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Who’s doing what in the African M&A space?

Marylou Greig
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Who’s doing what in the African M&A space?

DealMakers AFRICA

Australian mining company Askari Metals has entered into a binding agreement to acquire an 80% interest Earth Dimensions Consulting, owner of lithium project EPL 8535 located near the town of Uis in Namibia. In terms of the agreement Askari will pay $1,6 million, payable in AS2 consideration shares at an estimated issue price of A$0.40 plus a Net Smelter Royalty of 1.5% payable by Earth Dimensions.

InfraCo Africa, a UK head officed firm providing funding and expertise to infrastructure projects, has invested US$2 million in Mobility for Africa to scale the business. The Zimbabwe-based electric mobility company delivers affordable, cargo-carrying e-tricycles and solar-powered battery charging solutions to the underserved communities in rural Zimbabwe.

Host Africa, the hosting business leading in Cloud Server solutions in South Africa, has acquired Kenyan hosting company EAC directory. Financial details were not disclosed.

Financial services company Lipa Later has acquired Sky.Garden for an undisclosed sum. Sky.Garden is a mobile first SaaS e-commerce platform for African retailers. The acquisition is in line with Lipa’s aim to build an end-to-end service connecting merchants to customers.

ShEquity, a Mauritius-based impact investment firm has made an undisclosed investment in Owoafara, a Nigerian women-owned financial inclusion startup. Through Owoafara’s digital platform and card services, member businesses are verified and provided with a variety of financial services including credit not normally provided by the banks.

Nigerian proptech startup VENCO has secured US$670,000 in a pre-seed funding round led by Zrosk Investment Management with participation from Voltron Capital, Decimal Point Ventures and Fast Forward fund, among others. The technology platform which provides solutions to enhance living experiences in residential and commercial communities, will use the funds to scale its platform with more features such as credit delivery infrastructure for household spending. VENCO has set its sights on growing its presence in Kenya and expanding into Ghana and South Africa.

East African a fintech startup Watu Credit has received an investment from BluePeak Private Capital, the funds of which will be used to further improve mass-market mobility and promote financial inclusion.

SIDEUP, the Egypt-based logistics platform previously branded as Voo, has raised US$1,2 million in a seed round from investors which include Launch Africa VC, 500 Global, Riyadh Angels and Alex Angels, among others. The funds will be used to scale its presence in Egypt and expand into Saudi Arabia.

OneOrder, the technology enabled supplier and wholesale distributor solutions provider for restaurants, has raised US$3 million in seed funding led by Nclude with participation from A15 and Delivery Hero Ventures. The funding will be used to scale its market share in Egypt with a view to exploring opportunities across the rest of Africa.

Kenyan re-commerce startup Badili has raised US$2,1 million in pre-seed funding. The second-hand phone commerce platform will use the funds raised to scale the business in Kenya and increase its footprint in other markets. Investors participating in the round included, among others, Venture Catalysts, V&R Africa, Grenfell Holdings, SOSV and Artha India Ventures.

Uncover, a Kenyan skincare startup has raised US$1 million in seed funding from FirstCheck Africa, Samata Capital, Future Africa, IgniteXL and angel investors. The funds will be used to grow operations in Kenya with the aim of expanding into Nigeria.

Brito, a Cairo-based startup operating a series of smartly distributed, and fully operated Cloud Kitchens all over Egypt helping international brands to expand their presence and delivery to the Egyptian market, has raised US$1,25 million in a pre-seed round. The startup will use the funds to further develop its technology, grow its delivery fleet and expand its presence.

DealMakers AFRICA is the Continent’s M&A publication
www.dealmakersafrica.com

Thorts: Common issues to consider when purchasing a business

Jaco Meyer and Haafizah Khota
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Thorts: Common issues to consider when purchasing a business

This is the second in a series of articles highlighting common issues to consider
when purchasing a business.

The first article dealt with the practical considerations when identifying assets and how to correctly describe such assets in the transaction agreements, as well as calculating the purchase consideration in respect thereof.

As previously noted, the sale and purchase of a business is usually more complex and comprehensive to implement than a sale and transfer of shares, and can take longer to complete. There are a myriad commercial reasons why a purchaser may wish to pursue a business acquisition rather than a share acquisition, including that the purchaser need not assume any of the seller’s liabilities incurred before transfer (unless expressly agreed otherwise, and excluding employee related liabilities). However, almost invariably, there will be prepayments to or by the seller (if only rent and rates) and consideration should be given as to how these should be apportioned. It is also worthwhile to briefly highlight the scope of warranties under a sale of business agreement, as these are generally one of the most contentious items of negotiating the transaction agreements.

Apportionment of Responsibility

Interim period undertakings are designed to protect the buyer from the seller eroding the business being purchased. Buyers often require that the seller undertakes to continue conducting the business “in the ordinary course”, and not to enter into any agreement which would alter the ordinary course of the business.

Where signing of the transaction documents and completion occurs simultaneously, few interim period undertakings are given, as most will be unnecessary. However, the position is slightly more complicated where the effective date of transfer, for accounting purposes, is different from the date on which completion of the transaction occurs.

Where the effective date of transfer predates the completion date, certain questions must be considered and negotiated, for example –

• although the parties may have agreed that transfer takes place before completion, the revenue authorities may consider the income of the business to be that of the seller during this period; thus, the seller’s tax liability in these circumstances needs to be taken into account;

• what responsibility should the purchaser assume for liabilities arising after the transfer date: all liabilities (in that the purchaser receives the profit), or only those arising in the ordinary course of business; and

• practically, it should be considered whether revenues and costs can be identified and allocated before and after the date of transfer.

Warranties

As noted above, the scope of warranties is often one of the most contentious items of negotiation. Warranties are generally expressed as statements of fact, which may be qualified by means of a disclosure letter. This, ideally, should allow both parties to consider the business’ factual position and allow the buyer to renegotiate its price, should a material issue be identified.

The purpose of warranties is two-fold

• firstly, to shake the skeletons – out of the closet, in respect of the business, so that the buyer is provided with some reassurance about the quality of the business it is buying; and

• secondly, to provide an opportunity for redress if the business is not as warranted.

Warranties are particularly important in instances where there is a gap between the signature date of the agreement, and completion. If, during this period, matters arise which are in breach of the warranties, the buyer should have the opportunity to terminate the agreement or renegotiate the purchase consideration. For this reason, it is important to minimise the time between signing and completion.

