Capital Appreciation remains a tale of two divisions (JSE: CTA)
Don’t forget that the name of the group is changing soon
Capital Appreciation Limited is changing its name to Araxi Limited. The new JSE code will be JSE: AXX. This is the ancient Greek word for river, with the company noting that rivers represent continuous forward motion. Rivers do also dry up sometimes, but I don’t think that will be the case for this group based on their underlying momentum.
In an update for the six months to September 2025, the performance seems to once again be one of significant divergence across the two segments. The Payments division has continued with its terminal sales growth and interesting diversification initiatives, while the Software division is struggling with project conversion below the desired level.
They’ve worked hard to get the Software business right and these things unfortunately do take time, with some green shoots visible in terms of major contract awards in the financial services space. They are hoping to return to previous levels of performance in the Software business by 2027.
Other notable insights from the announcement include a reminder of the strength of the group balance sheet (there’s no debt), as well as the annuity nature of revenue in the Payments division (more than half of income and still growing). There are a number of new business initiatives across products like MicroPOS, Halo Dot and an Android device aimed at merchants in lower-tier markets as part of the digitisation of the lower-income economy.
Of course, they couldn’t help but include a playful comment on AI, noting that if you remove “rax” from Araxi, you’re left with AI. One wonders if that’s a sign of things to come in the corporate branding!
Results will be released around 2 December.
Greencoat Renewables had a tough interim period (JSE: GCT)
Wind is unfortunately a volatile resource
As fans of fossil fuels will tell you, renewable energy is a noble pursuit that does come with volatility. If you burn coal, then you know what the outcome of that process will be. If you need the wind to blow, then nature will determine how much power you make. It’s why most sensible people have realised that both are valuable resources in this world.
At Greencoat Renewables, as the name suggests, you won’t find any fossil fuels. This means that there will be periods when the wind just doesn’t blow as much as usual, like in the six months to June 2025 when the wind resource led to power generation that was 15% below budget. This has a knock-on effect on the net asset value (NAV) per share, which has decreased 8.6% based on reductions in wind resource budgets.
The group generated cash of €68.7 million, nearly 40% lower than the prior year. Due to the significant dividend cover, they’ve managed to still hit the full year dividend target, albeit with cover of 1.8x instead of 3.0x.
In terms of positives, the balance sheet is in decent shape overall and the company is signing contracts to provide power to data centres in Europe. There’s also a reduction in management fees in an effort to improve shareholder returns.
Naspers is doing a share split (JSE: NPN)
This is expected to align the price more closely with Prosus (JSE: PRX)
When a share price becomes very high (i.e. the price per share in absolute terms), companies consider using share splits as a way to make the shares easier for people to invest in. The most famous example of this not happening is Berkshire Hathaway’s A shares, which trade at an outrageous $736k per share! Owning one of those is a financial life goal in and of itself. In case you’re wondering, there’s a B share in Berkshire Hathaway that is a lot more attainable.
As for Naspers, the current share price is R5,892 per share. That’s certainly not in any danger of taking away Berkshire’s crown, but it’s high by South African standards and well above the Prosus share price. Naspers has decided that they don’t like the optics of this and they want to enhance accessibility, hence the decision to do a five-for-one stock split (or “share subdivision”) in which each holder of a Naspers N share will hold five shares instead of one.
All else being equal, this means the share price would trade at 20% of current levels. It doesn’t affect the Naspers market cap, as the number of shares in issue will be 5x higher.
Naspers values the Ghost Mail audience and they have included the full announcement here for ease of reference.
Fish oil prices took the tide out for Oceana (JSE: OCE)
Such is life in primary agriculture: sensitivity to global prices
Oceana released a trading statement for the year ending 30 September 2025. Kudos to management – this kind of early warning is exactly what a trading statement is for!
They expect HEPS to decrease by at least 40% for the period, with US dollar fish oil sales prices having halved from the record prices in the prior year. This is because the Peruvian anchovy biomass has recovered, which means supply of fish oil increased and prices corrected. In other words, HEPS fell from what were clearly unsustainable levels.
The group has also given a detailed update for the 11 months to August. It includes a note that Lucky Star only managed flat canned fish volumes locally in an environment of consumer pressure. You know it’s time for interest rates to come down when people can’t afford pilchards! Export demand was up, taking overall volumes 1% higher and allowing Oceana to improve operating margins. Inventory closed in line with the prior period.
Fishmeal and Fish Oil (USA) saw an 11% improvement in sales volumes thanks to improved landings and the heightened level of opening inventory. Sadly, this is where the impact of US dollar fish oil sales prices was really felt, so Daybrook’s earnings were “considerably lower” than before.
Wild Caught Seafood enjoyed a better performance in hake (sales volumes up 30% and European prices were higher), as well as the horse mackerel business in South Africa. Horse mackerel in Namibia was disappointing due to catch rates. Squid also struggled with catch rates.
Detailed results are due for release on 24 November 2025.
As for the share price, the past 5 years have looked like something that would get surfers excited:
OUTsurance released fantastic results (JSE: OUT)
Australia was the star of the show, which isn’t something you’ll see very often for South African companies
OUTsurance has released results for the year ended June 2025. To say they had an incredible year would be an understatement, with normalised earnings up 33.7% and the full year ordinary dividend up 36.2%. There’s even a special dividend as the icing on the cake!
These numbers were driven by the combination of factors that short-term insurers love seeing: solid growth in gross written premium (up 16.8% in Property and Casualty) and an improvement in the claims ratio from 56.8% to 53.6%, which means underwriting margins improved.
