subsidiary, is to acquire the retail shopping centre known as Centro Commercial H2O, together with a vacant plot of land detached from H2O. The gross purchase consideration is €121 million which includes deferred capital expenditure of €10 million. Net of existing senior bank debt of €61,5 million, the purchase consideration will be funded from existing cash resources.

Following last week’s ruling by SA’s Takeover Regulations Panel, French media company Canal+ has been granted an extension to 8 April to publish a firm intention announcement to acquire MultiChoice shares from minorities. The media company has upped its mandatory offer from R105 to R125 per share, valuing the company at R55,3 billion. The initial offer price was higher than that paid when it acquired the latest shares on market and tipped it over the 35% threshold, triggering a mandatory offer to minorities. Even so, the R105 offer was rejected by MultiChoice as significantly undervaluing the group whose net asset value sits at c. R181 a share.

Hulamin has acquired the remaining stake in Isizinda Aluminium from joint venture partner Bingelela Capital. The primary activity of Isizinda is the management of properties. Prior to the transaction, Hulamin held a 38.7% stake.

MC Mining has appealed to its shareholders not to accept the off-market takeover bid of A$1.16 per share by Goldway Capital Investment. The offer will remain open until 5 April 2024 unless it is extended or withdrawn by Goldway.

The disinvestment by Gold Fields of its 45% effective interest in Asanko Gold Mine to Galiano Gold for gross proceeds of US$170m, has closed with all conditions precedent fulfilled on March 4, 2024. Goldfields received US$65 million in cash and 28,5 million shares in Galiano as upfront proceeds for the divestment. The remaining proceeds will be settled through deferred and contingent payments.

Unlisted Companies

Last-mile delivery and express parcel services company The Courier Guy, has been acquired by private equity firm Adenia Partners alongside co-investors DEG, Proparco and South Suez. Financial details were undisclosed.

The launch of a new, majority black owned venture capital fund, Conducive Capital, will invest in early- and growth-stage disruptive technologies. The fund aims to raise, in its first close in July 2024, US$15 million with a target final close of $50 million within 24 months.

French energy giant TotalEnergies and Qatar’s state-owned oil company QatarEnergy have together acquired a majority stake in an exploration licence of Block 3B/4B in the Orange Basin, off South Africa’s west coast. TotalEnergies acquired a 33% participating interest while QatarEnergy has taken a 24% interest. The stakes were acquired from existing shareholders Africa Oil South Africa, Ricocure and Azinam.

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

Weekly corporate finance activity by SA exchange-listed companies

Marylou Greig
-
0
Weekly corporate finance activity by SA exchange-listed companies

Astral has disposed of its minority 9.8% stake in Quantum Foods for an aggregate consideration of R141,7 million. The transaction, executed through a book over, was acquired by Country Bird at R7.25 per share – a 70% premium to the current market value.

Heriot Properties, a wholly-owned subsidiary of Heriot REIT, has acquired an additional 807 069 Safari Investments RSA shares from Reya Gola for a purchase consideration of R5.60 per share and an aggregate purchase consideration of R4,5 million. The purchase was executed by way of a cash settled on-market block trade on the JSE. Following the acquisition, Heriot Properties and its concert parties (excluding Reya Gola) will hold a 58.8% stake in Safari.

Lighthouse Properties has disposed of, on the open market, 164,973,138 Hammerson shares for an aggregate cash consideration of R1,02 billion.

Certain parties to loan contracts with Mantengu Mining have agreed to convert their debt claims against the company into equity at a rate of R1.50 of debt per Mantengu Mining share. The rate is a 93.58% premium to the 30-day VWAP prior to the date on which the settlement was agreed (29 February 2024).

Kibo Energy has announced the issue of 81,081,081 ordinary shares at an issue price of 0.00037 pence per share to a service provider in payment of outstanding invoices for a total value of £30,000.

Jubilee Metals has issued 9 million shares at an average price of 2.11 pence per option share following the exercise by an option holder. After the issue, the company will have 2,983,493,617 ordinary shares in issue.

A number of companies announced the repurchase of shares.

Brimstone Investment has, since its December year-end, repurchased 1,5 million ‘N’ shares for an aggregate R7,2 million.

