Wednesday, October 15, 2025
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Ghost Bites (Bell Equipment | Bidvest | Blue Label | Brimstone | CA Sales | RCL Foods | Santam | Sea Harvest | Sun International)

The Finance Ghost
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Ghost Bites (Bell Equipment | Bidvest | Blue Label | Brimstone | CA Sales | RCL Foods | Santam | Sea Harvest | Sun International)

Remember when R53 per Bell Equipment share wasn’t good enough for activist minority shareholders? (JSE: BEL)

Now at R39 per share and with earnings plummeting, regret must be kicking in

Bell Equipment is a wonderful cautionary tale of how far you get in life by being too greedy. I always thought that R53 per share was a more than reasonable take-private offer, yet there were certain minority shareholders who blocked the deal from going ahead.

The share price closed at R39 per share on Monday after releasing a further trading statement for the six months to June that reflects a drop in HEPS of between 22% and 32%. Sure, the US tariffs are an issue that nobody saw coming at the time of the R53 offer, but the point here is that cyclical businesses are highly exposed to broader macroeconomic and geopolitical risks. We never know exactly what will go wrong, but we know that at some point, something in the world will go wrong.

Here’s the really bad news: the impact of tariffs wasn’t as bad as expected in this period, but management reckons the second half of the year will be worse. Yes, that means worse than the drop in earnings we’ve just witnessed.

A rare dip in earnings at Bidvest (JSE: BVT)

The market wasn’t happy with this

Bidvest fell 5.9% on Monday after releasing results for the year ended June 2025. This takes the year-to-date move to -15.6%, with the share price clinging to a support line that goes back to early 2023. Traders may want to keep an eye on this one to see what happens.

As for investors who have taken a long-term view on Bidvest, it’s not fun to see a drop in HEPS from continuing operations of 3%. Bidvest is one of the most impressive companies on the JSE, but they have extensive exposure to the “real economy” and general levels of industrial and consumer discretionary activity in South Africa. Against that backdrop, the modest drop in HEPS is actually pretty good in my view.

As always with Bidvest, the performance is best explained by digging into the underlying segments. I’ll start with the highlights package, being Services SA up 13.6%, Services International up 12.1% and Branded Products up 7.8%. Automotive managed to grow by 2.5%, boosted by a recent improvement in the car market. Alas, Freight had a rough time with a drop in earnings of 10% and Commercial Products got slaughtered, down 28.4%. Adcock Ingram was down 5.2% year-on-year after a much better second half helped mitigate the awful interim period.

It gives you an indication of the diversification in Bidvest when the note dealing with Services South Africa attributes the performance to airport lounge passenger volumes and an enhanced landscape offering. I’ve been to enough airport lounges to know that these are unrelated services.

You must be wondering how Commercial Products took such a knock. Bidvest talks about “lower profits from the majority of businesses” in that segment – yikes. There were some pockets of growth in that part of the business, but clearly nowhere near enough to make up for the problems.

The silver lining is cash generated from operations, which increased by 5.8% as the cash conversion ratio improved considerably. Despite this, acquisitions (including the large Citron deal) meant an increase in net debt to EBITDA from 2.0x to 2.2x.

Due to unfortunate timing of other capex, return on invested capital fell from 16.1% to 14.0%. That’s still well ahead of the weighted cost of capital, but investors will obviously want to see a quick improvement in that trajectory.

The final dividend was up 1%, a better outcome than HEPS that was likely made possible by the decent cash conversion – and the unwillingness of management teams to ever reduce a dividend. When varsity textbooks talk about dividends being sticky, they aren’t wrong.

Blue Label gives more details on the planned Cell C separation (JSE: BLU)

They make it clear that this isn’t yet an announcement of an intention to list Cell C

If you’ve ever thrown a number of small electronics and extension cords into the same box and then tried to untangle them some time later, you’ll have experienced the smallest taste of what it’s like for Blue Label Telecoms to figure out how to restructure Cell C to prepare it for listing. The company has announced details of a pre-listing restructuring that seeks to sort out a number of balances between Cell C and Blue Label entities, primarily The Prepaid Company (TPC).

As you’re probably aware, the current era of Cell C (and by far its most successful since inception) is focused on enabling mobile virtual network operators in South Africa. Capitec Connect is a perfect example, with the bank able to sell mobile network services like airtime to its customer base thanks to Cell C technology in the back-end.

The TL;DR of the Great Cord Untangling is that Blue Label will own a “significant majority” of the shares in Cell C after the listing, although that stake will subsequently reduce through a “sell down” process, which is a fancy way of saying that large institutional investors will be contacted to test their appetite to buy shares in Cell C from Blue Label. At this stage, Blue Label hasn’t indicated the price at which this will happen, but they have committed that they will sell down their stake to the point where they have not less than 26% of the shares in Cell C. It’s also worth noting that Cell C management will hold around 4.5% in the company to create alignment.

With an R11.7 billion market cap at Blue Label, the restructuring values are way in excess of the 30% threshold to trigger a Category 1 transaction circular. It looks like most of the value of the group is attributable to Cell C, so this separate listing (if it goes ahead) will be particularly interesting to follow in terms of how both stocks trade after the transaction. Growth investors will inevitably focus on Cell C and value investors will keep an eye on the “rump” that is Blue Label.

Ignore HEPS at Brimstone and focus on the metric that counts (JSE: BRT | JSE: BRN)

Intrinsic NAV is the right way to look at investment holding companies

Every single time Brimstone releases a financial update, I feel like I write the same plea for a shift in focus from HEPS to intrinsic net asset value (INAV) per share. This is certainly how the market looks at Brimstone and determines the share price, so why does management keep beating the HEPS horse to death?

In the six months ended June, Brimstone increased HEPS by 35%. Sounds amazing, right? But then why is the share price down 11% in the past 12 months?

As always, INAV has the answer. INAV per share has fallen by 22.1% in the past six months, now at 864.7 cents. The current share price is R4.77, so the traded discount to INAV is 45%. That’s pretty normal for the discount in this stock, which gives you further proof that the market literally couldn’t care less about HEPS here.

If you’re wondering where the pressure came from, then the main culprit is the stake in Oceana (JSE: OCE) where the share price has had a difficult time in 2025. Primary agriculture is a tough sector and when you add in the volatility of the ocean, expecting consistent performance is totally unrealistic.

Another period of growth for CA Sales Holdings (JSE: CAA)

The broader theme of FMCG growth in Africa remains relevant

CA Sales Holdings released numbers for the six months ended June 2025. The company has supported the Ghost Mail platform by including them here, so please do check out the official company narrative.

The company has such an interesting business model. If you believe in the rise of the middle class in Africa and the shift from informal to formal retail as part of urbanisation trends, then you’ll probably like the CA&S story. If you enjoy seeing earnings growth, then you’ll like it too. Revenue may have been up just 4% for the period, but that was good enough for operating profit growth of 9.6% and HEPS growth of 16.1%.

Having said that, the biggest risk facing the company is the exposure to the Botswana economy. The country is heavily exposed to the diamond industry and unless you’ve been living under a rock (of the non-shiny kind), you’ll know that lab-grown diamonds have caused a massive problem for De Beers and thus the fiscus in Botswana. For now at least, those impacts don’t seem to be hitting CA&S too hard, with only a slight dip in revenue and EBIT in Botswana. Still, as the largest country exposure (39% of group EBIT), this means that other countries are under more pressure to grow. If Botswana does experience a significant drop in profits, then we might see group earnings take a knock.

Only time will tell. All that CA&S can do in the meantime is develop as many other lucrative markets as possible, thereby reducing the relative exposure to Botswana over time. In terms of controlling the controllables, they are doing an excellent job in my view.

If you’re keen to hear the latest directly from management, then you can register for the next Unlock the Stock on 11 September at midday, featuring the CEO of CA&S. They are always so open to answering detailed questions about the business, so don’t miss this opportunity!

RCL Foods baked in solid growth (JSE: RCL)

There’s an impressive EBITDA margin trajectory at play here

RCL Foods released numbers for the year ended June 2025. The company has supported the Ghost Mail platform by including them here, so please do check out the official company narrative.

Now for my narrative, and I agree with the CEO’s comment about delivering “pleasing results” in this environment. Revenue from continuing operations may have been up by only 1.8%, but underlying EBITDA from continuing operations improved by an impressive 7.9%. Margins clearly went the right way.

