- There has been a fair bit of excitement around Datatec after the company appointed international investment bankers Lazard & Co to assist with a strategic review of the business. When you appoint bankers to help with strategy, they aren’t going to suggest operational improvements – they are going to suggest deals! With the release of a cautionary announcement, Datatec has noted that it is in negotiations regarding a disposal of Analysys Mason. The company also released its results for the year ended February 2022. With so much news around the business, I covered it in this feature article.
- Bytes Technology Group, which was previously unbundled from Altron, released results for the year ended February 2022. The UK-based software, security and cloud specialist achieved a record set of results with an improved gross margin and a substantial 57% growth in operating profit. Headline earnings per share is up 61%. A gross final dividend of 4.2 pence per share has been declared as well as a special dividend of 6.2 pence per share. The share price closed 2.4% higher at R86.69, down 27% this year as market sentiment has soured towards the tech sector.
- Balwin Properties has announced a share buyback transaction in subsidiary Balwin Rentals. Balwin Properties currently holds 25% in Balwin Rentals, with 75% held by a company called Yieldex Trading. The portfolio has 215 rental apartments with 94% occupancy and a net operating yield of 9.77%. The deal is structured as a buyback from Yieldex of its 75% stake for R18 million. Over the past three years, the property has appreciated from the discounted acquisition price of R128 million to a current value of R170.7 million. Balwin Rentals currently has a loan to book value ratio of around 73%. The buyback is funded by a loan from Balwin Properties to Balwin Rentals. As there are directors who are common to both companies, this is a small related party deal that required a fairness opinion. BDO Corporate Finance has signed off that the transaction is fair.
- Coronation Fund Managers has released results for the interim period ended March 2022. Revenue fell by 10.8% and headline earnings per share (HEPS) decreased by 22.2%. The interim dividend is down 12.3%. Coronation expects institutional flows to remain under pressure in line with difficult economic conditions. The reality is simple: asset management businesses depend on the ability of South Africans to save for their futures. Inflation puts that heavily under pressure. When combined with pressure on equity prices, the impact on an asset management firm like Coronation intensifies. Coronation’s share price is down 30% this year.
- Delta Property Fund has released results for the year ended February 2022. Collections have improved dramatically and Funds From Operations increased by 17.8% despite a 4% decrease in rental income. There are still significant negative fair value adjustments to the portfolio. Loan-to-value is very high at 57% (up from 56.5%), which is why Delta is still firmly a turnaround story. No dividend has been declared at this stage. The auditors have raised an emphasis of matter related to a material uncertainty around going concern status of the fund. In simple terms, this means that the auditors have highlighted that the fund is facing major financial challenges and there is risk of it simply not coming right. The share price fell over 10% in response to these results.
- Entities linked to Des de Beer are still buying up shares in Lighthouse Properties. Certain Resilient directors also received substantial stakes in Lighthouse from the distribution in specie by Resilient of shares in Lighthouse.
- Platinum group metals (PGM) and chrome miner Tharisa has closed its deal with The Tharisa Community Trust to acquire the trust’s 6% stake in Tharisa Minerals (Pty) Ltd in exchange for an issue of shares in Tharisa representing around 1.1% of shares in issue. This is a R90 million deal that effectively flicked the B-BBEE shareholder to the top of the structure.
- African Bank releases results on the JSE even though the shares aren’t listed, as the company issues other instruments in the market. You may recall that this bank was rescued from the dead through a curatorship process to avoid a systemic shock to the local banking system. In the six months to March 2022, African Bank achieved a net profit after tax of R257 million after a net loss in the comparable period of R135 million. Customer advances are higher, impairments are lower and retail deposits are up – all good stuff. The MyWORLD transactional banking product has attracted 967,000 accounts of which 512,000 are funded. Operating costs were slightly lower year-on-year, a very impressive performance. It’s great to see these kinds of numbers from a bank that very nearly disappeared from our landscape.
- After the very sad passing of David Kan, the founder and CEO of Mustek, Group Managing Director Hein Engelbrecht has been appointed as Acting Group CEO.
- Brimstone Investment Corporation has confirmed that its subsidiary Sea Harvest Group (which is also listed on the JSE) has completed the acquisition of MG Kailis, a fishing business in Western Australia.
- Sable Exploration and Mining’s deal with Magni Investment Holdings and Lurco Metals is no longer proceeding as conditions precedent were not met. Sable has confirmed that companies have approached it for a potential reverse listing, which means using Sable to acquire assets and quickly achieve a listing of those assets in the process.
- Despite Sibanye-Stillwater CEO Neal Froneman’s recent remuneration of R300 million making headlines (most of which was in equity awards), over 78% of shareholders voted in favour of the remuneration policy at the company AGM.
- The listing of Southern Palladium on the JSE was originally planned for 25th May. As the primary listing on the Australian Stock Exchange (ASX) isn’t finalised yet, the date has been pushed out. The company is awaiting a revised listing date from the ASX.
- Exemplar REIT has released results for the year ended February 2022. The property fund grew its net asset value (NAV) per share by 14.7% to R12.29 and has a loan-to-value of 35.2%, which is a bit high in this environment. The total dividend for FY22 is 117.60 cents. The share price is R9.60 but there is almost no trade in this stock.
- Investec’s repurchase programme for its preference shares will start on 25th May, with an authority to repurchase a maximum of 5% of preference shares in issue.
