Ghost Bites (Alexander Forbes | MTN Rwanda | Santova)
Unlock the Stock: Afrimat and Spear REIT
Afrimat’s track record is spectacular. Spear REIT is a highly respected property fund. On Unlock the Stock, you can learn about both companies.
RCL is far more than just a chicken business
RCL is far more than just a chicken business these days, which isn’t a bad thing.
Bidvest: strong trading profit growth in every division
Bidvest closed 3.8% higher after releasing results for the six months to December 2021.
Liberty Two Degrees: reversions continue to bite
Liberty Two Degrees holds stakes in some of the most iconic properties in the country
Alviva: 20% revenue growth excl. Tarsus
After teasing the market with a trading statement, Alviva has now released all the details of the interim results for the six months ended December 2021.
PSG Group and the Great Value Unlock
This is one of the biggest news stories on the JSE that we’ve seen in a while
JSE Limited: a cash cow in a shrinking field
You may not be aware of this, but the JSE Limited is listed on the JSE. You’re right in thinking that this sounds like the financial version of the movie Inception
Capital Appreciation on the deal train
The company has announced the acquisitions of three technology companies in South Africa and a 20% stake in a company in the Netherlands.
Woolworths won’t miss 2021
as released results for the 26 weeks to 26 December 2021. The share price rallied 6% despite a fair share of negative commentary on Twitter.
Cashbuild’s negative sales momentum continues
Cashbuild released its interim results for the six months ended 26 December 2021
Alexander Forbes to buy 60% of TSA (JSE: AFH)
This is a voluntary announcement of a typical bolt-on acquisition
The term “bolt-on” acquisition gets used loosely to describe a deal that is typically low on risk, as the acquirer is buying a business that slots quite easily into the existing business. Or bolts onto it, for that matter.
Alexander Forbes has agreed to acquire a 60% stake in TSA Administration, an independent provider of institutional group risk insurance administration services in South Africa. The business has been at it for 25 years and serves over 120,000 insured members.
Alexander Forbes has the option to acquire the remaining 40% stake over a period of five years. This is a good example of an initial position of control, with the ability to take out the minorities over time.
The deal is too small to even be categorised for JSE purposes, so details of the purchase price haven’t been announced.
MTN Rwanda under margin pressure (JSE: MTN)
This subsidiary seems to be struggling more than the others
MTN Rwanda has grown mobile subscribers by 7% and active data subscribers declined by 0.7%. That’s not exactly a high growth story, even if Mobile Money subscribers grew by 17.2% in the latest quarter. MTN Rwanda experienced a 50 basis points drop in customer market share as competition started to bite.
Service revenue was up by 14.9% and EBITDA by only 9.4%, so margin fell by 220 basis points to 45.5%.
The story at profit after tax level is anything but good, with a 32% drop due to increasing financing costs relating to inflation adjustments on lease payments.
Ouch.
Santova investors can’t wait for Monday (JSE: SNV)
Shortly after the close on Friday, Santova released excellent numbers
To say that Santova has been a winner of the pandemic would be an understatement. This small cap now boasts a market cap of over R1 billion and has been executing a strategy to make the most of the gift that was the supply chain crunch of the pandemic.
It’s clearly been working, with share price growth over three years of a whopping 430%. To avoid using the depths of the pandemic as a base for comparison, we can look at a five-year chart that shows growth of over 162%, which is a compound annual growth rate (CAGR) of 21.4%.
This company is a perfect example of why small cap investors get excited about the world. When it works, it works incredibly well.
The company is still growing its earnings strongly, with growth in headline earnings per share (HEPS) for the 12 months to 28 February 2023 of between 19.1% and 24.1%.
I’m sure that Santova investors are looking forward to seeing what the share price action on Monday morning might bring. Based on the midpoint of the earnings guidance, the company is trading on a Price/Earnings multiple of roughly 5x.
Little bites:
- Director dealings:
- An associate of a director of FirstRand (JSE: FSR) has sold shares worth R6.7m in exchange for units in a unit trust.
- A director of a subsidiary of Growthpoint (JSE: GRT) has sold shares worth nearly R1.7m.
- You guessed it – Des de Beer has bought another R1.55 million worth of shares in Lighthouse Properties (JSE: LTE).
- The chairman of Southern Palladium (JSE: SDL), Terence Goodlace, has resigned from the board based on other board positions and advice received on the number of board positions in the industry that would be appropriate. Mike Stirzaker, an existing director, has been appointed as the interim chairman.
- Attention Indluplace (JSE: ILU) shareholders: check your inboxes for the circular related to the offer by SA Corporate (JSE: SAC).
- If you are a shareholder in WBHO (JSE: WBO), take note that the circular regarding the B-BBEE transaction has been posted to shareholders.
- And in a final circular reference (Excel jokes are always allowable), Premier Fishing and Brands (JSE: PFB) has released the circular regarding the offer by Sekunjalo Investment Holdings.
- The small related party transaction at Acsion Limited (JSE: ACS) has received the nod of approval from the independent expert as being fair to shareholders.