When you reach HEPS, the benefit of leverage throughout the income statement is clear. HEPS from continuing operations increased by 28.6%, although the company would prefer you to look at underlying HEPS from continuing operations which increased by 14.4%. That’s a great outcome.

The dividend is the real highlight, up by a whopping 71%.

The Baking and Groceries segments did the heavy lifting here, while Sugar was down year-on-year due to a demanding base. In Baking, it’s all about converting modest growth in volumes into solid EBITDA growth, as that business has pretty serious operating leverage in it. In Groceries, the period has been one of margin mix improvement, with a higher focus on premium brands including in pet food. As for Sugar, the overall performance was strong, but was down vs. the prior year.

Despite this performance, the share price is almost perfectly flat year-to-date and hasn’t moved much over 12 months either. It trades at a modest mid-single digit Price/Earnings multiple.

Double-digit everything at Santam (JSE: SNT)

It’s been a great time for insurance companies

The local financial services companies that are heavily exposed to insurance have generally been having a grand old time recently. Santam is up more than 11% year-to-date and over 24% over 12 months. I don’t think people will complain too much about that, although Santam shareholders shouldn’t depress themselves by looking at the OUTsurance (JSE: OUT) chart with 58% growth over 12 months and 14% year-to-date.

For the six months to June 2025, Santam achieved 12% growth in group insurance revenue. HEPS jumped by 19%, so they are doing a good job of converting revenue growth into higher earnings growth. One of the key drivers here is conventional insurance net underwriting margin (essentially the profit they make on short-term insurance), which jumped from 6.5% to 11.3%.

Another point worth touching on is that the international businesses (India and Malaysia) saw earnings improve by 18%. Shriram in India has been the star contributor here. The broader Sanlam (JSE: SLM) / Santam stable is one of the few ways on the JSE to get exposure to the incredible economic story that is India.

The interim dividend was up 10.3%, so the payout ratio was lower than the prior period. Still, double-digit growth in the dividend is a solid outcome!

Sea Harvest has certainly been harvesting, with HEPS almost doubling year-on-year (JSE: SHG)

The group is heavily exposed to the hake industry

Sea Harvest released numbers for the six months ended June 2025. The company has supported the Ghost Mail platform by including them here, so please do check out the official company narrative.

From my perspective, it’s pretty hard to find fault in a result that saw revenue increase by 34% and headline earnings jump by a massive 120%. Due to an increase in the weighted average number of shares, HEPS was up by “only” 91% – an exceptional performance.

Interestingly, gross profit margin was actually down by roughly 100 basis points, so the magic really happened below that thanks to the high revenue growth and the knock-on benefit of operating leverage (the joy of having fixed costs at a time when revenue is flying high). Operating profit margin improved from 9% to 14%.

Debt ratios also look better after a result like this of course, with net debt to EBITDA improving from 2.7x to 2.1x.

Where did the revenue growth come from? It’s mainly about the hake business, with higher catch rates (up 15%) and better pricing (up 10%). Other areas of the business also contributed positively, other than abalone which had a really tough time with lower selling prices. The abalone business achieved a positive operating profit, but substantial fair value losses based on biological asset revaluations took that performance into the red in terms of segmental net profit.

Despite the name, there’s more to Sea Harvest than just the ocean. The Cape Harvest Foods segment includes various dairy businesses and things went very well there, with EBIT up by a delicious 71%.

It’s extremely difficult to predict how this group will perform, as there are just so many variables at play. Management is “cautiously optimistic” about the second half, with a number of factors that will impact global pricing for the various products.

The share price chart over 12 months looks like a topographic profile of the ocean floor:

Sun International is doing well under the circumstances (JSE: SUI)

Earnings are up and debt is down

The casino and gaming sector isn’t a particularly fun place to be right now. Online sports betting has proven to be quite the disruptor. Casinos are large and expensive assets to own if they are underutilised. And to make things more difficult, competition authorities in South Africa aren’t keen on consolidation, as evidenced by the approach taken towards the Sun International – Peermont deal.

Sun International terminated that deal in the end, incurring R11 million in costs along the way. That’s small compared to some of the other major adjustments in the latest earnings.

We don’t have full details yet, but a trading statement for the six months to June 2025 has indicated adjusted HEPS growth of between 5.6% and 7.4%, which is pretty good under the circumstances. Encouragingly, debt (excluding IFRS 16 leases) is down from R5.2 billion as at December 2024 to R5.0 billion as at June 2025.

Without adjustments, HEPS is up by between 56.8% and 61.6%. The put option liability related to SunWest seems to be the biggest cause of the difference between adjusted and unadjusted HEPS.

Results are expected to be released on 8th September.

Nibbles:

  • Director dealings:
    • Orion Minerals (JSE: ORN) issued shares worth A$508k to an associate of a director in settlement of a loan facility. The company also issued shares worth A$42.5k in lieu of director fees. That works out to around R6.4 million worth of shares.
    • Des de Beer bought another R5 million worth of shares in Lighthouse (JSE: LTE).
    • It looks like there was a trade between directors of Visual International (JSE: VIS), with one director selling shares worth R1 million to another director.
    • An associate of the CEO of Spear REIT (JSE: SEA) sold shares worth R950k. This is most unusual, as the CEO and his associates are almost always buyers rather than sellers. The announcement notes that the sale is for “restructuring the investment portfolio and complying with certain commitments” – and importantly, it’s only a small portion of the overall shareholding. Still, a sale is a sale.
    • An associate of a director of KAP (JSE: KAP) bought shares worth R500k.
    • An associate of the CEO of Acsion (JSE: ACS) bought shares worth R224k.
    • A director and associate of that director bought shares in Finbond (JSE: FGL) to the value of R89k.
    • The CEO of Vunani (JSE: VUN) is still mopping up the limited liquidity in the market, with a purchase of shares to the value of R6k.
  • As a very important step for Harmony Gold’s (JSE: HAR) strategy, shareholders of MAC Copper approved the transaction that will see Harmony acquire the company. There are still some conditions precedent to get through, but some of the biggest ones are already out of the way. Harmony expects the deal to close by the end of October.
  • Merafe (JSE: MRF) is facing difficult times in the ferrochrome market, with the smelting operations at Boshoek and Wonderkop having been suspended back in May this year as part of a business review process. They also temporarily suspended operations at the Lion smelter for maintenance and rebuilds during the weak market conditions. Things don’t seem to be improving out there, with Merafe taking the tough decision to commence s189 proceedings (i.e. retrenchments) for the Boshoek and Wonderkop smelters, with the Lion smelter currently being evaluated as well.
  • Gemfields (JSE: GML) shareholders will surely be pleased to learn that the disposal of Fabergé has been completed. It may be a glamorous asset, but it certainly isn’t a good asset. This was the right move by Gemfields.
  • AfroCentric (JSE: ACT) is a left-field name on the JSE, so their trading statement only gets a mention down here on an otherwise busy day of earnings. For the six months to June 2025, HEPS dropped by between 36.5% and 40.5% year-on-year. The Retail Cluster is where the pressure is, with the loss of contracts and lower margins from pharmaceutical products. Although that sounds bleak, earnings are at least much higher than in the second half of 2024, so there’s some positive momentum.
  • Huge Group (JSE: HUG) has been on a cost savings drive, which includes retrenchments of employees across various group companies. They will save R16 million in the next 12 months (net of separation costs) and R32 million annually thereafter. The savings in the first year are always much lower because of retrenchment packages. There have also been various changes to management structures. Huge included a brief update in the announcement on Huge Distribution, where the revenue run-rate has been R8 million per month for the first five months of the new financial year vs. R54 million annual revenue in FY25. They’ve also noted that Huge NXTGN is now generating revenue thanks to securing various clients.
  • Things still aren’t good at Nutun (JSE: NTU), which you may remember as the charred remains of Transaction Capital. GCR Ratings has affirmed Nutun’s credit ratings, but the outlook has been revised to Negative. And yes, it’s pretty ironic that this has happened to a company that specialises in buying distressed debt. Their credit rating is still good, but that outlook is a concern, particularly as GCR Ratings has attributed the revision to a lack of sustainable improvement in the competitive position of the business.
  • The CFO of Novus Holdings (JSE: NVS) has resigned with effect from December 2025. Kim Julies will step into the role, having been with the group since 2017. It’s always great seeing an internal appointment.

