Unlock the Stock is a platform designed to let retail investors experience life as a sell-side analyst. Corporate management teams give a presentation and then we open the floor to an interactive Q&A session, facilitated by the hosts.
This year, Unlock the Stock is delivered to you in proud association with A2X, a stock exchange playing an integral part in the progression of the South African marketplace. To find out more, visit the A2X website.
In the 29th edition of Unlock the Stock, we welcomed TWK Investments back to the platform. The management team gave a presentation on the performance and strategy and took numerous questions from attendees.
As usual, I co-hosted the event with Mark Tobin of Coffee Microcaps and the team from Keyter Rech Investor Solutions. Watch the recording here:
Unlock the Stock is a platform designed to let retail investors experience life as a sell-side analyst. Corporate management teams give a presentation and then we open the floor to an interactive Q&A session, facilitated by the hosts.
This year, Unlock the Stock is delivered to you in proud association with A2X, a stock exchange playing an integral part in the progression of the South African marketplace. To find out more, visit the A2X website.
In the 28th edition of Unlock the Stock, we welcomed Karooooo to the platform for the first time. The management team gave a presentation on the performance and strategy and took numerous questions from attendees.
As usual, I co-hosted the event with Mark Tobin of Coffee Microcaps and the team from Keyter Rech Investor Solutions. Watch the recording here:
The Satrix Balanced Index Fund (with assets under management of R9.5 billion) has just turned ten. Over this decade, the fund’s consistent performance demonstrates why rules-based or indexed balanced funds are dominating their category.
Kingsley Williams, Chief Investment Officer at Satrix*, attributes the fund’s consistent performance to a rigorous and systematic Strategic Asset Allocation process, which focuses on the medium to long term, while ignoring the noise in the short term.
“The proof of our pioneering approach is in the pudding. Since inception, the fund has consistently been in the top quartile of performers more than half the time on a rolling three-year basis, while beating the median active manager 91% of the time over the same period. On a rolling five-year basis, it has never underperformed the median active manager, lending credence to its long-term approach”.
Source: Satrix. Data: Morningstar. November 2013 – October 2023.
A Revolutionary Approach
In 2013, the Satrix Balanced Index Fund was one of the early adopters of an indexed or rules-based approach to constructing multi-asset funds locally.
Williams says, “In the multi-asset space, from an active management perspective, you can add value at building block level in terms of strategic asset allocation to different asset classes, including equities, bonds, commodities, etc., as well as timing your trades within each asset class. Active managers in this space can tactically change allocation both between and within asset classes – with varying degrees of success.”
Satrix chose to do neither. “Instead of actively managing each asset class, we track indices that provide investors with cost effective and representative performance of each asset class. By focussing on getting our building block balance right, we have succeeded in gaining a long-term edge. The self-enforced discipline of not tactically changing course in the short term keeps costs, both management and trading, lower while allowing our strategic positioning to pay off. We review our position every two years and only make changes if we deem it necessary. Research has shown that acting more often seldom adds value and definitely adds cost. We believe this approach puts the odds firmly in favour of investors to outperform their more active counterparts.”
Next, Williams shares their balanced index funds’ key differentiators:
1. The Evidence Is In The Returns: Williams says, “Despite the upside potential of tactical asset allocation, the difference between active managers’ and rules-based providers’ returns has been remarkably small. Most rules-based funds have consistently done very well, which raises the question of whether investors are being adequately compensated through more expensive offerings. In fact, often human intervention ends up destroying value rather than adding it – the global research on this is quite clear in that more than 90% of return and volatility variation comes down to setting strategic asset allocations. For this reason, we focus entirely on getting the strategic asset allocation right.”
2. The Fee Differential: Rules-based funds offer a lower pricing point, which compounds the value proposition of robust returns. Over the medium to longer term, active managers need to be correct quite often in their tactical decisions to justify a higher fee – which has proven exceedingly hard to do consistently, especially as markets are becoming more efficient and complex.
The Secret Sauce: The Differentiators That Set Satrix Apart:
The consistent performance of the Satrix Balanced Index Fund is tied to two critical differentiators:
1. Structural Premiums Captured
A key differentiator for the Satrix Balanced Index funds is that the local equity building blocks make use of Satrix’s multi-factor index portfolio, SmartCore™. Nico Katzke, Head of Portfolio Solutions at Satrix, says that multi-factor strategies offer exposure to risk premiums shown to pay off over the medium to longer term.
“SmartCore™ offers a refined core exposure to the local equity market. Global and local research suggests that certain company features, including measures of value and balance sheet quality, as well as positive price and earnings momentum, make them more likely to outperform at lower drawdowns. The strategy systematically captures these factor premiums while explicitly targeting risk, both on an absolute basis and relative to the local benchmark index. This aligns with our overall philosophy of exposing our clients’ assets to longer-term sources of return.”
