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Friday, April 4, 2025
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GHOST BITES (Accelerate Property Fund | AECI | ArcelorMittal | Emira Property Fund | enX | Ethos Capital | Jubilee Metals | Nampak | PSG Financial Services | Sephaku | Vukile | York Timber)

The Finance Ghost
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GHOST BITES (Accelerate Property Fund | AECI | ArcelorMittal | Emira Property Fund | enX | Ethos Capital | Jubilee Metals | Nampak | PSG Financial Services | Sephaku | Vukile | York Timber)

Accelerate Property Fund needs another rights offer – but there are positive signs (JSE: APF)

This is a good example of a company that is shrinking into prosperity

Bigger isn’t always better. In some business models, scale is your friend and is practically a necessity for survival. In others, scale adds limited benefit and can quickly become a disaster if the building blocks aren’t in place.

Accelerate Property Fund falls into the latter bucket, with the fund having gotten itself into all kinds of trouble under previous management. This has led to significant property sales (R700 million done and R1.2 billion still to go) to reduce debt and get the balance sheet under control. There was also a R200 million rights offer recently. The company has just announced the need for another R100 million rights offer, so the equity injections aren’t over yet.

Is there light at the end of the tunnel? There might be, provided that Fourways Mall makes the shift from white elephant to prize beast. The fund brought in Flanagan & Gerard and the Moolman Group in a last-ditch attempt to address the large vacancy rate in the mall. It’s down from 19.0% to 13.4%, so the strategy seems to be working. The mall had a decent increase in sales at the end of last year. R144 million in capital expenditure has gone into improving the mall, with further projects including a roof on the upper level parking deck and a new solar plant.

The headroom for these projects has been created by a reduction in debt from R4.4 billion to R3.7 billion, along with asset disposals that are in process and the rights offer of R100 million that will take place soon. As a show of support for the strategy, the commercial lenders have renewed Accelerate’s entire debt book for two years.

Once all is said and done, they expect the loan-to-value to be below 40%. If they can get the metrics at Fourways Mall right, then this could be a pretty lucrative deep value play in the local property sector. Is this dog finally going to have its day?

AECI is looking to sell its public water division (JSE: AFE)

The deal is too small to be categorisable under JSE rules

AECI has entered into a binding memorandum of agreement to sell Improchem’s public water business. Improchem is a wholly-owned subsidiary of AECI. The buyer is a B-BBEE investment entity owned by Nsukutech and Tanzanian group Junaco Limited. Junaco supplies water treatment chemicals and equipment across Eastern and Southern Africa and has partnered with AECI for 15 years, so the parties know each other well.

There are various regulatory hurdles that need to be overcome. You won’t see much more in the way of detail on this transaction, as it falls below the categorisation thresholds in JSE rules. These are the thresholds that trigger more detailed disclosure. AECI technically didn’t need to announce anything at all, so at least they gave the market a few details on a voluntary basis.

This disposal is part of the strategy to focus on core businesses at AECI.

Separately, the company announced that the disposal of Much Asphalt has now been completed. The final price was in line with the guidance of R1.1 billion. Remember, many deal structures allow for the final price to vary based on changes to working capital in the business while the deal is being implemented.

ArcelorMittal is deferring the decision to shut the Long business (JSE: ACL)

The IDC is coughing up to kick the can down the road

ArcelorMittal is in a difficult position. Viewed purely through a profit lens, the Long business should’ve been gone ages ago. Viewed through a social lens, it would be a complete disaster for the small towns that rely on this business. ArcelorMittal needs to try and manage being a good corporate citizen and not letting its shareholders down.

After extensive engagement with government (and I suspect plenty of examples of calling each other’s bluff), we finally have an update that sees the Long business stay open for at least another 6 months. This is being made possible by the IDC putting in a R1.68 billion facility. Government has also provided a Temporary Employee Relief Scheme (TERS) grant. ArcelorMittal hasn’t disclosed the value thereof.

Now, if this sounds to you like good money being thrown after bad, you’re on the right track and I share your sentiment. Our country has plenty of examples of people living off the taxpayers and we don’t need to create corporate examples as well. The good news is that these relief measures are accompanied by promises for structural changes, like the preferential pricing system and tariffs. My understanding is that cheap steel being exported by China is the problem, so government also isn’t in an easy situation right now. We aren’t exactly making friends and influencing people in the West right now, so upsetting our biggest partner in the East isn’t a great approach either.

For shareholders in ArcelorMittal, it’s hard to say for sure whether this is good news or not. The IDC facility is debt, so what is essentially happening here is that operating losses are being funded by a debt package that would never be provided by commercial banks due to the risks involved. Will any structural improvements in the industry more than offset these costs?

ArcelorMittal is about as speculative a play as you’ll find anywhere.

Emira seems happy with performance thus far this year (JSE: EMI)

A pre-close update indicates that they are on track internally

Emira Property Fund released a pre-close update based on numbers for the 10 months to 31 January 2025. There are still challenges for landlords out there, evidenced by ongoing negative reversions on leases – albeit to a lesser extent than before. This has improved from -6.8% to -4.2%.

The retail portfolio has almost gotten rid of negative reversions, coming in at -0.9% vs. -4.0% by the end of the interim period (September 2024). The office portfolio can’t say the same, but at least reversions are headed in the right direction, improving from -9.6% to -5.8%. This is despite the office portfolio being strongly skewed towards high quality properties. As for the industrial portfolio, there’s a nasty trend in reversions that saw them deteriorate from -7.9% to -10.8%.

The residential portfolio is spread across 3,389 units, with a low vacancy rate and high collections vs. billings. They sold 386 units in this period, unlocking disposal proceeds of R312.9 million.

Looking at other capital allocation strategies, the US portfolio is down from 12 properties to 11 and saw an uptick in the vacancy rate based on the bankruptcy of a retailer. Over in Poland, Emira’s shareholders recently approved the tranche 2 subscription option that will take Emira’s stake to 45% in DL Invest. The Polish portfolio is mainly logistics or industrial in nature (67% by value).

The loan-to-value ratio has decreased to 34.1% as at February 2025. That’s a meaningful improvement from 42.0% as at the end of September 2024. They expect to finish at between 36% and 37% as at the end of March.

Although it’s clear that there are still difficulties in the market, Emira is making progress and is pleased with how the financial year has gone.

enX sells West African International (JSE: ENX)

Don’t be fooled by the name – this is the Southern African chemicals business

As confusing names go, this one has to take the cake. West African International is the chemicals segment of enX and it operates in South Africa. West of what, exactly? Australia?

Either way, enX has found a suitor for the business. Trichem South Africa will subscribe for a 25% stake in West African International and will have the option to acquire the remaining 75%. If they don’t, they have the right to sell the 25% to enX (this takes the form of a put option).

Assuming the deal goes ahead and the put option isn’t exercised, enX would look to return surplus cash to shareholders. The initial subscription for shares is based on the NAV of West African International and that money would stay in the business going forwards, so that’s a red herring. The bit that enX shareholders care most about is the price for what would be the remaining 75% in the enlarged company. This will be calculated as 95% of net asset value, plus 75% of profits over the period between the first subscription for shares and the exercise of the ownership option.

The deal value for the initial subscription for shares and the subsequent purchase of 75% is capped at R450 million. I doubt it will get anywhere close to that number, as the NAV of the segment was R283 million as at August 2024. Profit after tax was R84 million for that year.

Unless the business is busy falling over or had an unusually great time in 2024, I’m not sure why they would want to sell it at what looks like a P/E multiple of under 4x.

Ethos Capital sold down a portion of Optasia (JSE: EPE)

This does wonders to prove the valuation

Ethos Capital’s largest and arguably most impressive asset is Optasia, a fintech group that contributed 48% of Ethos’ net asset value (NAV) per share as at 31 December 2024. Optasia is focused on under-banked individuals and SMEs in frontier markets, so that’s the kind of growth opportunity that gets venture capitalists excited.

An existing shareholder in Optasia has bought a further 13% in the group. Ethos Capital sold 0.81%, or approximately 11.1% of its 7.3% economic interest. This valued Optasia at an enterprise value of $1 billion, which is a 12.8x EV/EBITDA multiple. Welcome to startup valuations!

A valuation on paper is one thing. A valuation based on an arm’s length deal is quite another. This deal is a 13% premium to the value at which Optasia was recognised in the financials at the end of December. That’s great news for Ethos. Further positive news for shareholders comes from management’s intention to either reduce debt or return the proceeds to shareholders, rather than deploy it into new opportunities.

Jubilee Metals blames lower chrome prices for the latest results – but is that right? (JSE: JBL)

The interim results aren’t good news for shareholders

Jubilee Metals released its interim financials for the six months to December 2024. Although revenue was up 51%, EBITDA fell by 6.8% as it was “impacted by softer chrome prices” in this period. Well, that’s what the highlights section of the SENS announcement says.

In reality, the chrome business in South Africa improved its revenue per tonne of chrome concentrate, so I don’t know what they are getting at here. In the section dealing with PGMs, they even talk about how they focused on chrome recoverability in the first quarter to capitalise on those market conditions.

Sure, market prices for chrome may have dipped, but they still sold chrome at a more favourable price than before. Clearly, the EBITDA pressure didn’t come from the chrome business.

So, what was to blame? The average cost per tonne of chrome concentrate was up 30.3%, so the strategy to get the stuff out the door is putting margins under pressure.

They also had a tough time in the copper business, although this wasn’t based on market conditions. Revenue was up 5.1% and gross profit fell 88%, with the stoppage of the Roan operations due to power interruptions not helping at all. They’ve now addressed the power issues. Major changes have been made at Roan that are showing promising signs.