The buyer should consider which information about the business is important to it, and structure the warranties to address those items. This will depend on the nature of the business; for example, in a manufacturing or wholesaling business the physical condition of the assets is important. In a service business, supplier, customer and employee contracts are important. Warranties that certain facts are not true should also be considered and included.

If a warranty is breached, the buyer would ordinarily be entitled to claim damages resulting from the breach of that warranty. Practically, it needs to be considered how such damages will be quantified, but an appropriately worded clause in the transaction agreement may address this. Buyers should also be aware that they have a general duty to mitigate their loss in these circumstances.

In certain instances, it may also be appropriate to deal with a potential breach of warranties as an adjustment to the purchase consideration, or have it covered by an indemnity provided by the seller, particularly where the transaction contemplates the preparation of completion accounts and/or stock taking at completion. Another option is to tie it in with the retention of part of the purchase consideration or the payment of deferred consideration.

Of course, whenever an indemnity is provided, buyers should anticipate that sellers will request limitations on their liability, often in the form of time or amount based limitations. Indemnities and limitation of liability, including warranty and indemnity insurance, will be discussed in more detail in further articles.

Conclusion

The whole question of warranties, disclosures and the information process needs to be carefully planned and controlled. It is also useful to have a draft of the disclosure letter prepared as soon as possible, to encourage the parties to agree, at an early stage of the negotiations, what would be accepted as disclosure. Parties are encouraged to engage their transaction advisers at the outset, so that they are fully aware of and, preferably, the conduit for documents passing between parties.

Jaco Meyer is a Director and Haafizah Khota an Associate in Corporate & Commercial | Cliffe Dekker Hofmeyr.

This article first appeared in DealMakers, SA’s quarterly M&A publication
DealMakers is SA’s M&A publication
www.dealmakerssouthafrica.com

Africa Thorts: Trends in African energy and tech investments

Khaya Hlophe-Kunene
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Africa Thorts: Trends in African energy and tech investments

Despite a challenging macro-environment, foreign direct investment (FDI) in Southern Africa increased nearly ten-fold in 2021, to US$42 billion. FDI growth extended across the continent with West and East Africa, for instance, experiencing increases in 2021 of 48% and 35% respectively1. While the FDI landscape in 2022 is not quite as rosy as that of the previous year, positive trends nevertheless persist.

INVESTMENT IN TRADITIONAL ENERGY SECTORS

Much of the FDI into Africa is driven by an increasing demand for energy, both within Africa and outside the continent. From oil and gas to large-scale renewables, the energy industry was responsible for billions of dollars in capital deployed over the last 12 months.

Looking ahead, interest in African oil and gas will continue as prices and demand remain high. Exploration activity off South Africa2 and Namibia3 is expected to increase in the next 18 to 24 months, as companies weave through approval processes. Downstream, a liquefied natural gas project in Palma, Mozambique is being pursued, with new refinery capacity also being proposed in South Africa.

RENEWABLES SHINE AND INVESTORS ARE HEEDING THE CALL

Despite extensive carbon reserves, reliable access to electricity remains a critical problem across much of Africa, impacting livelihoods and the prospect for economic growth. According to the International Energy Agency’s Africa Energy Outlook 2022 (Outlook 2022)4, Africa will need investment of $25 billion annually just to meet current demand, while five times that investment in renewable energy solutions will be required over time to achieve Africa’s climate goals.

In 2021, there was an increase in the number of international projects in African renewables. Yet, much of the funding is concentrated among export projects in North Africa, delivering energy not to Africans, but to consumers in the Middle East and Europe. This includes a $20 billion project to supply wind and solar energy from Morocco to the UK via the world’s longest sub-sea power transmission cable.

Consequently, there remains untapped demand for renewable energy projects in the rest of Africa. According to Outlook 2022, Africa is home to 60% of the best solar resources globally, but only 1% of installed capacity. There have been recent solar installations increasing capacity across the continent, led by South Africa, the Democratic Republic of Congo (DRC), and Botswana; however, to meet the increasing demand, scalability and replication are needed.

TECH EXPANSION FUELLED BY GROWTH IN MERGERS AND ACQUISITIONS

A more recent trend in African investment across several sectors is an increase in mergers and acquisitions5. While the move is not surprising, what turns heads is the boldness of African-owned corporates in this space. Deals this year included, inter alia, the acquisition of Nona Digital by Yoco South Africa, solidifying the company’s position as a fintech leader in Southern Africa, as well as the cross-border acquisition of Ghana’s GreenLion by Nigeria’s Trade Depot, furthering consolidation in the business-to-business commerce space in West Africa.

Such acquisitions are fuelled by a wave of venture capital. As a result, growth and innovation are spreading beyond key tech hubs such as Cape Town, Nairobi, and Accra, into less established markets.

As African corporates are flexing their muscle, so too are Africa’s venture capitalists. Leading investors – from the American powerhouse, JP Morgan to start-up darling, Y-Combinator – are now joined by home-grown VCs, including AlphaWave in South Africa and 4DX Ventures in Ghana. These organisations are shifting the dynamic of ownership and expansion on the continent.

The use of African capital to fuel mergers and acquisitions is also causing ripples in the renewables sector. One example is the recently proposed merger of Nigeria’s Starsight Energy and South Africa’s SolarAfrica, two of the continent’s largest renewable power developers. If approved by regulators, the deal would create a combined portfolio of over 220MW in operated and signed generation capacity, and 40MWh of battery storage, with an additional pipeline of more than 1GW.

Both the energy and tech sectors remain ones to watch in 2022 and 2023. According to James Zhan, Director of Investment and Enterprise at the United Nations Conference on Trade and Development (UNCTAD), (“the African continent has great potential to attract international investment in the green and blue economies, as well as infrastructure. A challenge is to improve the investment climate and strengthen Africa’s capacity to absorb sustainable investment”6).

HITTING THE RIGHT MARK

Increasingly, investors wish to place their money in ‘Africa’, rather than in any one single market. This strategy is contingent on having advisors who understand the continent and, more importantly, the pitfalls and opportunities that come with it.

Put simply, investors require a partner with the necessary expertise and networks for them to thrive.

1) https://unctad.org/news/investment-flows-africa-reached-record-83-billion-2021#:~:text=FDI%20to%20Southern%20Africa%20increased,the%20third%20quarter%20of%202021
2) https://businesstech.co.za/news/energy/607364/major-oil-exploration-planned-off-south-africas-coast/
3) https://www.news24.com/fin24/companies/namibia-oil-discovery-could-be-a-giant-says-totalenergies-ceo-20220928
4) https://www.iea.org/reports/africa-energy-outlook-2022
5) https://www.brookings.edu/blog/africa-in-focus/2021/04/07/figure-of-the-week-trends-in-mergers-and-acquisitions-in-africa/
6) https://unctad.org/news/investment-flows-africa-reached-record-83-billion-2021

Khaya Hlophe-Kunene is Co-Head Valuations | PSG Capital

This article first appeared in DealMakers AFRICA, the continent’s quarterly M&A publication.