2. Construction
The biennial research-intensive process that Satrix employs for its Strategic Asset Allocation review is its other key performance differentiator.
Williams adds, “Being part of the larger Sanlam Investment Group, we can access multiple perspectives to thoroughly review each of our considered asset classes’ expected returns over the medium to long term. That’s one key variable in the optimisation process; the other is cutting-edge optimisation techniques that enable us to understand the risk interplay between the asset classes.
“We do a significant amount of stress testing to arrive at the most efficient portfolio possible, under different assumptions and scenarios. The biennial review also allows us to update the balanced fund according to regulatory changes and newly accessible asset classes. For example, we recently included global listed infrastructure as this provides a source of differentiated equity returns in an otherwise US and technology-dominated global equity universe. Even with significantly reduced expected return forecasts, our optimisation approaches ‘love’ infrastructure because of how it behaves with other asset classes, and further diversifies the portfolio.”
Crucially, the process is systematic; so the asset allocation is not changed according to market swings, and is only reviewed once every two years. In this way, the fund is being actively managed, but not in a traditional, tactical sense.
A key consideration for Satrix is building solutions that are optimally diversified with sufficient upside potential.
Katzke adds, “true diversification is all about putting your eggs in uncorrelated baskets in the most efficient way possible. This involves prioritising risk source diversification so that the fortunes of our funds are not decided by singular events.”
The Market is Starting to Notice
While rules-based funds still account for a comparatively small proportion of assets within the balanced fund categories (according to Morningstar numbers, roughly 8% and 6% for high- and low-equity balanced fund strategies respectively), the market is starting to notice.
According to Williams, “we’ve seen up to half of all flows in the high equity balanced fund segment going to rules-based strategies in the last year. With a few of these index strategies now having reached ten-year milestones on the back of performances superior to most active managers, the case for indexation in balanced funds has never been stronger. We believe a disciplined, indexed approach puts the odds firmly in favour of clients with an eye to long-term wealth creation.”
*Satrix, a division of Sanlam Investment Management
CIS disclosure Satrix Investments (Pty) Ltd is an approved financial service provider in terms of the Financial Advisory and Intermediary Services Act, No 37 of 2002 (“FAIS”). The information above does not constitute financial advice in terms of FAIS. Consult your financial adviser before making an investment decision. While every effort has been made to ensure the reasonableness and accuracy of the information contained in this document (“the information”), the FSP, its shareholders, subsidiaries, clients, agents, officers and employees do not make any representations or warranties regarding the accuracy or suitability of the information and shall not be held responsible and disclaim all liability for any loss, liability and damage whatsoever suffered as a result of or which may be attributable, directly or indirectly, to any use of or reliance upon the information.
Satrix Managers (RF) (Pty) Ltd (Satrix) is a registered and approved Manager in Collective Investment Schemes in Securities. Collective investment schemes are generally medium- to long-term investments. With Unit Trusts and ETFs the investor essentially owns a “proportionate share” (in proportion to the participatory interest held in the fund) of the underlying investments held by the fund. With Unit Trusts, the investor holds participatory units issued by the fund while in the case of an ETF, the participatory interest, while issued by the fund, comprises a listed security traded on the stock exchange. ETFs are index tracking funds, registered as a Collective Investment and can be traded by any stockbroker on the stock exchange or via Investment Plans and online trading platforms. ETFs may incur additional costs due to being listed on the JSE. Past performance is not necessarily a guide to future performance and the value of investments / units may go up or down. A schedule of fees and charges, and maximum commissions are available on the Minimum Disclosure Document or upon request from the Manager. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. Should the respective portfolio engage in scrip lending, the utility percentage and related counterparties can be viewed on the ETF Minimum Disclosure Document.
Listen to the latest episode of Ghost Wrap here, brought to you by Mazars:
The inevitable delisting of Ascendis is upon us (JSE: ASC)
Interestingly, this is a general offer rather than a scheme – and that’s unusual
Typically, a delisting of a company is achieved through a scheme of arrangement. This is called an expropriation mechanism by advisors, as you need 75% approval to force the outcome on 100% of shareholders. Without this mechanism, things would grind to a halt in corporates, as you can’t have just a handful of shareholders blocking the rest from an outcome.
Sometimes, you’ll see a general offer instead. In such a case, shareholders can choose to reject the offer and follow the company into unlisted territory. The downside of course is that liquidity is non-existent in the private space, so you’re probably going to hold those shares for a long time.
In a consortium led by ACN Capital, the offer price to shareholders of Ascendis is 80 cents per share, reflecting a premium of 25% to the 30-day VWAP. The consortium has been put together by Carl Neethling of Acorn Agri fame. I must of course point out that Carl is the current CEO of Ascendis, so this is essentially an offer by the management team to either accept 80 cents a share or join them in the private market rather than the listed market.
The post-delisting strategy includes a variety of restructuring and growth initiatives. This is a classic private equity play of taking a business and fixing it in private rather than in public, as that’s a far more efficient way to do it.