Jubilee is planning to update the market in April regarding guidance. Perhaps by that stage, they will have a better one-liner to explain the results than “impacted by softer chrome prices” – as this clearly doesn’t tell the story at all.

Phil Roux bids Nampak adieu (JSE: NPK)

This comes as a surprise – well, to me at least

Phil Roux was appointed as the CEO of Nampak in April 2023. That’s only two years ago. Having made plenty of progress, he’s decided to step down with six months’ notice.

This feels like a surprise. Roux will retain some involvement in the group at least, remaining on the board in a non-executive capacity and as the chair of a new Strategic Planning and Oversight Committee. The committee has some pretty granular stuff in its mandate, so this doesn’t feel like a traditional non-executive role.

Andrew Hood will take over as CEO from 1 October 2025. He is described as having “extensive experience” within Nampak and he will be appointed as COO from 1 April 2025 so that he can work closely with Roux for the next six months. This makes it even clearer to me that this came as a surprise, as that’s an odd succession structure.

Another solid period for PSG Financial Services (JSE: KST)

This business model really gets the job done

PSG Financial Services operates a strong business that is built around a combination of distribution power and management of assets. The companies on the market that have focused only on the latter have found it really difficult to grow assets. Those with a distribution capability have been doing far better.

The good times have continued for them, with a trading statement for the year ended February 2025 reflecting expected growth in recurring HEPS of between 22% and 25%.

Despite this underlying performance, the PSG share price is down 8% year-to-date. It’s up nearly 18% in 12 months.

Sephaku had a tough end to its year (JSE: SEP)

The GNU has been a disappointment for the cement industry

After much excitement related to the GNU, there’s been very little follow-through for the construction industry. Data suggests that there is limited improvement in demand for building materials and the underlying results of companies in the sector support this view.

Sephaku Holdings has reported that Sephaku Cement experienced a minor increase in profits for the 12 months to December 2024, which is a decent outcome in the context of a 4% dip in sales volumes and an 11.2% decrease in EBITDA. Sephaku Cement had gotten off to a great start in the interim period that was subsequently ruined in the second half by unplanned repairs and an associated drop in production levels. They were lucky to have lower financing costs and depreciation, leading to profit coming out slightly up despite the drop in EBITDA.

At the Metier business, which has a different year-end to Sephaku Cement, volumes are down for the 11 months to February. EBITDA is up at least, benefitting from higher selling prices and cost savings.

Vukile Property Fund has confirmed guidance for the year ended March 2025 (JSE: VKE)

This was a busy period for Iberian acquisitions

Portugal and Spain are the talk of the town in the local property sector. It seems as though this is the new Poland for local investors. Luckily for Vukile, they’ve been early adopters here, with a portfolio in that region that has been a feature of the group for several years now.

Despite all the excitement on that side of things, the South African portfolio generated growth in net operating income of 6.4% in the year ended March 2025. The township and rural segments are doing particularly well, capturing the trend of informal-into-formal retail. Rental reversions are positive, so that’s clearly a highlight that speaks to demand for the space from tenants.

As this excellent chart from the deck shows, shoppers are drinking – just not at restaurants:

Over in Spain, economic growth was well ahead of forecasts in 2024. As South Africans, we can only dream of such things. Portugal also had decent economic growth and both countries achieved record tourist numbers. Still, like-for-like growth in Spanish subsidiary Castellana was only 2%, which is well below what the South African portfolio managed in the past year. Personally, I wouldn’t extrapolate that – the fundamentals in Iberia are clearly better at the moment.

After a busy period of dealmaking, Vukile is now calming down with no planned acquisitions, equity capital raises or dividend reinvestment programmes. That’s good news in my books. They expect to achieve 6% growth in the dividend per share for the 2026 financial year. No further share issuances will certainly help with this.

And as for the year that just ended, being the 12 months to March 2025, they also expect the dividend per share to be up by 6%. That’s solid.

York Timber had a stronger interim period (JSE: YRK)

But there’s still no interim dividend

York Timber had a much better time of things in the six months to December 2024. Revenue was up 18% and adjusted EBITDA (which excludes the fair value adjustment on biological assets) increased dramatically from R8.3 million to R84.3 million. HEPS jumped from 4.67 cents to 14.31 cents, so at this point you must be wondering if there’s an interim dividend.

The answer is no, there isn’t. HEPS was boosted by the biological asset value increase of 5%, which isn’t a cash inflow. Core earnings per share excluding the fair value movement still reflected a loss, albeit a much smaller one at 0.09 cents vs. a loss of 10.06 cents in the comparable period. And although cash generated from operations achieved a massive swing from negative R7.8 million to positive R45.7 million, it’s also true that debt in the group increased (thanks to the Pine-Valley acquisition) and so did working capital requirements.

This company has always felt to me like a really hard way to make money.

Nibbles:

  • Director dealings:
    • Among sales by directors of Impala Platinum (JSE: IMP) that were mainly to cover the tax on share awards, it looks like there was one director that sold R5.6 million worth of shares that represented an entire award, not just the taxable portion.
    • The CEO of Sirius Real Estate (JSE: SRE) sold shares worth R2.8 million. The company has been on a roll recently with acquisitions, so that comes as a surprise.
    • A director of HomeChoice (JSE: HIL) sold shares worth R1.4 million.
    • A non-executive director of Shaftesbury Capital (JSE: SHC) bought shares worth R1.2 million.
    • A director of Remgro (JSE: REM) bought shares worth R249k.
  • Lesaka Technologies (JSE: LSK) hosted an investor day and released four detailed presentations that take you through the business. It took me a little while to find them on the website. You can enjoy the presentations and the webcast at this link.
  • OUTsurance Group (JSE: OUT) announced that its Australian business Youi is making some changes to its distribution strategy. They are moving away from a broker distribution channel and will instead focus on direct distribution. This means the end of the distribution relationship with Blue Zebra Insurance, in which Youi holds a 36.9% interest that will be sold to other shareholders. Separately, the company announced that losses from Cyclone Alfred are expected to mostly be within the reinsurance claim window. They do expect residual losses though, coming in at between A$10 million and A$15 million – a reminder of the risks sitting on insurance books when it comes to natural disasters.
  • Eastern Platinum (JSE: EPS) has very little liquidity in its stock. They also have a lot less revenue than before, with results for the year ended December 2024 reflecting a 41.5% drop in revenue and a swing into operating losses. The company has a large working capital deficit. There are obviously going concern risks here, with the company clinging to the upside potential of the Zandfontein operations that are being ramped up.
  • Kore Potash (JSE: KP2) has released results for the year ended December 2024. They are in the process of raising funding for the Kola project, so the focus at the moment isn’t on what you’ll find in the financial statements. This is common for junior mining companies that are still in project phase. The cash burn in the latest year was $3 million and the group had $1.3 million in cash as at the end of December. They need to raise money this year to meet the going concern test, as they have large payments to make in relation to the development.
  • If you are following Merafe (JSE: MRF) closely, you’ll be interested to know that the company has broken down its revenue in Asia in more detail. This is part of the JSE’s proactive monitoring review process. As Asia is the largest contributor to revenue, I guess they wanted to see more disaggregation to give investors granular detail.
  • Gold Fields (JSE: GFI) is considering a bond offering. They are looking at issuing 10-year bonds to repay outstanding amounts under the $750 million bridge facilities that were used to fund the acquisition of Osisko Mining in 2024. Global coordinators and bookrunners have been appointed to drum up interest among fixed income investors.
  • AYO Technology (JSE: AYO) finally released financials for the year ended August 2024. The headline loss per share jumped from 71.81 cents to 177.09 cents. To give you context to just how bad the income statement is, gross profit was R347 million and operating expenses came in at R648 million.
  • Finbond (JSE: FGL) announced that holders of 71.27% of shares in issue (less exclusions) elected to receive cash dividends rather than scrip dividends.

Hot take: chillies and the human desire for suffering

Dominique Olivier
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Hot take: chillies and the human desire for suffering

Curry. Con carne. Arrabbiata. Peri-peri. In almost every corner of this world, you’ll find a dish that’s been given the signature bite of the chilli pepper. As strong as they are small, these pungent peppers have achieved the culinary equivalent of world domination, when all they really wanted to do was to get us to stop eating them. 

The other day, I came across a headline that seemed innocent enough: Campbell’s is spicing up its range of iconic soups.

Harmless, right? Just a classic American brand keeping up with the times, rolling out a few new flavours to keep things fresh. Except, the deeper I dug into this story, the weirder it got.

Campbell’s isn’t just playing around with new flavours – it’s diving headfirst into the spice pool. The New Jersey-based food giant has launched four new varieties: Spicy Chicken Noodle, Spicy Tomato, Spicy Buffalo-Style Cream of Chicken, and (I can’t believe I’m typing this) Spicy Nacho Cheese Soup. It’s a weirdly hot twist for a brand strongly associated with comfort and nostalgia, don’t you think? After all, for most of us, soup is the kind of thing we eat when we’re cold or sick, not when we’re actively trying to break a sweat.

And yet, this isn’t just Campbell’s throwing stuff at the wall to see what sticks. The numbers back them up: spicy flavours account for a quarter of soup category growth, according to industry data. Younger consumers in particular are driving the demand for spicier flavours (if you were looking for concrete proof that Gen Z are all secretly masochists, this may be as close as you get). A 2022 survey of over 6,000 consumers found that nearly three-quarters believe that most foods taste better with some level of heat.