DealMakers AFRICA is a quarterly M&A publication
www.dealmakersafrica.com

Africa’s Energy Transition – seismic shifts create new opportunities

Edmund Higenbottam and Dusan Bozic
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Africa’s Energy Transition – seismic shifts create new opportunities

The importance of global decarbonisation and a sustainable planet is foremost; however, Africa’s journey to achieving net zero highlights the risk of further differentiating economic winners and losers. Individual countries, including the one-third of African nations that depend on fossil fuel commodities for state revenue, foreign currency receipts and local economic activity, have limited ability to influence the profound changes to the global energy market.

To achieve the targets set by the Paris Agreement requires a shift in the global economy, which implies that a third of Africa’s current oil reserves, half the current natural gas reserves, and 90% of current coal reserves shall remain in the ground. These fossil fuel resources “stranded” by the necessary changes to global energy consumption have a total value of US$6,7tn at today’s prices. Other important sectors in Southern Africa face indirect impacts; for example, the platinum sector, given the importance of catalytic converters related to internal combustion engines in the overall demand for the metal. Political discourse regarding a “just transition” risks overstating the negotiating power actually possessed by policy makers on the continent. For example, fossil fuel exporting countries cannot compel other countries to continue to accept such imports.

COVID-19 has further seen governments reprioritising budgets towards funding emergency health services and economic stimulus, and away from funding the expansion and improvement of electricity-generating infrastructure. It is estimated that it would cost Africa c. US$2,8tn to reach a net-zero energy mix by 2050, translating to roughly US$40 to $100bn investment per annum for Africa to meet its SDG 7 (Sustainable Development Goal Number Seven – Affordable and Clean Energy) targets. In contrast, estimated investment in power in Africa in 2019 was just US$17bn.

The requisite investments are unaffordable for many African economies, and increased reliance on international finance will be needed if progress is to be made. Furthermore, the cost of finance and perceived investment risk is higher for African countries than for developed economies – despite vast improvement in stability and governance.

It is important to note that there are also many positives to the energy transition and the development of the new associated technologies for African economies. Thermal power generation technologies are associated with very significant minimum efficient scale, implying centralised product of energy and complex transmission and distribution systems. In most African economies (like in many countries elsewhere in the world), power generation and distribution is owned by state-owned enterprises which, in many cases, have failed to run these systems efficiently on behalf of the public. Eskom in South Africa is a case in point. In contrast, solar PV technology can be operated efficiently at a much smaller scale, enabling individual corporations and businesses, and even families, to generate their own power in whole or material extent. As such, solar technology and the transition away from carbon is facilitating the “decentralisation” or even “democratisation” of power supply.

Additionally, many of the metals required for battery production, including vanadium, manganese, nickel, cobalt and lithium, are vastly available across the continent. The market for these metals is expected to see rapid growth in the coming years and will be driven by increased demand for electric vehicles, smartphones and off-grid energy storage. In fact, the DRC was once dubbed the “Saudi Arabia of the solar era”. The challenge for developers of these resources in Africa is likely to be the development and operation of complex benefaction assets, rather than the quality of the underlying resources.

According to the United Nations Economic Commission, there are several key drivers for an accelerated African renewable energy transition:

  1. Africa’s energy demand is rapidly growing: Population growth, expanding middle class, industrialisation, urbanisation, trade and economic growth.
  2. Wide recognition in the international finance community that Africa’s energy gap needs to be addressed.
  3. Africa is endowed with an abundance and quality of renewable energy resources: Independent power producer tenders across the continent yield some of the cheapest tariffs globally. As an example, the World Bank/IFC Scaling Solar Project in Zambia saw tariffs of US$0.06 per kWh.

Verdant Capital has advised on renewable energy transactions across the value chain, embedding itself to tackle the core challenges entrenched in Africa’s energy transition. In South Africa, where, for good reasons and bad, uptake of solar infrastructure has been faster than the rest of the continent, Verdant Capital advised on a multi-hundred million rand acquisition in the battery sector, subject to Competition Commission approval.

Other countries in Southern Africa, which are less affluent than South Africa, have experienced a growth in the demand for Pico-solar products. Pico-solar systems are smaller and more affordable than their traditional solar counterparts, and have the power to provide useful amounts of electricity to charge the increasing number of low power consuming appliances from mobile phones and e-readers to LED lights. Picosolar has the power to light up millions of homes in the same way that the mobile phone has connected and empowered communities across the continent. Further, it offers an affordable means to the energy transition, incorporating the needs of lower income households and allowing for wider market reach across rural, periurban and urbanised cities. Verdant Capital’s Hybrid Fund, following its first close in December 2021, is currently finalising a US$15m investment in a leading PAYGO business in Southern Africa, assisting the firm to bridge its capital needs between inventory shortfalls and escalating market demand for Pico-solar products in the region. In West Africa, where many countries are experiencing recurring electricity outages and blackouts, with such bottlenecks costing two to four percent of annual GDP, Verdant Capital has performed financial advisory work, enabling downstream economic integration in both the off-grid commercial markets and smaller scale solar product adoption channels.

The energy transition imposes painful challenges on the economies of Africa, as it does to economies around the world. Different economies – mature versus developing, energy exporting vs energy importing – face different types of challenges and opportunities.

Climate change is real. Whether or not all economies will achieve the 2050 net zero targets remains a subject of debate, but it is undeniable that the global energy sector is changing profoundly, and will continue to do so, with significant impact on African economies. These changes imply the decline of sectors important to many economies in our region, with potentially important and painful impacts on unemployment and social cohesion. However, these changes also create new opportunities, including new extractive industries’, mining and processing of “green minerals”, reduced dependence on grid power and the associated SOEs, and new businesses’ manufacture, assembly, and installation of these renewable energy assets, large and small. Economic transition creates opportunities for entrepreneurs, large corporations, financiers and dealmakers across the board.

Sources: PwC, Africa Energy Review 2021; World Bank; IRENA

Edmund Higenbottam is Managing Director and Dusan Bozic an Associate | Verdant Capital

This article first appeared in the DealMakers’ Renewable Energy 2022 Feature

DealMakers is SA’s M&A publication
www.dealmakerssouthafrica.com


Not going quietly into December

The Finance Ghost
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Not going quietly into December

After staying out of the headlines for most of the last couple of months, South Africa waited until the back-end of the year to get all the attention. The team from TreasuryONE explains the rollercoaster.