Now, here’s the most important part: the exit offer is conditional upon the delisting resolution being approved by shareholders by no later than 30 April 2024. A delisting requires approval by 75% of shareholders. Based on irrevocable undertakings and strong intentions of support, the company believes that it has already secured 59.98% approval.
Despite the fact that this isn’t a foregone conclusion, the share price jumped to 80 cents anyway. Anyone buying at that price is presumably looking forward to joining the team in private, as the offer of 80 cents is months away from being paid.
Revenue up at Invicta, but HEPS has gone nowhere (JSE: IVT)
The bankers are getting the spoils at the moment, with finance costs up significantly
In an industrials firm, a decent revenue performance is usually accompanied by improved operating margins and a juicy jump in net profits. That hasn’t transpired at Invicta, at least not on a HEPS basis.
Revenue increased by 12% in the six months ended September and so did gross profit, so it’s not a gross margin issue. Operating profit was up 7%, with expected credit losses on trade receivables driving the deterioration in operating margin. Profit before tax increased by 6%, with the further knock to margin coming from the jump in finance costs that offset the improved equity-accounted earnings from joint ventures.
By this stage, you must be wondering why HEPS was flat despite a 6% increase in profit before tax, particularly in a period where Invicta repurchased 1% of ordinary shares outstanding. To figure that out, we have to refer to the note on headline earnings, where you’ll see a substantial profit in the equity-accounted earnings that gets reversed out for headline earnings:
You can now see that headline earnings actually dropped slightly, with the share repurchases bringing this up to a flat HEPS result (269 cents vs. 268 cents in the comparable period).
So, we now know that the sale of a property by Kian Ann (the associate in Asia) is what improved profits, as the operational profit growth from the core business was actually eaten up by finance costs. This is why debt reduction is a strategic focus for the group, as the management team at Invicta is currently working hard so that their bankers can live better lives.
As a final comment, these industrial groups are always far more volatile at segmental level than group level. It’s a game of swings and roundabouts, with some segments doing well (like operating profit up 34% in the Capital Equipment segment) and others taking a nasty smack, like the auto / agri parts business where operating profit fell 28%.
In line with last year, there’s no interim dividend. Invicta only pays a final dividend.
Oceana prioritises volumes over margins at Lucky Star (JSE: OCE)
And in this period, it seemed to work
Oceana reported numbers for the year ended September 2023 and they look excellent. From continuing operations, revenue increased by 22.6% and HEPS was good for 29.2%. That’s the shape that you want to see on the income statement.
In some areas, like fish oil, improved pricing gave the group a significant boost. In others, like the canned fish businesses, the group opted to absorb some of the input cost pressures in an effort to maintain affordability of the products. Along with other challenges like catch rates and load shedding costs, the impact was a drop in gross margin from 30.8% to 28.6%.
They tried to make up for it in other areas, like sales and distribution expenditure from continuing operations up by 9.9%, which means these costs fell as a percentage of revenue from 5.9% to 5.3%. Overheads were up by 16.5%, mainly due to employment costs. Thankfully, that’s still below revenue growth.
Unlike so many other companies at the moment, the net interest cost actually reduced from R168 million to R154 million thanks to debt repayments.
The group is doing a good job of generating cash and is doing an even better job of investing it in the business. Capital investment jumped by 120%, allocated to various projects within the operations.
The only negative in the segmental result was wild caught seafood, which grew revenue by 9.1% and saw operating profit fall by 15.3%. Notably, Lucky Star volumes were up 9%. Canned fish inventory was 18.7% higher, so there’s been significant investment here to ensure availability of product. That isn’t the case everywhere in the business, like local fish oil stocks which have dropped substantially.
And in case you need a reminder of how risky this business is, I couldn’t resist highlighting the cancellation of Peru’s main anchovy fishing season due to the high presence of juveniles, resulting from the effect of the El Niño weather pattern. These fishing groups can have good years and terrible years, often for reasons well outside of their control. In this case, that cancellation gave global prices a boost, which helped Oceana. Of course, if Oceana actually owned a business in Peru, it would be a very different outcome. Oceana wasn’t immune to the weather patterns in this period, as La Niña caused local horse mackerel catch rates to drop by 32.4%.
The outlook seems to generally be positive, but of course there are many reasons why the final performance might be very different to expectations.
Shaftesbury celebrates strong trading in the West End (JSE: SHC)
The target is 5% to 7% rental growth per annum – and that’s measured in GBP
London’s West End is world famous and with good reason. Shaftesbury refers to its portfolio as “irreplaceable” – so at least they have no shortage of love for their properties. Shoppers seem to like them as well, with footfall up 12% year-on-year. Leasing transactions signed over the past few months are running at rentals 6% higher than the June 2023 financial year.
The vacancy rate has moved even lower, down at 2.2% from 2.5% in the year ended June 2023.