Note: Ghost Bites is my journal of each day’s news on SENS. It reflects my own opinions and analysis and should only be one part of your research process. Nothing you read here is financial advice. E&OE. Disclaimer.

Sea Harvest interim results: geared for success

Sea Harvest
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Sea Harvest interim results: geared for success

Sea Harvest financials for the six months ended June 2025

“Today we earn over half our revenue offshore, and, with all processing done in South Africa, retain a strong pricing influence that underpins our resilience as a Rand-hedge and a local and global player”

Felix Ratheb – Chief Executive Officer

Sea Harvest is geared for success

Sea Harvest Group’s 2025 interim results, which it released on Monday, September 01, 2025, represent a pleasing turnaround in the company’s performance, compared to the same period in 2024. Revenue increased by 34% to R4.4 billion (2024: R3.3 billion) and headline earnings per share (HEPS) increased by 91% to 95 cents (2024: 50 cents). Earnings before income and tax (EBIT) increased by 58% to R590 million (2024: R373 million), at an EBIT margin of 13% (2024: 11%). Although the results are primarily attributable to higher catch rates and significantly improved pricing in its core hake business, it is also due to strategic moves that saw strict cost control across all businesses and volume efficiencies across the Group.

Shredding the Gnar

The results prove once again that Sea Harvest certainly knows how to “shred the gnar” in the boardroom – to use an analogy from surfing, a sport that the Group has supported through its corporate social investment (CSI) since it was officially recognised as a new sporting code for the Olympics ahead of the Tokyo 2020 Games. “Shredding” refers to confident and stylish manoeuvres executed by highly skilled surfers, while “gnar” refers to rough waves that would most likely wipe out less skilled surfers. Sea Harvest entered its 61st year in existence in 2025, not only proving its staying power but growing in this time from a small fishing business on the Cape west coast to a leading, vertically integrated, diversified fishing business that sells to more than 30 countries around the world.

The Group has a workforce of more than 5,000 people with 99% of its employees in South Africa. Its asset base includes a total of 61 factory freezer trawlers, fresh fish and purse sein vessels; eight processing operations; eight aquaculture farms and processing operations; eight factory shops; and engineering capabilities that repair its own- and third-party vessels. The Group’s deep-sea hake, pelagic, prawn, and aquaculture businesses are located, inter alia, in the port towns of Cape Town, Saldanha Bay, St Helena Bay and Mossel Bay, as well as Hermanus, Buffeljags, Kleinzee, and Ladismith in South Africa, and in Shark Bay, Exmouth, Port Samson and Fremantle in Western Australia.

A Strong Investment Case

Since listing on the Johannesburg Stock Exchange in 2017, Sea Harvest’s investment case has held strong allowing it to deliver on its growth and expansion strategy. What sets Sea Harvest apart is that the fishing industry, its key focus, has high barriers to entry with positive dynamics that drive premium pricing. Sea Harvest is the largest hake company globally and is the market and brand leader in volume and value within seafood in South Africa. It has world-class production facilities with an experienced and established management team. Furthermore, the Group has enjoyed long relationships with a diverse international customer base generating hard currency earnings.

Chief Executive Officer (CEO), Felix Ratheb, says, “When we listed, we fixed our sight on being a leading, responsible, global business that remains true to our purpose of creating jobs, improving food security and achieving broader economic impact. Our strategy in pursuit of this vision, which was to secure volumes, enhance margins and grow through acquisitions, has built a substantial, diversified seafood group. Today we earn over half our revenue offshore, and, with all processing done in South Africa, retain a strong pricing influence that underpins our resilience as a Rand-hedge and a local and global player.”

Tightening the Net

According to Ratheb, the Group approached 2025 with a sharpened focus on earnings growth and shareholder returns and kicked off the year by refining its strategy around three priorities. “For the next three years, our goal is to drive efficiency and profitability in our South African fishing business, restructure underperforming segments, and reduce debt,” he says. The subtle reversal manoeuvre delivered efficiency gains in the hake business during the reporting period, which were not only achieved by good cost control but also by the addition of four new trawlers and better vessel utilisation to boost landed volumes by 15%. In the six months to 30 June 2025, the Group’s net debt to EBITDA ratio improved to 2.1 times (30 June 2024: 2.7 times).

A firm hake biomass drove the improved catch rates, while the pricing increases were made possible by robust demand for wild-caught fish across all markets. The inclusion of the pelagic business for the full six-month period, which delivered a solid performance with higher processed volumes and improved fish oil yields, resulted in revenue of R879 million, and EBIT of R144 million at a 16% EBIT margin. Overall, revenue for the fishing segment rose 19% to R2.1 billion, with EBIT nearly doubling to R429 million, and the EBIT margin expanding to 21%. This means that the segment accounts for 64% of total revenue and 90% of EBIT for the reporting period.

In the Group’s dairy business, Ladismith Cheese’s new sliced cheese line and roller dryer powder plant increased operating capacity after being fully commissioned during the reporting period, while solar investments delivered strong returns. This, supported by higher milk flows and stable pricing, increased revenue by 24% to R975 million, with EBIT up 73% to R61 million. The Australian business increased revenue by 7% to R455 million, supported by higher prawn prices and strong engineering division performance, with EBIT recovering to a positive R0.3 million from a R15 million loss in 2024. Despite the aquaculture segment remaining under pressure due to weak demand and lower selling prices in Hong Kong and China, revenue increased by 63% to R167 million with the inclusion of Aqunion. The segment recorded an Operating Profit of R8 million.

Looking forward

Ratheb states that the Group is well positioned for future growth. “We will continue to strengthen our South African hake and small pelagic businesses by driving efficiency and profitability. Although a very small part of our business, our abalone and Australian operations are being restructured to prepare for long-term recovery as market fundamentals improve. We are also committed to reducing debt by 50% over the next three years through stronger cash flow, disciplined investment, and selective disposals to support increased dividends for shareholders in the future,” concludes Ratheb.

The Sea Harvest Group is a leading vertically integrated seafood, agri-processing and branded fast-moving consumer goods (FMCG) business with a global footprint. Sea Harvest was established in 1964 and has developed a strong reputation and solid long-term relationships with its geographically diverse international customer base.

The Group harvests wild-caught seafood off the coasts of South Africa and Australia and processes the catch into a variety of chilled and frozen premium seafood products including fish oil and fishmeal. Through Sea Harvest Aquaculture, they farm abalone. Their varied wild-caught and farmed products are then packed and marketed to a local and international customer base. Their agri-processing business produces value-added dairy products, such as cheese, butter and powders, for the South African retail and food service markets. Their convenience foods business produces premium convenience foods for the retail and food service markets in Southern Africa.

VIEW THE FULL RESULTS HERE >>>

Note: Sea Harvest values the Ghost Mail audience and the company has placed its earnings here accordingly. This article reflects the views of the company. For the views of The Finance Ghost, refer to the section in Ghost Bites dealing with these results.

CA&S interim results: stronger earnings, capacity building and expansion

CA Sales Holdings
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CA&S interim results: stronger earnings, capacity building and expansion

CA Sales Holdings financials for the six months ended June 2025

“We are encouraged by the performance in the first half of the year, which demonstrates the value of our diversified footprint and disciplined financial management. The investment in Tradco positions us to capture new opportunities in East Africa, where demand for consumer goods and reliable route-to-market solutions is growing rapidly”

Duncan Lewis – Chief Executive Officer

CA&S posts resilient interim results, expands into East Africa with Tradco stake

CA Sales Holdings Limited (CA&S), the fast-moving consumer goods route-to-market group operating across Southern and East Africa, has delivered a solid set of interim results for the six months ended 30 June 2025, underpinned by organic growth, acquisitions and expansion into new markets.

Revenue grew 4.0% to R5.96 billion compared with R5.73 billion in the same period last year. Gross profit improved 9.0% to R948.96 million, while operating profit increased 9.6% to R334.67 million. Earnings per share advanced 15.5% to 50.72 cents, with headline earnings up 16.9% to R241.72 million and headline earnings per share increasing by 16.1% to 50.44 cents per share. A lower withholding tax charge, on dividends from Botswana, contributed to the improved headline performance.

Total assets expanded by 16.3% to R5.85 billion, reflecting investment in warehouse capacity, business combinations and associates, working capital, as well as higher cash resources, which rose from R1.05 billion to R1.29 billion.

