Africa Bitcoin Corporation is now also raising money for their credit fund (JSE: BAC | JSE: BACC)
These are small numbers in the context of the greater market, but it will be an interesting test of investor appetite for the new name and strategy
Africa Bitcoin Corporation – previously Altvest – has received approval for a secondary listing of the ordinary shares and the preferred C ordinary shares on the Namibian Stock Exchange. This is important, as it means that capital raising activities are being extended to Namibian investors as well.
The company is currently busy with a raise of up to R11 million at holding company level, with a closing date for the equity raise of 23 October. We knew about this raise already as part of the announcement of the change of name and strategy.
The new news is a Class C capital raise of up to R20 million. Those who follow the company will know that Class C shares refer to the Altvest Credit Opportunities Fund (ACOF), by far the most scalable business they currently have. If the capital raise goes ahead to the full extent, Class C shareholders will increase their stake from 27% to 35% in ACOF and Altvest as the holding company will dilute its stake from 73% to 65%.
I must note that although ACOF is a scalable business, the value of net assets was R38.8 million as at February 2025 and the loss after tax was R12.6 million. These numbers are outdated by several months and it’s always better to raise equity using fresh numbers, as it’s very hard to know how ACOF has performed over the past 6 months or so.
Although volumes remain very thin, the recent change of name from Altvest to Africa Bitcoin Corporation certainly got some attention in the market, with the share price up more than 40% since early August when there was little or no activity in the stock.
Finbond is acquiring a controlling stake in Benefits Bouquet (JSE: FGL)
This is a good example of a company that does what it says on the tin
Benefits Bouquet is a South African business that provides (you guessed it) a range of benefits to consumers, with everything from discount coupons through to legal advisory services, trauma and HIV support and funeral assistance. It therefore sounds like a plug-and-play for a financial services group like Finbond, with the obvious synergy of being able to bundle the benefits with financial products.
Importantly for where Finbond currently is in its lifecycle, Benefits Bouquet is profitable and ready to wash its own face from day 1. The company generated total profit after tax of R24.6 million in the six months to August. The announcement doesn’t give an indication of seasonality, so we have to make the simplifying assumption that the business makes close to R50 million over 12 months.
Finbond is buying a 74% stake for R116 million, which implies a total value of R157 million. The business has therefore been valued on a P/E multiple of just over 3x for a controlling stake, which feels very low and makes me question whether the recent profitability is maintainable and can indeed be doubled to get to an annual view. The net asset value (NAV) is R227 million, so the purchase price also implies a substantial discount to NAV.
The deal will be done in two tranches, with R78.6 million payable almost immediately for the first 50% and R37.7 million payable when the other 24% changes changes in September 2026. In other words, they’ve locked in part of the price a year ahead, so it looks even cheaper when you adjust for that.
Either there’s much more than meets the eye here, or Finbond has done a smart deal. Without more detail on the financial performance of the target company, it’s hard to know for sure.
Gemfields reports the full extent of its troubles (JSE: GML)
A loss at EBITDA level is not what you want to see
Gemfields has been having a tough time out there. The company has a difficult business to run, with great uncertainty around the quality of rubies and emeralds that come out the ground and what they might be worth at auctions. This makes revenue even trickier to predict than for most mining groups, yet Gemfields faces similar capex pressures to mining companies that take more dependable resources out of the ground. A further layer in this risk cake comes in the form of geopolitical risk in Mozambique and Zambia, ranging from tax changes through to regional violence.
TL;DR: this isn’t a glamorous or easy business, despite how pretty the products are.
Management at Gemfields seems to have accepted that they ran the balance sheet too hot in recent years, culminating in the need to ask shareholders for money. In the chairman’s statement for the six months to June 2025, Gemfields acknowledges that they paid high dividends between 2022 and 2024 relative to the capex treadmill they were on. I think that’s a sign that things will be run more conservatively going forwards in terms of cash returns to shareholders, despite the worst of the capex programme now being behind them.
They certainly can’t allow the balance sheet to break again, as they’ve now played the rights issue card and it will be much harder to do it again. They’ve also found a buyer for Fabergé for $50 million, taking an economically unattractive asset off their balance sheet and giving them more headroom.