Spicy food isn’t new. What is new is the way it’s seeping into everything, not just the traditionally mild and soothing world of canned soup. It’s the Hot Ones YouTube series, where celebrities sweat through Scoville-induced existential crises. It’s the viral challenges where people voluntarily eat chips so spicy they require a legal disclaimer. It’s the fact that there are entire festivals dedicated to hot sauce, where attendees gleefully burn their taste buds off like it’s a competitive sport.

Most species avoid pain as a survival mechanism. But humans? We chase it down and put it on the menu. 

How does a chilli pepper make a living?

Let’s kick things off with a little biology. Ever wonder why chilli peppers burn in the first place? It all comes down to something called an antifeedant. Sounds fancy, but in plain terms, it’s nature’s way of saying, “Hey, maybe don’t eat me” to the world. Some plants develop foul-smelling fruits (looking at you, durian) in order to scare off would-be grazers, while others cultivate bitter-tasting leaves or roots (thanks a lot, kale). 

The fiery antifeedant at play in chillies is called capsaicin, and it works in cahoots with sidekicks known as capsaicinoids. When ingested, these chemicals actually trigger pain receptors in your mouth and throat, sending off an SOS signal straight to your brainstem and thalamus, which process heat and discomfort. Essentially, your body thinks you’ve eaten something like a hot coal, hence the sweating, the gasping, and the urge to chug milk like your life depends on it.

But why would a plant want to make eating it a miserable experience? Most fruiting plants rely on animals to eat their fruits and then, um, distribute their seeds elsewhere as a method of reproduction. So why go full sadist? As it turns out, chillies aren’t actually waging war on all creatures indiscriminately. They’re just picky about their seed couriers.

Mammals (like us) have capsaicin receptors, which means we feel the burn. Birds, on the other hand, get a VIP pass. They don’t have capsaicin receptors, which means they can munch on chillies without so much as a flinch. As a result, they became nature’s top-tier chilli seed couriers, spreading them far and wide.

So, in a way, chillies pulled off an evolutionary masterstroke. They deter land-based mammals who might distribute their seeds in a narrow radius while enlisting far-flying (and far-pooping) birds as their personal delivery service. It seems like a faultless plan on paper, if only human beings didn’t decide to not only tolerate the burn but actively seek it out. The question is, why are we like this?

Some like it hot

One school of thought among evolutionary biologists suggests that our fondness for spice started as a survival tactic. Peppers (along with other spicy foods like wasabi and mustard) come packed with natural antimicrobial properties, meaning they help kill off the bacteria that can turn a meal from delicious to disastrous. This theory makes particular sense when you consider that spicier cuisines tend to dominate in warmer climates, where food spoils more easily. The thinking goes that those who developed a taste (and tolerance) for chilli were less likely to get sick from rotten food, and over time, that preference became ingrained.

But biology is only one piece of the puzzle. Psychology has also thrown its hat into the ring with a different perspective, one that paints spice lovers as thrill-seekers. Back in 1980, psychologists Paul Rozin and Deborah Schiller put this to the test by feeding people progressively hotter doses of chilli. Their conclusion was that the attraction to spice is similar to the rush people get from riding roller coasters or taking scalding hot baths. It’s all about “constrained risks”, in other words, situations where we can experience a little bit of danger (or at least perceived danger) in a controlled, safe environment. More recent studies have taken this further, linking a preference for spice to personality traits like sensation seeking and sensitivity to reward. In other words, if you’re the kind of person who enjoys skydiving, gambling, or cranking the shower dial up to magma, odds are you’re also the one ordering the spiciest thing on the menu.

And then, of course, there’s culture to take into consideration. Remember, humans don’t just eat for survival – we eat for meaning. Our food choices reflect tradition, identity, and the way we want to be perceived. Anthropologists have found that in many cultures, spice is less about flavour and more about who you are. Take Mexico, for instance. In some regions, spiciness is deeply tied to national and regional identity. Cultural historian Esther Katz references a phrase from Indigenous Mixtec people in Oaxaca: “Somos fuertes porque comemos puro chile”, which translates to “We are strong because we eat nothing but pepper”. The implication is that handling heat isn’t just a preference, but a mark of resilience, toughness, and even pride. Similar associations pop up across multiple cultures, where eating spicy food is linked to bravery, masculinity, or just good old-fashioned toughness.

And so, the humble chilli, a fruit that evolved to keep us at bay, has instead become the object of our obsession. We’ve taken its fiery defence mechanism and turned it into a badge of honour, a source of pleasure, and a billion-dollar industry. Whether we’re sweating over a bowl of soup, braving a Carolina Reaper for internet glory, or simply dousing our eggs in Tobasco, one thing is clear: pain, in small, edible doses, is something we’re more than willing to pay for. Maybe that’s the real human enigma – while most creatures avoid suffering, we’ve found a way to season it, bottle it, and ask for seconds.

Humans 1, chillies 0.

About the author: Dominique Olivier

Dominique Olivier is the founder of human.writer, where she uses her love of storytelling and ideation to help brands solve problems.

She is a weekly columnist in Ghost Mail and collaborates with The Finance Ghost on Ghost Mail Weekender, a Sunday publication designed to help you be more interesting. She now also writes a regular column for Daily Maverick.

Dominique can be reached on LinkedIn here.

GHOST BITES (Bell Equipment | Netcare | Novus | Orion Minerals | MultiChoice | Safari Investments | Telkom)

The Finance Ghost
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GHOST BITES (Bell Equipment | Netcare | Novus | Orion Minerals | MultiChoice | Safari Investments | Telkom)

Bell Equipment reminds us what a cyclical business looks like (JSE: BEL)

That previous offer price of R53 per share just feels further and further away

I’ve said it many times and I’ll say it again: I think that Bell shareholders who blocked the take private deal were too greedy. The share price is now just below R38 and the offer price was R53. Sure, if the cycle was in Bell’s favour, then perhaps the price might get back there without an accompanying offer to boost it. Alas, the opposite is true.

For the year ended December 2024, Bell Equipment’s revenue fell by 13% and operating profit was down 37%. It just gets worse as you head further down the income statement, with HEPS down by 42%. At least there’s a dividend of 160 cents per share, representing a payout ratio of almost 35% of HEPS. Hardly a growth asset right now and not exactly a cash cow, either.

The issue is that Bell’s customer base is primarily in industries like mining. This is a hugely cyclical game where investment in capital goods (like the products that Bell sells) will only happen when the miners feel good about commodity prices. This wasn’t the case for the majority of commodities in 2024 (gold really was the exception), hence the impact on Bell’s numbers.

This takes us back to the issue I had with minority shareholders who blocked the deal: I felt that the offer was more than decent, particularly as it was being made based on earnings that were at a favourable point in the cycle. If Bell does ever get back to R53 per share, I suspect it will be a few years away. Time value of money, anyone?

Personally, I think much the same story of regret awaits the Barloworld shareholders who blocked that deal as well. Time will tell.

Netcare flags mid-single digit revenue growth (JSE: NTC)

The trend of declining maternity cases continues

The decline in the birth rate in developed countries and particularly among higher income families in emerging markets is becoming an increasingly concerning reality. This could lead to a demographic profile in years to come that is highly problematic, as we’ve seen in places like Japan and China. It’s not just an anecdotal thing of having fewer friends with kids than in prior generations – it’s an observable trend confirmed by numerous data points like declining maternity cases at Netcare.

The other trend that I always note is the level of demand for mental health services. Combined with the maternity trend, these are just some of the reasons why Netcare is experiencing a change in revenue mix where medical cases are growing faster than surgical cases. Interestingly, mental health demand may be coming off its peak though, with paid patient days 1.9% lower in this particular period in that area.

The underlying revenue mix may be changing over time, but at least the direction of travel is up. At group level, paid patient days are up 1.1% for the first half of the year. Revenue per paid patient day has increased roughly in line with inflation, which means that the group expects full-year revenue to be up by between 5% and 6%.

To help boost shareholder returns, the group has been busy with an extensive share buyback programme. This does indicate a degree of capital allocation discipline in the group, particularly as many hospital projects do struggle to generate sufficient returns on capital.

Interim results are due for release on 19 May.

Novus and the TRP just aren’t friends at the moment (JSE: NVS)

The mandatory offer to Mustek shareholders continues to be a headache

Novus hasn’t been on the right side of the Takeover Regulation Panel (TRP) recently. After raising their ire around concert party definitions in the offer made to Mustek shareholders, it looked as though things were sorted out. The Firm Intention Announcement (FIA) was released and the ball was rolling.

The latest development is that the TRP has now withdrawn its approval for the FIA, which means that Novus has to publish a new one within 20 business days. Presumably the clock will then be reset for the deal process to be followed. In the meantime, Novus will appeal against the ruling on an urgent basis.

This is a messy situation.

Orion Minerals really put the SENS systems to the test (JSE: ORN)

There was so much news that they needed four announcements in one day!

Orion Minerals certainly kept the market appraised of their plan to release major news on the underlying projects during March. In a flurry of announcements on Friday, they did exactly that.

A lot of it is very technical in nature, as is typical for a junior mining company. I’ll just focus on the high level stuff.

First up, the Definitive Feasibility Study (DFS) for the Prieska Copper Zinc Mine. The initial phase needs capex of R560 million and would achieve first production 13 months after the start of construction. This near-surface asset would run for 4.3 years. To get the life of mine up, there is a second phase that will be implemented roughly halfway through the initial phase. The total life of mine then increases to 13.2 years, with an expected post-tax internal rate of return (IRR) of 26%.

Then, we can deal with the DFS for the Flat Mines Project at Okiep Copper. This is less lucrative but still worthwhile, with a post-tax IRR of 19%. The expected capex bill is R1.6 billion. They have also planned a phased approach here, making it easier to raise funding along the way.