In February, CA&S strengthened its East African presence with the acquisition of a 35% stake in Trapin Holdings Limited (Tradco), a Kenya-based route-to-market business with operations across multiple countries in the region. The R108.4 million transaction broadens the group’s service offering to existing clients and provides access to a market identified as central to its long-term growth ambitions.

Chief executive Duncan Lewis said the results reflect the resilience of the group’s operating model. “We are encouraged by the performance in the first half of the year, which demonstrates the value of our diversified footprint and disciplined financial management. The investment in Tradco positions us to capture new opportunities in East Africa, where demand for consumer goods and reliable route-to-market solutions is growing rapidly,” he said.

While no interim dividend was declared, in line with company policy, the group maintained a positive outlook for the remainder of the year. Management noted that Southern and East Africa continue to offer growth opportunities, supported by rising urbanisation, infrastructure development and economic diversification.

“We remain conscious of the challenges surrounding cost control and the need for targeted strategic investment. Through disciplined financial management, we are well placed to capitalise on opportunities that will secure the long-term success of CA&S,” concluded Lewis.

The interim results have not been audited, reviewed or reported on by the company’s auditors.

CA Sales Holdings Limited is a collective of fully integrated fast-moving consumer goods service providers operating in several Southern and East African countries. The group offer route-to-market solutions across borders to some of the world’s most admired consumer brand owners. Their route-to-market solutions include selling and distributing fast-moving consumer goods as well as services such as retail execution and advisory, retail support, technology and data solutions, and training. The group collaborates with clients, taking brands beyond borders and navigating the supply chain to reach stores, shelves, baskets and trolleys. They ensure availability for and visibility to shoppers, including promoting the brands. Working closely with clients, they address trade obstacles, enhance shelf
presence and safeguard and build market shares.

VIEW THE FULL RESULTS HERE >>>

Note: CA&S values the Ghost Mail audience and the company has placed its earnings here accordingly. This article reflects the views of the company. For the views of The Finance Ghost, refer to the section in Ghost Bites dealing with these results.

RCL Foods FY25 results: improved sales mix and cost savings drive HEPS growth

RCL Foods
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RCL Foods FY25 results: improved sales mix and cost savings drive HEPS growth

RCL Foods financials for the year ended June 2025

“We have delivered a pleasing set of results and progressed well against our strategic priorities. A notable contributor this year was the cost saving initiatives, which together with an improved sales mix translated into good bottom line growth.”

Paul Cruickshank – Chief Executive Officer

Financial Highlights

  • Revenue continuing operations +1.8% to R26.5 billion
  • Underlying EBITDA continuing operations +7.9% to R2.4 billion
  • Underlying HEPS continuing operations +14.4% to 146.1 cents
  • HEPS total operations +10.0% to 156.3 cents

VIEW THE SHORT FORM ANNOUNCEMENT BELOW:

JOB030147_RCL_SFA_prelims_Eng_v6

RCL Foods is a South African food manufacturer producing more than 20 much-loved brands including Yum Yum peanut butter, Nola mayonnaise, Ouma rusks, Pieman’s pies, Number 1 mageu, Sunbake and Sunshine bread, Supreme flour, Selati sugar, Bobtail and Catmor pet food and Molatek animal feed.

VIEW THE FULL RESULTS HERE >>>

Note: RCL Foods values the Ghost Mail audience and the company has placed its earnings here accordingly. This article reflects the views of the company. For the views of The Finance Ghost, refer to the section in Ghost Bites dealing with these results.

Rainbow Chicken FY25 results: building on momentum

Rainbow Chicken
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Rainbow Chicken FY25 results: building on momentum

Rainbow Chicken financials for the year ended June 2025

“A more strategic product mix and improved volume performance are driving sustainable growth”

Marthinus Stander – Chief Executive

Financial Highlights

  • Revenue +9% to R15.8 billion
  • EBITDA +66.2% to R1.1 billion
  • Headline earnings +224.3% to R584.8 million
  • Headline earnings per share +223.6% to 65.57 cents
  • Dividend per share: 20 cents

VIEW THE SHORT FORM ANNOUNCEMENT BELOW:

Rainbow_40x8_FC

Rainbow is one of South Africa’s largest processors and marketers of chicken. Rainbow is a fully integrated broiler producer that breeds and rears its own livestock, which it feeds from its own feed mills. It also processes, distributes and markets fresh, frozen, value added, and further-processed chicken. The Chicken Division produces a wide range of products under three well established brands: Rainbow, Simply Chicken and Farmer Brown, whilst the Animal Feed Division produces grain-based feeds for a range of species under the brands of Epol and Driehoek Feeds.

VIEW THE FULL INVESTOR SUITE HERE >>>

Note: Rainbow Chicken values the Ghost Mail audience and the company has placed its earnings here accordingly. This article reflects the views of the company. For the views of The Finance Ghost, refer to the section in Ghost Bites dealing with these results.

Ghost Bites (MAS | Northam Platinum | Super Group)

The Finance Ghost
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Ghost Bites (MAS | Northam Platinum | Super Group)

Solid numbers at MAS, but watch that footfall (JSE: MSP)

eCommerce is a trend worth watching

Whenever a retail-focused property fund releases earnings, one of the first things I look at is footfall. The trend is clear across multiple geographies: people aren’t going to malls as often as they used to. In some cases footfall growth is still positive (driven by trends like urbanisation), but not by much. When footfall turns negative, then the only thing driving higher tenant sales will be the average basket size and the extent to which landlords can participate in omnichannel sales that are fulfilled by stores in the mall.

Long-term concerns aside, MAS Real Estate put out solid numbers for the year ended June 2025. With so much focus on the shareholder register and the board recently, it’s great to see that the underlying business is doing well. Distributable earnings per share jumped by 27.7% year-on-year and valuations were up 7.3% on a like-for-like basis. The loan-to-value ratio has improved from 26.3% to 23.2%. It all looks good.

As alluded to when I started this section on MAS, footfall isn’t the major driver of growth here. In the MAS retail portfolio (excluding the DJV joint venture), it was up 3.3% for the full year, but footfall only increased by 0.8% in the second half of the year. That’s a huge deceleration. The good news is that sales per square metre grew 6.9% for the full year and 6.3% in the second half, with higher rent reversions in the second half helping to blunt the impact of lower footfall.

The DJV retail portfolio did a lot better on key metrics, with sales per square metre up by 18.8% on a like-for-like basis and footfall up 4.2% for the full year. Rent reversions were a meaty 24%.

The tangible net asset value per share is 186 euro cents (roughly R38.40 vs. the current share price of R21.00). The market has been more focused on the dividend – or lack thereof – than the capital value recently. With the dust having settled on the shareholder register and with Prime Kapital (the joint venture partner) having given an undertaking to prioritise distributions of available profits over new investments, the hope is that dividends will soon return.

Costs are running too hot at Northam Platinum (JSE: NPH)

And this means that margins have suffered

Northam Platinum has released results for the year to June 2025. Despite a modest production increase in own operations of 0.7%, operating profit has dropped sharply from R4.8 billion to R3.6 billion. Operating profit margin has contracted from 15.7% to 10.9%. That’s clearly a problem.

We can’t even point to a poor sales result to explain this, as sales volumes were up 5.9% and sales revenue increased 6.9%. That really isn’t a bad result, but it wasn’t enough to offset the cost pressures in the group. The cash cost per equivalent refined 4E ounce increased by 8.1%.

If we dig deeper into the operations, Booysendal as the largest operation suffered a 14.4% decline in operating profit to R3.9 billion. This operation also required 11.7% more capex, so that’s quite a squeeze on free cash flow. At Zondereinde, they managed to grow operating profit by 5.5% to R570 million despite a deterioration in the cash margin per refined 4E ounce. Capex was 7.7% lower at Zondereinde, which also helped. Unfortunately, Eland more than offset the good news at Zondereinde. In fact, Eland more than offset Zondereinde full stop, with a 31.3% deterioration in the operating loss to R768 million! To add insult to considerable injury, capex was 31.9% higher at Eland.

Although Northam enjoys significant headroom on its facilities, it’s also worth noting that net debt increased from R3.1 billion to R5.1 billion. The net debt to EBITDA ratio more than doubled from 0.50x to 1.04x.

