A Quantum leap in earnings (JSE: QFH)

Earnings at the poultry group are much higher than before

In February, Quantum Foods released a voluntary update dealing with the four months to January. It painted a really positive picture, as there were no HPAI (avian flu) outbreaks and there’s been practically zero load shedding. To add to the happier times in the poultry sector, egg selling prices were up.

With so much positivity around the rebuilding of the layer flock and the increase in egg supply, investors were hoping that the strong start to the year would continue. The insert-unavoidable-eggcellent-pun-here news is that this appears to be the case, with HEPS for the six months to March 2024 up by a rather daft 213%.

Percentage moves don’t make much sense once you head above 100%, so it’s better to note that the increase is from 21.7 cents to 68.0 cents.

The operational update was far more detailed than the trading statement, with the company simply noting that the conditions highlighted in the operational update continued for the remaining two months of the interim period.

Santam has concluded the deal for the short-term part of MultiChoice’s insurance business, NMS Insurance Services (JSE: SNT)

You may recall that Sanlam initiated the deal

In the middle of 2024, Sanlam announced that it would be acquiring 60% in MultiChoice’s insurance business (NMS Insurance Services). At the time, the deal was structured with a R1.2 billion upfront payment and R1.5 billion in potential earn-outs. Given the challenges being faced by MultiChoice, this was a very welcome injection of cash.

NMS includes both life insurance and general insurance products. Cleverly, the share class structure was set up in such a way that there are separate classes of shares. This allowed Sanlam to initiate the transaction, before bringing Santam along to buy the general insurance side of the business.

Santam picked up the relevant shares for R925 million and at the time that deal was announced, it was made clear that the prospects for an earn-out on this book are limited. Sanlam therefore ended up with an initial net outflow of R275 million, plus a large potential earn-out.

None of this is new information. The only new part is that Santam and Sanlam have now implemented the deal, which means that they are both on the register alongside MultiChoice.

Nibbles:

• Director dealings:
  • The results of the Lighthouse Properties (JSE: LTE) scrip dividend are in! Unsurprisingly, Des de Beer picked up a vast number of shares in the process, with a scrip dividend worth R31 million. There were three other directors who picked up shares in this way, albeit to a much lower extent with an aggregate value of R2.4 million.
  • A non-executive director of BHP Group (JSE: BHG) bought shares worth R517k.
  • The spouse of an executive director of Brimstone (JSE: BRT) bought shares worth R240k.

• Super Group (JSE: SPG) announced that the Supreme Court of New South Wales has approved the scheme of arrangement related to the deal for SG Fleet. This is the last major step before the scheme becomes effective, with a planned implementation date of 30 April. Goodness knows that Super Group needed this one, given the challenges elsewhere in the group.

• SA Corporate Real Estate (JSE: SAC) released an announcement that Cervantes Investments (Pty) Ltd now holds 12.86% in the company. That sounds very much like the percent now held by Castleview Property Fund (JSE: CVW) based on their announcement, so I’m pretty sure Cervantes is part of Castleview.