In the past week, we have seen President Ramaphosa embroiled in the “farmgate,” or Phala Phala situation. We have had reports of the President willing to resign, then making an abrupt U-turn as he was convinced by senior members of the ANC and Business SA to fight the findings. We have also seen that the ANC is standing by the President, which makes the base case that the ANC elective conference will probably go as expected, but never say never.

Rand rollercoaster

What has the Phala Phala situation done to the Rand?

We saw the rand trading below the R17.00 mark last week, as we had the US Fed stating that they will be less aggressive with its interest rate hikes, and the rand tested the R16.90 level against the US dollar. After the report broke and rumours were flying about the President resigning, the rand lost almost R1.00 in one day and touched a high of R17.95 against the US dollar!

With a sense of normality in the market, we have seen the rand trading back toward the R17.30 level, but given that the US dollar is losing some ground, we can safely assume that there is currently a risk premium in the rand.

Speaking of the US dollar, we have seen the greenback trading upwards of the 1.05 level in the last couple of days. With the market expecting the US Fed to be a little less aggressive, the US dollar has started to drift higher against most currencies. Although the economic data releases haven’t been bad as of yet, with the employment data being better than expected for the last couple of months, the fact that the Fed seems happy with the trajectory of inflation gives credence to the notion that the worst of the hiking cycle is behind us and a Fed pivot could be par for the course next year.

US employment

On the data side, we have little top tier data out of the US this week, which focuses the mind on South African news and events for movements in the rand. With the storm regarding Phala Phala seemingly dying down in the market, we can expect the rand to trade within fairly narrow bands as it begins to track the US dollar again. The South African GDP number out yesterday surprised to the top side; the latest gross domestic product numbers for the third quarter of 2022 showed surprising growth of 1.6% in the quarter. The year-on-year figure is 4.1% but needs to be netted off against the low base that it was measured against from last year.

While we had our start of December jolt, especially in the rand market, we expect a period of consolidation and sideways movement before we head into the crux of the month with the ANC conference, US Fed meetings and US CPI out. Expect these events to concentrate most of the market volatility, but now that South Africa is in focus, any adverse news regarding the Presidency could send the rand running again.

Visit the TreasuryONE website to learn about market risk and other solutions offered by the group.

Ghost Bites (Absa | Capital & Regional | Fortress | Sanlam)

The Finance Ghost
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Ghost Bites (Absa | Capital & Regional | Fortress | Sanlam)

Absa is also enjoying the banking party

The third bank to release an operating update is also doing well

As recent updates by Nedbank and Standard Bank confirmed, the banking industry is a nice place to be at the moment. Demand for credit is robust, net interest margins are higher, non-interest revenue is doing just fine thanks and credit losses are under control. The net result is positive jaws, which means operating margins are expanding.

We now have a third bank in the mix, with Absa releasing an update for the ten months to October. With solid loan growth and revenue up by a mid-teen percentage, Absa seems to be doing just as nicely as the others. Both net interest income (NII) and non-interest revenue (NIR) are up by mid-teen percentages.

Within NIR and as we’ve seen elsewhere, improved insurance revenue has been a major driver, with pressure in the markets side of the business numbing that benefit.

Absa even calls its jaws “strongly positive” with a note that expenses are only up by single digits, something that certainly suggests a happy story for margins. The cost-to-income ratio has improved to the low 50s.

Pre-provision operating profit for the ten months has posted growth in the low 20s, a really strong result.

The key there is “pre-provision” as this number is before credit losses. The credit loss ratio is in the upper half of the target range of 75 to 100 basis points, so Absa is also running at acceptable levels, like the peers who recently gave updates.

With return on equity of 17%, Absa is doing incredibly well overall. This bank has come a long way.

The outlook for the full year is positive overall, with the bank pouring some water on the fire by noting that vehicle finance and personal loan impairments are likely to increase significantly as the effect of high rates works through the system.

Absa’s share price is up 25% this year and the underlying numbers support this move.

Capital & Counties brings us a property view from the UK

Property metrics continue to recover, with valuations under pressure in the industry

For the five months to the end of November, Capital & Counties reports that footfall was 11% ahead of 2021 and 90% of the equivalent period for 2019.

Supported by a strong period of letting, occupancy improved from 93.8% to 94.6%. Rent collection is nearing pre-Covid levels.

The company is aiming to improve its Adjusted Profit by more than 20% in the medium-term.

The problem facing property funds at the moment is that valuations are under pressure because of rising yields. Despite improving operational metrics, many funds are reporting a net decrease in portfolio valuations because the values are so sensitive to interest rates.

Sanity is prevailing with Fortress (for now at least)

It’s going down to the wire, with the shareholder meeting scheduled for January

In line with its regulatory timetables, the JSE formally notified Fortress of its intention to remove the company’s REIT status based on the requirements for that status not being met. Regular readers will know that Fortress has a dual-share class structure that worked well in the good times. Sadly, the pandemic wasn’t “the good times” by any means and the company is now stuck.

Fortress has lodged an objection to the JSE ruling to buy time until the shareholder meeting scheduled for 12 January 2023. At this meeting, shareholders will consider a temporary change to the company’s rules around distributions, with a view to preserving REIT status.

The important news is that the JSE will wait until that meeting before making a final decision on REIT status, which is clearly a sensible approach.

The future of Fortress will now be determined at that all-important meeting.

Karooooo’s subscriber growth is looking strong

The company has given a sneak peak ahead of results in January

In case you’ve been living under a rock or you just hate vowels, Karooooo is the 100% owner of the Cartrack business. This is a subscription business that is now growing on the global stage, an initiative that has required significant investment in sales teams and other overheads.

For the quarter ended November, Cartrack reported a 14% increase in subscribers. The rate of growth (the number of net paid additions) increased by 27%, which is certainly encouraging and reflects improved operating conditions for the company.

For full details, we have to wait until 19th January.

Sanlam numbers are under pressure

The share price fell 3% in response to an operational update

For the 10 months to October, it’s been a mixed bag for Sanlam with some substantial swings at business unit level. Diversification helps here of course, with the group result inevitably being smoother than segmental outcomes.