The increase in operating losses in OUTsurance Ireland from R218 million to R448 million is because they are busy incubating that business. Instead of throwing money at an acquisition, OUTsurance is doing things the “hard” way with short-term pain and long-term gain. After all, their Australian business is a perfect example of the benefit of building from scratch, as OUTsurance is one of the only South African corporates to have truly made a success of an Australian expansion.
It’s been a great year for the short-term insurance industry and OUTsurance is almost a pure-play in that space, which explains the 7% jump in the share price on the day of release and the 52% increase over the past 12 months!
Sirius raises €105 million in debt (JSE: SRE)
Debt raises are just as important as equity raises
Sirius Real Estate, like practically all property funds, takes advantage of the benefits of financial leverage. This means using debt to boost return on equity. The property sector is perfect for this as the properties themselves are appealing security for lenders and the underlying cash flows are linked to leases, which makes them contractual in nature.
Now, there are many ways to raise debt, including the most obvious solution which is to just phone the bank. For larger funds like Sirius that do regular acquisitions and thus need access to lines of capital, note programmes are a great way to spread the funding risk and attract a variety of institutional debt investors. Another useful feature of a note programme (depending how it is structured) is the use of tap issues, which means raising additional debt capital under the terms of an existing programme.
This is how Sirius has raised €105 million in new notes on the same terms as the existing €359.9 million 1.75% bonds due in November 2028. You may be wondering about that strange number (the capital value, not the interest rate!) – this is actually the second time they are tapping the programme, having raised €59.9 million in May 2024 after the initial issue of €300 million in 2021.
Sirius will use the proceeds for the pipeline of potential acquisitions in Germany and the UK, as well as general corporate purposes. If there’s one company that knows how to find acquisition opportunities and deploy capital, it’s this one.
Southern Sun adds to the positive hospitality narrative (JSE: SSU)
The prepared comments at the AGM are helpful
Southern Sun hosted its AGM and released the prepared comments on SENS, giving us another example today of good disclosure to investors. Importantly, for the first five months of the financial year ending March 2026 (i.e. for April to August 2025), the South African occupancy rate improved by 160 basis points to 59.2%.
It gets better. This uptick in occupancy been accompanied by the average room rate increasing by 6.7% over the period, so room revenue growth came in at an impressive 9.7%. We recently saw City Lodge (JSE: CLH) indicate strong growth in the past couple of months, so there’s an overall improvement in this sector that is exciting to see.
The offshore segment has a very different story to tell unfortunately, with the Paradise Sun in Seychelles having been closed for a major refurbishment. This obviously skews the numbers, with occupancy of just 33.4% vs. 46.5% in the comparable period. The hotel has now reopened and they obviously expect strong trading from the newly renovated facility. There’s unfortunately no good reason why trading has been subdued in Mozambique and Tanzania, so that is having a negative impact on performance that probably won’t magically go away in the next few months.
Once you combine the local and international performance, you get a slight uptick in occupancy rate from 57.1% to 57.8%, with average room rates up 4.0% and overall room revenue growth of 6.4%.
Room revenue is only part of the story, with evening and conferences as another important driver. Thanks to strong demand in that space, the South African business grew EBITDAR (but we don’t know by how much). That’s not a typo by the way – EBITDAR is the industry standard metric in hospitality. They aren’t explicit regarding group earnings, but the narrative suggests that group profits may have dipped due to various factors like the losses at Paradise Sun and major IT costs.
Importantly, the group has a strong balance sheet and can pursue the current expansion pipeline without impacting the cash being returned to shareholders (both share buybacks and dividends).
I think that this is a chart worth keeping an eye on:
Nibbles:
- Director dealings:
- There have been some interesting trades in shares of Pan African Resources (JSE: PAN) by the CEO. He sold shares worth around R10.9 million in the market and also took profit of R2.7 million on a CFD position. That’s a significant disposal after a sharp rally in the share price, but a small portion of his overall exposure.
- A non-executive director of South32 (JSE: S32) bought shares worth just over R3 million.
- The group COO of Spar (JSE: SPP) bought shares worth R493k.
- An associate of a major subsidiary of WeBuyCars (JSE: WBC) sold shares worth R480k.
- An associate of the chairperson of KAP (JSE: KAP) bought shares worth R149k.
- The offer for Renergen (JSE: REN) by ASP Isotopes (JSE: ISO) had a fulfilment date for conditions of 30 September 2025. They think they might still get that right, but they’ve taken the step of extending the date out to 28 November 2025 just in case. There are a number of difficult approvals already out of the way, like the Competition Commission. This has freed them up to start working on the integration plan while the rest of the conditions are met.
- If you’re keen to learn more about AngloGold Ashanti (JSE: ANG), then you can check out a presentation that the company is using at two major conferences. You’ll find it on this page under “recent presentations” on the left.
- Copper 360 (JSE: CPR) released their integrated annual report and AGM notice, as well as something that investors don’t like seeing: a “change statement” regarding the financials. This is a rare thing on the market in which something has changed in the financials in the period between their announcement and the publication of the annual report. There are numerous changes to the numbers, ranging from balance sheet items (understandable given the recently announced capital restructuring) through to reallocations of cost of sales (that’s hard to understand). The headline loss per share is 33.82 cents instead of the 31.95 cents initially reported.
- MultiChoice (JSE: MCG) announced that the reorganisation of the South African operations has begun, as all the conditions for the transactions have been met. These transactions are necessary to meet the various regulatory conditions for the Canal+ deal. This has particular relevance for shareholders in the Phuthuma Nathi structure.
- Marshall Monteagle (JSE: MMP) announced that financial director Edward Beale has stepped down from that role and will immediately become the chairman of the board to replace Rory Kerr. This means they need a lead independent director, with Dean Douglas taking that role. Heidi Koegelenberg has been promoted to the financial director role.
