Ghost Bites: Vol 11(22)
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Recent Posts
Unlock the Stock: Afrimat and Spear REIT
Afrimat’s track record is spectacular. Spear REIT is a highly respected property fund. On Unlock the Stock, you can learn about both companies.
RCL is far more than just a chicken business
RCL is far more than just a chicken business these days, which isn’t a bad thing.
Bidvest: strong trading profit growth in every division
Bidvest closed 3.8% higher after releasing results for the six months to December 2021.
Liberty Two Degrees: reversions continue to bite
Liberty Two Degrees holds stakes in some of the most iconic properties in the country
Alviva: 20% revenue growth excl. Tarsus
After teasing the market with a trading statement, Alviva has now released all the details of the interim results for the six months ended December 2021.
PSG Group and the Great Value Unlock
This is one of the biggest news stories on the JSE that we’ve seen in a while
JSE Limited: a cash cow in a shrinking field
You may not be aware of this, but the JSE Limited is listed on the JSE. You’re right in thinking that this sounds like the financial version of the movie Inception
Capital Appreciation on the deal train
The company has announced the acquisitions of three technology companies in South Africa and a 20% stake in a company in the Netherlands.
Woolworths won’t miss 2021
as released results for the 26 weeks to 26 December 2021. The share price rallied 6% despite a fair share of negative commentary on Twitter.
Cashbuild’s negative sales momentum continues
Cashbuild released its interim results for the six months ended 26 December 2021
- Richemont released a strong result with 46% sales growth and operating profit more than doubling. Trading on a substantial valuation though and with stories from the results presentation of a bearish overhang and some awkwardness between executives and analysts, the share price took a nasty 12.9% knock. I wrote a feature story on the Richemont results that you can read here.
- The Foschini Group released a very impressive set of numbers for the final quarter of the 2022 financial year. Although measured against a Covid-affected base, it’s still a solid performance that demonstrates the value of a localised supply chain in this environment. I wrote about the results in detail in this article.
- Tsogo Sun Hotels has released a trading statement for the year ended March. Importantly, the company also plans to change its name to Southern Sun in line with its rebranding, which finally removes the confusion of having two companies on the JSE with the Tsogo name (the other is Tsogo Sun Gaming). Tsogo Sun Hotels expects revenue to be way more than double the prior period, driving EBITDAR of between R738 million and R797 million vs. a loss of R177 million in the prior period. This improved result includes insurance proceeds of R191 million. The “R” on the end of EBITDAR isn’t a typo – this stands for “rent” payments and EBITDAR is a metric that Tsogo Sun Hotels reports to the market. There is still a headline loss per share of between -7.5 and -8.9 cents, a substantial improvement from the prior period of -63.5 cents but still not where the company needs to be. Trading under the ticker JSE: TGO, the share price is up over 50% in the past year and is flat year-to-date.
- Massmart shareholders will be relieved to learn that the Competition Commission has recommended the approval of the sale of Cambridge Food, Rhino and Massfresh to Shoprite with conditions. We don’t know yet what those are. Considering these businesses are already awful and lose money, one wonders what conditions Shoprite will be willing to accept. I remain skeptical of this transaction from a Shoprite perspective and look forward to seeing what the plan is. For Massmart shareholders, it’s literally a lifesaver. In case you’re curious, in a deal of such importance the Competition Commission makes a recommendation to the Competition Tribunal. The Tribunal needs to make a final decision.
- Etion Limited is selling 100% of the shares in Etion Create to a wholly-owned subsidiary of Reunert. Etion Create manufacturers customised electronic subsystems and products for clients in sectors like mining, industrial, aerospace and cyber security. The deal is worth R197 million (the final amount may vary slightly) and the company generated profit of R15.7 million in the six months to September 2021. That’s an annualised Price/Earnings multiple of 6.3x. The deal is small for Reunert and doesn’t need shareholder approval. The same isn’t true for Etion, as this is a Category 1 deal which needs a circular and shareholder approval. Etion closed 6.5% higher on Friday and Reunert closed flat.