The Financial Services side of the business illustrates the point perfectly, down 1% overall. Within that, we see movements like a 23% increase in life insurance and a 50% decrease in general insurance! The group level result from Financial Services would be up 10% were it not for once-off items, though I always view this kind of analysis with skepticism. Most years have “once-off items” in them for the majority of companies. It’s called the risk of dong business.

With further pressure coming from lower investment market returns, net operational earnings declined 6%.

And if you’re wondering what caused all that pain in general insurance, I hope you’re sitting down and ready for a long list. One of the issues is claims inflation, as increases in premiums tend to lag inflationary increases in the costs of repair. Along with investment market volatility and all the usual South African issues (like cable theft), it’s not an easy market.

Notably, the Alexforbes life book is now integrated into Sanlam Life and has been a positive contributor to the business.

Strategically, the most important news is that the proposed joint venture with Allianz is making good progress with regulatory approvals, with a plan to complete the deal by mid-2023.

The share price is down 14% this year.

Little Bites:

  • Director dealings:
    • Des de Beer has bought another R5m worth of shares in Lighthouse Properties
    • The CEO of Altron bought another R31.7k worth of shares
    • A director of Afine Investments clearly used some Black Friday savings to buy shares, with a purchase of just R4.4k (not a typo)
  • Anglo American is pushing ahead with a $200 million investment as part of a plan to achieve a zero emissions haulage solution. Upon completion of this deal, Anglo will hold a controlling stake in First Mode, thereby accelerating the commercialisation of the nuGen Zero Emissions Haulage System. This hydrogen-powered mine truck is technology that I’m keeping a keen eye on.
  • Tharisa announced that construction at the Karo Platinum site has officially commenced. The project is situated in a Special Economic Zone in Zimbabwe.
  • Northam Platinum has been granted an extension for the posting of the circular related to the Royal Bafokeng Platinum offer. The circular will be posted by no later than 23 December.
  • With Nampak facing serious challenges at the moment, it raised eyebrows in the market that PSG Asset Management has acquired more shares and now holds 6.23% in the company. They clearly see value amidst the troubles.
  • Raubex has appointed former CEO Rudolf Fourie as the Chairman of the Board. There’s an interesting corporate governance lesson that you can learn here. As Fourie isn’t independent as defined (due to being the ex-CEO), the board is also required to appoint a Lead Independent Director, with Setshego Bogatsu taking that role.

Ghost Bites (Glencore investor update | Schroder results)

The Finance Ghost
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Ghost Bites (Glencore investor update | Schroder results)

Glencore investor update

The mining giant is reminding investors what it offers

In a slide deck of 36 pages, Glencore has laid out what investors should be focusing on. The company picked a great day on the market to release it, as there were very few noteworthy updates.

Of course, it doesn’t take long before the presentation talks about the journey to net zero emissions and the energy sources required to achieve that. The mining industry is full focused on this.

Glencore has no shortage of coal assets, with the company talking about a “responsible decline” of the coal portfolio and 12 mine closures by 2035.

The company believes that there is a substantial supply deficit in copper over the next decade, driven by demand for renewable energy and electric vehicles, alongside the difficulties of bringing on more supply and the extent of investment required. Of course, Glencore points this out because the group owns major copper projects.

To help you understand just how big this group is, I thought this extract from the presentation would help:

Net debt is managed around a $10bn cap and the ceiling is $16bn, so there is room for using debt for acquisitions. To manage return on equity, a decrease in leverage is rectified through special dividends and share buybacks.

Finally, I couldn’t resist sharing this slide that gives the rules that Glencore applies in determining distributions to shareholders and the use of special dividends or buybacks:

To read the entire investor presentation, follow this link.

Schroder European Real Estate looks good on key metrics

Keep an eye on debt expiry in 2023, despite the low LTV in this fund

In its full year results for the period ended September, Schroder European Real Estate Investment Trust kicked off the results by pointing out that quarterly dividends have reached pre-Covid levels. That’s a big deal, when you consider what the world has been through. To sweeten the deal, there was also a significant special dividend linked to the asset management profits achieved at Paris Boulogne-Billancourt.

With a property portfolio focused on European cities, the net asset value return of 7.3% is particularly impressive in this environment. The major drivers are valuation uplifts in the industrial and DIY portfolio, along with the German office portfolio. The direct portfolio valuation has registered a like-for-like increase of 3%.

The net asset value is a lot lower than it would’ve been without the special dividend, which shows that the management team keeps shareholder value top of mind when allocating capital.

The balance sheet is strong (hence the dividends), with a loan-to-value (LTV) of 29% gross of cash and 20% net of cash. This is higher than a year ago, but that’s not a bad thing as property funds need debt to generate proper returns to shareholders. The target is actually 35% gearing, so there is room to take on more debt. The average cost of debt is 1.9%.

Around 33% of the net debt expires in 2023 and discussions are underway with lenders. It is likely that finance costs will increase from the current low levels, with the hope being that financing costs will be offset by rental indexation.

Little Bites:

  • Director dealings:
    • The family trust of the CEO of Altron has bought another R169k worth of shares
    • Value Capital Partners is still buying big chunks of shares in ADvTECH, in this case worth just under R30m
    • A director of Momentum Metropolitan has acquired shares worth R179k
  • The Naspers and Prosus buybacks are always touching on every couple of weeks, simply because they are so huge. Between 28 November and 2 December the group purchased Naspers shares worth R2.2 billion and Prosus shares worth $328 million.
  • Pan African Resources announced that the JSE has granted formal approval of its R5 billion medium-term note programme. People tend to forget that the JSE is a great place to raise debt capital, something that doesn’t get the same attention as equity delistings because individual investors can’t participate in the debt raises.

Ghost Bites (Hyprop | Metair | Murray & Roberts | Nampak | Nedbank | Oceana | Tharisa | York)

The Finance Ghost
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Ghost Bites (Hyprop | Metair | Murray & Roberts | Nampak | Nedbank | Oceana | Tharisa | York)

Hyprop reports improved trading conditions

The retail-focused property fund has released a pre-close update

With a retail portfolio in South Africa and Eastern Europe, Hyprop has been thrilled to see the return of shoppers to the malls without masks on their faces. Let’s face it – shopping with masks was no fun at all.

In a pre-close update, the company kicks off with the balance sheet and notes that 84.4% of shareholders (including yours truly) elected the dividend reinvestment plan. This represented a value of R844 million, which had to be reduced on a pro-rata basis to R500 million. There’s also strong demand for the company’s debt, with a bond auction of R785 million in November being 1.4x oversubscribed.

Around 80% of debt is hedged against interest rates, which is important as those rates are on the up in South Africa and Europe.