Curro has repurchased an aggregate 21,201,450 shares during the period 15 June 2023 to 6 March 2024. The shares were repurchased at an average price per share of R9.97 for an aggregate purchase consideration of R21,2 million.

Invicta has concluded an intra-group repurchase with Humulani Marketing, a wholly-owned subsidiary of the company, in terms of which it acquired 762,492 shares from Humulani at a repurchase price of R26.92 per share. The shares will be held by Invicta in treasury.

The price for Adcorp’s odd-lot offer has been finalised. Those shareholders accepting the offer will receive R4.01 per share which represents a 5% premium to the 30-day VWAP at the close of business on 4 March 2024.

Prosus and Naspers continued with their open-ended share repurchase programmes. During the period 26 February to 1 March 2024, a further 3,804,685 Prosus shares were repurchased for an aggregate €104,12 million and a further 268,583 Naspers shares, for a total consideration of R861,13 million.

AB InBev has repurchased a further 850,371 shares at an average price of €56.60 per share for an aggregate €48,13 million. The shares were repurchased over the period 26 February to 1 March 2024.

In August 2022 the trading of Afristrat Investment’s shares were suspended on the JSE. Since then, the company has been unable to make additional progress with regards to its restructuring initiative process due to its suspension and liquidation application. In its announcement, the company noted that as at 1 March 2023 it was unable to pay its debt and did not meet the solvency and liquidity test as required by the JSE. As a result, the company was commercially insolvent and would proceed with a liquidation application.

Three companies issued profit warnings this week: MTN, Exxaro Resources and OUTsurance.

Two companies either issued, renewed, or withdrew cautionary notices this week: MultiChoice and Astoria Investment.

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

Trends in SA capital markets

Terence Kretzmann and Bhargav Desai
-
0
Trends in SA capital markets

While the Johannesburg Stock Exchange (JSE) remains Africa’s largest and most liquid stock market1, new equity listings and capital raising activity has decreased significantly over recent years (Figure 1). As this has corresponded with a large number of delistings, the pool of listed equity investment opportunities on the JSE has shrunk over this period. Some of this decline may be attributable to global macroeconomic factors, such as the COVID-19 pandemic, a volatile inflation and interest rate environment, and geopolitical tensions such as the Russia-Ukraine war, which have impacted global equity prices. However, as a developing country and relatively new democracy, South Africa (SA) also has some of its own unique and well publicised political, economic and infrastructure challenges, which have, at times, exacerbated the general risk-off approach towards emerging and frontier markets, and the flight of capital to perceived safe-haven assets2.

Figure 1 – Number of new equity listings on the JSE
Source: JSE

The trends (Figure 1) are not unique to SA, with other international exchanges, such as the London Stock Exchange (LSE), also seeing limited appetite for new equity listings over recent years. However, the picture for the NASDAQ is more positive (Figure 2), with that exchange having benefitted from numerous technology companies coming to market. By contrast, only 5.6% of equity listings on the JSE are in the technology sector3.

Figure 2 – Number of new equity listings on the LSE, New York Stock Exchange (NYSE) and NASDAQ
Source: S&P Capital IQ Pro

What we did see in SA was an increase in the deployment of private equity (PE) capital into technology-related businesses. The allocation to information technology increased from 1.0% in 2019 to 5.8% in 2022 (Figure 3)4, with a larger share also going to financial services, indicating a potential link with fintech. Is this a result of the early-stage nature of many of these endeavours, or has PE capital emerged as a preferred source of investment to fund growth, rather than the public markets?

Figure 3 – Allocation of PE capital in SA to information technology and financial services
Source: South African Venture Capital and Private Equity Association Survey 2023

In 2022, South African technology companies raised US$830m through 95 rounds of PE funding, constituting 17% of the total funding, and 14% of the overall deal count, for PE-related technology transactions in Africa5.

Increased costs, additional regulation and rigorous reporting requirements are regularly cited as reasons for companies to avoid public listings. Critics argue that these restrict the ability to be entrepreneurial and agile, which is especially relevant to early-stage growth companies where heightened scrutiny from the wider investor community and media restricts one’s ability to manoeuvre.