In terms of guidance for FY26, the unit cash cost per 4E ounce is expected to be between R27,500 and R28,500. The FY25 number was R25,728, so the cost pressure seems to be relentless. Even if PGM prices do well, it all seems very risky to me.

The share price is up 98% year-to-date. It’s cooled off quite a bit though, down 14.5% from its recent 52-week high. To finish off on Northam, I enjoyed this chart in the investor presentation that shows the six monthly average basket price going back over the past decade, along with an indication of where the current spot price is. It shows you why the share price has rallied in anticipation:

Super Group’s continuing operations are struggling for growth (JSE: SPG)

But the balance sheet is in good shape

Super Group released a trading statement for the year ended June 2025. It’s not exactly the easiest time in the world to be running a logistics business with heavy exposure to the European automotive sector, along with an automotive dealerships business that is clearly in that value chain as well.

Despite this, HEPS from continuing operations is expected to move by between -2.3% and 0.0%. They might be in the red, but not by much. This excludes the results of SG Fleet (which was disposed of), inTime (in the process of being disposed of) and the Suzuki, Kia and Hyundai dealerships in the UK (I can’t find any evidence of an announced transaction for this – happy to be corrected if wrong).

If you look at total operations instead of continuing operations, HEPS was up by between 24% and 28%.

Super Group notes that the balance sheet is strong, with debt leverages at “modest” levels and plenty of headroom on their borrowings covenants i.e. the ability to access capital if needed. We will find out for sure on 9 September when Super Group is expected to release earnings.

Nibbles:

  • Director dealings:
    • A director of Sabvest (JSE: SBP) bought shares in the company worth R7.3 million.
    • An associate of a director of 4Sight Holdings (JSE: 4SI) bought shares worth R1.4 million.
    • Des de Beer bought another R1.06 million worth of shares in Lighthouse Properties (JSE: LTE).
    • An associate of a director of KAP (JSE: KAP) bought shares worth R995k.
    • A director of STADIO (JSE: SDO) bought shares worth R298k and a different director bought shares worth R108k.
    • A director and an associate of the same director bought shares in Finbond (JSE: FGL) worth R118k.
    • A director of Vunani (JSE: VUN) bought shares worth R3.7k.
  • Accelerate Property Fund (JSE: APF) has suffered a delay in the release of the circular for the all-important Portside disposal. The JSE has granted an extension for the release of that circular until 15 October 2025. They really need to get that deal done to remove one of the many overhangs on the share price.
  • In mid-July, AECI (JSE: AFE) announced the disposal of Schirm USA. The good news is that the deal has become unconditional and has been implemented, with $40 million in proceeds flowing to AECI. The group is executing a strategy that includes focusing on AECI Mining and AECI Chemicals, while divesting from any distractions.
  • Shareholders in eMedia Holdings (JSE: EMH) gave almost unanimous approval for all the resolutions required for the transaction with Remgro (JSE: REM). I’m not surprised, as it seems like a solid deal for eMedia.
  • Sebata Holdings (JSE: SEB) did not release the results for the year ended March 2025 as expected on 29 August. They have unfortunately not even given an indication of when the results might come out, due to delays in the technical review in the audit of Inzalo Capital Holdings.
  • Salungano Group (JSE: SLG) announced that the board can no longer stand behind the previous guidance that the listing suspension will be lifted in mid-November. Due to ongoing delays in financial reporting, they can’t even give an updated timeline at this point.

Note: Ghost Bites is my journal of each day’s news on SENS. It reflects my own opinions and analysis and should only be one part of your research process. Nothing you read here is financial advice. E&OE. Disclaimer.

How a boardwalk sideshow changed modern medicine

Dominique Olivier
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How a boardwalk sideshow changed modern medicine

Coney Island had its peep shows, its freak shows, its barkers and rides. And tucked between them was an exhibit of premature infants in glass boxes, tended by trained nurses. This wasn’t entertainment – it was the beginning of modern neonatal care, smuggled in as a carnival act.

On a warm summer’s day in the early 1900s, the boardwalk at Coney Island was alive with noise and colour. Barkers shouted promises of firebreathers, snake charmers, and the world’s smallest horse. Music drifted from carousels, mingling with the smell of popcorn and salt air. Families came for spectacle, and spectacle is what they got.

But tucked between the sideshows and the thrill rides was a very different kind of attraction. Inside a pristine white pavilion, for the price of 25 cents, visitors could step into what was called The Infantorium. There, behind glass doors, tiny premature babies lay in metal incubators, tended by uniformed nurses. Some weighed barely one kilogram. Many had been declared hopeless by hospitals. Yet here they were – breathing, growing, and clinging to life.

The man behind this improbable exhibit was Martin Arthur Couney. To the public, he was the Incubator Doctor, a pioneer who brought medical technology out of hospitals and into amusement parks. To the medical establishment, he was something closer to a charlatan – mysterious in background, evasive about his qualifications, and far too willing to place fragile infants on public display.

And yet, over the course of four decades, Couney’s incubator sideshows saved thousands of lives.

The man who invented himself

Couney’s own story was as much a performance as the ones he staged. Born Michael Cohen in Germany in 1869, he later reinvented himself as Martin Couney and claimed a background that changed depending on the telling. Sometimes he said he had studied medicine in Leipzig or Berlin. Other times he insisted he had apprenticed under Pierre-Constant Budin, the French obstetrician credited as a father of modern perinatal medicine.

The record tells a murkier tale. For starters, there is no evidence that he ever earned a medical degree. Some reports suggest he emigrated to the United States as early as 1888, which would make his claims of extensive European training difficult to reconcile. Still, whether through apprenticeship or sheer force of will, he absorbed enough knowledge to talk convincingly about neonatal care. More importantly, he understood something that few in the medical profession grasped at the time: premature infants were not necessarily doomed, and the incubator might offer them a chance.

From chicken coops to child hatcheries

The incubator, by the time Couney discovered it, was not a new idea. Farmers had long used heated boxes to hatch chickens, and in the late 19th century, French physicians began adapting the idea for infants born too soon. One of them, Stéphane Tarnier, introduced a version that maintained a warm, regulated environment, while his assistant Budin (yes, the same Budin that Couney claimed to have studied under) refined the design further.

But the medical establishment was sceptical. Incubators were expensive, untested, and to many doctors, the effort seemed wasted on babies they believed were too weak to survive.

Couney thought differently. In 1896, he arranged to display Budin’s “child hatchery” at the Berlin Industrial Exposition. The public reaction was astonishing. Crowds flocked to see the tiny infants in their glass-fronted boxes. For many, it was the first time they had encountered a premature baby who had a chance of survival. Couney realised that spectacle could serve as persuasion. If doctors would not yet embrace the incubator, perhaps the public would.

A sideshow with a serious purpose

When Couney brought his incubator shows to the United States, he leaned fully into the pageantry. His exhibits travelled from one world fair to another before finding permanent homes at Coney Island and Atlantic City. The branding varied – sometimes “The Infantorium,” sometimes “Baby Incubators” – but the concept was the same. Visitors paid admission, nurses cared for the infants around the clock, and the curious filed past the glass cases in droves.

It was, in one sense, theatre. Nurses were encouraged to lift the babies out and cuddle them in view of the crowd. Posters declared, “All the world loves a baby.” But behind the theatrics was a sophisticated operation. The incubators were carefully engineered, warmed by boilers that circulated hot water through pipes beneath the infants’ cribs, with thermostats to regulate the temperature. Air was filtered twice, first through wool soaked in antiseptic, then through dry wool again before entering the chamber. Every effort was made to reduce contamination and maintain cleanliness.

As you can imagine, the costs were enormous. Round-the-clock feeding, equipment, and nursing care added up to more than most families could dream of affording. In 1903, Couney estimated that caring for one premature baby cost $15 a day, or roughly $400 in today’s terms. Yet he never asked parents to pay. The entrance fees, morally questionable as they were, funded the entire operation.

Critics and controversies

Not everyone was impressed. From the beginning, medical journals questioned Couney’s motives. The Lancet described the practice as an “unscrupulous way to make money”. Child welfare groups accused him of objectifying infants, treating them as exhibits rather than patients. The very location of his shows – wedged between animal acts and risqué peep shows – seemed to confirm the charge.

The 1911 Coney Island fire deepened the criticism. Though every infant was rescued, the idea that fragile lives had been placed in danger within a theme park struck many as irresponsible. Others pointed to the proliferation of imitation incubator shows, often poorly run and unsanitary, which further tarnished the concept.