Perhaps most importantly, asset disposals have been 12% ahead of the June 2023 valuation. They’ve identified 5% of the portfolio to be recycled, which is the REIT term for selling properties to unlock capital for reinvestment elsewhere.
The fund is targeting growth in rentals of 5% to 7% per annum. Provided cap rates (the valuation methodology for properties) remain stable, this implies total annual property returns of 7% to 9%. It’s quite interesting to note that the expectation is for 1% of the total property value to be invested per annum in refurbishment, asset management and “repositioning opportunities”, along with energy upgrades.
The loan-to-value ratio is 30%, adjusted for disposals since June. All of the group’s debt is at fixed rates and the weighted average cost of debt is 4.2%.
Standard Bank affirms guidance for a strong full-year result (JSE: SBK)
Based on the ten months to October, things are still looking good
Standard Bank has released a voluntary trading update for the ten months to October 2023. It’s good news for shareholders, with full-year guidance affirmed. This means the group expects to deliver better margins, a credit loss ratio within the through-the-cycle target range of 70 – 100 basis points and return on equity between 17% and 20%.
Looking deeper, banking revenue growth over the 10-month period is up by more than 20%, although the rate of growth has slowed as the bank has started lapping periods of higher interest rates.
This is why net interest margin expansion has calmed down in recent months, with lower retail demand for credit and more competitive pricing (especially on mortgages) also playing a role. Notably, corporate-related demand for debt is strong, particularly for energy-related opportunities. Dankie, Eskom.
Non-interest revenue is up by low-to-mid teens, helped along by transaction volumes, price increases and general market volatility that supports trading revenues. Remember, banks want volatility in the market, as they provide execution on the market rather than taking a view on the direction of the market. This is very different to asset managers.
As a reminder, cost growth in the interim period was 16%. The group notes that this growth rate has come down, but it remains “elevated” overall. Other than that rather cryptic description, what we do know is that the bank has achieved positive jaws, which means revenue growth has exceeded cost growth i.e. margins expanded.
The credit-loss-ratio “remains below the top of the target range” so we have to assume it is pretty close to 100 basis points, which certainly makes sense given the broader operating environment.
Finally, before you forget that there’s far more to Standard Bank than just South Africa, the Africa Regions contributed 44% of group headline earnings.
Tsogo Sun heads sideways (JSE: TSG)
Load shedding is incredibly expensive for the group
It’s hard out there. When you see a company with revenue growth of 7% and EBITDA growth of just 1%, then you know cost pressures are severe. Tsogo Sun’s results for the six months to September may reflect HEPS growth of 48%, but don’t let that fool you about the story on the ground.
You see, the prior period reflected headline earnings of R607 million, but this included the once-off cost to terminate hotel management contracts. If we strip that out to make it more comparable, we find headline earnings of R896 million. In this period, headline earnings came in at R895 million. It’s a resilient result, but there’s been zero growth here.
The first culprit is load shedding, which the group reckons was responsible for a 100 basis points knock to EBITDA margin. They achieved a margin of 34% this period and they believe it would’ve been 35% without the cost of diesel.
The other issue is the same one that many corporates are facing, a sharp rise in net finance costs. They have increased from R316 million to R370 million. Just like at Invicta as referenced further up, the banks are getting the growth, not the equity investors.
Looking deeper, the bingo and limited payout machines took the biggest knock. There were some encouraging signs elsewhere, like improvement in hotel vacancies despite a jump in average room rate, driving double-digit revenue growth in that part of the business. And perhaps in sync with the commodity that it is named after, Gold Reef City is performing well.
Wesizwe’s Bakubung mine enters a s189 process (JSE: WEZ)
I fear that there is more to come in the PGM sector based on commodity prices
Wesizwe Platinum announced that the Bakubung Platinum Mine has entered into s189 consultations, which is a fancy way of saying that retrenchments are the Christmas present that none of the staff wanted. After two strikes in 2022 and 2023 as well as an unprotected strike over five weeks, executed against a backdrop of plummeting PGM prices, the sad reality is that economic troubles eventually lead to long-lasting consequences.
There are 571 employees that could be affected. The current headcount is 761 employees. This is a huge cutback, with the company referring to it as a “bloated structure” that simply isn’t viable.
Zeda’s rental business looks good, but used cars are struggling (JSE: ZZD)
It seems that the used car market is finally feeling the pinch
Zeda has released its first annual results as a listed company. They will go down as a great start to the company’s life-after-Barloworld, with revenue for the year ended September up by 12% and HEPS up by 17%. A return on equity of 36.7% is exceptional.
The segmental performance is interesting. Car rentals grew 12% and leasing grew by 13%, but the car business recorded flat revenue and unit sales.
Still, it was enough for Zeda to settle the unbundling debt of R1.55 billion two years ahead of schedule. There is now a healthy net debt to EBITDA ratio of 1.5x. Although this obviously puts HEPS growth under pressure, it juices up return on equity as much of the growth is being funded with bank debt rather than shareholder equity.