These DFS reports will allow the company to negotiate project funding, plan the implementation and negotiate offtake deals, among other workstreams.

Separately, the company announced a mineral resources update for the Flat Mines Area, informed by recent drilling activity. Junior mining is all about de-risking the project and getting closer to numbers that have higher confidence. This is what gets investors across the line.

And guess what? They did the same thing for Prieska, with a mineral resource update based on the recent data that was gathered in the DFS study.

Overall, the rubber now hits the road for Orion Minerals. This is where things hopefully get exciting for them, as they will need to raise capital for these projects. The market cap is R1.2 billion, so it’s likely that there will be significant dilution of shareholders along the way. This isn’t necessarily a problem, provided the valuation of Orion keeps improving over time and capital can be raised at higher share prices over time.

MultiChoice has pulled the rug on Phuthuma Nathi – and it’s disgusting (JSE: MCG)

The Canal+ transaction is starting to look like a matter of life and death

I’ve been writing and mentioning on radio interviews for a while now that MultiChoice looks to me like it was built for sale, not for sustainability. They threw everything at building out the African operations, hoping that South Africa would be able to fund it. This is as risky a strategy as you’ll find, appealing only to a buyer who wants major African exposure in one shot – much like Canal+.

The deal has gone from a nice-to-have to practically a life-or-death situation for MultiChoice. The recent results have been shocking at group level and the latest announcement shows that even Phuthuma Nathi shareholders aren’t safe. This is a disaster for B-BBEE investors, with the Phuthuma Nathi share price crashing by 56% on Friday.

The issue lies in MultiChoice South Africa, which is the level at which Phuthuma Nathi is invested. Sure, there’s a difficult environment being faced by the company, but MultiChoice has been messing around in Africa instead of getting the basics right at home. When there are endless complaints about the quality of the smart TV streaming app and nothing is done about it, you know that management is focusing on all the wrong stuff. If you add the African pressures to this, you now have a situation where MultiChoice has flagged that the dividend at MultiChoice South Africa is likely to be “significantly lower” going forwards.

So, in summary, lots of qualifying Black investors (including some major groups) trusted MultiChoice to run a decent business in South Africa that could keep paying dividends. Instead, they dropped the ball completely and now they need to preserve cash at SA level to help with the Rest of Africa. Worst of all, the Rest of Africa is a set of businesses that Phuthuma Nathi doesn’t even get any upside exposure to!

This is a disaster for many B-BBEE investment groups that saw Phuthuma Nathi as a reliable source of dividends and cash flow. Frankly, the board of MultiChoice should be looking for new jobs, but alas there is so little true corporate accountability in South Africa that it probably won’t happen.

But maybe, just maybe, there are enough angry B-BBEE investors out there with sufficient capital behind them to put pressure in the right places. I live in hope.

Safari Investments is exiting Namibia (JSE: SAR)

They found a Namibian buyer for their property assets

Safari Investments has decided to sell 100% of its interests in Safari Namibia for R290 million. The group wants to focus on rural and township shopping centres in South Africa instead, a rather interesting growth area. Unlocking capital from non-core assets obviously helps with this.

Safari Namibia is the owner and manager of the Platz am Meer Shopping Centre in Swakopmund. Having had the immense pleasure of visiting Swakopmund once before, I do wish I could go see the deal for myself! It’s a beautiful little place.

Travel memories aside, the deal also comes with an “agterskot” (a potential future payment) if Safari Namibia achieves a targeted net operating income yield during the 12 months after the disposal. This could add between R1 million and R10 million to the price for the deal.

The fair value of the property is R303 million, so even if the agterskot is triggered, they would have sold this at a price below fair value. Still, I agree that exposure to retail properties in lower income areas in South Africa is a better bet for the long term than having a shopping centre in Swakopmund.

Telkom’s earnings are trending higher, but HEPS is the right metric to use – as usual (JSE: TKG)

This is a great example of how badly EPS can be distorted

Telkom has released a trading statement dealing with the year ended March 2025. The good news for investors continues to flow at the group, with HEPS up by at least 10%. The telecoms sector has been enjoying strong market support lately and Telkom is no different, with the share price up more than 40% over six months.

Regular readers will be aware that trading statements are triggered by an earnings move of at least 20%, so why did this get released for a HEPS move of 10%? The answer lies in the Earnings Per Share or EPS line, which is impacted by the profit made on the disposal of Swiftnet. Including that profit means there’s a 300% increase in EPS!

Clearly, that’s not an indication of recurring earnings growth, hence why HEPS is the better metric to use.

Nibbles:

  • Director dealings:
    • An executive at Investec (JSE: INL | JSE: INP) sold shares worth R4.3 million.
    • A director of the main operating subsidiary at Mpact (JSE: MPT) sold shares worth R1.49 million.
    • A couple of directors at Cilo Cybin (JSE: CCC) bought shares worth R17k.
  • There’s a changing of the guard at Capitec (JSE: CPI). Gerrie Fourie is retiring as CEO, having been part of the executive management team for the past 25 years. He’s a founding member of the bank and can certainly look back on a career that genuinely changed the banking landscape in South Africa. His successor is Graham Lee, who has been on the group executive team since 2022. He joined Capitec in 2003, so this is a great example of a succession plan in action.
  • Rex Trueform (JSE: RTO) released results for the six months to December 2024. There’s practically no liquidity in this stock, so it just gets a passing mention. Although revenue fell by 4.5%, gross profit margin was up and operating profit increased by 9.6%. Despite this, HEPS fell by 3%. African and Overseas Enterprises (JSE: AOO) is a related entity that also released results, reflecting HEPS up by 0.5%.
  • AH-Vest (JSE: AHL) released results for the six months ended December. This is a tiny company, hence it only gets a mention in the Nibbles. Revenue fell 12.8% and HEPS crashed by an ugly 93%, so the company is barely profitable. It made a profit of R178k off revenue of R100.6 million. I’ve seen thin margins before, but this quite possibly takes the cake.
  • The chairperson of Labat Africa (JSE: LAB) has resigned with immediate effect, which is odd after 12 years on the board. Separately, a new director with IT experience has been appointed to the board, so this points to the new direction being taken by the company. N Bodirwa has been appointed as interim chairperson.
  • Europa Metals (JSE: EUZ) released results for the six months to December 2024. This was the period in which the Toral Project was disposed of to Denarius Metals Corp in exchange for shares. They also announced the planned Viridian Metals deal in this period, which they subsequently decided not to pursue. They will need to figure out the way forward, as the assets on the balance sheet almost entirely consist of the stake in Denarius.
  • Cilo Cybin (JSE: CCC) updated the market on the process for the proposed acquisition of Cilo Cybin Pharmaceutical. Due to the timing of the audit, the intention is to have the latest pro forma financial information in the circular. To achieve this, the company is approaching the JSE for a dispensation for a further extension of the circular distribution date.
  • Salungano Group (JSE: SLG) is dealing with a change in CFO during the finalisation of results that are now terribly late. They need to get the March 2024 annuals out, as well as the September 2024 interims. With another delay announced on Friday and an expectation of only releasing these reports by June 2025, the March 2025 annuals might be late by then as well!
  • Stefanutti Stocks (JSE: SSK) announced that the disposal of SS-Construções (Moçambique) Limitada is still suffering delays. The fulfilment date for the conditions to the deal has been extended to 30 April 2025.
  • Conduit Capital (JSE: CND) released its quarterly progress report. The company has to do this as it is suspended from trading. Aside from the provisional liquidation issues, the more important updates are: (1) the sale of CRIH and CLL to TMM, which was once again blocked by the Prudential Authority, has had its fulfilment date extended to 16 May to allow for time to engage with the regulator, and (2) the company is taking steps to enforce the arbitration award against Trustco Properties.
  • London Finance & Investment Group (JSE: LNF) had no problem in getting the approval from shareholders to delist and return capital to shareholders, with an almost unanimous vote in favour of the plan.
  • Randgold & Exploration Company (JSE: RNG) released results for the year ended December 2024. This is little more than a cash shell these days that is busy pursuing legal claims. There is no revenue other than finance income. The operating loss for the year ended December 2024 improved by 44% to a loss of R17.2 million.

GHOST BITES (Ascendis | Capital Appreciation | CA Sales | Datatec | Fairvest | Heriot | Sirius Real Estate)

The Finance Ghost
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GHOST BITES (Ascendis | Capital Appreciation | CA Sales | Datatec | Fairvest | Heriot | Sirius Real Estate)

Comparability is limited in Ascendis’ numbers (JSE: ASC)

The change to investment entity accounting is a big one

As flagged when Ascendis recently released a trading update, the shift to investment entity accounting makes a big difference to the numbers. They will now be focusing on metrics like net asset value (NAV) per share, rather than consolidated HEPS.

There’s nothing wrong with this approach, but it makes things difficult in the first year of its application. This is because the changes aren’t applied retrospectively, so the comparatives are now practically meaningless in the context of the latest numbers.

To give us a starting point for this new chapter of the company’s life, NAV per share was 105 cents as at December 2024. The Medical portfolio is 35% of the value and the Consumer portfolio is 65%.

The Consumer business is slow, with almost no growth at the moment in the face of subdued demand and pressure on pricing. The balance sheet is strong enough to allow them to launch new products to the market, which may be facilitated through acquisitions, like in the case of a new weight management product. Still, this feels to me like the narrow moat side of things, so it’s a pity that it forms the bulk of the portfolio.

