Aspen released a positive update – something the share price desperately needed (JSE: APN)
The market cap has shrunk faster than the waistlines of GLP-1 users this year
Aspen’s share price closed 3.5% higher on Monday on a day when the ALSI was up 0.9%, so the market clearly appreciated the latest news from the company. In truth, Aspen shareholders will take whatever good news they can get at the moment, with the share price down 39% year-to-date.
In this case, the happy news for Aspen is that the South African Health Products Regulatory Authority (SAHPRA) has approved the use of once-weekly Mounjaro injections for chronic weight management. Of course, they make the usual disclaimers around using this in conjunction with a reduced-calorie diet and increased physical activity, but I think we all have enough anecdotal evidence from the internet or from friends using GLP-1 injections that the exercise tends to be an optional extra.
Mounjaro is Lilly’s answer to the Ozempic craze that Novo Nordisk brought to the world. Aspen launched Mounjaro in December 2024 for the treatment of Type 2 diabetes in South Africa. My understanding is that the latest approval allows it to be prescribed for obesity specifically, which means that Aspen is excited about being able to target a wider market.
I’ll see myself out.
ASP Isotopes closed a casual 34% higher after releasing a business update (JSE: ISO)
They even got noticed by influential international FinTwit accounts
ASP Isotopes has certainly captured the attention of the market. The share price closed 34% higher yesterday on the JSE. Before you quite correctly point out that there’s limited local liquidity in the stock, I must note that the Nasdaq-listed shares closed 31% higher. In other words, this wasn’t just some finger trouble on the day in an illiquid stock.
The reason for the jump? The company announced that they’ve locked in their largest ever supply agreement for enriched silicon-28. They’ve also made a strategic acquisition of a radiopharmacy in the US to work with their PET Labs business.
The deliveries for the enriched silicon-28 are expected during the first quarter of 2026. The words “quantum computing” feature in the announcement and this certainly got the market excited, with “semiconductor” as the sprinkles on top. There are no financial details given about the order, so the market simply latched onto the concept and hit the buy button.
As for the radiopharmacy acquisition, this is a small deal in Florida that they expect to be accretive to revenues, EBITDA and earnings per share in 2026. It looks like a roll-up strategy is underway here, with PET Labs in discussion with multiple independent radiopharmacies in different jurisdictions for acquisition opportunities. ASP Isotopes is a business run by investment bankers, so you can be sure that acquisitions will continue to be part of the story.
ASP Isotopes is hosting investors at its facilities in mid-November, so it’s likely that the market will pay the stock even more attention after that.
There’s not a single mention of financial effects anywhere in this announcement, yet the market cap jumped by a third. What a time to be alive.
Mid-teens growth at Boxer – but a big drop in HEPS (JSE: BOX)
The impact of the IPO is still affecting the comparability of earnings
Boxer released results for the 26 weeks to 31 August 2025. With turnover growth of 13.9% and trading profit growth of 15.1%, the self-styled “People’s Champion” is winning among lower income consumers.
They’ve enjoyed 5.3% like-for-like sales growth, which is well ahead of inflation. This means that Boxer is enjoying continued growth in volumes, with the informal-into-formal retail trend providing a rare example of a genuine tailwind in South Africa.
Interestingly, like-for-like sales growth in the comparable interim period was up at 7.7% (vs. the latest 5.3%), yet total growth was 12.0% in that period vs. 13.9% in this period. This is because sales growth from new stores has accelerated, which is an indication that they are opening stores in better locations. I’m not sure if the conversion of some Pick n Pay (JSE: PIK) stores is having a positive impact here, but I’m guessing that’s at least some of the reason for this growth. There were nine new Superstores that Boxer that opened in this interim period and they are running 36% above budget for turnover, which is obviously excellent.
Speaking of store growth, Boxer’s distribution centre network has sufficient capacity to support store growth plans for the next 4 to 5 years. This is the case after the completion of the KZN Tongaat DC that can service 120 stores. This is good news for near-term capex pressure and bad news for near-term margins, as the facility will initially be underutilised.
Excluding the costs of being a listed entity, trading expenses were up 12.6%. Thanks to the turnover growth of 13.9% and the consistent gross margin of 20.3%, this means that Boxer would’ve expanded trading profit were it not for the new expenses of being listed. If we include those listing expenses, trading expenses were up 14.3%. The biggest chunk of this was obviously once-off costs (R41 million) vs. ongoing costs (R16 million), so that will give Boxer a softer base when they look back on this period next year.
Unfortunately, the good news stops after the trading profit line. Thanks to a 79.1% increase in net finance charges (a combination of balance sheet restructuring and the silliness of IFRS 16 that puts lease expenses on this line), headline earnings was up just 5.3%. Once you include the 51.1% increase in the weighted average number of ordinary shares, you get to a drop of 30.3% in HEPS!
There’s really nothing that the Boxer management team could do about the IPO, as they were simply passengers on the corporate journey that controlling shareholder Pick n Pay needed to send them on. To make it worse, they didn’t even retain the R8.5 billion proceeds from the IPO, as this was sent up to the broken mothership to try and fix Pick n Pay’s business. The full year numbers for FY26 will once again be impacted by the change in the number of shares in issue, so there’s one more report coming with a skewed base for HEPS.
