- Calgro M3 released results for the year ended February 2022. There’s been an enormous positive swing in Headline Earnings Per Share (HEPS), from a loss of 15.17 cents in 2021 to a profit of 105.63 cents in 2022. The good news starts right at the top, with revenue up 50.3%. Although there is still no dividend, this is clearly a strong result. Despite this, the share traded lower and remains at a substantial discount to net asset value per share.
- It was a day of results from property developers, with Balwin also announcing results for the year ended February 2022. Revenue is up 16%, HEPS is up 6% and core HEPS (which excludes charges related to the B-BBEE deal) is up 16%. The cash position approximated doubled year-on-year. The net asset value (NAV) is 10% higher at 749.01 cents per share and the share traded at R2.65 in morning trade, a hefty discount to NAV that hasn’t been helped by market sentiment towards the company, which soured further after a poorly communicated deal to buy a new head office near Melrose Arch. A final dividend of 13.5 cents per share takes the total 2022 dividend to 20.9 cents.
- After blockbuster results from MTN (see yesterday’s feature article at this link), sector peer Vodacom released results for the year ended March 2022 and reminded the market that it is on a much slower and steadier growth path. Revenue was up 4.5% (or 5.8% on a normalised basis excluding currency effects) and Vodacom now has 129.6 million customers across the group. HEPS was up 3.4%, free cash flow increased by 4.6% and the full year dividend was 3% higher at 850 cents per share. Interestingly, capital intensity (the percentage of revenue invested in capital expenditure projects) increased 80bps to 14.3%. The share price traded 3% lower in the morning at around R141.6 per share, reflecting a dividend yield of 6%.
- Altron released results for the year ended February 2022, with revenue growth of 5.7% and HEPS growth of 37.8%. If you are happy to work with the company’s definition of normalised HEPS, then that is 82.9% higher at 75 cents per share (vs. 51 cents without adjustments). There have been several disposals of businesses by the group and a few segments that were turnaround stories. There’s been significant focus on reducing costs and collecting debtors as well, so it is encouraging to see a decrease in working capital (cash tied up in the operations). This bucks the trend in IT hardware businesses globally which have had to increase their investment in inventory in a time of chip and other shortages. CEO Mteto Nyati is leaving the group in June 2022, having given it a solid base off which to deliver the Altron 2.0 strategy.
- Redefine Properties has released results for the six months to February 2022. Distributable income per share is up just 0.6% and the SA REIT NAV per share has dropped by 8.8%. Portfolio occupancy fell from 92.9% to 91.7% over the past six months. The major concern is that office vacancies have deteriorated even further, from 12.9% at the end of August to 16.4% at the end of February. The group is making slow progress in reducing the loan-to-value (LTV) ratio, down 50bps to 41.9% with a target to reduce it to 40%. This isn’t an easy reduction to achieve, requiring a halt to non-essential capex and disposals of properties to pay down debt. Redefine is down around 6% this year and it looks like the tough times aren’t over in the sector.
- Raubex has announced its results for the year ended February 2022 and it mostly makes for enjoyable reading. Revenue is up 30.9% and HEPS is up by a whopping 263.1% to 297.4 cents. The cash flow statement isn’t as flashy as the income statement, with cash generated from operations down 39.8% to R800 million and capital expenditure up sharply to nearly R696 million. Once all cash flows are considered, the group devoured R259 million in cash. This included R137 million in dividends to group shareholders and R42 million in share buybacks. There’s still R1.5 billion on the balance sheet, but I always tread carefully when a company is effectively paying dividends from cash reserves rather than operating cash flows net of capital expenditure.
- Astral Foods certainly wasn’t clucking around in the six months to March 2022. The poultry producer achieved a revenue increase of 26% and HEPS jump of 138%. The interim dividend of R7.90 per share is much higher than R3.00 per share in the comparable period. In fact, it’s even higher than the full year 2021 dividend of R7.00 per share. This excellent result was driven by higher poultry volumes and the partial recoupment of input costs. The balance sheet is strong, with net cash inflows of R639 million in this period and a net cash balance of R909 million at the end of March. The company has indicated that the supply-demand dynamic for the rest of the year looks balanced, which could support further recovery of input costs. The share price rallied 4% shortly after the announcement, but is still more than 6% down this year.
- Barloworld has released an update for the six months ended March 2022. Without any adjustments, group HEPS has more than doubled to between 750.6 and 760.6 cents. There are various other growth ranges presented based on the treatment of Avis Budget Southern Africa as being held for sale. The company also used the announcement to remind shareholders that the secondary listing in London was cancelled back in October 2021 based on lack of liquidity in the shares on that market. Barloworld jumped over 5% higher after the news to trade at around R111.50, a Price/Earnings multiple of around 14.8x. The share price is still down around 27% this year because of the exposure to Russia.
- Life Healthcare released a trading statement for the six months to March 2022. HEPS from continuing and discontinued operations is between -15% and -12% lower. If you exclude the Scanmed disposal and the strength in the base from Covid-related contracts, earnings growth would’ve been around 10%. Normalised EBITDA margin is 17% (up from 16.6% in the comparable period) and net debt to normalised EBITDA is 2x, a significant improvement from 2.78x a year ago but worse than 1.82x at 30 September 2021. The market didn’t like it, sending the share price over 4% lower in initial trading after the announcement came out.
- Jubilee Metals Group has invested R796 million over the past 12 months in its operations. The expanded, wholly-owned Inyoni operation in South Africa is exceeding design throughput and has put Jubilee on course to achieve its PGM ounce production target even without relying on joint ventures in the group. Chrome concentrate is sold to offset PGM production costs. In Zambia, the group has achieved significant milestones in delivering the Southern Copper Refining Strategy, which also makes use of a cobalt by-product. Jubilee’s share price is four times higher than at the start of 2020, an astonishing return, but has drifted 24.5% lower over the past 12 months.
- Sirius Real Estate has agreed to sell an asset in London for GBP16 million on a net initial yield of around 2%. The asset was acquired at the time of the BizSpace deal and this selling price is a 94% premium to the value at the time Sirius acquired the asset. The company points to this as an example of how the BizSpace platform creates value in the portfolio by increasing rental income.
- Premier Fishing and Brands has released a trading statement for the six months ended February 2022. HEPS is expected to be between 65.4% and 85.4% higher, an expected range of 2.90 to 3.25 cents. Although the share price closed 24% higher, that trade took place hours before the announcement came out, so it wasn’t a reaction to this news.
- Ascendis Health is trading under cautionary as the company has entered into negotiations to refinance its loan facilities. Hold onto your hats, as anything is possible here!
- A director of a subsidiary of PSG Konsult has bought shares in the company worth nearly R2 million. That’s a meaty enough trade to warrant a place in Ghost Bites.
- Michiel Le Roux, founder of Capitec and non-executive director, has entered into a collar transaction on Capitec shares through associated entity Kalander Sekuriteit with a deemed value of R1.2 billion. The put strike price is R1,871.20 and the call strike price is R3,326.58. These option structures provide hedging protection against a move below the put strike price, while giving away upside above the call strike price. The current price is R2,140 per share.
