Ghost Bites (Metair | Northam)

Metair (aka the JSE’s unluckiest company) has a new CEO (JSE: MTA)

Paul O’Flaherty is taking the top job

I meant what I said in the headline to this particular bite. I really cannot think of an unluckier company than Metair. If they aren’t dealing with floods in KZN and the impact on customers, they are trying to navigate hyperinflation in Turkey.

The share price is down roughly 40% in the past 12 months. This makes it a rather interesting speculative play, particularly when you look at this chart and realise how important the current level is:

The company has a new sheriff in town, with Paul O’Flaherty moving into the CEO role from 1 February after the resignation of Sjoerd Douwenga for health reasons. O’Flaherty comes with considerable experience in tough situations, having been in top executive roles in the construction and steel industries. He also once worked at Eskom, which might make Metair seem simple.

You might also recognise his name from the role he played in the separation of ABSA Bank from Barclays PLC.

This is a 36-month contract that will bring some stability to management. The bigger question is what it will bring to the share price!

Northam’s production moves sharply higher (JSE: NPH)

Purchases from third parties more than doubled in this period

Northam Platinum released a production update dealing with the six months to December 2023. This represents the first half of the financial year.

Total equivalent refined metal production from own operations was 10.6% higher, mainly due to a 14.9% increase at Booysendal and a handy contribution from Eland with a 51.8% increase. Zondereinde was 0.4% lower.

Equivalent refined metal purchased from third parties more than doubled, up 114.5%. This now represents 16% of total production including purchased material.

The total production metric is 19.9% higher year-on-year, with the company attributing the overall increase to a strategy of mechanisation. Despite this, Northam hasn’t escaped the carnage in the platinum sector, down 37% over the past year.

Little Bites:

• Director dealings:
  • Two directors of major subsidiaries of Santova (JSE: SNV) exercised share options at significant discounts to the current market price. One director sold all the shares immediately and the other director sold just over 78% of the shares acquired. Finally, a director of the listed company sold shares worth R400k.
  • Acsion (JSE: ACS) is 77% held by the Anastasiadis Family Trust. This clearly isn’t enough for the family, as an associate of the director has bought further shares worth R65k. It’s a small purchase but you need to keep in mind that there isn’t much liquidity in this thing.

• Mantengu Mining (JSE: MTU) has released the pro-forma effects for the proposed issue of shares and warrants. This is linked to the R500 million facility to be made available to Mantengu by GEM Global Yield. Basically, pro-forma numbers tell you what the financials would look like assuming the deal had already gone ahead. Think of it as a before and after at a specific imaginary date, in this case 28 February 2023. The impact is that the loss per share would’ve been 12 cents instead of 10 cents. This is the combined impact of R10 million in additional administrative expenses (a 2% commitment fee) and the issuance of many shares under the structure.

• Although creditors have now approved the business rescue plan at Tongaat Hulett (JSE: TON), the company is still technically listed and so updates must be given on the process. The only information in the latest update that is relevant in my opinion is the news that Tongaat is seeking leave to appeal the judgement regarding sugar levies that was handed down in early December 2023. This is important for the broader sugar industry. Critically, the practitioners have reaffirmed their view that the business has a reasonable chance of being rescued – under the future ownership of the Vision consortium, of course.

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