A maiden interim dividend of 45.3 cents has been declared, so the market will now have that as a useful basis for comparison going forwards.
Digging deeper into the results presentation, we find that Boxer opened 25 new stores to reach 547 stores. This is part of the jump in net finance charges, as there are an increasing number of leases over time with costs that are recognised in that line. But the much more interesting strategic news is that Boxer Rewards Club now has 2.3 million members, which means that Boxer can start to tap into that rich data and generate additional sources of revenue.
The first six weeks of trading after period-end are described by the team as “strong” – a word they are heavily overusing in their announcement – so there’s not much insight we can glean from that in terms of momentum. As with all retailers, there’s all to play for in the second half of the year.
Calgro M3 is being valued by the market on earnings, not NAV (JSE: CGR)
This means that near-term earnings pressure is hurting the share price
Calgro M3 has had a rough year in the share price. While the local index marches to the top right-hand corner of the page, Calgro is down 19% year-to-date.
Aside from generally poor sentiment in the market towards SA Inc. stocks, Calgro is struggling with a market that just refuses to value the company on a multiple above low single digits. The market also isn’t interested in the net asset value per share (up 6.4% to R15.82 per share in the latest results), with the share price languishing at R5.26 – less than a third of NAV!
But where the market does focus is on earnings, with HEPS for the six months to August 2025 down by a rather yucky 18% to 82.86 cents. There’s also no dividend at the moment, so the share price doesn’t have any kind of dividend yield to anchor it.
The group’s capital allocation strategy is on full display in the latest earnings. The Memorial Parks business collected R51.64 million in cash, an amount that is in excess of the group’s administrative expenses of R45 million. There are costs related to the memorial parks of course, but this source of cash helps tremendously to keep things ticking over during a period of deep investment in the developments. In this period, cash utilised in operations was R50.6 million vs. cash generated from operations of R57 million in the comparable period – a swing of over R107 million! Property development is no joke.
When Calgro M3 moves forward with a big project, like Bankenveld District City, they have to put down expensive infrastructure. The revenue from this investment is only recognised upon finalisation of public sector agreements. This puts some pressure on the financials that the company needs to carefully manage.
The real pressure in this period came from a decrease in revenue of 11.59% in the residential property development segment. Although gross margin only declined slightly, earnings don’t stand much of a chance when revenue dips like this. Interestingly, the group actually doubled the number of unit sales in this period, so the drop in revenue is mainly because of lower infrastructure revenue in the reporting period.
Calgro M3 isn’t the simplest business to understand, but thankfully the management team is always keen to engage with investors and they are regular attendees on Unlock the Stock. The next event is on 23 October and you can register for free here to attend the virtual presentation and pose questions to the management team.
Here’s some great news – Canal+ will inward list on the JSE after the MultiChoice deal (JSE: MCG)
This means that investors will be able to access the broader entertainment and media group
Canal+ had to vasbyt to get the deal across the line, but they’ve done it. Having jumped through various regulatory hoops, the deal for MultiChoice (JSE: MCG) became unconditional and achieved so many acceptances that they are now well above the all-important 90% threshold.
Why is that level so important? Once acceptances hit 90%, the squeeze-out provisions can be invoked. This allows an acquirer to avoid an awkward and frustrating situation where a small number of shares remain outstanding. A squeeze-out forces the remaining shareholders to sell their shares to the offeror at the same price that everyone else got, so Canal+ will end up holding 100% of MultiChoice.
The really good news is that Canal+ is following through on its plans to inward list on the JSE. This idea was floated around as part of the deal, but we now have a concrete commitment. I’m always excited to see listings on the JSE, with the Cana+ and MultiChoice combined group serving more than 40 million subscribers across nearly 70 countries. This is a scale player in the world of media and entertainment.
Of course, this also means that the financial turnaround of MultiChoice will be taking place in public, even if only in the form of segmental disclosure in the financials. I look forward to seeing what happens here.
Nibbles:
- Director dealings:
- The exec in charge of ADvTECH’s (JSE: ADH) recruitment business has sold R34 million worth of shares. The announcement notes that this is a Section 42 transaction, which is typically just a personal restructuring of how the shares are held. In such a case, there usually isn’t a change to the indirect ownership. The announcement unfortunately doesn’t specify the extent of the change to indirect ownership.
- Three directors / senior execs at AVI (JSE: AVI) were awarded share options and sold the whole lot to the value of R13 million.
- A director of Shoprite (JSE: SHP) sold shares worth R179k as part of a portfolio rebalancing. Companies love using this wording. In my books, a sale is a sale.
- The offeror in the Barloworld (JSE: BAW) deal has achieved a beneficial interest of 58% in the company. The offer is open for acceptance until 7th November.
- Mustek (JSE: MST) and Novus (JSE: NVS) released a joint announcement that the TRP investigation into the deal remains ongoing and hence a compliance certificate hasn’t been provided. This means that Novus cannot move ahead with settling the offer consideration to Mustek shareholders. The companies will release an updated deal timeline when the TRP investigation is completed.
