In this edition of Ghost Bites:
- Mantengu may have locked in a profit on the iron beneficiation plant
- Northam Platinum met or exceeded guidance for key metrics
- Purple Group reaches for the Telescope with a spicy acquisition
- It’s time to put Schroder European Real Estate out of its misery
- Spear REIT locks in a tidy return on two properties
Mantengu may have locked in a profit on the iron beneficiation plant (JSE: MTU)
It all depends on how the next year pans out
Mantengu has announced the disposal of the iron beneficiation plant in Limpopo for R50 million. Having bought the asset little more than a year ago in February 2025, they are locking in a profit on disposal of R33.5 million!
It’s not quite that simple, as only R20 million of the price is payable immediately. The remaining R30 million becomes payable when the iron plant achieves “commissioning” – which they define as the plant achieving not less than 75% of its full capacity for three consecutive months.
Weirdly, the purchaser will have 12 months to achieve that status. If they don’t, then the R30 million lapses. That doesn’t feel like the right incentive to me, but presumably the underlying scenario analysis checks out.
An important element of the deal is that Mantengu will have the ability to construct additional iron plants globally under a licence agreement. This may become useful down the line, especially if the Averi transaction goes ahead.
Ghost Bite: There’s absolutely no guarantee that the R30 million will go through. If it doesn’t, then Mantengu got their money back on this asset and some change. But if it does, then they’ve locked in a juicy little profit here!
Northam Platinum met or exceeded guidance for key metrics (JSE: NPH)
It’s just a pity that PGM prices have let them down
Northam Platinum released a production update for the year ended June 2026.
They came in ahead of guidance on key metrics including total equivalent refined metal produced from own operations, equivalent refined metal purchased from third parties, total chrome concentrate produced and sold, as well as total 4E metal sold. A mouthful, I know. But all four of those metrics achieved record levels in this period, so they deserve a mention.
Other production metrics were all within guidance, driven by a solid performance across the group’s operations. This includes the ramp-up at Eland, which is proceeding on schedule.
On the PGM side, refined metal sales were up 10%. In chrome, total concentrate production was up 17.4%.
Ghost Bite: Production performance is the primary measure of a management team’s performance in the mining sector. They can’t control commodity prices, but they can control production. Despite Northam putting in a solid operational performance, the ugly correction in the PGM sector means that the price is down 30% year-to-date.
Purple Group reaches for the Telescope (JSE: PPE)
Vertical integration is coming at quite the price
Purple Group now boasts 1.3 million active clients and over R100 billion in assets on its platform. The group has done a spectacular job of scaling to this size, which is exactly why I’m a happy investor.
It’s worth pointing out that I avoided the COVID-era hype entirely though, choosing to time my entry based on when Purple Group was under pressure. They had lost their “darling” status, and the market had turned its attention elsewhere. Those are excellent ingredients for a successful entry.
My average purchase price is R1.06 vs. the current price of R1.72, a gain of 61%.
Purple has been focused on organic growth and allowing the platform to do its thing. Cross-selling has been the order of the day. I personally think that the platform has become too cluttered now, so I hope they don’t lose the “Easy” part of EasyEquities. For now at least, the numbers look fantastic and people seem to be more active than ever on the platform.
To augment this growth story, Purple has announced the acquisition of 100% of Telescope AI.
Telescope provides investment research and compliance infrastructure to platforms including IG Group, tastetrade and EasyEquities, among others. They already reach over 3 million end users across 7 jurisdictions. The compliance offering, Guardrails, has completed more than 2.5 million checks across global jurisdictions.
In other words, Purple is vertically integrating here and moving further up the value chain. Interesting.
The total price is up to $10.75 million, with $7 million payable upfront and $3.75 million payable on a deferred basis. Goodwill is the order of the day here, as Telescope NAV is just AUD494k (around $340k!) and the attributable loss after tax for the six months to February 2026 was AUD88k ($61k).
The more interesting metric would be to see what EasyEquities is currently paying to Telescope each year. By owning the company, Purple is essentially bringing that spend in-house. But even then, I suspect that you would need an actual telescope to see how high this valuation multiple is.
Of the $7 million initial payment, $5 million will be paid in cash and $2 million will be settled by issuing Purple shares at the 30-day VWAP as at the closing date.
