- Tiger Brands released results that the market seemed to find glimmers of hope in, with a 4.3% gain on the day to recover some of the steep losses in recent months. I remain as bearish as ever on the business, with pressure on volumes and a decrease in profitability. I’ve written a feature article on the result here.
- Bidcorp gave shareholders an update covering the ten months to April 2022. This update is full of fascinating insights into trading conditions in the hospitality industry. There are even insights related to the hybrid working trend and the impact on offices. I wrote about the update in this feature article.
- RFG Holdings (Rhodes Food Group) released earnings for the six months to 3rd April 2022. Yes, that’s a rather odd reporting calendar. Group revenue increased by 20.9% and headline earnings increased by 32.5%. That all sounds amazing until you notice “normalised headline earnings” only growing by 3.2%. The revenue number does include the acquisition of the Today pie business, but there’s a genuinely strong underpin here in categories like fruit, jams and other. International turnover was a major contributor (up 53%) as export volumes grew by 32.7%. The problem is that if you exclude the insurance proceeds for loss of profits during Covid, as well as restructuring costs, normalised operating profit margin declined from 7.6% to 6.5%. This is the story of inflation currently, with strong sales growth and a far less exciting impact at net profit level. A growing balance sheet drove a higher net debt number. The focus now is on managing cost pressure on margins, while capitalising on demand for canned goods.
- Grindrod Shipping announced results for the three months to March 2022. The quarterly reporting is driven by the company’s listing on the Nasdaq. The group is still making plenty of money, with revenue of $110.3 million and adjusted net income of $29.8 million. There was $106.5 million in unrestricted cash at the end of the period. Headline earnings per share is $1.55 for this quarter, a spectacular increase year-on-year from $0.12. A dividend of $0.47 per share has been declared. The share price is up nearly 55% this year and has jumped 254% in the past twelve months!
- Glencore has a reputation for being a rather wild establishment. With a “colourful” history, the group has recently cooperated with investigations by authorities in the US, UK and Brazil into past activities related to bribery. There were separate US investigations into market manipulation. Glencore must pay penalties of $700 million to resolve bribery investigations and $486 million to settle the market manipulation issue. There’s another $40 million payable to Brazilian authorities. There are further claims brought against Glencore Energy by UK authorities, which Glencore will plead guilty to. In summary, Glencore had recognised a provision of $1.5 billion in the 2021 financials for these matters and doesn’t expect the final amount to be materially different. To give context to this number, Glencore made $6.9 billion in headline earnings in FY21.
- Mediclinic has released results for the year ended March 2022. Revenue increased by 8% in this period and is 5% higher than pre-pandemic levels. Thanks to the impact of operating leverage, adjusted EBITDA increased by 22% in FY22 and the margin increased from 14.2% to 16.1%. Comparing profitability to pre-pandemic levels is insightful, with adjusted EBITDA up 1% and adjusted operating profit flat vs. FY20. The cash performance in this period was encouraging, with cash conversion of 127% (i.e. a catch up on working capital from the prior year) that increased cash from GBP294 million to GBP534 million. Headline earnings per share was 19.0 pence, up from 9.6 pence the prior year. The proposed final dividend is 3.00 pence per share. For pre-pandemic context, it was 3.20 pence in FY20. In a separate announcement, it was noted that a non-executive director has acquired shares in the group.
- Vunani has released its results for the year ended February 2022. Revenue from continuing operations increased by 17% and profit from continuing operations increased by 257%. HEPS jumped from 7.2 cents to 34.7 cents. This puts the group on a trailing Price/Earnings multiple of around 8x.
- MiX Telematics released a trading statement for the year ended March 2022. HEPS is expected to be between 36% and 55% lower than the prior year, mainly driven by planned increases in operating costs to drive growth initiatives.
- Value Capital Partners has mopped up more shares in education group ADvTECH, investing another R4.7 million or so in the group.
- Hosken Consolidated Investments (HCI) expects HEPS to be at least 345.2 cents, an increase of at least 20% on the prior year. Guidance of “at least 20%” is the minimum disclosure required by the JSE in a trading statement, so the final answer may well be higher.
- Reunert has released its financials for the six months to March 2022. Slow and steady is the name of the game, with revenue up 11% and HEPS up just 1%. The dividend per share is up 7%, which is somewhat more exciting. Growth was impacted by a three-week wage strike in the Electrical Engineering segment in the first half of the year, which reduced output capacity by 14%. Reunert recently announced the acquisition of Etion Create from JSE-listed Etion Limited for R168 million on a cash-free and debt-free basis. The free cash flow outlook for FY22 is positive, with an expectation that stock levels have now stabilised.
- In remarks made at the AGM, the Chairman of Hulamin noted that demand for aluminium flat rolled products exceeds supply and that the order book is currently firm. This means that demand is likely to remain strong for the rest of 2022.
- Cell C (part of listed company Blue Label Telecoms) has launched its bond process for the recapitalisation of the company. Debt of R7.3 billion will be compromised by offering 20 cents to the rand to the lenders. In other words, they will only get back 20% of their money if this goes ahead. A meeting of noteholders has been called for 20th June 2022.
- Shareholders in Universal Partners should note that the mandatory offer from Glenrock is not fair and reasonable, as it is 33% lower than the fair value per share based on Deloitte’s report in the reply circular. If you want to see an example of such a document in an offer process, you can find it here.
- Reinet Investments has completed its share buyback programme that began on 28 March 2022, with 2.5 million shares repurchased for a total of R810.2 million. Reinet’s market cap is around R62 billion.
- Brikor released a trading statement for the year ended February 2022. HEPS has decreased by between 42% and 52%, with this news driving a 9% drop in the share price.