And yet, for all the controversy, Couney’s results spoke loudly. His survival rates were significantly higher than those of hospitals that admitted premature infants. Parents who had been told to prepare for funerals instead brought home children who thrived.

A quiet defiance of eugenics

What made Couney’s work even more radical was the cultural climate in which he operated. The early 20th century was the height of the eugenics movement in America, a time when many in the medical community openly questioned whether premature babies should be saved at all. Eugenics exhibits, sometimes set up on the very same fairgrounds, celebrated the “fittest” families and promoted slogans like “Kill defectives, save the nation”.

To save premature infants was, in that worldview, to preserve weakness and to give it a chance to spread to future generations. Couney rejected the premise entirely. He insisted that given care and time, these children could survive and flourish. Every incubator he placed on display was not only a medical intervention but also a public argument against a brutal ideology.

The long arc of recognition

Couney spent decades travelling from fair to fair, and when he finally settled his operations permanently at Coney Island and Atlantic City, his shows ran year after year. Behind the glass, thousands of premature infants passed through his care. By his own reckoning, he and his nurses saved more than 6,500 lives.

Yet even as he racked up successes, Couney remained an outsider. Hospitals refused his offers to donate incubators when his shows closed. The medical establishment continued to view him with suspicion, partly because of his uncertain credentials, partly because of his unorthodox methods.

It was only in the years after his death in 1950 that his reputation shifted. By then, incubators had become standard equipment in neonatal units. Hospitals were doing what Couney had been doing for decades, though now with institutional legitimacy and without the carnival bunting.

The legacy of the Incubator Doctor

Couney’s life remains wrapped in mystery. We may never know the full truth of his training, or whether he embellished his past to protect his credibility. But what is clear is the scale of his impact. In an era when premature babies were dismissed as unfit to live, he proved otherwise.

His shows were at once bizarre and humane, a mixture of spectacle and science that unsettled many but comforted those who mattered most: the parents who watched their children grow stronger inside those heated glass boxes.

Today, neonatal intensive care is one of the most advanced branches of medicine, with technologies that would have looked like science fiction in Couney’s day. But the principle is the same – the belief that even the smallest, frailest infants deserve a chance.

That conviction, once dismissed as quackery, began its long march to acceptance not in the corridors of hospitals, but in the carnival pavilions of Coney Island.

About the author: Dominique Olivier

Dominique Olivier is the founder of human.writer, where she uses her love of storytelling and ideation to help brands solve problems.

She is a weekly columnist in Ghost Mail and collaborates with The Finance Ghost on Ghost Mail Weekender, a Sunday publication designed to help you be more interesting. She now also writes a regular column for Daily Maverick.

Dominique can be reached on LinkedIn here.

Ghost Bites (Altron | Equites | Harmony | Impala Platinum | KAP | Libstar | Metrofile | Rainbow Chicken | Sibanye-Stillwater | South32 | STADIO | Trellidor | Truworths)

The Finance Ghost
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Ghost Bites (Altron | Equites | Harmony | Impala Platinum | KAP | Libstar | Metrofile | Rainbow Chicken | Sibanye-Stillwater | South32 | STADIO | Trellidor | Truworths)

Altron flags a flat interim performance (JSE: AEL)

The market didn’t love it

Altron’s share price dropped 10% on Thursday based on a voluntary update that indicates a flat revenue and EBITDA performance for the six months to August 2025. They’ve noted a tougher operating environment with tight IT budgets.

Of course, a flat group performance doesn’t mean that there aren’t big swings at segmental level. The Platforms segment achieved double-digit revenue growth (which naturally means solid EBITDA growth as well), while the IT Services segment bore the brunt of the trickier environment. The Distribution segment has also had a tough time.

Full details will be available when interim results are released on 3 November.

Equites Property Fund remains committed to shifting capital from the UK to SA (JSE: EQU)

The loan-to-value ratio is expected to drop sharply thanks to disposals

Equites released a pre-close update that deals with the six months ending August 2025. They’ve used it as an opportunity to remind the market that the plan is to sell off the UK portfolio and allocate the capital to South Africa instead. How times have changed in the past decade in the property sector!

The UK portfolio seems to be in decent shape at the moment, which would support an exit on reasonable terms. In South Africa, the appeal is that there’s limited availability of large land that is suitable for logistics hubs, hence the desire by Equites to get moving on its land parcel for development. It’s been an expensive four years of development (peaking at over R2.5 billion in 2024) and they expect it to settle at R1 billion in FY26.

The loan-to-value ratio is estimated to be 37.9% at the end of this interim period. Thanks to the extensive disposals, they expect it to drop to 24.3% by the end of the 2026 financial year. Other important guidance is that they expect the distribution per share to increase by between 5% and 7% for the year.

Harmony has its heart set on copper, but they need to maximise the gold opportunity (JSE: HAR)

Gold production in FY26 is still expected to be below FY24 levels

Harmony Gold may have gold in the name, but they are definitely splitting their love across two commodities at the moment. They expect to conclude the MAC Copper acquisition in October as part of their diversification plan.

Of course, if gold wasn’t shooting the lights out at the moment, the market would probably be more enamoured with the copper strategy. Instead, we have a situation where Harmony is lagging its peers due to gold production that dipped by 5% year-on-year at a time when the gold price has dished up a huge opportunity. Just because they are “within guidance” doesn’t mean that investors are happy.

Here’s the bigger frustration: production guidance for FY26 is between 1,400,000 and 1,500,000 ounces. That’s not encouraging vs. FY25 at 1,479,671 ounces. It’s also well below the FY24 number of 1,561,815 ounces, so things are going backwards.

Unfortunately, the drop in production has been accompanied by a substantial increase in all-in sustaining costs (AISC) of 17%. Again, that’s in line with guidance, but that doesn’t make it good. Guidance for FY26 is AISC of between R1,150,000/kg and R1,220,000/kg, another significant increase vs. FY25 at R1,054,346/kg.

Despite major metrics going the wrong way in FY25, HEPS increased by 26% thanks to the one thing that Harmony cannot control: the gold price. Based on the guidance for FY26, they will need the gold price to keep shining brightly next year.

FY25 was a year to forget for Impala Platinum (JSE: IMP)

PGM prices were flat for the year ended June, with hopes of better times to come

As I’ve written many times in Ghost Bites, the PGM sector rally has been firmly forward-looking rather than based on the performance over the past year. Impala Platinum is further proof of that, with ugly numbers for the year ended June 2025 that saw revenue dip by 1.1% and EBITDA fall by 19.8%. HEPS was down by 69.5%.

The reason for the financial pain was a small dip in sales volumes at a time when the rand price per 6E ounce was flat. Mining costs certainly don’t sit still, so a year in which revenue goes nowhere means a period of margin compression.

The silver lining was the cash, with a major swing into positive free cash flow and even the declaration of a dividend of 165 cents per share (more than double HEPS for the year). Impala’s dividend policy is based on free cash flow.

The outlook for FY26 is growth in unit costs of between 4% and 9%. They expect saleable production of between 3.4 and 3.6 million ounces, which implies decent growth on the FY25 number of 3.37 million ounces. But of course, what they really need is for the PGM price to behave itself.

Nothing ever seems to get better for KAP investors (JSE: KAP)

The share price is way down this year and so are the earnings

KAP has released financials for the year ended June 2025. They aren’t good, with revenue down 2%, operating profit down 14% and HEPS nosediving 47%. Unsurprisingly, there’s no dividend.

Concerningly, it seems like the fourth quarter had the worst operating conditions of the year, which means negative momentum going into the new financial year.

The ramp-up of the new MDF line at PG Bison is absolutely key to getting the numbers into the green, with revenue up 10% and operating profit down by a nasty 28% in that business. Operating margin has fallen sharply from 17.4% to 11.3%. Sadly, margins are expected to be below historical levels in the near term, with market conditions making it difficult to optimise this investment.

Elsewhere, Safripol grew revenue by 4% and operating profit by 43%. Operating margin in that business increased from 3.8% to 5.2%, which is still a paper thin margin. At Unitrans, revenue fell 4% and operating profit was down 14%, a good example of operating margins going the wrong way. Feltex is a particularly nasty story in the OEM automotive value chain, with revenue down 8% and operating profit down 37% due to lower volumes and non-recurring costs related to a model changeover. Sleep Group went the right way at least, with revenue up 7% and operating profit up 27% thanks to improved mix. Finally, Optix remains a mess, with revenue up just 1% and an operating loss of R44 million – you definitely can’t scale into profitability with a growth rate of 1%!