While managing listed companies (and public opinion) comes with its challenges, it brings with it the benefit of deep pools of capital in SA. Many institutional investors hold that regulation and reporting requirements can be advantageous, contending that effective management should possess the discipline and skills to handle these aspects as an integral part of business operations and growth. Retail investors also benefit from the additional regulatory protection in the listed environment.

Interestingly, as ESG becomes increasingly influential in capital allocation, whether for public or private investment, and PE capital expands (partly due to a shrinking listed universe), one might anticipate a convergence in certain regulatory standards and investment criteria between the two markets over time. The cost of sound advice and rigorous systems should be outweighed by the long-term benefits of building a transparent, accountable and sustainable business, able to draw on deeper pools of capital.

Will there be a tipping point where new equity listings return to public markets in SA, with robust systems to allow for transparency and ease of trade? Or will PE develop over time, to the point where it can provide a similar offering to retail investors? While the increased prominence of PE is likely here to stay, we expect that listed markets will, over the long term, continue to provide an effective platform to sufficiently mature companies seeking to raise capital for continued growth. In an environment that offers transparency, deep pools of capital and an enhanced profile, companies can also continue to grow acquisitively through issuing shares that have earned a premium by demonstrating their ability to run a business under wider scrutiny.

Will SA have its own tech listing boom when private capital markets have played their role in funding startup and early-stage businesses that have been developed locally and reached a point of maturity fit for public markets? While the JSE may benefit from SA’s position as one of the largest hubs for innovation in Africa, the NASDAQ can be attractive to SA technology companies as it has, at times, seen substantially higher valuations being achieved for new tech listings. However, it may be sensible for SA technology companies to consider a JSE listing as a first step, allowing them to establish a track record with investors and build their profile, thereby better positioning themselves for a potential future international listing.

1 Riscura and BrightAfrica – Liquidity (https://brightafrica.riscura.com/listed-equity/liquidity/#:~:text=The%20Johannesburg%20Stock%20Exchange%20(JSE,USD%201%20431m%20traded%20daily)
2 Riscura and Bright Africa – Liquidity
3 JSE
4 South African Venture Capital and Private Equity Association Survey 2023 (https://savca.co.za/wp-content/uploads/2023/09/SAVCA-PE-Survey-2023-Electronic.pdf)
5 2022 Partech Africa Report (https://partech-admin.prod.unomena.io/media/documents/2022_Partech_Africa_Tech_VC_Report.pdf)

Terence Kretzmann is a Director and Bhargav Desai a Junior Corporate Financier | PSG Capital.

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

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

Ghost Bites (ADvTECH | Brimstone | Murray & Roberts | Mustek | Quilter | Sea Harvest)

The Finance Ghost
-
0
Ghost Bites (ADvTECH | Brimstone | Murray & Roberts | Mustek | Quilter | Sea Harvest)

Get the latest recap of JSE news in the Ghost Wrap podcast, brought to you by Mazars:

Growth continues at ADvTECH (JSE: ADH)

Enrolments at the schools are in line with targets for 2024

ADvTECH has released a trading statement for the year ended December 2023, reflecting growth in HEPS of between 16% and 21%. That’s really good. They also report normalised earnings per share to strip out corporate action costs and once-off transactions, with that metric up by between 17% and 22%.

Whichever way you cut it, the numbers seem to be appealing. ADvTECH notes that all divisions contributed to the performance and that enrolments at the schools are in line with targets for 2024, so that bodes well for the new financial year as well.

Brimstone: debt reduction and share buybacks (JSE: BRT)

But why such a high dividend?

Brimstone is an investment holding company that holds a wide variety of interests. Some are controlling stakes and others are minority holdings, so you end up with a rather odd scenario of an investment holding company preparing consolidated accounts with all the different line items. I don’t think that is helpful for decision makers, so I ignore the income statement.

The balance sheet and supporting notes is where I think you’ll find what you need here. The intrinsic net asset value (or INAV) is management’s view of what the assets are worth. They show it in great detail and arrive at R12.13 per share, down from R13.25 per share a year ago. The share price closed 17% lower at R4.56, so the discount to INAV is vast.