The share price has been on quite the rollercoaster ride. Despite a rally of 27% in the past 30 days, it’s still slightly down year-to-date.
Little Bites:
Director dealings:
An executive director of Richemont (JSE: CFR) – and we can probably guess who – exercised warrants for B shares and paid R2.2 billion for the new shares. See the note further down regarding these warrants.
A non-executive director of Bytes Technology Group (JSE: BYI) sold shares worth £294k and a senior executive sold shares worth £1.1 million.
An associate of a director of a major subsidiary of Discovery (JSE: DSY) has sold shares worth R8.25 million.
Dr. Christo Wiese has bought shares in Collins Property Group (JSE: CPP) worth R1.02 million.
The general partner of the ARC Fund, UBI General Partner Proprietary Limited, is a related party to Dr. Johan van Zyl. UBI has bought shares in African Rainbow Capital (JSE: AIL) worth R992k.
A non-executive director of Glencore (JSE: GLN) has bought shares worth £49k.
The CEO of Primary Health Properties (JSE: PHP) bought shares worth £3.1k as part of a dividend reinvestment plan.
Take note Sun International (JSE: SUI) shareholders: the company is now trading under cautionary due to a potential acquisition. No further details have been announced at this stage. As always, there is no certainty whatsoever of a deal being put to shareholders. All we know is that discussions are underway.
Ellies Holdings (JSE: ELI) has renewed the cautionary announcement. This company has been trading under cautionary since September 2022, so it’s a bit of a joke now. The share price is down at 5 cents.
The work permit for Matias Cardarelli has finally been issued, so he can replace Roland van Wijnen as CEO of PPC (JSE: PPC) with effect from 1 December 2023.
Vodacom’s B-BBEE scheme YeboYethu (JSE: YYLBEE) released results for the six months to September 2023. These structures are usually highly leveraged and Vodacom’s is no different, so higher interest rates are a problem. An interim dividend of 92 cents per share has been declared. The share price is R28.
Back in 2020, Richemont (JSE: CFR) created a “loyalty scheme” to mitigate the reduction in the cash dividend by issuing share warrants to investors. There was a three-year exercise period. 98.9% of those warrants were executed, representing around 2.9% of shares currently in issue. This has obviously been dilutive for shareholders who didn’t receive or exercise the warrants, but those shareholders also benefitted from the company finding an innovative way to retain its cash.
Tiny little Nictus Limited (JSE: NCS) – market cap R33 million – released a trading statement for the six months to September. HEPS is expected to be between 6.86 cents and 7.02 cents, which is a solid turnaround from a headline loss of 0.82 cents in the comparable period. The share price is 62 cents but the bid-offer spread is the size of earth.
Super Group (JSE: SPG) announced that its very strong credit rating has been affirmed by S&P Global Ratings. It has a long-term national scale rating of zaAAA and a short-term rating of zaA-1+. When it comes to credit ratings, seeing a lot of As is a good thing.
In case you are stuck in suspended counter Efora Energy (JSE: EEL), you might want to know that the company has now released results for the six months to August 2021, as well as the year ended February 2022.
At least there’s one less zombie on the JSE, with the listing of W G Wearne (JSE: WEA) being removed from 28 November. The company says that it will consider a listing on other exchanges in South Africa in due course. Good luck to you if you are stuck in that thing with unlisted shares.
The irony behind the most recognisable violin hook in 90s alt-rock, and what it can teach us all about the cost of an original idea.
If you were following local business news last week, you probably already know that Pick n Pay received quite an embarrassing slap on the wrist courtesy of Checkers and the High Court of Cape Town. But in case you missed it, I’ll give you a quick summary of what happened.
In 2021, Pick n Pay decided to introduce a new premium range of products for its core upper customer, with the primary objective of establishing a “foodie brand” across multiple categories. The issue that landed them in court is that the packaging of said range is strikingly similar to the packaging on Checkers’ premium Forage and Feast range, which was launched at the end of 2020.
At a quick glance, you may not even be able to tell which packaging belongs to which retailer. Both feature a navy, white and gold colour scheme, with similar fonts and other design elements.
Following a tussle in the courts, Deputy Judge President Patricia Goliath has ordered Pick n Pay to “destroy all printed materials, product packaging and the like bearing the infringing get-ups, which are under its control, or alternatively to deliver all such material to Shoprite Checkers for destruction.”
Of course, Pick n Pay is denying any wrongdoing on their side, insisting that as a brand, they have always made extensive use of the colour navy. They will seek leave to appeal the judgement. I guess we’ll have to wait and see how that works out for them.
Originality: an expensive commodity
So why all the fuss?
In the competitive landscape of business, originality is not just a rare gem; it’s an advantage. Companies invest considerable resources in cultivating and safeguarding their unique ideas, as originality often serves as a crucial differentiator in the marketplace. Copyright, the legal mechanism designed to protect the expression of creative concepts, plays a pivotal role in this endeavour.