KAP just never seems to catch a break.

Positive momentum at Libstar – at last (JSE: LBR)

I’ve certainly done my part in boosting cheese sales

Libstar has been a disappointing story in our market. The FMCG company has lost around 65% of its value since listing in 2018. Like so many consumer businesses in South Africa, things just haven’t worked out as planned.

The good news is that the six months to June 2025 reflect solid positive momentum in the business. If they can keep this up, then things could get very interesting for punters – as evidenced by the share price being up 14% in the past month.

For the six months, HEPS will be up by between 15.1% and 25.2%. Normalised HEPS from continuing operations will be up by between 10.4% and 20.4%. Much like a slice of their cheese, whichever way you cut it, that’s still yummy.

Metrofile’s earnings have dropped, but a potential deal is still on the table (JSE: MFL)

So, the usual story then

If you threw darts at a timeline in recent years, chances are good that you would hit a spot where (1) Metrofile’s earnings are under pressure, and (2) someone is considering an offer for the company. The latest period is no different.

For the year ended June 2025, a trading statement tells us that Metrofile expects HEPS to drop by between 12% and 27%. Ouch.

Luckily, a Delaware-based company is still serious about making an offer, with discussions at an “advanced stage” – although the timeline has been extended based on engagements with regulators.

The share price is up 20% year-to-date and a whopping 106% over six months. This has everything to do with the potential offer and nothing to do with the underlying earnings, that’s for sure.

A pot of gold at Rainbow Chicken – and yes, even a dividend (JSE: RBO)

The volatility in chicken earnings remains breathtaking

If you follow the poultry sector, you’ll know that modest changes in revenue can drive substantial moves in profits. This is because of the operating leverage inherent in the model, as well as the structurally low operating margins that are impacted by modest moves in e.g. gross margin.

What does this look like in practice? Rainbow Chicken’s numbers for the year to June 2025 reflect growth in revenue of 9% and a move in EBITDA margin from 4.4% to 6.7%. By the time you get to HEPS, you find an insane jump of 224%!

Such is the improvement in this sector that there’s even a dividend of 20 cents per share (vs. HEPS of 65.57 cents).

I must remind you that it doesn’t take much for earnings in this sector to very quickly head the other way, so tread carefully. Personally, I prefer to eat chicken rather than invest in it.

Gold and US PGMs gave Sibanye-Stillwater’s earnings a huge boost (JSE: SSW)

There’s a 19-fold increase in headline earnings!

For a long time, I considered myself a bit unlucky in Sibanye. I watched my stake sit in the red for ages, which is unfortunately a feature rather than a bug when it comes to cyclical stocks. Still, the PGM market felt like it took forever to get going.

But where I got extremely lucky was in my decision to take the money and run a month ago. It’s rare in life that you genuinely sell at the top of a chart, so I’ll take the wins where I can. The negative momentum over the past month has been pretty rough, with the share price having dropped by 20% in just a few weeks:

If you think the share price is volatile, wait until you see the earnings. Sibanye released results for the six months to June 2025 and they reflect headline earnings that have gone to the moon, up 19 fold vs. the prior year!

I always skip straight to the segmental reporting to see where the big moves were. The biggest contributor in this period was South African gold, with adjusted EBITDA more than doubling from R2.2 billion to R4.8 billion. That’s only slightly more than South African PGMs, with remarkably consistent adjusted EBITDA of R4.78 billion. So, that’s a strong performance locally.

Looking abroad, the big win was in US PGMs, with both the underground and recycling operations experiencing a huge positive move in earnings. If you add them together, adjusted EBITDA jumped from R635 million to R5.15 billion. A special mention must also go to zinc for an adjusted EBITDA turnaround from a loss of R351 million to profit of R657 million. The remaining ugly duckling is lithium, with a loss of R310 million that is even higher than the loss of R280 million in the comparable period.

Unfortunately, Trump’s One Big Beautiful Bill Act means that the big beautiful S45X10 credits that Sibanye enjoys on PGMs in the US will be phased out between 2031 and 2034. That may sound far away, but mining is a long-term game. This legislative change has driven an impairment of R3.8 billion to Sibanye’s PGM operations.

I must note that there’s an even larger impairment of R5.3 billion to the Keliber lithium project, based on changes to forecast lithium prices. Due to Sibanye’s efforts to have its fingers in many pies, in some cases in contrasting strategies (PGMs vs. battery technology), chances are that some parts of the group are doing well and others are in trouble at any point in time.

Overall though, the group is in a much better place than before. They are taking advantage of the improved market conditions and they are telling a bullish story around cash generation heading into 2026.

A strong year for South32 (JSE: S32)

Revenue and profits both came in significantly higher

South32 has released results for the year ended June 2025. Revenue from continuing operations was up 17% and the ordinary dividend increased by 71%, so there’s plenty for investors to smile about. Diluted HEPS was 91% higher

The results presentation includes this handy chart that shows how the group made its money in FY25, adjusted for the disposal of Illawarra Metallurgical Coal, the impact of a cyclone on manganese in Australia and a few other bits and pieces:

This gives you a really useful lay of the land. It also shows you just how important alumina and aluminium is to the group. Thankfully, Mozal Aluminium (which is likely to stop producing after March 2026 based on energy availability) is just one part of the group. It contributed 355kt of the total 671kt of aluminium in FY25, so it’s big enough to be an annoying drag on earnings, but definitely not big enough to cause a major issue all by itself.

Another interesting view is to see just how different the margins are across these commodities, as shown in these charts:

When people talk about the “mix effect” in margin, this is what they mean. As revenue changes across the underlying businesses, group margins shift based on the changing mix of revenue. The effect is less noticeable in groups with more consistent margins across the segments.

Overall, South32 is telling a bullish story as they head into a new financial year, with significant focus on Worsley Alumina as major growth capex project.

Excellent growth at STADIO shows that tertiary education is firmly a for-profit business (JSE: SDO)

Student growth is expected to remain strong

STADIO has released results for the six months to June 2025. They are really good, with student numbers up 9% in semester 1 and revenue growth of 16%. A mix of price and volumes growth is exactly what investors want to see, along with cost control that has led to a 24% jump in EBITDA. By the time you reach the bottom of the income statement, you’ll find a 28% increase in core HEPS.

With almost 55,000 students currently in the group, they reckon they can reach 80,000 students by 2030. Thanks to having multiple tertiary offerings in the group, I certainly wouldn’t bet against them achieving that target.

STADIO’s share price has tripled in the past 3 years. The underlying growth in tertiary education has certainly helped, but they still needed to deliver on the opportunity.

Have we reached the bottom for Trellidor? (JSE: TRL)

Hopefully the latest financial year is the end of the slide – but the UK is a worry

Trellidor has confirmed that the sale of Taylor Blinds and NMC became effective on 25 August 2025. The final price (after balance sheet adjustments) was R51.9 million. The good news is that a portion of this price will go towards further debt reductions, with the group having made excellent progress in reducing net debt from R146.7 million as at June 2023 to R85.3 million as at December 2024. Based on those dates, you can see that they’ve been in trouble for a while.

Is the pain over yet? Maybe, maybe not. A trading statement dealing with the year ended June 2025 shows us that HEPS will drop by between -5% and -15%, coming in at between 30.6 cents and 34.21 cents. The Trellidor UK division has been a disappointment in this period, which is a worry given the ongoing poor performance of the South African business.

The current share price of R1.92 means a Price/Earnings multiple of mid-single digits. Given the recent track record and now the concern around the UK, I still wouldn’t call that a bargain. Things might get worse for this share price, as evidenced by it closing 11% lower on the day of this announcement on strong volumes.

Is there a worse retailer in South Africa than Truworths? (JSE: TRU)

Sometimes, shares are cheap for a reason

There are some really innovative and interesting retailers in South Africa. Truworths definitely isn’t one of them. About the only positive thing I can say is that they aren’t losing money offshore like some competitors are doing. Office UK grew revenue by 9% in the year ended June 2025. But even with that revenue growth, trading profit (if you adjust for a major once-off in the base) was basically flat.