The more interesting side is surely the Medical portfolio, with five entities providing a variety of devices to the private and government sectors. One of those entities is Surgical Innovations, which exited business rescue in 2023 and has been fighting for its life ever since. Thanks to the overall improvement to the balance sheet though, Ascendis could support one of its other investees making an acquisition of two strategic agencies. I’m no expert in this sector, but this sounds like a higher quality business than the Consumer portfolio in the South African context.

You may recall that there was an offer at 80 cents a share to take Ascendis private in late 2023 / early 2024. The NAV is now a fair bit higher than that number and the share price is at 83 cents.

Capital Appreciation’s payments division is doing well (JSE: CTA)

Importantly, the software division is no longer making losses

Capital Appreciation’s best business is undoubtedly the payments division. It continues to grow revenue at double digits and has a strong annuity flavour to its business model with multi-year contracts. Annuity revenue is more than half of total revenue and that obviously does great things for visibility and thus the valuation over time.

The ongoing growth of digital payments vs. cash will help them here, with innovations focused on providing solutions to micro-enterprise customers in Africa. There are good reasons to believe in the positive outlook for this division.

The recent drag on the story has been the software division. When work was slow to come in, Capital Appreciation tried to retain key staff in the hope that things would improve. At some point though, you simply have to restructure the business to respond to slower demand. This has now taken place, which is why the division returned to profitability in the second half of the year. Although the revenue prospects seem to be weak, they are no longer bleeding there.

Results for the year ended March will be released in early June. The share price is up 17.7% over 12 months. It’s well off the 52-week high of R1.90 though, currently trading at R1.40.

CA Sales just can’t stop growing (JSE: CAA)

This remains one of the most impressive local growth stories

If you’ve been paying attention to Unlock the Stock, you would’ve had the chance to engage with the management team of CA Sales Holdings on multiple occasions by now. In doing so, you would probably have reached the conclusion that they are a humble bunch who know what they are doing. Their next appearance on the platform is on 10 April (register for free here), so you have a chance to get to know them if you haven’t done so before.

When you consider that HEPS just grew by 25.3% in the year ended December 2024, it’s important to pay attention to this story. Sure, they are facing risk from exposure to the economy in Botswana and thus the look-through impact of diamond prices, but they’ve also done a fantastic job of diversifying beyond their home market. Management feels confident about the Southern and East African portfolio of businesses in the group, hence why the final dividend increased by 24.9%. This implies strong cash quality of earnings.

One of the things I appreciate most about the group is the bolt-on acquisition strategy. Instead of betting the farm on huge transactions, they go step-by-step in adding businesses to the portfolio. It’s like building a house out of lots of little Lego blocks rather than one or two big ones. If you’ve ever unleashed a toddler on a Lego house, you’ll know that small blocks are more resilient. African trading conditions and toddlers aren’t all that different.

The market has certainly taken notice of the company, with the P/E multiple at over 13x. The share price is up 48% over 12 months. Even more impressively, they are up slightly year-to-date, bucking the trend we’ve seen in consumer businesses on the JSE.

The company greatly values the Ghost Mail audience and they have placed their results at this link on the site, along with great visual summaries and the investor presentation. Don’t miss it!

Datatec is managing mid-single digit growth (JSE: DTC)

The company wants you to focus on gross profit as the right metric

Datatec has been quite busy in talking to the market recently, having released a couple of presentations that explain the overall group. To add to this, they’ve now released a trading update dealing with the year ended February 2024.

Revenue isn’t the metric that they believe you should be focusing on, as software and services are sometimes sold on a net basis (i.e. just the gross profit is recognised instead of sales and cost of sales). Ultimately, what actually matters is gross profit, so that’s how they’ve chosen to deliver this update.

At group level, gross profit is up 6% (measured in USD). Westcon International led the way with 9% growth, which is particularly helpful as that’s also the largest segment. Logicalis International is up next, both in terms of size and growth rate, with a 5% uplift. Sadly, Logicalis Latin America was down 12%, although the company has noted that overall financial performance has actually improved – so there must be cost reductions in that business.

Investors will have to wait for 27 May for full details.

Fairvest expects to hit the upper end of guidance for B shares (JSE: FTA | JSE: FTB)

They had no problem raising R400 million this week

If you’ve been reading Ghost Bites this week, you would’ve seen that Fairvest raised R400 million on the JSE in a matter of a couple of hours. Best of all, they did it at an almost immaterial discount to the share price. This is the power of an accelerated bookbuild structure combined with a deep capital market (by emerging market standards).

The company has now released a pre-close presentation for the six months ending March 2025. The good news is that they expect to meet the upper end of their tight guidance of a distribution per B share of 45 to 46 cents. That’s what shareholders want to see.

The other thing that shareholders love seeing is a balance sheet in decent shape. The loan-to-value is expected to be below 32% at reporting date. They are in the process of refinancing R1 billion at what sounds like an appealing cost of debt.

So, what sits underneath all this? Fairvest isn’t typically on the tip of the tongue when people think about examples of local property funds, yet this is a substantial player (market cap of over R9 billion) with a lot of properties across retail, office and industrial sectors. The properties are spread across the country. To add to the diversification, Fairvest also has a 26.3% stake in Dipula, up from 5.0% as at the end of September 2024.

At overall portfolio level, rental reversions were positive 4.2%. That’s better than 3.6% in the interim period. Vacancies did increase though, from 4.3% to 5.9%. This suggests that they are being stickier on price, with a willingness to let tenants go if they can’t afford the new lease. They are locking in renewals with a weighted average escalation of 6.8%, so tenants are having to make significant commitments here.

As you dig into the different property types, you can see some really different trends coming through. The retail portfolio achieved a positive rental reversion of 2.5% and achieved a steady tenant retention rate of just over 86%.

The office portfolio is much more interesting, with impressive rental reversions of 7% but a retention rate of only 67.6%. The vacancy rate in the office portfolio is up from 9.6% to 14.8%. I get the sense that they are putting their foot down in negotiations, preferring to lock in higher quality leases rather than simply putting in whoever they can find.

The industrial portfolio managed positive reversions of 7.5%, which is actually down from 9.7% in the interim period. This asset class has been running hot in South Africa (and abroad). Tenant retention fell though, down from 91.5% to 82.1%.

The share class structure at Fairvest means that the A shares get their distribution first based on set rules, with the B shares then getting the rest. This is why the guidance is focused on the B shares. When things are going well, you would therefore expect to see the B shares outperforming the A shares (as they carry more risk). This chart confirms the position:

Acquisitions have boosted Heriot REIT (JSE: HET)

There’s impressive growth here

Heriot REIT has released results for the 6 months to December 2024. Although distributable earnings jumped by 42.5%, you need to keep in mind that there was an acquisition made in this period that saw more shares being issued. It’s always important to look at the distribution per share for this exact reason. Even on that basis though, the increase was 14% and that’s impressive.

The acquisition of Thibault and the underlying growth in Safari (in which Heriot holds 10%) were positive contributors here, with further good news coming in the form of debt refinancing at favourable rates. They are paying 100% of distributable earnings as a dividend, so they are in good shape over there.

The NAV per share increased by 20% to R18.96. The share price of R16 is a pretty modest discount to NAV, with the market clearly believing management’s guidance of distribution per share growth of 10% to 15% for the full year. Based on the interims, why wouldn’t you believe it?

Sirius Real Estate: buying low in Germany, selling high in the UK (JSE: SRE)

This is how to make money in property

Sirius Real Estate is known for pulling off some smart deals in the property sector. They are particularly good at buying properties and then actively managing them to get a better exit yield. The latest announcement is a great example of both legs of these property deals.

First, you have to buy a property. Sirius is acquiring a multi-tenanted business park in exotically named Mönchengladbach, Germany for €17.21 million. They are getting it for a net initial yield of 8.21%. This deal is a sale and leaseback with the current owner, a large engineering company occupying 26% of the site. The new leases have terms of between 3 and 10 years. The property as a whole is only 66% occupied, so you can be sure that Sirius will apply its expertise in getting that percentage up.

Then, once a property has been improved, you have to sell it. Sirius has done exactly this in the UK (the other region of focus), with a sale of BizSpace Cardiff at a 10% premium to book value. Sirius has sold four properties in the UK this year at an average premium of 13.5% to book value.

With the conclusion of this deal in Germany, Sirius will have deployed €118 million of the €181 million raised in July 2024. This means they still have a significant war chest for deals, particularly when you add in the €100 million of headroom on the balance sheet for additional debt. As Sirius can borrow at rates below 4% at the moment, the deals are coming in at yields well above the cost of debt.

Meanwhile, in South Africa, property funds are having to fund transactions at a cost of debt that is higher than the yield on the properties. It’s not hard to work out which model can be more lucrative.