Then, of the $3.75 million deferred amount, $2.75 million will be split into five annual instalments of $550k. Each instalment will be reduced by the extent to which the operating cash outflow of Telescope exceeds $250k per year. The net instalment can be settled in cash or shares.
The remaining $1 million deferred payment will be based on the achievement of certain milestones by Telescope AI within five years. Again, this can be settled in cash or shares.
I would love to see the underlying agreements around what the buyers can and can’t do with Telescope. It would make zero sense for the sellers to simply allow the buyers to avoid deferred payments by investing in the business and ensuring that it is operating cash flow negative. I must tell you that I’ve seen huge loopholes in many a transaction though, so anything is possible here.
Ghost Bite: This is a Category 2 transaction, so shareholders won’t be asked to vote. There also isn’t a transaction circular. If there was a vote, I suspect that there would be a lot of questions asked about the valuation. With the market cap of R2.45 billion, at least Purple Group isn’t betting the farm here.
Errata: the first version of Ghost Bites this morning noted that Purple is buying 50% of Telescopic. My apologies for misreading the announcement. I’ve corrected this Bite to reflect that they are buying 100%.
It’s time to put Schroder European Real Estate out of its misery (JSE: SCD)
The valuation is just getting worse
Schroder European Real Estate intends to wind down the company. In many ways, they would simply be putting it out of its misery.
The recent story has been anything but happy, with Schroder suffering disappointing property returns and dealing with huge tax headaches as well.
Things aren’t getting any better unfortunately. The latest portfolio update reflects a decline in value of 3.9% over the past quarter. Aside from yield pressure, there are also more conservative assumptions around investment demand for secondary offices. Some of the industrial assets have also moved the wrong way.
Ghost Bite: It really has been a horrible story, with a total return over 5 years of just 12.7%!
Spear REIT locks in a tidy return on two properties (JSE: LAB)
This has worked out beautifully for them
Spear REIT has finalised the disposal of Hamilton House and Chiappini House, both of which are situated in De Waterkant, Cape Town. Spear originally acquired these properties in October 2024 as part of the broader deal to acquire the Western Cape portfolio from Emira Property Fund (JSE: EMI).
Spear originally paid R80.75 million for the properties. They are now selling them less than two years later for a disposal price of R108 million. That’s a 34% return over two years – a seriously impressive outcome!
Apart from the obvious financial benefit of this disposal, it also has strategic benefits in the form of simplifying Spear’s portfolio and reducing the fund’s exposure to smaller, decentralised office assets.
Ghost Bite: This is yet another reason why I leave property management to the experts. I’ll stick to buying REITs and investing in these management teams, rather than doing buy-to-let myself. I can’t see myself finding a property that can give me a capital return of 34% in two years.
Results of previous poll:
Nibbles:
- Director dealings:
- The CEO of Africa Bitcoin Corporation (JSE: BAC) bought ordinary shares in the company. Unlike his other recent purchases, this is at group level in the holding company itself, rather than preferred shares in one of the underlying investments.
- Italtile (JSE: ITE) is looking for a new CEO of major subsidiary Ceramic Industries. Lance Foxcroft, who also previously served as group CEO, is taking early retirement. The reason provided is that the travel demands between Australia and South Africa are simply too great. As an interim measure, group CEO Brandon Wood will assume oversight responsibility for Ceramic Industries. The group has commenced a process to appoint a Head of Manufacturing to look after that side of the group.
- AngloGold Ashanti (JSE: ANG) is trying to persuade shareholders to vote in favour of a proposed repurchase programme of up to $2 billion. The sticking point seems to be the tenure of the authority, with AngloGold obviously looking for as much flexibility as possible (up to five years). Proxy advisory firm Institutional Shareholders Services has recommended that shareholders vote against the programme, as their belief is that it should be limited to 18 months. It will be interesting to see how this plays out.
- Afine Investments (JSE: ANI) announced the results of the dividend reinvestment alternative. Investors were able to reinvest up to 25% of their dividend in new shares. The end result is that R5 million in new shares will be issued and a cash dividend of R16.7 million will be paid by the company.
- Araxi Limited (JSE: AXX) announced that Michael Pimstein will transition from Executive Chairman to Non-Executive Chairman. He is one of the four founders of the business, so this is an important step in the broader succession plan of the group.
- African Media Entertainment (JSE: AME) announced that a company called Trucha Limited has increased its stake from 7.70% to 10.09%. I can’t find anything particularly useful about Trucha online.