Now, Checkers can’t claim to have the copyright on navy blue packaging, but what they can do (and have successfully done) is to claim that Pick n Pay’s too-similar design is misleading to customers, who could potentially confuse the two brands.
Ultimately, the investment in preserving original ideas reflects a commitment to maintaining a competitive edge and ensuring that innovation remains a strategic advantage. This is why Checkers was willing to fight tooth and nail to make sure that their ideas remain only theirs.
Cue the violins
Perhaps one of my favourite examples of the intricacies of intellectual property comes from the world of music.
Even if you’ve never heard of a band called The Verve, odds are you’ve probably heard their breakout hit, “Bitter Sweet Symphony”, at least once in your life.
Refresh your memory and indulge in a little classic 90s alt-rock:
You probably don’t even have to make it more than two bars into this song to recognise it, thanks to that hyper-memorable violin melody that plays on repeat. And it’s exactly that violin melody that got The Verve into a lot of trouble in 1997.
That’s because the string section that opens “Bitter Sweet Symphony” was based off of a sample taken out of a Rolling Stones song called “The Last Time” – or to be more precise, the orchestral version of “The Last Time” that was recorded by the Andrew Oldham Orchestra in 1965.
You can hear the Oldham Orchestra version here:
What’s a sample, you ask? In music, sampling is like borrowing a snippet (or sample) from one recording to use in another. These samples can be bits of rhythm, melody, speech, sound effects, or even longer chunks of music.
But, here’s the catch – using samples without permission could land you in considerable copyright trouble. And getting the green light for sampling, known as clearance, can be a really complicated affair. If you are asked to pay to use the sample in question, it could also be quite expensive, especially if you’re eyeing samples from big-name sources.
What makes it all the more tricky is that there’s no law that specifically prohibits sampling, and different courts have different takes on whether sampling without permission is OK or whether it constitutes copyright fraud. Most issues are decided on a case-by-case basis.
In the case of The Verve, things did not end well. While lead songwriter Richard Ashcroft had negotiated use of the sample from copyright holder Decca Records, he neglected to obtain permission from the Rolling Stones’ former manager, Allen Klein, who owned the copyrights to all of the Stones’ pre-1970 songs, including “The Last Time”.
When “Bitter Sweet Symphony” was gearing up for its single debut, Klein, who was then at the helm of ABKCO Records, threw a curveball by denying clearance for the sample. He claimed that The Verve had exceeded the portion that they had agreed with Decca Records. A legal skirmish ensued, leading The Verve to surrender all royalties to Klein. As further salt in the wound, songwriting credits on “Bitter Sweet Symphony” were changed to Jagger–Richards (the lead members of the Rolling Stones).
Verve songwriter Richard Ashcroft walked away with his hit song under someone else’s name and a modest $1,000 in his pocket. The band’s bassist, Simon Jones, later went on to reveal that the band were initially promised half the royalties. However, when the single started flying off the shelves, they were given an impossible choice: hand over 100% of the royalties, or remove the song from circulation permanently.
“Bitter Sweet Symphony”’ reached No 2 in the UK and No 12 in the US in its year of release, and was even nominated for a Grammy. To this day, it remains one of the most recognisable songs of the 1990s, eclipsing every other track ever released by The Verve. In 2019, Billboard estimated that the single had generated almost $5 million in publishing revenue since its release. None of that revenue went to Ashcroft or any of the other members of The Verve.
If that isn’t the very definition of bittersweet success, then I don’t know what is.
Fortunately, this story does have a somewhat happy ending
Following the death of Allen Klein in 2009, Ashcroft approached Joyce Smith, who took over the management of the Stones, with an appeal to have his songwriting credits restored. He was successful – in 2019, ABKCO, Jagger and Richards agreed to return the “Bitter Sweet Symphony” royalties and songwriting credits to Ashcroft. There’s no back payment of the 22 years worth of royalties that the Stones pocketed on Ashcroft’s behalf, but he will receive all royalties going forward.
As businesses fight in the realm of innovation, the recent battle between Checkers and Pick n Pay serves as a cautionary tale. It underscores the notion that an original idea is not only a source of competitive advantage but a precious asset worth protecting. In a world inundated with choices and visual stimuli, the distinctiveness of a brand (or a piece of music) can be the deciding factor in capturing consumer attention and loyalty.
The lesson reverberates beyond the courtroom: originality is well worth fighting for. In the end, the battleground may differ, but the essence remains the same. The pursuit of originality is a journey that demands resilience, legal acumen, and an unwavering commitment to protecting the integrity of ideas in a world where imitation lurks just around the aisle or the musical note.
About the author:
Dominique Olivier is a fine arts graduate who recently learnt what HEPS means.Although she’s really enjoying learning about the markets, she still doesn’t regret studying art instead.