But if things don’t improve in the business, then a further deterioration in the balance sheet is exactly what will happen. There are good reasons why this was an awful period, ranging from government silliness in Zambia through to major capex programmes in Mozambique. Still, revenue fell by a nasty 47% and EBITDA swung from a profit of $50 million to a loss of $4.9 million. Free cash flow was negative, coming in at -$22 million as net debt ballooned to $61.2 million from $44.4 million. These numbers are horrendous before we even consider them on a per-share basis in the wake of the $32.3 million rights issue (forex movements gave them a helping hand there, as the rights issue was expected to be $30 million). The Fabergé disposal proceeds will make a big difference to the net debt number.
It’s all about the second half of the year. One thing we know for sure is that it cannot look anything like the first half, otherwise Gemfields will be headed for disaster.
Heriot REIT’s growth is very high, but you need to adjust for the Thibault acquisition (JSE: HET)
You always have to be careful when there have been major deals
When a company makes a major acquisition, looking at total growth gives a skewed answer in terms of how the business is performing. There’s a simple reason for this: depending on the timing of the deal, recent earnings (including the acquired asset) aren’t directly comparable to prior period earnings (excluding the asset).
In the case of Heriot REIT, the timing of the recent deal is such that we are dealing with maximum skew here. The Thibault acquisition took place on 28 June 2024, so it was in the prior period for literally a couple of days before being included in full in the latest period. This explains why Heriot has reported huge growth numbers, like a 26.1% increase in distributable earnings.
Of the R389.2 million in distributable earnings, R61.9 million was from Thibault. If you strip that out entirely and then compare distributable earnings to the base period, you find growth of 6%. But before you latch onto that number, it’s important to know that there are other distortions, including the investment in Safari Investments (JSE: SAR). Safari changed its year-end in the prior period, so the current period is comparing 12 months of earnings to 15 months of earnings.
Instead of focusing on the year-on-year moves, it’s probably better to just consider the NAV per share of R17.53 vs. the share price of R16.00, reflecting one of the smaller discounts to NAV in the sector. The distribution per share was 121.91 cents, so the stock is trading on a yield of 7.6%.
But here’s the catch: the word “trading” is working very hard here, as there’s almost no trade in this stock. I’ve just included it in this section as an important reminder to always look at the impact of acquisitions on year-on-year growth. This is especially true when the growth numbers look odd to you, or very different to sector peers.
Prosus announces an acquisition in France (JSE: PRX | JSE: NPN)
The company isn’t shy to invest in Western Europe, with a strategy of using AI to enhance growth
When it comes to technology, the US is seen as the centre of the Western world. This is where the big innovations have come from in recent years, with Europe lagging horribly behind. Despite this, Prosus (and thus Naspers) has positioned itself as a technology giant outside of the US, with exposure to both emerging markets and Europe. Goodness knows that Europe isn’t a bastion of growth right now, but the company reckons that the use of AI in its platform businesses can change that.
The latest example is the acquisition of 100% of La Centrale for €1.1 billion, a deal that Prosus will execute through its OLX platform. La Centrale is a French motor classifieds platform, which immediately tells you that (1) there’s a lot of data here, and (2) better use of that data could increase engagement and thus value. Sounds like the typical Prosus strategy, doesn’t it?
This deal is OLX’s entry into Western Europe. OLX is accustomed to higher growth markets in Central and Eastern Europe, so this will be an adjustment for them. One of the important drivers of growth is the opportunity to increase the portion of car sales in France that involve a dealer, as it looks like the French market has a much higher proportion of private sales than countries like Germany. It therefore seems that La Centrale is closer in spirit to a business like AutoTrader in South Africa, where most of the cars for sale are listed by dealers.
The seller is Providence Equity Partners, so the asset has already been through a journey of professional ownership. This is important, as it irons out some of the issues that face founder-owned businesses when they try and integrate into a corporate.
Prosus values the Ghost Mail audience and has included the detailed announcement here, including their strategic rationale.
Texton’s results reflect the simplification of its exposure (JSE: TEX)
This means the movement in NAV per share is more nuanced than usual
Texton Property Fund hasn’t been shy to hold an unusual portfolio of assets. They’ve played around with exposure to US property funds and in the end it seems like they achieved a decent outcome, even though I have a fundamental issue with corporate management teams acting like asset managers. The job of a corporate management team is to allocate capital in places that investors can’t access in any other way, like in direct properties or in controlling stakes offshore, not just units in an offshore fund.