- Steinhoff has confirmed that over 43,000 claims were received under the global settlement. These total EUR3.2 billion in value. Distributions to successful claimants will commence in 2023. It’s been a long and painful road.
- Platinum and chrome miner Tharisa has released a trading statement for the six months to March 2022. Headline earnings per share (HEPS) is expected to be between $0.15 and $0.16 per share, a decrease of between 31.5% and 26.9% vs. the comparable period. Despite the drop, the share price climbed 6.2% on Friday.
- With the Woodside Petroleum merger going ahead, BHP will sell its oil and gas business to Woodside and receive shares in return. Those shares will be declared to BHP shareholders as a dividend in specie, which is a fancy term for a non-cash dividend. South African shareholders will be settled in cash instead, as Woodside won’t be listing on the JSE (unfortunately). That will take a little longer, as a sale agent will need to sell the Woodside shares in the open market and the cash will be remitted to shareholders within 12 weeks of completion of the merger. The in specie dividend will be paid on 1 June 202.2. There may be some South Africans who receive Woodside shares, provided they followed the instructions issued by the company back in April and met the relevant regulatory requirements.
- Renewables business Kibo Energy has appointed Cobus van der Merwe as CFO. He comes with experience in investment management and capital raising, which perhaps points to the future for this group. Current CFO Pieter Krugel will move to CEO of Mast Energy Developments. The company has also issued shares to settle the forward payment facility with Sanderson Capital Partners. Sanderson now holds 12.79% in the company. Kibo is still suspended from trading.
- In very sad news, the highly respected founder and CEO of Mustek has passed away at the age of 62. David Kan founded the group in 1987 after emigrating to South African from Taiwan. He certainly leaves behind a legacy in the ICT industry in South Africa. Of course, the share price came under pressure based on this news, dropping 5%. The company will need to provide an update on succession planning as soon as possible.
- Eastern Platinum has filed a technical report on the Crocodile River Mine, a platinum group metal mine 7kms south of Brits. Based on the findings, Eastern Platinum will focus on the Zandfontein Section. The planned project has a net present value of $188 million excluding the tailing storage facility operation and $202 million including it. This is based on a 11.9% discount rate. The company will now focus on securing the required funding for the project.
- Data consulting business PBT Group has announced a restructuring of the staff investment companies, Spalding and Yonex. Someone there is clearly a fan of tennis, squash or perhaps even badminton! Yonex has swapped its 13.78% stake in PBT for a 51.5% stake in Spalding. There’s no impact on PBT shareholders from this transaction. This is a really interesting company and one that you may not have heard of, so take some time to go check it out.
- Toyota Financial Services is a debt issuer in the local market, which means it releases financial updates on SENS. You may find it interesting that operating profit before tax for the year ended March 2022 is between R950 million and R990 million. In the prior year, it was just R18 million. I haven’t delved into this but I wanted to flag it here as I suspect the FY23 result is going to take a knock from the disruptions to the local Toyota supply chain from the flooding at the Durban factory. If you want to see the impact of that disruption on a local listed company, you can do some research on Metair.
- AYO Technology has released results for the six months to February 2022. Revenue is down 8% and the headline loss per share has worsened by 43% to -35.90 cents. Of course, there’s still a dividend, as this Iqbal Surve-linked company isn’t shy to declare a dividend even when there are significant losses. A dividend of 35 cents per share has been declared, a yield of 10% on the current share price.
- An entity associated with newly-appointed Ascendis Health director Carl Neethling has picked up nearly R182k worth of Ascendis shares.
- Deneb previously agreed to sell a property in Worcester and things started to go wrong when the date for the purchaser to obtain funding was extended. An update on Friday confirms that the deal is off, as the buyer has not secured a mortgage bond.
- Castleview Property Fund is a tiny REIT that holds one shopping centre in Gqeberha and one in Cape Town. For the year ended February 2022, the distribution per share is 44.74 cents and the net asset value per share is 460.92 cents. The share price is R5.00 and never trades, so I’ve included this to show you how small and obscure a JSE-listed company can be.
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