Nibbles:

  • Director dealings:
    • The CEO of Standard Bank (JSE: SBK) received share awards and sold the whole lot (not just the taxable portion). The after-tax portion that he elected to sell was worth R8.9 million. Although he remains heavily invested in the bank, the timing isn’t great when the bank has been telling the market that this will be a strong year for Africa.
    • Various Investec (JSE: INL | JSE: INP) executives sold shares worth R8.2 million.
    • A non-executive director of BHP (JSE: BHG) bought shares worth around R910k.
    • The COO of Spar (JSE: SPP) has bought more shares in the company, this time to the value of R407k.
  • The board of PPC (JSE: PPC) has approved the construction of the R3 billion integrated cement plant in the Western Cape. Although the company announced this a couple of months ago, at the time the decision was still subject to final approval. Sinoma Overseas Development Company has been approved as the counterparty to the EPC contract for the project. Work will commence in the next quarter.
  • Telemasters (JSE: TLM) is trading under cautionary due to a potential acquisition by the company as well as due to discussions that investors are having with the major shareholders. Against this backdrop, revenue for the six months to December 2024 increased by 6.2% and HEPS fell by a whopping 42.6%. It feels like something needs to happen here, even if it’s not clear what exactly.
  • Copper 360 (JSE: CPR) released an update on hard rock mining at Rietberg Mine. Perhaps it means something to you that the ore is a mafic noritic rock primarily hosting bornite and chalcopyrite mineralisation. It certainly doesn’t mean anything to me. All I can tell you is that the CEO is “determined to adhere to the development and production schedule” – so that’s a good thing, I guess.
  • Acsion Limited (JSE: ACS) released a cautionary announcement. They have entered into “negotiations with a non-related third party” that could have a material effect on the share price. At this stage, there are no other details available.
  • Prosus (JSE: PRX) plans to nominate Phuthi Mahanyele-Dabengwa as an executive director. She is currently the South African CEO of Naspers and is a highly respected leader. She is also expected to be nominated as an executive director of Naspers (JSE: NPN) with effect from 1 April.

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

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

Exchange-Listed Companies

Sirius Real Estate continued its acquisition of spree, this week announcing the addition of a multi-tenanted business park in Mönchengladbach, an area close to economic hubs Duisburg and Cologne in Germany. The €17,21 million acquisition is through a sale and partial leaseback agreement with the current owner, SMS Group which occupies c.26% of the site.

In a move to expand its market share in adultwear through organic and acquisitive growth, Pepkor has entered into an agreement with Retailability to acquire the Legit, Swagga, Style and Boardmans businesses for an approximate R1,9 billion (flagged as less than c.2% of Pepkor’s market capitalisation in the release). These businesses at one time formed part of the Edgars Group which emerged from business rescue in 2020 to form part of the Retailability stable. Pepkor aims to unlock value through its extensive scale in sourcing, supply chain and back-office functions, in addition to leveraging its capabilities in credit and other financial services.

Zaad, which is indirectly controlled by Zeder Investments’ subsidiary Zeder Financial Services, has disposed of its equity interests in businesses Bakker Brothers (including intellectual property rights in the Netherlands) and Pristine Marketing to ETG Inputs. The businesses have operations in Zimbabwe, Mozambique and Zambia. The aggregate disposal consideration of R135 million will be paid to Zaad with R18 million on the deal’s effective date and the balance will be held in escrow for 12 months and paid on close. The deal is a category 2 disposal.

Shaftesbury Capital has entered into a strategic, long-term partnership with Norges Bank Investment Management, the Norwegian sovereign wealth fund, in respect of its Convent Garden estate. Norges has taken a non-controlling 25% stake with Shaftesbury Capital retaining 75% ownership and management control. The transaction values the Covent Garden estate at £2,7 billion and gross proceeds from the transaction are expected to be c.£570 million. The portfolio has a net initial yield of 3.6%, annualised gross income of £104 million and an estimated rental value of £134 million as at end December 2024. The portfolio covers 220 buildings and over 850 units across 1.4 million square feet.

As a result of market speculation, Gold Fields announced it had made a non-binding indicative proposal to acquire Australian miner Gold Road Resources for a cash consideration of A$3.05 per share in a deal valued at A$3,3 billion. The consideration comprised a fixed portion of A$2.27 per shares plus a variable portion equal to the value of each shareholders’ proportion of Gold Road’s shareholding in De Grey Mining. The proposed acquisition would consolidate Gold Fields’ ownership of Gruyere, a low-cost long-life producing old mine in Western Australia in which Gold Road holds a non-operating joint venture interest. The proposal was rejected by the Gold Road Board of Directors which made a counter offered to acquire Gold Fields’ operating interest in the Gruyere mine. This was turned down by Gold Fields.

Unlisted Companies

Jem HR, a specialist human resources firm offering tech platforms for deskless workers has closed its pre-Series A funding round, raising R60 million in a round led by Old Mutual subsidiary NEXT176 which includes a R30 million private debt facility. Jem streamlines HR operations for employers, from leave management and payslip delivery to internal communications and query management, building long-term financial stability through payroll-integrated savings, financial services and financial education.

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

Weekly corporate finance activity by SA exchange-listed companies

Marylou Greig
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Weekly corporate finance activity by SA exchange-listed companies

Kore Potash has conditionally raised c.£7,7 million, before expenses, by way of a placing of new ordinary shares at a price of 1.7 pence per share. The proceeds of the fundraise will be used to pay PowerChina International Group for optimisation work, impact assessment update, fees and working capital.

Through the issue of new Fairvest B shares, the company has raised c.R400 million. 85,106,382 Fairvest B shares will be issued at R4.70 per share. Funds raised will be applied to various capital allocation opportunities.

A total of 46,583 Sygnia shares were repurchased by the company in terms of its odd-lot offer for a total consideration of R1,048,118. The repurchased shares represent 0.03% of the total issued share capital of the company. The shares were cancelled and delisted on 26 March 2025 and accordingly the share capital of Sygnia reduced to 152,330,906 shares.

Anglo American Platinum has proposed to change its name to Valterra Platinum ahead of its planned spin-off from Anglo American. The company will retain its primary listing on the JSE post the demerger and will seek a secondary listing in London.

Industrial engineering holding company PSV, the listing of which was suspended in September 2020, has updated shareholders that the consideration of the recapitalisation of the company was still ongoing. The company remains under cautionary.

This week the following companies repurchased shares:

Schroder European Real Estate Trust plc acquired a further 58,300 shares this week at a price of 66 pence per share for an aggregate £38,478. The shares will be held in Treasury.

In its interim results, Momentum Group advised that, between 1 January and 6 February 2025, it had repurchased 16 million shares at an aggregate cost of R477 million.

On March 6, 2025, Ninety One plc announced that it would undertake a repurchase programme of up to £30 million. The shares will be purchased in the open market and cancelled to reduce the Company’s ordinary share capital. This week the company repurchased 111,804 of its ordinary shares at an average price of 149 pence for an aggregate £167,512.

In its annual financial statements released in August 2024, South32 announced that it would increase its capital management programme by US$200 million, to be returned via an on-market share buy-back. This week 1,171,371 shares were repurchased at an aggregate cost of A$4,14 million.

On 19 February 2025, Glencore plc announced the commencement of a new US$1 billion share buyback programme, with the intended completion by the time of the Group’s interim results announcement in August 2025. This week the company repurchased 15,000,000 shares at an average price per share of £3.07 for an aggregate £46 million.

In October 2024, Anheuser-Busch InBev announced a US$2 billion share buy-back programme to be executed within the next 12 months which will result in the repurchase of c.31,7 million shares. The shares acquired will be kept as treasury shares to fulfil future share delivery commitments under the group’s stock ownership plans. During the period 17 to 21 March 2025, the group repurchased 813,020 shares for €47,19 million.

Hammerson plc continued with its programme to purchase its ordinary shares up to a maximum consideration of £140 million. The sole purpose of the buyback programme is to reduce the company’s share capital. This week the company repurchased 459,390 shares at an average price per share of 254 pence for an aggregate £1,16 million.

In line with its share buyback programme announced in March 2024, British American Tobacco plc this week repurchased a further 666,733 shares at an average price of £31.55 per share for an aggregate £21 million.

During the period 17 to 21 March 2025, Prosus repurchased a further 8,203,244 Prosus shares for an aggregate €363,19 million and Naspers, a further 397,320 Naspers shares for a total consideration of R1,91 billion.

Six companies issued profit warnings this week: Investec, AH-VEST, Astral Foods, Burstone, Bell Equipment and TeleMasters.

During the week six companies issued cautionary notices: Gold Fields, Santova, TeleMasters, PSV, Metrofile and Acsion.

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

Telling the right story: navigating media challenges in M&A transactions

Siyabonga Nyezi
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Telling the right story: navigating media challenges in M&A transactions

“News is the first draft of history”. This quote is often attributed by many media sources to Washington Post publisher Phillip L. Graham. Graham, born in 1915, couldn’t possibly have come up with an early 20th century quote. Many others attribute it to writer Alan Barth, who would have been a toddler around the time this quote became prominent. These examples are a reminder that, when repeated often enough, inaccurate statements from prominent sources can misrepresent history. Reporting on M&A transactions is no different.

In November 2024, South African Airways (SAA) announced that it had turned a profit for the first time since the 2012 financial year. Many asked how a company that was nearly sold for R51 just a few years prior could be doing so well. The answer to this question is simple: this never happened. There was never a transaction where the national carrier would have been sold for R51.

Without delving into its intricacies, the SAA deal would have required the acquirer – a private equity consortium – to make a working capital injection of R3bn into SAA over a period of two years. The R51 figure was simply a nominal amount representing 51% ownership in SAA, with 51 shares (out of 100) to be purchased by the acquirer at R1 per share. This means that the acquirer would have paid a total investment consideration of R3,000,000,051 (R3bn, plus R51 for the shares).

One might wonder why it is still important to discuss the construct of a deal that is no longer being pursued. It is because the misconceptions that may be created (and are created) by sensational headlines in such high-profile transactions may have far-reaching consequences. In SAA’s case, the reporting played a role in eroding the confidence of the ultimate shareholder (the taxpayer) in the decisions made by the appointed representative, the relevant Minister at the time. There is, of course, nothing wrong with disagreeing with the economics of a deal, as long as the criticism is rooted in fact.