Perhaps the message eventually landed, as Texton has taken steps to sell non-core properties and even the BREIT and SREIT units (the offshore property funds). This is why we’ve seen significant returns of contributed tax capital in addition to dividends. The move in the net asset value per share of 8% and even in distributable earnings or 7.6% has been impacted by these simplification decisions.
Frustratingly, the management commentary refers to “like-for-like” performance in South Africa being flat, despite property sales. The whole point of giving like-for-like commentary is that it should adjust for any portfolio changes!
The net asset value per share is 574.61 cents and Texton is currently trading at R3.00, so there’s a substantial discount there. The right thing to do in my view would be share buybacks to help close the gap.
Nibbles:
- Director dealings:
- Des de Beer bought shares worth R4.2 million in Lighthouse Properties (JSE: LTE).
- A trust, of which a director of Valterra Platinum (JSE: VAL) is a beneficiary, has sold shares in the company worth R420k.
- Oopsies do happen in the market – a director of Southern Palladium (JSE: SDL) placed a share order in September during a closed period. Although he quickly tried to cancel the orders, a small trade worth just over R1k went through. Of course, the bigger concern is how a director was blissfully unaware of the closed period rule. The company will need to get tighter on this.
- Gold Fields (JSE: GFI) announced that the deal to acquire Gold Road Resources has met all conditions, with the shareholders of the target approving the scheme. After adjustments, the final deal value is roughly A$3.3 billion. The enterprise value (which adjusts for the cash in the business and therefore focuses only on the operations) is $2.6 billion. Part of the transaction sees Gold Fields acquire a stake in Northern Star Resources, with a deal already done with JPMorgan to sell that stake for A$1.1 billion. Those proceeds will be applied towards the acquisition bridge facility. In other words, the deal included an asset they don’t actually want to own, hence they’ve locked in a sale of that asset and taken some pressure off the debt required for the total purchase price.
- SAB Zenzele Kabili (JSE: SZK) released earnings for the six months to June 2025. They are incredibly volatile because of the leveraged underlying exposure to listed shares in AB InBev (JSE: ANH). This is how earnings can swing to a profit of R1.1 billion in the latest period vs. a loss of R690 million in the comparable period! The dividend is up 32% and the net asset value (NAV) per share increased by 8% to R77.05. The share price is languishing at a substantial discount to NAV, trading at R35.93.
- Southern Palladium (JSE: SDL) is firmly in exploration phase, so the financials reflect the typical losses that you’ll see in junior mining. For the year ended June 2025, the headline loss per share was A$0.053, worse than A$0.075 in the comparable period. The cash balance is up to A$9.9 million thanks to A$8 million in equity that was raised during the year.
- Wesizwe Platinum (JSE: WEZ) is very behind on its financials, hence the stock is suspended from trading. They’ve now released a trading statement dealing with the year ended December 2024 (yes, 2024) in which they’ve flagged a headline loss per share of between 12.78 cents and 12.94 cents, which is much worse than the headline loss in the comparable period of 1.55 cents. Ouch.
- In a small related parties transaction, RCL Foods (JSE: RCL) has agreed to extend the management services agreement with Siqalo Foods. This is a related party matter as Remgro (JSE: REM) is the common denominator here. The contract has been extended until 31 October 2027, with Siqalo paying RCL Foods R188 million per financial year for services across various operating functions. BDO Corporate Finance was asked to assess the contract for fairness and they have opined that it is fair.
- Cilo Cybin Holdings (JSE: CCC) is successfully transitioning to the General Segment of the JSE Main Board. This is the regulatory framework that a number of smaller companies recently chose to use when it was launched, as it creates a somewhat less onerous compliance environment for listed companies.
- Labat Africa (JSE: LAB) has elected to change its auditors based on the difficulties in meeting the required reporting timelines. This is the challenge when moving beyond the leading firms in the market (there are really only a handful of them), as smaller firms can struggle to meet the needs of listed companies. Labat is sticking with smaller firms though, giving P Mapfumo Accountants and Auditors a try as the new auditors.
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.