How does this discount get closed? Much of it is structural, of course. Still, a strategy of disposing of assets at a price close to or at the INAV and then buying back Brimstone shares at a deep discount does wonders in companies like these. It just requires the directors to consciously decide to make the group smaller, which is where this often becomes a problem.

Brimstone is selling off certain investments and has reduced debt by R307.5 million since the end of December. During the year ended December 2023, the company repurchased shares worth R21.6 million, with more repurchases of R7.2 million subsequent to year-end. That all sounds like good stuff.

Unfortunately for shareholders, the company also insists on paying out a high proportion of HEPS as a cash dividend, despite the discount to INAV. This immediately makes me feel that the group is more of a cash cow for the controlling shareholders rather than a serious attempt at reducing the gap to INAV for minority shareholders. With HEPS of 71.6 cents and a dividend of 40 cents per share despite the vast discount to INAV, this is why I don’t hold shares in Brimstone.

Losses have narrowed at Murray & Roberts (JSE: MUR)

The debt also looks far better, but there’s a long way to go here

Murray & Roberts has lived through troubled times recently. Although revenue and EBITDA have both moved higher, the real highlight is the massive swing from an attributable loss of R2.5 billion to just R95 million. A loss should never be celebrated, but the context is important here.

The diluted headline loss per share from continuing operations came in from 16 cents rather than 27 cents in the comparable period, so losses have also narrowed on a headline basis with impairments and other issues stripped out.

The most important line is net debt, which has improved dramatically from R1.97 billion to R247 million.

Based on these numbers, it shouldn’t surprise you that no dividend will be declared for the full year ending June 2024. At least you’ve been warned. Instead, the company will be focusing on a sustainable capital structure and bedding down the new operational structure that sees the managing directors of the four operating companies all appointed to the group board.

Group CEO Henry Laas has agreed to stick around until August 2025.

Mustek will want to forget about 2023 (JSE: MST)

Cheap stocks can stay cheap – and still rise and fall with earnings

When you’re buying a stock on a low earnings multiple, you need to still be careful of a value trap. There needs to be some kind of catalyst for the multiple to move higher sustainably, otherwise all that happens is the multiple stays consistently low and the share price flaps around based on the financial results anyway.

At Mustek, the low trailing multiple turned out to be a sensible approach from the market. Investors were wary of whether the good times could continue. Spoiler alert: they couldn’t.

For the six months to December 2023, revenue fell 13%, gross profit margin contracted by 70 basis points to 13.4% and operating profit was down 25.3%.

By the time you get to HEPS, it’s down 58.81% from 221.74 cents to 91.34 cents. Although this is only an interim number, the share price of R10.34 suddenly doesn’t look like such a bargain.

And in case you’re wondering, the joy of capitalist competition is playing out in green energy products. This has been a major source of the reduction in gross profit. When you are thinking about a business, you always have to consider the threat of competition in a lucrative space and what this would do for prices.

Quilter celebrates record profitability (JSE: QLT)

Go with the flows

Quilter is a UK-based asset and wealth management business that understands the importance of a distribution strategy to attract inflows. In simple terms: they are quite good at selling investment products. This is absolutely critical to manage periods of tough returns in the market. When times are good, this is a flywheel effect that leads to great profits.

How do you measure this? Core business net inflows. Although they will definitely be volatile each year (as we saw at Quilter in 2023 where they were far lower than the prior year), the point is that inflows are good and outflows are bad. Provided assets are still growing, the asset manager is doing the right thing.

With Assets under Management and Administration up 7%, of which 1% is attributable to net inflows, revenue increased by 3%. Thanks to costs decreasing by 3% as the group focused on profitability, adjusted profit before tax was up 25%.

It’s interesting to see how financial distortions come through. HEPS has actually fallen severely from 12.6 pence to 3.2 pence, yet adjusted diluted earnings per share increased from 7.9 pence to 9.4 pence. The difference seems to be due to policyholder tax outcomes.

Cash, as always, is king. The dividend per share moved higher from 4.5 pence to 5.2 pence. The share price is roughly 25% higher over the past 12 months.

Finance costs eat up the profits at Sea Harvest (JSE: SHG)

Yet another example of banks getting the benefit of corporate growth

At Sea Harvest, we can see an income statement profile that has played out in many corporates in the past year.