The group’s loan-to-value ratio is 38.2%.

Looking at the South African performance at tenant level, tenant turnover for the four months to October is 16.9% higher than the previous year. Trading density (which takes into account the trading space) is up 15.7%. Foot count is running 7.1% higher than the comparable period in 2021, so the combination of more shoppers and high inflation is definitely helping.

With a vacancy rate in October of just 1.3%, the situation looks far better than the October 2021 (2.6%) and 2020 (3.3%) numbers.

In Eastern Europe, turnover is up 8.4% year-on-year and trading density is up 8.9%. Foot count is 10.9% higher. Vacancies at 0.5% are actually higher than in October last year, when they were 0.3%. Still, that’s a low vacancy rate regardless.

The African portfolio isn’t a happy story, with Hyprop still trying to exit its investment in the Ikeja City Mall in Nigeria. In Ghana, the deteriorating economy means that a term sheet to sell the properties fell through.

Overall, it sounds like the most important parts of the portfolio are doing well.

Metair has proven its mettle

Floods, hyperinflation and supply chain challenges – it’s been quite a year

Metair has really been through the most this year. With key operations as far apart as KZN and Turkey, the group has somehow been hit by natural disasters and hyperinflation in the same year. If they didn’t have bad luck at Metier, they would have no luck at all.

In the Automotive Components vertical, the flooding at Toyota’s factory caused havoc in the middle of the year. Production levels resumed during September and stabilised at pre-flood levels. An insurance claim of R400 million has been received thus far and the final claim is under review, with a cap of R500 million. At Ford, production of the next-gen Ford Ranger commenced in mid-November and Metair subsidiaries have entered production and ramp-up phases. Costs of R475 million related to the new Ranger will be incurred in FY22, of which at least 35% will be capitalised.

Despite all these issues and delays, volume expectations over the model lives remain unchanged. The company expects OEM production volumes to be over 700,000 units from 2023, provided supply chains are stable.

To put the importance of a new model into perspective, Metair expects the revenue from the new Ford model to be R46 billion over the model life, if I interpret the announcement correctly.

In the Energy Storage business, margins were impacted by extremely high inflation in Turkey and Romania. The costs are being recovered from customers, but there was a time lag. It all comes down to this quarter, which is the most volume sensitive for the business. It’s a mixed bag of expectations, with the Turkish business expected to be 17% higher, Romania down by 15% and South Africa flat.

Hyperinflation in Turkey is a mess, requiring Metair to apply the painful and complicated hyperinflation rules in IAS29.

Looking at the balance sheet, supply chain challenges have necessitated a larger holding of inventory on the books to allow for potential shipping delays and increases in airfreight costs.

Finally, efforts to achieve a “value unlock opportunity” have not been successful, mainly due to the overall investment climate in Eastern Europe which has obviously been negatively impacted by the war in Ukraine. For now, Metair will focus on running the businesses as best it can.

This share price chart gives you a great visual of how wild this year has been for the company:

Disaster at Murray & Roberts

The Clough deal is dead and the share price has tanked

Just when there was some solid momentum in the strategy to save Murray & Roberts’ balance sheet, there’s a new disaster for shareholders in the form of a 21% drop in the share price thanks to the Clough deal falling over.

The buyer needed to put in an interim loan facility of A$30 million to avoid Clough being placed under voluntary administration. For whatever reason, the parties couldn’t agree on the terms of the loan and so the transaction has collapsed and the buyer has walked away.

With Clough in urgent need of capital, the directors have no choice but to place the company under voluntary administration in Australia. Murray & Roberts has also placed its Australian investment holding company into voluntary administration.

The only other investment in Australia is RUC Cementation, which has a net asset value of $85 million and which has not been placed into administration.

Other than the interest in RUC and a guarantee to Clough USA (related to the old buyout of minorities) of A$3 million, Murray & Roberts has no residual exposure to Australia.

Voluntary administration appears to be quite similar to business rescue, with the goal of preserving the company. That certainly doesn’t mean that any equity value will be preserved.

Green bank, green share price performance

Like the other banks, Nedbank is enjoying these trading conditions

In a pre-close update covering the 10 months to October, Nedbank noted that the company is performing in line with the guidance given during August.

Net interest income is increasing by low double digits, supported by an increase in average interest earning banking assets of mid-single digits. Solid loan growth is being experienced across the corporate, business banking and retail books. Of course, the other factor here is net interest margin (NIM), which improves as interest rates increase.

The credit loss ratio is within the 80bps to 100bps guidance provided for full year 2022. There is some pressure coming through from the corporate book, including stressed borrowers in sectors like commercial property, aviation and agriculture.

Non-interest revenue (NIR) grew by high single digits. This has been a mixed bag, with solid performance in businesses like insurance and pressure in trading income and asset management income. Due to delays in closure of renewable energy deals, there is risk of Nedbank missing guidance for NIR.

As I’ve written about before, the key metric to watch is positive jaws, as this means that margins are heading the right way. The good news is that this is indeed the case for Nedbank.

The bank is on track to beat the 2019 level of earnings and is focused on achieving a return on equity (ROE) above the 2019 level of 15% by the end of 2023. The longer-term goal is over 18%.

Nampaking another punch to shareholders

After suffering a huge knock, Nampak shareholders have taken another 8.5% smack

The market hated the news of a rights offer last week, a necessary step in giving Nampak’s balance sheet some breathing room. The market clearly didn’t like these results either, with the share price coming under further pressure.

For the year ended September, revenue increased by 21% and trading profit increased by 13%. That sounds rather good, until you read further down the income statement. Operating profit before net impairments fell by 4% to R1.2 billion, which isn’t pretty but is clearly still a large, positive number. The result was helped along by strong volumes in beverage cans and the liquid paper business.

By the time you get to attributable profit though, you’ll instead find a loss of R147 million vs. a profit of R207 million in the comparable period. Ignoring impairments, headline earnings came in at R229 million vs. R402 million in the prior year. Detractors included foreign exchange losses, higher interest rates and increased impairments.

With all this noise in the numbers, another useful metric is cash generated from operations before working capital changes. This fell by 11% to R1.5 billion.

Although Nampak managed to comply with its major debt covenants (net debt : EBITDA and EBITDA : interest), the problem is that a major facility (R1.35 billion) is repayable soon (March) and the group can’t cover that repayment without an equity capital raise. This is partially because efforts to dispose of certain assets were unsuccessful.

The proposed rights offer is for R2 billion, with the excess to be used in the business and to pay advisory fees to the bankers etc.