She brings her love of storytelling and trivia to Ghost Mail, with The Finance Ghost adding a sprinkling of investment knowledge to her work.
The Ghost Wrap podcast is proudly brought to you by Mazars, a leading international audit, tax and advisory firm with a national footprint within South Africa. Visit the Mazars website for more information.
In this episode of Ghost Wrap, I recapped five important stories on the local market:
Mr Price released results that I felt were rather poor, yet the market took the stock over 8% higher by the close on the day of release. Either I’m wrong, or the market is wrong. Listen to my reasoning and decide for yourself.
Southern Sun and City Lodge are enjoying a resurgence in demand for hotel rooms, with the former doing as well as I expected and the latter surprising me to the upside.
Sirius Real Estate executed a successful capital raise on the market, demonstrating that investors are highly supportive of the strategy.
African Rainbow Capital has made sure once and for all that I’ll never touch the company with my money, as the latest capital raise is highly painful for minority shareholders.
Sibanye-Stillwater incurred the wrath of investors with the news of a convertible bond capital raise, but did the market overreact to this news?
Listen to the latest episode of Ghost Wrap here, brought to you by Mazars:
African Rainbow Minerals acquires the other half of Nkomati Mine (JSE: ARI)
The mine has been on care and maintenance since 2021
African Rainbow Minerals currently has a 50% stake in the Nkomati Mine. This mine has a nickel sulphide orebody and established infrastructure, having been placed on care and maintenance in March 2021. It can quite quickly be put back into steady state production of class one compatible nickel sulphide concentrate, which is what battery manufacturers are looking for.
It also has other bi-metal products like copper, cobalt, platinum, palladium and chrome.
African Rainbow Minerals clearly likes the outlook here, which is why the company is buying the other 50% in the asset held by Norilsk Nickel Africa. The purchase price for the equity is just R1 million, but don’t let that fool you. There’s a much more complicated transaction in the background about environmental liabilities and other mine liabilities.
The transaction is expected to close during 2024.
Earnings at Crookes Brothers go bananas (JSE: CKS)
Is there anything more volatile than primary agriculture?
If you want a nice, steady investment that won’t cause you much stress, then stay right away from primary agriculture. Despite what certain political parties will tell you, farming isn’t a guaranteed road to riches.
The latest trading statement is proof of this. Crookes Brothers had a terrible time last year, but things look much better now. Headline earnings per share for the six months to September has come in at 321.2 cents, which is a whole lot better than a loss of 193.7 cents in the comparable period.
This massive improvement is mainly thanks to the sugar cane and banana operations, along with a drop in fertiliser and other agricultural input costs. The fertiliser price has been a headache for several other listed companies on the local market that play in that space.
You’ll struggle to trade Deutsche Konsum, but you can learn from it (JSE: DKR)
And the lesson is that European property doesn’t like higher interest rates
Deutsche Konsum is one of the most pointless listings on the JSE. This thing never trades. Despite this, they need to meet all the reporting requirements of the JSE, like releasing financial results.
Still, elements of the financials are interesting and potentially applicable to other companies that you might be looking at. Before we get into that, you need to know that Deutsche Konsum is a specialist REIT focused on German retail properties. In other words, don’t take these insights and try apply them to Poland.
Countries with historically low interest rates don’t like it when rates move higher. It does ugly things to property valuations, like the portfolio value dropping by 9% year-on-year. The devaluation of the properties and an impairment of loan receivables has moved the loan-to-value ratio from 49.7% to 60%. That’s not what anyone wants to see. In other bad news, funds from operations fell by 11.5%.
The company is currently in a fight about REIT status and hasn’t declared a dividend for this year.
Long story short: in any country in the world, property funds can get into trouble.
Little Bites:
Director dealings:
An executive director of Richemont (JSE: CFR) has bought warrants with a value of R335 million. The announcements never name the directors (in true Swiss style), but I’m sure we can guess who is doing derivative trades with that kind of underlying value. In a separate announcement, a director executed warrants to buy shares worth R7.7 million.
Pay attention to this one: an associate of the CEO of Southern Sun (JSE: SSU) has bought shares worth R4.8 million.
An executive of Mondi (JSE: MNP) received shares under a long-term incentive scheme and couldn’t sell them quickly enough, selling the whole lot for a total value of £160k.
I always treat purchases by Value Capital Partners with caution, as this is an institutional investor that has board representation, so this is more of an institutional purchase that comes through as director dealings. The quantum maybe isn’t comparable to other director purchases, but the direction of travel is useful. With that out the way, the news is that Value Capital Partners has bought nearly R2.8 million worth of shares in Altron (JSE: AEL).
A director of Kumba Iron Ore (JSE: KIO) has sold shares worth R1.77 million.
The company secretary of Nedbank (JSE: NED) has sold shares worth R181k.
The company secretary of Datatec (JSE: DTC) has sold shares worth R62.4k.
