In this edition of Ghost Bites:
- Copper 360 finds no love in the market
- NERSA throws Merafe a lifeline
- Momentum lives up to its name once more
- Pan African Resources: a record year of cash flow and a nasty market response
- Sirius Real Estate signs off on another successful year
- Tiger Brands put in an exceptional margin performance
Copper 360 finds no love in the market (JSE: CPR)
With numbers like these, that isn’t a surprise
Copper 360 has released results for the year ended February 2026. The highlight is that total borrowings are down 63% from peak levels. The bad news is that this was only achieved through a recapitalisation of the company.
The group is taking a new, simplified approach to its operations. This seems to be helping, with concentrate copper production up 32% in the second half of the year. Plant recovery rates increased substantially as well.
The SENS announcement refers to “Rietberg Mine’s glory hole” – I won’t be Googling anything about that. But what I can tell you is that total revenue for the year was flat, which means that the gross loss (yes, a gross loss instead of gross profit) was only 1% better than the prior year.
The operating loss improved from R370 million to R213 million, but most of that improvement is because of a non-recurring impairment.
Ghost Bite: This stock has been a catastrophe, having shed 70% of its value in the past year. The stock ticker JSE: CPR turned out to be nasty joke, as CPR is exactly what investors need after this experience.
NERSA throws Merafe a lifeline (JSE: MRF)
I feel that this was the right call
The ferrochrome sector in South Africa finally has something to smile about. After Eskom agreed to give a special tariff to the sector, final sign-off was needed from the National Energy Regulator of South Africa (NERSA).
The good news is that NERSA has given the green light to the plan, with only the final terms and conditions needing to be settled.
This has put the brakes on the s189 process at Merafe’s joint venture with Glencore (JSE: GLN) – good news indeed!
Ghost Bite: Why did Afrimat (JSE: AFT) close lower on the day of this news, despite being an obvious beneficiary of the ferrochrome sector bursting back into life? Market apathy can be a beautiful thing for investors. I’m buying the Afrimat weakness. The NERSA approval is the catalyst I was waiting for. But how do you feel?
Momentum lives up to its name once more (JSE: MTM)
Every business unit grew its earnings
Momentum’s operating update for the nine months to March 2026 looks excellent, with HEPS up by a meaty 20%. Normalised headline earnings grew by 15%, with share buybacks helping to boost this solid performance in the business.
As we’ve seen across the sector, value of new business margin is under pressure. There’s been an industry-wide shift from life annuities towards living annuities. This is the only metric that went the wrong way, with value of new business down by 4% as margin contracted from 0.6% to 0.5%.
The rest of the numbers look excellent, with recurring premiums up 7% and single premiums up 15%. The present value of new business premiums increased by 15%.
Strong returns across equity and bond markets helped improve investment returns in the period, but poor performance in the venture capital fund was a major drag on the returns on shareholder funds. South Africa is a very tough place to be trying to do venture capital.
From a business unit perspective, the stars of the show were Momemtum Investments (up 53%), Metropolitan Life (up 21%), Momentum Africa (up 60%) and Momentum Health (up 35%). It’s also worth noting that India swung from a loss of R42 million to a profit of R3 million!
Ghost Bite: If there’s one thing South Africa knows how to do, it’s produce excellent financial services businesses.
Pan African Resources: a record year of cash flow and a nasty market response (JSE: PAN)
It’s all about the guidance
Pan African Resources released an operational update for the year ending June 2026. Gold production was up by 40% year-on-year, but at the lower end of FY26 guidance. Despite inflationary pressures, they are also within guidance for all-in sustaining costs (AISC).
Combined with the gold price, these metrics helped the group generate record operating cash flow. They are in a net cash position of $46.2 million, with the only debt on the balance sheet relating to the domestic medium-term notes of $49.8 million.
Production guidance for FY27 is 280,000oz – 302,000oz. The mid-point represents growth of nearly 6% from FY26 levels.
The bigger worry is AISC, which is expected to jump from $1,870/oz to between $2,075/oz and $2,175/oz – an increase of 13.6% year-on-year!
The group is investing for the future, particularly in Australia where they are busy with another acquisition. They will need to achieve better numbers at Tennant Mines, as this was one of the drags on performance in FY26.
Ghost Bite: The market didn’t appreciate the update, with the share price down 16% in response. Pan African has been a great position for me in the gold sector, but that cost guidance is a concern.
Sirius Real Estate signs off on another successful year (JSE: SRE)
It was a very busy period of acquisitions
Sirius Real Estate’s results for the year ended March 2026 reflect an 8.4% increase in funds from operations (FFO), or 4.5% on a FFO per share basis. This was driven by 6.4% like-for-like growth in the annualised rent roll. It’s important to remember that these growth rates are in hard currency (euro), not rand.
HEPS fell by 18.6% for the period due to foreign currency translation losses. This is something for investors to consider, but I’m not sure that it’s the best measure of underlying performance at this company.
Instead, investors are likely to focus on these two things: 4.1% growth in the total dividend for the year and a 5.0% increase in the adjusted NAV per share.
It’s been a busy period of acquisitions for Sirius, with nine deals in Germany and four in the UK. Despite this, the net loan-to-value ratio sits at a healthy 36.1% (higher than 31.4% at the end of the prior period).
Ghost Bite: Sirius is an excellent operator. The problem is that the market knows this, so the valuation tends to be too demanding for me to get involved.
Tiger Brands put in an exceptional margin performance (JSE: TBS)
This is a textbook turnaround story
Tiger Brands’ results for the six months deserve more than just a quick read, especially as some of the key metrics don’t look impressive.