“Flat” is more than we can say for Truworths Africa, still the biggest contributor to trading profit in the group but not for long at this rate. Revenue went nowhere in this period and trading profit fell by around 16%.

Add these two segments together into a group result and you’ll find sales up by 3.2%, gross margin down 100 basis points to 41.3% and operating margin down 730 basis points to 20%. HEPS dropped by just over 8% to 752.1 cents and the dividend followed suit.

Any highlights? Well, the balance sheet is in a net cash position rather than net debt, but this can often just be due to the timing of working capital movements for retailers.

Truworths is trading on a Price/Earnings multiple of 8x. In my view, that’s still much too high. This is probably the last name I would own in this sector.

Nibbles:

  • Director dealings:
    • Associates of two director of Renergen (JSE: REN) – including the CEO) sold shares worth R7.8 million.
    • The CEO of Grindrod (JSE: GND) – who is shortly leaving the group – sold share awards worth R4.4 million. The announcement isn’t explicit on whether this is the taxable portion or not.
    • A director of a major subsidiary of Sasol (JSE: SOL) sold shares worth R501k.
    • A non-executive director of Collins Property Group (JSE: CPP) sold shares worth R410k.
    • A director of a major subsidiary of PBT Group (JSE: PBG) bought shares in the company worth almost R80k.
    • An associate of the CEO of Acsion (JSE: ACS) bought shares worth R42k.
    • The CEO of Vunani (JSE: VUN) is still on the bid, buying R2k worth of shares in an illiquid market for the stock.
  • Frontier Transport (JSE: FTH) announced that CFO Mark Wilkin will be retiring with effect from August 2025, after roughly four decades with the company! He’s replaced by Ulandy Gribble, who is currently in charge of the numbers at Golden Arrow Bus Services (the largest subsidiary). It’s always good to see an internal succession plan playing out.
  • Randgold & Exploration Company (JSE: RNG) released results for the six months to June 2025. This is a tiny listed company, so it just gets a passing mention here. The operating loss improved by 24% to R8.3 million (but that’s still a loss obviously) and the headline loss per share was 8.80 cents.

Note: Ghost Bites is my journal of each day’s news on SENS. It reflects my own opinions and analysis and should only be one part of your research process. Nothing you read here is financial advice. E&OE. Disclaimer.

South African M&A Analysis H1 2025

Marylou Greig
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South African M&A Analysis H1 2025

Global uncertainty and local budget-related wrangles still weigh on confidence and demand in South Africa. Yet, higher commodity prices and market volatility created opportunities. M&A activity by value of SA-listed companies rose 66% in H1 2025 compared with the prior year, and DealMakers recorded 164 deals worth R418,3bn.

Source: DealMakers Online

Excluding failed transactions, the real estate sector led activity (37%), followed by resources (13%), technology (7%), and industrial and manufacturing (7%) – broadly mirroring last year’s trends.

The top 10 deals by value reflected this pattern, with resources and real estate dominating. Highlights included Gold Fields’ acquisition of Gold Road Resources (A$3,7bn|R43,7bn) and Primary Health Properties’ acquisition of Assura (£1,79bn|R43,3bn).

Excluding deals by foreign companies with secondary listings in South Africa, deal value for H1 2025 more than doubled to R228,5bn. SA-domiciled, exchange-listed companies were involved in 31 cross-border transactions during the period, with Africa, Australia and Europe the most active destinations. Once again, real estate deals topped the list, followed by technology.

Despite increased opportunities, many companies remain cautious, holding cash yet to be deployed. Instead, firms have turned to multi-billion rand share buyback programmes and special distributions to reward shareholders.

Source: DealMakers Online

The scale of this shift is striking:

  • In H1 2010, repurchases accounted for 10% of General Corporate Finance (GCF) activity and just 2% of aggregate transaction value.
  • By H1 2020, in the midst of the COVID-19 pandemic, they had risen to 33% of activity and 10% of value.
  • Fast forward to H1 2025, repurchases dominated, representing 50% of GCF transactions and value (R227,5bn). Together with special and capital reduction distributions (R30,4bn), companies returned R258bn to shareholders in the period.

DealMakers H1 2025 League Table – M&A activity by the top South African advisory firms (in relation to exchange-listed companies).

DealMakers H1 2025 League Table – General Corporate Finance activity by the top South African advisory firms (in relation to exchange-listed companies).

DealMakers is SA’s M&A publication.


The latest magazine can be accessed as a free-to-read publication on the DealMakers’ website www.dealmakerssouthafrica.com

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

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

Exchange-Listed Companies

The deal grabbing the headlines this week is the proposed R7,2 billion acquisition of private schools group Curro by the Jannie Mouton Foundation (JMF). The delisting of the company and its reincorporation as a non-profit organisation would give it the flexibility to reinvest all profits by expanding its bursary programme and building schools in rural and lower-income areas. JMF which already holds a 3.36% stake has offered shareholders an equivalent of R13 per share – a 60% premium to the share price prior to the announcement. The R13 settlement is in the form of cash and a combination of shares in Capitec, and PSG Financial Services. While the deal will certainly redefine private education, public opinion as to the reason for the deal varies, ranging from an act of philanthropy to the need to adjust the current model, away from the shareholder spotlight, in response to the decline in demand for private schooling.

Rex Trueform has acquired a further 21% equity interest in Byte Orbit from majority shareholder A Ramdath for a purchase consideration of R21 million. The price tag will be settled through the issue of 1,69 million new N shares at R12.39 per share. Rex Trueform acquired its initial 30.2% investment in Byte Orbit in December 2024 for R21 million.

Continuing with its strategic repositioning and restructuring programme, Accelerate Property Fund has announced the sale of the Buzz and the Waterford Centre. The properties, located in Fourways in Gauteng, were disposed of to Dorpstraat Capital growth Fund (owned by Dorpstraat Property Investments, Rabie Property Group, Nedbank Property Partners and Alpha Plus) and Property House Group Investments (ultimate holders being the Wimson Trust and the Gray Trust) for an aggregate consideration of R215 million. The disposal yield is 9.5% after taking into account the agreed exit of Pick n Pay as the anchor tenant at the Buzz.

Delta Property Fund is to sell the Parkmore property situated at 142-144 Fourth Street in a category 2 transaction. Afrocentric Intellectual Property will pay R19 million in cash for the property. The sale is part of Delta’s business and portfolio optimisation strategy and proceeds will be used to reduce its debt balance.

Mahube Infrastructure has cautioned its shareholders that it has received a proposal from a third party in relation to proposed acquisition of all the issued ordinary shares in the company, excluding certain shareholders, leading to the delisting of Malhube. Further details will be provided to shareholders in due course.

Metrofile has advised that the company is still in discussions with Main Street 2093, a special purpose company through which the potential transaction will be implemented. While talks remain at an advanced stage, the company says the timeline has been extended due to regulatory engagements.

Shareholders have approved the disposal by Jubilee of the South African Chrome and PGM Operations to One Chrome announced in June for a disposal consideration of US$90 million (c. R1,59 billion).

Mantengu Mining has finalised the disposal of 30% of its shareholding in Blue Ridge Platinum (BRP) to BEE parties – a condition of the deal announced in October 2024 which saw Mantengu acquire BRP from Ridge Mining owned Sibanye-Stillwater and Imbani Platinum SPV (50%-owned by Entrepreneurs Business Group). The 30% stake was disposed of for R1.00 to the BEE consortium, represented by Vitai Resources (20%), the BRP Mine Employee Trust (5%) and the BRP Mine Community Trust (5%).

The scheduled general meeting of Ayo Technology Solution shareholders of 20 August 2025, to vote on the scheme offer by Sekunjalo Investment and delisting of the company, has been postponed a month at the request of the Public Investment Corporation. The institution requires additional time to adequately assess the merits and risks associated with holding shares in a delisted entity. Should shareholders vote in favour of the scheme, Ayo’s listing will terminate on 28 October 2025.

Unlisted Companies

Norwegian development finance institution Norfund and South African fund Infra Impact will, in partnership, invest in Green Create, a waste-to-value group with operations in South Africa and Mauritius. Green Create facilities treat both effluent wastewater as well as agricultural waste, reducing the load on the downstream municipal water treatment infrastructure as well as landfilling and generate biogas that can replace fossil fuels in industrial processes.

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

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