While the parties to a transaction that garners public interest cannot control what publications write about the deal, it is incumbent on such parties to provide information that is clear and accurate, and in a manner that stakeholders will understand. Many of the articles on the SAA transaction feature “R51 SAA deal” or a similar variation of the phrase in the headline. To their credit, some publications do delve further into the deal construct in the body of the article. Others, unfortunately, simply leave it at that: just R51.

While the concerns around reporting on state-linked deals may be centred mostly around issues of public buy-in, the communication and reporting around any high-profile transaction may have far-reaching consequences for that deal. Premature communication, for example, may lead to panic amongst shareholders. Delayed communication, on the other hand, may result in distrust from the public, shareholders and authorities alike and, in some instances, scrutiny or even fines or censure from regulatory authorities. For example, section 9 of the JSE Listings Requirements requires listed entities to announce certain transactions such as takeovers, reverse take-overs and funding arrangements. Failure to announce such a transaction may result in censure or penalties, as set out in paragraph 1.21 of the JSE Listings Requirements. Unclear messaging may result in all of the above consequences. Because of these risks, parties in transactions that garner public attention have to ensure that, when they share information with the public, they do so in a manner that is clear, timely and unambiguous.

As much as transparency and communication are important, parties should take caution not to breach any confidentiality restrictions that may be contained in the transaction documents or, where applicable, the disclosure regulations in the JSE Listings Requirements and legislation, such as the Financial Markets Act.

Parties to such transactions need to formulate an effective communication strategy, focused on clear messaging and timely updates. Clear communication on the proposed transaction provides transparency to stakeholders such as shareholders, employees, and the public. Critically, it mitigates the risk of inaccurate reporting on the deal as a result of scant information from the parties.

The announcement of a proposed transaction is a key event in the transaction. It can have a significant impact on the valuation of a company, especially if it is a listed entity. The recent announcement of the proposed Barloworld acquisition is an example of how announcements can affect a company’s value. The announcement was followed by a 21% surge in the share price, the biggest one-day gain for the company since 1999. Barloworld’s clarity in relation to who the parties will be, what they intend to do, timelines, the future of the company etc. undoubtedly contributed to this. This underscores the importance of clear, effective communication with the public when announcing a proposed transaction.

The flow of information should not and, in some instances, cannot end at the announcement stage. Where it is necessary to update stakeholders on the transaction, the parties should do so in a timely and appropriate manner. Delayed communication may result in discord among shareholders, a shift in the perception of the deal, negative reporting and, as mentioned, censure or fines.

Business media has, for a long time, played an important role in informing the public and holding industry participants accountable. After all, it was because of one of the media calls that analysts first raised the alarm about the dubious happenings at Enron. Parties engaging in M&A activity should embrace the flip-side of this coin, where effective communication with stakeholders ultimately trickles down to more accurate (and usually positive) reporting on deals. The better the communication, the lesser the risk of the transaction being misreported.

Siyabonga Nyezi is an Associate, reviewed by Werner De Waal, Partner | Fasken.

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

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

The growing prevalence of W&I insurance in SA transactions: FAQs

Janine Howard
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The growing prevalence of W&I insurance in SA transactions: FAQs

Since the emergence of Warranty and Indemnity (W&I) insurance in the South African market, this form of insurance has gained momentum as a tool for getting deals done effectively and efficiently. Although traditionally utilised by players in the private equity (PE) space, W&I insurance is increasingly being used by corporate and trade entities.

Traditionally, the primary driver for using W&I insurance in PE deals has been that where PE funds are exiting an asset, they are required to use the proceeds of the sale to realise returns for their investors.

Accordingly, being liable for a number of years in respect of warranty claims can prove problematic once proceeds have been distributed to investors, and the concept of an escrow arrangement or holdback for future warranty claims is not attractive to PE funds.

In addition, PE funds have been reluctant to give operational warranties in respect of the target assets as they are not generally involved in the day-to-day aspects of the business. A further reason for the prevalence of W&I insurance in PE deals is that when PE funds acquire an asset, the selling parties are often founders and they, together with the existing management team, will remain involved or even reinvest in the business.

As such, maintaining positive working relationships with founders and management is a key priority for the success of the business, and using W&I insurance shifts any liability for warranty breaches from the seller to the insurer. This is because the W&I insurance product seen most frequently in the South African market is a no-recourse policy, which means that any amounts paid out by the insurer cannot be recovered from the seller.

Another advantage of W&I insurance is that the parties are more likely to engage in commercial negotiations where a broader, more reasonable set of warranties can be given, instead of the discussions being driven solely by a desire to limit potential recourse.

Finally, W&I insurance also has the advantage of mitigating against enforcement risk in cross-border deals because a claim is made against the insurer and not the sellers, who may be scattered across various jurisdictions.

These elements of W&I insurance have also been noted more recently by trade buyers and sellers and, therefore, we have seen the expansion of W&I insurance beyond the PE space.

However, despite the increasing prevalence of W&I insurance in South Africa, it still raises a number of questions, and it is not always clear to transacting parties how to get the best value out of this product. To clarify this, we have set out some frequently asked questions and responses on W&I insurance below.

What will typically be covered under a W&I insurance policy, and how can cover be maximised?

Broadly speaking, W&I insurance policies will cover loss arising from a breach of warranties resulting from matters that were unknown to the buyer, as well as any defence costs and gross-up costs. There will, of course, be limitations on the amounts and what can be claimed from the insurer, and these largely mirror what one would expect to see in a sale agreement.

Examples of such limitations will typically include de minimis amounts, below which a warranty claim cannot be made, retention amounts, and limitations on the total liability of the insurer under the policy. The thresholds at which the limitations are set will be negotiated between the insurer and the insured and will affect the pricing of the policy.

The quality and extent of coverage under the W&I insurance policy will fundamentally be driven by the extent and quality of the due diligence investigation that was undertaken in relation to the target asset. This is because the policy will only cover unknown risks and, as such, the insurer will seek to get comfort from the due diligence investigations that all risks have, to the extent reasonably possible, been uncovered and are known to the buyer.

Despite this review and examination of the due diligence reports, it is worth noting that the insurer will not seek to obtain reliance on the reports. Typically, areas that are not investigated, or are not adequately investigated as part of the due diligence process, will not be covered by the W&I policy. Accordingly, the best way to maximise cover under the W&I insurance policy is to ensure thorough due diligence has been undertaken on the target asset.

What will typically be excluded from cover under a W&I insurance policy and how should the parties deal with this excluded liability?

In addition to matters that are known to the buyer and items that have not been adequately investigated, there are a number of general exclusions that are typical for South African W&I insurance policies. These include any fines and/ or penalties other than those relating to tax, consequential and indirect losses, structural defects, purchase price adjustments, anti-bribery and corruption liabilities, and environmental pollution liabilities.

Liability for matters excluded from the W&I insurance policy should be negotiated between the buyer and the seller. Increasingly, the position in South Africa is that the seller is expected to stand behind such excluded matters, subject to market-appropriate limitations of liability.

What are the costs of W&I insurance and who is liable for these costs?

The cost of W&I insurance in South Africa was considered high in the past, being around 1.75% to 2.5% of the amount insured under the policy.

However, the global decrease in M&A activity in the United Kingdom and United States has meant that insurers are more willing to extend their reach into Africa. This competition has resulted in the decrease of premiums, and it is now common to see premiums in the range of 0.9% to 1.7% of the amount insured under the policy.

Traditionally, when used by PE funds, it was generally accepted that the buyer would bear the cost of the W&I insurance on the understanding that when the PE buyer eventually exits, they will see the benefit of a W&I policy, which is then paid for by the incoming buyer.

However, as more and more trade buyers are looking to make use of W&I insurance, the cost of the insurance is being more heavily negotiated and, although it is still more common for the buyer to pay the costs, there has been a rise in the premium being split between buyers and sellers.

What is the timing for putting a W&I insurance policy in place?

Often, transacting parties are reluctant to explore W&I insurance on the basis that it may delay a transaction. However, this is increasingly proving not to be the case because W&I processes can be managed in parallel with the negotiation of the transaction and insurers are eager to work within the existing deal timelines. Depending on the availability of the due diligence materials, the W&I processes would typically take between two and four weeks.

As the appetite for W&I insurance grows across the continent, dealmakers should seek out brokers and advisors to test the viability of this insurance for their transactions, even if it is not initially contemplated.

Janine Howard is a Partner | Bowmans.

This article first appeared in Catalyst, DealMakers’ quarterly private equity publication.

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

CA&S: a business on track

CA&S Group
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CA&S: a business on track

This article has been provided by CA&S and does not reflect the views or analysis of The Finance Ghost. As always, you can find that in Ghost Bites. Published with thanks to CA&S for recognising the value of the Ghost Mail investor audience.

Key highlights (FY2024)

  • Revenue increased 10.6%
  • Headline earnings rose 25.9%
  • Dividend increased 24.9%

CA&S Group (CAS:BSE, CAA:JSE) has reported a strong set of annual results for the financial year ending 31 December 2024, demonstrating the strength of its diversified business model and its continued push into high-growth markets. Revenue rose from R11.32 billion in 2023 to R12.52 billion, with management attributing the growth to expansion into organic growth, geographical expansion and acquisitions. As a result, gross profit increased to R1.92 billion, up from R1.72 billion the previous year.

Headline earnings increased to R585.31 million up 25.9% from last year, with headline earnings per share up from 97.97 cents to 122.71 cents. The Group also reported an increase in total assets to R5.65 billion, driven by warehouse expansion, strategic acquisitions, and investment in associate companies. Operational cash flow remained robust, providing a healthy increase in cash holdings from R1.06 billion to R1.17 billion and further supporting the growth strategy of the group.