Revenue increased by 6% and gross profit was up 13%, which is great as this means that gross profit margin moved higher. The theme here is improved pricing that more than offset lower sales volumes. The weak rand also plays a role here.

None of it helped at operating profit level sadly, which fell 2%. Load shedding related costs jumped from R25 million to R46 million for the year.

We then arrive at the net finance costs line, which jumped by a whopping 79%. This is a combination of interest rates being much higher than the previous year, along with higher average borrowing levels.

Thanks to the bankers getting such a great outcome, HEPS was down 5%. Despite this, the final dividend moved higher from 38 cents to 40 cents per share.

Looking ahead, the South African business will look to take advantage of the 5% increase in the Total Allowable Catch. The rest of the business will focus on managing the usual supply-demand fluctuations in the broader seafood market. And of course, there will be a lot of attention on the deal to acquire 100% of Terrasan’s pelagic fish business and 63.07% of Terrasan’s abalone business.

Little Bites:

  • Director dealings:
    • In a very unusual transaction, directors of Stor-Age (JSE: SSS) have been able to sell shares that were acquired via a scheme that included an interest-bearing loan from the company. This is a typical structure in the property sector, with dividends on the shares applied against the interest. What makes this unusual is that an institutional shareholder has made an offer to the directors to buy their shares under the scheme, thereby allowing them to settle the debt and pocket the difference. The price for the trade is R14, which is only slightly below the current market price. Three directors sold a collective R104 million worth of shares in this trade.
    • As part of a funding transaction with a financial institution, CEO of Sibanye-Stillwater (JSE: SSW) Neal Froneman exercised a put option to sell R96.4 million worth of shares in the company at R66.24 per share. For context, the current share price is R19.50!
    • A director of Gold Fields (JSE: GFI) sold shares worth R11.75 million. These are vested performance shares all the shares were sold, not just the portion to settle taxes.
  • Lighthouse (JSE: LTE) has sold shares in Hammerson worth just over R1 billion. This unlocks a lot of capital for Lighthouse to pursue yield-accretive direct property acquisitions.
  • MTN Uganda (JSE: MTN) released results for the year ended December 2023. Service revenue increased by 16.1% and EBITDA was up 16.3%, so at least margins are consistent. Capital expenditure moved 5.5% higher and the final dividend was 16.4% higher. This is a better trend than we’ve seen in MTN’s other African subsidiaries.
  • Eastern Platinum (JSE: EPS) announced that the initial soft start of the Zandfontein underground operations at the Crocodile River Mine is now fully operational. They will now focus on ramping up underground efforts and bringing material to the surface, with the first batch of run-of-mine processing scheduled for the second quarter of this year. The goal is to achieve a mining run rate of 40,000 tons per month by the end of 2024.
  • Clientele (JSE: CLI) has appointed Angela Pillay as Executive Financial Director. She has extensive experience in financial services.
  • It says something about the maturity and strategic direction of Jubilee Metals (JSE: JBL) that the company has appointed formal boards for both the South African and Zambian businesses. Separately, the company announced that an option holder will exercise 9 million options at an average price of 2.11 pence per option, so be careful of ongoing dilution here.
  • The end is nigh at Ellies (JSE: ELI), with the latest news being the resignation of the CFO and an independent non-executive director.
  • Afristrat (JSE: ATI) will proceed with a liquidation application as the company is commercially insolvent.
  • Luxe Holdings eventually put us all out of its misery by delisting in November 2023. This hasn’t stopped the JSE from issuing a public censure and fine of R7.5 million against Helena Dorothea Grewar, who was CEO at the time. She sold shares worth R12 million in the closed period, which absolutely isn’t allowed. To make it worse, the JSE says she didn’t even engage with regulatory correspondence, which isn’t a smart strategy. On top of the fine, she has been disqualified from holding office as a director of any JSE listed company for a period of 5 years.
1...798081...210Page 80 of 210

Focuses on making market news and investment concepts accessible, understandable and fun!

Ghost Mail is free to read

SUBSCRIBE TODAY

Partner with Ghost Mail

CONTACT US

© Ghost Mail

Verified by MonsterInsights