The share price chart makes for an unpleasant sight:

There’s nothing salty about Oceana’s earnings

Despite a stronger second half, the dividend is still slightly lower

For the year ended September, Oceana grew its revenue from continuing operations by 12% and operating profit by 11%, so margins came under a bit of pressure. The benefits of financial leverage were felt further down the income statement, with headline earnings per share (HEPS) from continuing operations up by 17% to 626 cents.

Looking at the full group, revenue was up 11% but operating profit only increased by 6% and HEPS increased by 10% to 606.2 cents. From this, you can immediately see that the discontinued operations are loss-making (group HEPS of 606.2 cents vs. HEPS from continuing operations only of 626 cents).

The dividend has come under some pressure, with a decrease of 3% to 346 cents per share. This is likely due to a significant drop in cash generated from operations which fell by 33% because of increased canned fish and fishmeal inventory levels. When the business is sucking up cash, there’s less available for shareholders. A mitigating factor was a 12% decrease in capital expenditure.

It could certainly have been a lot worse, with the second half benefitting from a normalising supply chain in key businesses and favourable fishing conditions in the US.

Keep an eye on the balance sheet – net debt to EBITDA has increased from 1.5x to 1.7x. This is due to higher working capital requirements and the transaction of USD-denominated debt at a weaker exchange rate. Gross debt reduced by 6% in South Africa and 7% in US dollar terms, so any dollar weakness will help this ratio going forward.

Tharisa announces record profits

Record output is being achieved at a time when the commodity market is strong

Mining houses can’t control commodity prices. The most they can do is control production and look to capitalise on favourable conditions. With record earnings, Tharisa has done exactly that.

For the year ended September, revenue increased by 22.7% and EBITDA was up 12.9%, with clear cost pressures despite the company’s best efforts. Net profit increased by 35.6%.

Cash conversion was under pressure in this period, decreasing by 11.1% despite the increases in profitability.

The company reports in dollars and releases a press release based on rands, so the correct way to report the dividend is in dollars. At 7 US cents per share, the dividend is lower than 9 US cents in the comparable period.

Strategically, construction at the Karo Platinum Project in Zimbabwe has commenced and funding is well underway, with a goal of doubling Tharisa’s output in less than 24 months’ time.

York Timber taps the market

The company will raise R250 million through a heavily discounted rights offer

With a current market cap of R860 million, York Timber’s raise of R250 million is substantial. The share price has lost around 32.5% of its value this year, with only a 2% drop in response to the news of this capital raise.

The good news in this rights offer is that the money isn’t being raised to pay back the banks, as has been the case with most recent capital raises on the JSE. Instead, the capital will be used to procure more timber externally and invest in manufacturing plants, thereby allowing the harvesting age on the escarpment plantation to increase from 20 years to 23 years.

The company believes that this will enhance shareholder returns in the medium- to long-term. That would be nice, as York has historically struggled to give much love to shareholders.

The underwriter is A2 Investment Partners, the activist investment that has been involved in York for a while now. The underwritten portion is expected to be somewhere between R111 million and R160 million, subject to A2 not breaching the 35% threshold and needing to make a mandatory offer. An underwriting fee of R4.78 million will be paid to A2 for this.

The dilution for any shareholders not following their rights is substantial, with a 33.87% discount to the 30 day volume weighted average price. This is a renounceable rights offer, which means shareholders that don’t want to follow their rights can sell the right (known as a “nil paid letter”) on the open market.

Whatever you do, either follow your rights or sell the right. You’ll find it in your broker account on 4 January. If you do nothing, you will lose money.

Little Bites:

  • Director dealings:
    • At Lighthouse Properties, directors seem to be nothing if not consistent. Mark Olivier is the latest director mopping up shares on a regular basis, this time worth R715k. Of course, you won’t be shocked to learn that Des de Beer bought another R2.25m worth of shares
    • In an unusual trade that I assume is a hedge, a director of Ascendis has sold CFDs on the company’s shares with a total value of around R143k
    • A group of directors of Ninety One are part of an investment vehicle that invests in shares in the company, with the latest example being a purchase worth around R9.1m
    • A non-executive director of Sibanye-Stillwater has sold shares worth R237k
    • A non-executive director of Stefanutti Stocks has purchased shares worth R275k
    • A director of Afrimat has bought shares in the company worth R47.5k
  • Sygnia jumped 9.8% after releasing results for the year ended September. Despite assets under management and administration falling by 3.8%, revenue increased by 9.7%. HEPS is up 12.1% and the total dividend per share increased by 55.6% to 210 cents.
  • Alexander Forbes has released results for the six months ended September. Although operating income from continuing operations increased by 8%, profit from operations fell by 9% because of lower-than-expected market performance and higher operating costs. HEPS from continuing operations fell by 15%. The discontinued operations are doing well ironically, with group HEPS up by 11%. The interim dividend of 15 cents per share is 25% higher than in the prior period. In further bad news for the Sandton property market, Alexander Forbes is targeting a smaller footprint with lower rates that could achieve a 350 basis points reduction in the cost-to-income ratio.
  • Sabvest has executed a small investment in Valemont Trading, a business that produces a range of products for the pet market. The company is also the largest manufacturer and distributor of bird seed and related feeder products in the country. Sabvest has acquired a 39.3% equity interest and will also provide additional loans to execute an acquisitive growth strategy. Sabvest doesn’t play silly games, so keep an eye on this space as a platform for growth in this market. The deal value wasn’t announced.
  • BHP Group is still dealing with the legal fallout of the Fundão Dam collapse in 2015. With legal proceedings underway in Brazil, there is now a claim in the English courts that BHP is disputing due to the existing proceedings in the country where the disaster happened. BHP and Vale each held 50% of Samarco, the owner of the dam. As Vale hasn’t been named as a defendant to the claim in England, BHP had to file a “contribution claim” with a view to Value contributing to any damages that may be payable under a ruling in that country.
  • With Vodafone Group Chief Executive Nick Read stepping down at the end of December, there was some chatter on FinTwit about whether the local CEO might be promoted to the role. At this stage, that’s pure speculation. Still, Vodacom felt the need to announce this change of management at the global mothership.
  • Glencore has reached an agreement with the DRC over the company’s past conduct. The DRC will be paid $180 million in settlement. I would just love to know where that money will go.
  • Lighthouse Properties has successfully raised R50 million at an issue price of R6.50 per share. This is the same as yesterday’s closing price and in line with where it has been trading for the past few days.
  • Jasco Electronics is a rather obscure company with a market cap of just over R50 million. It makes no sense for a company of that size to be listed, so I’m not surprised that a cautionary announcement has now been released regarding an intention to make an offer by Community Holdings, the company’s major shareholder. The idea would be to subsequently delist the company as well. The offer price of 16 cents per share is a 4% premium to the 30-day volume weighted average price (VWAP).
  • Most of the shareholders in Datatec elected to receive the special dividend in cash (R2.63bn) rather than in scrip (R137m).
  • Grindrod’s special dividend of 55.9 cents per ordinary share has received approval from the SARB.
  • At Oasis Crescent Property Fund, unitholders of 32.3% of units elected to receive the cash distribution and the rest elected to receive additional units instead (like a scrip dividend).
  • Marshall Monteagle has released a trading statement for the six months to September, reflecting a headline loss per share of $0.069 vs. a profit of $0.072 in the prior period (which isn’t directly comparable because of a change in year-end). The company attributes this to declines in stock market valuations that have subsequently reversed.
  • If you’re curious about the process of business rescue, then following Tongaat at the moment will be of interest to you. The next step is for shareholders to vote on the remuneration of the business rescue practitioners in a vote to be held on 9 December.