While the comparative figures for 2023 were positively impacted by a once-off bargain purchase gain linked to the acquisition of Namibia’s T&C Group, CA&S still delivered a year-on-year increase in operating profit – rising from R747.31 million to R782.57 million. Excluding the non-recurring item, underlying profitability improved meaningfully, with both operating profits increasing by 25.5% and earnings per share by 27.9%, showing solid organic growth.

Commenting on the performance, Group CEO Duncan Lewis said the results were “a testament to our focus on strategic growth, operational efficiency, and market expansion.” He noted that despite a challenging global economic environment, the Group had demonstrated “resilience and agility,” positioning itself well for continued progress across its key markets.

CA&S acquired a 49% stake in Roots Sales (Pty) Ltd, a South African business that specialises in servicing the informal retail sector, an area identified by the Group as a key growth opportunity, and forms part of its channel broadening strategy.

CA&S acquired the remaining share capital in Macmobile, a provider of IT and data-driven market intelligence solutions focused on the formal and informal FMCG retail chains, across Africa.

The group declared a dividend increase of 24.44 cents per share, an increase of 24.9%, in line with its dividend policy.  

Looking ahead, CA&S is optimistic about the prospects within southern and East Africa, where GDP growth across most markets is forecast to average 3%. On 17 February 2025, the Group announced a strategic partnership and investment in Tradco Group, a route-to-market operator based in Kenya with a presence across multiple East African countries. The acquisition forms part of the Group’s strategic push into East Africa, aimed at strengthening its regional footprint and deepening its ability to support brand growth for multinational clients.

“We acknowledge the challenges posed by global economic volatility and supply chain disruptions,” Lewis said. “However, with our diversified business model, resilient product portfolio, strong balance sheet and a high-calibre leadership team, we are well positioned to navigate uncertainties and unlock further growth.”

CA&S intends to maintain its disciplined approach to cost management and capital deployment, with Lewis reaffirming the Group’s commitment to “delivering sustainable, long-term value for all stakeholders.”

Investor presentation:

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GHOST BITES (Bell Equipment | Metair | Metrofile | Zeder)

The Finance Ghost
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GHOST BITES (Bell Equipment | Metair | Metrofile | Zeder)

Bell Equipment tightens its earnings guidance (JSE: BEL)

It’s not pretty, but could’ve been worse based on initial guidance

In Bell Equipment’s initial trading statement released in December 2024, they guided for a drop in HEPS of “at least 40%” for the year ended December 2024. Now, the words “at least” can work really hard here, so investors always need to be nervous of that.

The good news is that the guidance wasn’t far off at all. In an updated trading statement, they’ve tightened the range to a drop of between 40% and 44%. That’s not what shareholders want to see of course, but it could’ve been much worse based on the initial guidance.

Metair expects more pressure to come in the automotive manufacturing sector (JSE: MTA)

Disruption can be an ugly thing

Metair has now released its results for the year ended December 2024. They include this fascinating table that shows passenger vehicle production in South Africa from 2014 to 2024, by manufacturer:

The SA Auto Industry Master Plan apparently had a vision of 735,000 units. Then along came COVID, followed by the Chinese. Alas, it doesn’t look like we are going to get there, as there is now massive disruption in the sector for the European brands. This means that Metair has had to downscale production estimates based on meetings with key customers like Ford and Toyota.

This is of course the reason why Metair has acquired AutoZone. They have little choice but to find ways to extract value from the existing cars out there, not just the manufacturing of new cars. The synergies are pretty clear here, with the ability to push manufactured parts through that distribution channel.

To be fair, they are also making solid progress in turning the business around within this difficult context. For example, Hesto shifted from negative EBIT of R608 million in 2023 to a profit of R257 million. This was despite the drop in vehicle production volumes.

Although the group reported a headline loss, you can blame the discontinued operations for that. The thing to focus on is continuing operations, in which case HEPS fell by 9% to 89 cents per share. Cash generated from operations was up 28%, so there’s some more good news.

All eyes are on the balance sheet, as Metair needed to navigate a situation that included R5.2 billion in group debt as at 1 January 2024. By the end of December 2024, it was down to R4.5 billion. They’ve managed to restructure bank debt of R3.3 billion at Metair into term loans of R1.7 billon and a secured mezzanine facility of R1.6 billion. They’ve also restructured R1.4 billion worth of debt in Hesto.

The cost of debt will vary based on net debt : EBITDA. As the metrics improve, the debt gets cheaper. I wish I could tell you what the metrics are for the mezzanine facility, but I cannot find them in the annual report. Unless I’m missing something obvious, that’s now gone from a concern to a red flag, as mezzanine funding can be extremely expensive based on the usual equity kickers.

If anyone has seen that disclosure, I would love to know where.

An approach has been made to Metrofile (JSE: MFL)

Will long-suffering investors finally get a good outcome here?

Metrofile hasn’t exactly been a bastion of organic growth. Recent results have been uninspiring to say the least, which is why the share price had lost 28% of its value thus far this year. Over three years, it had lost half its value. There hasn’t been much to smile about.

Those who bought in recently had a great day on Wednesday though, as the company released a cautionary announcement related to a potential acquisition of the company. Although there’s no firm offer just yet, the company has appointed advisors and things seem to be moving in that direction. Remember, until there’s an offer on the table, there’s no guarantee of one coming through.

The share price closed 28.8% higher in anticipation. That sounds amazing, until you see what that looks like on a chart:

As you can see, the latest rally has effectively taken the share price back to where it started the year. Other than investors (or is that punters?) who bought the stock this year, practically everyone else is in the red.

Here comes another disposal by Zeder Investments (JSE: ZED)

This time, it’s a business within Zaad Holdings

Zeder has been firmly in value unlock mode, which is a fancy way of saying that they’ve been selling off assets and paying the proceeds out to shareholders. There have been a bunch of disposals in this regard, leaving the company much smaller than it used to be.

The latest such example is a disposal of Bakker Brothers and Pristine Marketing, which fall under Zaad Holdings. The operations in question are in Zimbabwe, Mozambique and Zambia, along with intellectual property held by Bakker Brothers in the Netherlands. Zimbabwe is a difficult region and has been struggling with hyperinflation.

The total price is R135 million and the purchaser is an entity that is owned by ETG and SABIC Agri-Nutrients. R118 million is payable up-front and the rest will be held in escrow for 12 months. When you adjust the earnings for hyperinflation to get to a recurring number, the assets in question generated headline earnings of R65.7 million for the year ended June 2024. They aren’t exactly getting much of a multiple here, are they?

Before the fair value loss recognised in the interim results ended August 2024, these businesses were held at R440 million. They’ve therefore taken quite a bath here. The good news is that the fair value loss in the interim period already brought the value down to this selling price, so there’s no further impact on the net asset value or sum-of-the-parts value of the company.

Zaad will use the proceeds to reduce debt, so shareholders won’t get a special distribution. This is different to what investors in Zeder have become accustomed to.

Nibbles:

  • Director dealings:
    • Des de Beer has bought just under R2 million worth of shares in Lighthouse Properties (JSE: LTE), adding to his rather extensive collection of shares in the company.
    • An associate of a director of The Foschini Group (JSE: TFG) sold shares worth R975k.
    • A handful of directors of Anglo American (JSE: AGL) elected the “shares in lieu of fees” scheme. This is effectively a purchase of roughly R740k worth of shares.
    • A prescriber officer at the JSE (JSE: JSE) sold shares worth R62k.
  • Labat Africa (JSE: LAB) is pushing forwards with its IT strategy. The group has concluded the previously announced acquisition of Ahnamu and has issued the associated shares. They’ve also entered into a royalty distribution agreement with Ubits, an ICT company focused on the financial sector. They talk about generating “substantial value” without giving any real details of the economics, apart from throwing the number R2.5 billion around without any context. The announcement is a good example of a company using SENS as a PR platform.
  • SAB Zenzele Kabili Holdings (JSE: SZK) released its annual report for the year ended December 2024. This structure has some pretty serious risks given the underlying exposure and the way the whole thing is funded. The dividend is down 31% for the year and the net asset value plummeted by 57%. The net asset value per share is now just R28.26, so the share price of R39 is once again way above the underlying value. I genuinely don’t know where the bottom is for this thing.
  • Supermarket Income REIT (JSE: SRI) has completed the internalisation of its management function. In other words, it has cost shareholders a lot of money to put a normal situation in place where executives earn salaries and bonuses, rather than a fee linked to the size of the fund. It really is incredible how generational wealth was created by property executives (at a number of funds) who found themselves in the right place at the right time. There are very few external management company structures left.
  • Sibanye-Stillwater (JSE: SSW) announced that the Keliber Lithium project in Finland and the GalliCam project in France have been designated as strategic projects under the EU Critical Raw Materials Act. If this sounds terribly familiar to you, that’s because you read it just one day prior in an Anglo American announcement regarding their Sakatti copper project in Finland. Sibanye gave an interesting additional insight that there were 170 applications received and 47 strategic projects selected. The Keliber Lithium project is expected to start production in the first half of 2026. The GalliCam project is at pre-feasibility stage.
  • Gemfields (JSE: GML) requires more time to finalise the full year results. They will make more announcements in due course.
  • Perhaps something is finally going to happen at PSV Holdings (JSE: PSV), which has been suspended from trading since forever. There was a meeting with the JSE in March to understand how a potential recapitalisation would work. The JSE has requested information that the liquidator will need to provide. Overall, the company is still under a cautionary announcement – not that you’re able to trade it on the JSE right now anyway! You’ll struggle to even find a website for them.
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