Revenue growth was just 1.3%, while HEPS from continuing operations (without other adjustments) increased by 0.6%. The interim dividend was up by 3.6%.
If we dig deeper, we find far more encouraging ways to slice and dice the numbers.
For example, Return on Equity (ROE) put in a rather ridiculous increase from 16.3% to 26.3%. There are operational improvements here, but there’s also the use of additional financial leverage to juice up returns.
Another important number is group operating income before impairments and non-operational items, up 26.1% for the year. If you exclude the impact of the disposal of associate Carozzi, then you’ll find that HEPS from continuing operations would’ve been up 24.1% as well.
I must also highlight like-for-like volume growth of 4.5%, more than offsetting the impact of 1.7% price deflation. The efficiencies in manufacturing helped them increase gross margin from 29.8% to 32.1%.
Tiger Brands is following a disciplined approach to its underlying businesses. For example, efforts to find a buyer for King Foods haven’t led to a high enough offer coming in. But in the meantime, the operational improvements made to that business are paying off, so they’ve now decided to keep the business.
A look at the segmentals reveals that Milling and Baking managed to grow operating income by 15.3%, despite revenue increasing by a paltry 0.6%. They’ve found impressive efficiencies in factory labour and energy.
The Grains business suffered price deflation of 10.8% (mainly in rice), but volumes were up 6.9% in partial mitigation of that issue. Thanks to various initiatives, operating income improved dramatically by 91.7%. Margins nearly doubled from 6.4% to 12.7%!
The Culinary business had price inflation of 2.7% and 6.0% growth in volumes. The resultant 8.7% revenue growth was good enough to drive operating income growth of 26.9%.
In Snacks, Treats and Beverages, operating income jumped by 16.1% despite revenue growth of just 1.2%. Goodness knows we are seeing a pattern here of operating efficiencies.
Home and Personal Care is the group headache, with revenue down 9.5% and operating income up just 1.7%. Even where they are struggling with revenue, operating income was still slightly in the green.
Having executed major share buybacks and special dividends, the balance sheet is now in a net debt position that is designed to optimise shareholder returns vs. risk. Given the progress made in underlying operating margins, that seems more than reasonable.
Full-year guidance is unchanged despite the macroeconomic situation, with management focusing on where the group can win. There are still some disposals expected to be completed as the group finishes restructuring its portfolio of businesses.
Ghost Bite: The Tiger Brands turnaround will go down as a textbook example of what happens when an FMCG player focuses on its core strengths.
Results of previous poll:
Nibbles:
- Director dealings:
- Here’s another good reminder of what real money looks like: a co-founder of Capitec (JSE: CPI) executed a hedging and re-financing transaction related to shares worth around R1.8 billion. Yes, that’s with a “b”.
- A director of Altron (JSE: AEL) bought shares worth R1.1 million.
- The CEO of Rex Trueform (JSE: RTN) has bought R332k in “N” ordinary shares from the share incentive scheme. This allows other participants to be settled net of tax. If you look through the deal, it’s like a purchase of shares by the CEO in an on-market trade.
- The CEO of Spear REIT (JSE: SEA) – acting via associate entities and on behalf of his kids – bought shares worth over R150k.
- At the AGM of Optasia (JSE: OPA), the group told the market that they are having a strong start to the year. There’s progress on the regulatory environment in Nigeria, although my worry remains (telcos seem to be able to suspend Optasia’s airtime lending operations with limited impact on their own businesses). In an effort to expand the product range, Optasia has now introduced merchant loan products for SMEs. The share price is having an ugly time, down almost 17% this year. At least the company will finally be changing its registered name from Channel VAS Investments to Optasia Limited!
- AECI (JSE: AFE) announced the appointment of Alan Dickson as the new CEO, with effect from 1 July 2026. He brings experience from various sectors to the role, having spent 29 years at Reunert (JSE: RLO) before stepping down as CEO of that group earlier this year.
- Here’s some good news for investors in Hulamin (JSE: HLM). the Competition Commission has confirmed that the transaction to sell the Hulamin Extrusions business is no longer notifiable (i.e. they don’t need to approve it). This means that the condition related to approval by this regulator can be removed. The effective date for the deal is 1 July 2026.
- Raubex (JSE: RBX) has renewed the cautionary announcement related to the investment in Bauba Resources. They are “evaluating their strategic options” around this asset, with no details yet on what they might do. What they should do is sell it and simplify their group.
- The offer to shareholders in RMB Holdings (JSE: RMH) by AttBid was accepted by holders of 12.29% of shares in issue. Together with previous and recent purchases in the market, this takes the concert parties to a stake of 56.36% in RMH.
- Orion Minerals (JSE: ORN) is getting closer to completing its recent $15.4 million capital raise. They are almost halfway through the issuance of shares and options, with a further $8.7 million to be issued to committed investors.
- Labat Africa (JSE: LAB) has completed the acquisition of 20% of Mozfinders LDA. They’ve issued shares at a price of R0.05 per share to pay for it.
- Numeral (JSE: XII) has received an extension from the Stock Exchange of Mauritius to publish its financials for the year ended February 2026 by mid-June. Part of the delay is that they are working through a JSE pro-active monitoring review on their financials.
- Globe Trade Centre (JSE: GTC), surely the most obscure name on the JSE, has released results for the three months to March 2026. Although Funds From Operations increased by 16%, the net loan-to-value has ticked up from 57.0% to 57.7%. That’s much too high.
- Sable Exploration and Mining (JSE: SXM) is still in the process of appointing an auditor. They need to catch up on financials before the trading suspension can be lifted. At this stage, no targeted date for this milestone has been provided.