Was Powell right about inflation?

The Finance Ghost
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Was Powell right about inflation?

As we enter the final month of what has turned out to be a horrible year for markets, it’s perhaps worth re-examining the perceived root causes of higher inflation and interest rates and how these may change globally and locally next year. Chris Gilmour digs in.

US Federal Reserve chair Jerome Powell was quite correct in his basic assumption that inflation caused by the reaction to the Sars-CoV-2 pandemic would only be “transitory”. He correctly forecast that, as consumers started enjoying the lifting of restrictions such as lockdowns, they would go on spending sprees and spend their accumulated savings. But eventually those savings would run out, shortages would disappear and inflation would subside.

So far, so good.

Source: Bureau for Economic Analysis, Gilmour Research

The above graph shows US personal saving as a percentage of disposable income, which reached a recent high of over 25% but which is now at less than 5%. There’s nothing left from this source, so had this been the only source of higher inflation, Powell’s assertion that inflation was only transitory would have been completely correct. But there were many other factors, affecting both the US specifically and the rest of the world via seriously debased currencies.

For example, supply chains out of China were badly disrupted as a direct result of the pandemic. Semiconductors stopped being manufactured in Asia almost completely and didn’t restart until well into the recovery stage of the pandemic. This resulted in massive shortages of everything that used silicon chips in their manufacture, including automobiles. A crazy situation arose, whereby second-hand (“pre-owned” in car dealer-speak) vehicles were selling for more then new vehicles, simply because they were available and new vehicles weren’t.

But that phenomenon has now run its course and second-hand cars are now approximately 13% lower in price than they were a year ago, according to the Manheim Used Car Index in the US. So there’s another factor that is no longer contributing to inflation:

Source: https://publish.manheim.com, Gilmour Research

The two main input costs that contributed most to inflation around the world – fuel and food – are abating rapidly in US dollar terms. The oil price as proxied by Brent crude is back where it was in January this year, before the start of the war in Ukraine. And food prices, according to the UN Food & Agricultural Organisation (FAO) are similarly in steep decline in US dollar terms.

It’s important to understand the dynamic affecting fuel and food prices in currencies other than the US dollar, however. As the dollar has surged in value, thanks to generally rising US interest rates, most other global currencies have declined in response. Thus commodity prices in these currencies haven’t shown the same declines as those in dollar terms and that situation will prevail for as long as the dollar remains strong.  

Another factor contributing to inflation, via the creation of an artificially tight labour market, is the continuation of the Great Resignation. At both ends of the socio-economic spectrum in countries with high degrees of social welfare spending is the phenomenon post-pandemic of people deciding that they’ve had enough of working. At the upper end of the spectrum, people on so-called “final salary” pension schemes (called defined benefit in SA) are retiring early, deciding to vasbyt until their pensions become payable and in the meantime live frugally off savings. At the lower end of the spectrum, people are deciding to stop working altogether and rather just live off state benefits.

The net result is the same: there is a shortage of people to fill vacancies in these countries and that situation could persist for some time. This is a structural problem, rather than a cyclical event.

And in similar vein, the onshoring of manufacturing back to the US and away from China and other parts of far east Asia is also a structural shift. Many countries have decided that it’s more important to be able to rely on continuity of supply than to make lowest price for manufactured products the main criterion.

So for a number of years, expect structurally higher inflation in manufacturing processes than would otherwise have been the case, until these countries reach similar levels of output and productivity as China currently offers.

The good news is that both inflation and interest rates are likely to peak in 2023. Of course, the bad news is that by then the world will be in recession.

Views on how deep that recession may be differ markedly among top economists. Mohamed El-Erian of Allianz remains pretty bearish on the outlook for interest rates, while superbear Jeremy Grantham of GMO is maintaining his stance that a bubble is about to burst. While I respect Grantham’s analytical skills hugely, he is usually wrong on the markets, at least when it comes to timing. And of course arch-bear Nouriel Roubini of NYU Stern is persisting with his doom-laden outlook. In my experience, when all the merchants of doom are predicting pretty much the same thing, chances are it will turn out nothing like that.

Let’s wait and see.

This article reflects the independent views and opinions of Chris Gilmour, which are not necessarily the same as The Finance Ghost’s opinions on these stocks. For equity research on South African retail and other stocks, go to www.gilmour-research.co.za.

Ghost Wrap #4 (Sasol | HCI | City Lodge | Nampak | Standard Bank | Property (Vukile / Attacq / Fairvest / Emira / Resilient) | Premier)

The Finance Ghost
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Ghost Wrap #4 (Sasol | HCI | City Lodge | Nampak | Standard Bank | Property (Vukile / Attacq / Fairvest / Emira / Resilient) | Premier)

Welcome to Ghost Wrap. It’s fast. It’s fun. It’s informative.

In this week’s episode of Ghost Wrap, we cover:

  • Sasol’s disappointing trading update and the impact on Omnia
  • HCI’s excellent recovery year
  • City Lodge’s celebration of summer
  • Nampak’s broken balance sheet that needs a large rights offer
  • Standard Bank’s continued enjoyment of these economic conditions
  • Some trends seen in several property updates (Vukile / Attacq / Fairvest / Emira / Resilient)
  • The cancellation of the Premier IPO

The Ghost Wrap podcast is proudly brought to you by Mazars, a leading international audit, tax and advisory firm with a national footprint within South Africa. Visit the Mazars website for more information.

Listen to the podcast below:

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