The rules around the release of trading statements are designed to give shareholders an early warning when financial results will differ significantly from the comparable period. In the case of a mess like Efora Energy (JSE: EEL) that is suspended from trading, I’m not sure that the rule should apply. Case in point: a daft situation where the company has released a trading statement for the six months ended August 2021!
Listen to the latest episode of Ghost Wrap here, brought to you by Mazars:
Covid didn’t kill this radio star (JSE: AME)
African Media Entertainment is bouncing back strongly
Although we were all forced to stay home and stay safe during the pandemic, it actually wasn’t a good time for radio stations. Many of the smaller stations are dependent on being part of the events ecosystem of their hometowns. During the pandemic, there were no events to be part of!
Things have thankfully improved tremendously for African Media Entertainment, with the six months to September reflecting revenue growth of 11% and operating profit growth of 34%. Headline earnings is up 27%. Even better, HEPS is up 39% to 207.3 cents.
Despite all this, the dividend is flat at 100 cents per share.
I always pay attention to the commentary around Moneyweb for obvious reasons. Digital and radio revenue is higher than the previous year, with that business looking at alternative business strategies to achieve revenue growth.
It’s worth highlighting that the company also has an indirect economic interest of 29.9% in Kaya FM, achieved through a 100% economic interest in Mokgosi Holdings.
City Lodge shows signs of life in its pricing (JSE: CLH)
The food and beverage strategy also continues to pay off
Earlier this week, I wrote about Southern Sun and how I prefer the leisure-style offering to a more business-focused offering, while also acknowledging the solid job done by City Lodge in pivoting the business in response to consumer changes.
A voluntary operating update by City Lodge shows that those management interventions are starting to really bear fruit. The comment that surprised me is a note that both leisure AND corporate travel have recovered to pre-Covid levels. The three months to September 2023 saw occupancies rise to 62%.
Now, occupancy is one thing, but pricing is quite another. It’s easy to fill rooms at a low price, which has been the issue plaguing City Lodge in the post-pandemic recovery. It’s good to see that average room rates in South Africa are 9% above the prior comparative period, after increasing 12% in FY23.
I like the 44% increase in food and beverage revenue for the quarter. I also like the net cash position, with R100 million in the bank and R70 million in debt. There are substantial undrawn facilities. The balance sheet is important, as there is significant reinvestment needed in the hotels, particularly after the pain of the pandemic and deferred projects.
Importantly, the group generates 16.3% of its energy requirements from solar renewable energy. And, not to scare you, but a water resilience strategy is a key focus area!
Unsurprisingly, the market liked this update.
Delta Property Fund sells a Port Elizabeth property (JSE: DLT)
This makes a very, very small dent in the debt
Delta has agreed to sell a property in Port Elizabeth known as Cape Road for R33 million. It has a 69.3% vacancy rate and was last valued at R36.6 million. Despite the vacancy rate, it was generating an operating income of just over R1 million.
Delta is trying to sell assets to reduce its loan-to-value ratio. This sale barely touches sides, with the loan-to-value down by 20 basis points from 61.4% to 61.2%. Vacancy levels will decrease by 20 basis points from 32.9% to 32.7%.
Transfer will hopefully be completed by March 2024.
Frontier Transport Holdings is a lesson in cost control (JSE: FTH)
Here’s a perfect example of how modest revenue growth can do big things
Frontier Transport is one of those companies that never seems to be on the radar for retail investors. Operating a bus service isn’t exactly a swashbuckling way to make money, yet here we are with Frontier reporting a jump in EBITDA of 42.6%. Most impressively, that’s been achieved off revenue growth of 6.9%.
How, I hear you ask? Expenses only increased by 1.1%, which really is an impressive outcome. Once you factor in net finance income and profit from the N2 Express service (which is equity accounted), there’s a 62.9% increase in attributable profit.
Perhaps the most important thing about Frontier is the role it plays in the transport infrastructure. The reality of the situation is that this is the only viable alternative to taxis in the broader Cape Town region. On top of that, Frontier has businesses that play in adjacent transport verticals like luxury coach tours.
Notably, the increase in the dividend has been far more modest than the 64% increase in HEPS. The dividend is up by only 10% to 24.2 cents.
KAL Group shows excellent cost control (JSE: KAL)
Like-for-like growth is hard to come by, though
This period saw the inclusion of a full year of performance at PEG Retail Holdings (the fuel business) being included in KAL Group’s results. In the prior period, it was only included for three months. This obviously limits comparability.
Instead of looking at revenue growth of 42.7%, I would focus on like-for-like growth of just 5%, which shows that things aren’t easy out there in the agri space. I did find it impressive that gross profit is up 45.7%, reflecting higher gross margin despite the lower margin fuel revenue playing such a role. This talks to improved margins within the retail business.
The real win is like-for-like expenses falling by 2.1%. They also calculate this metric excluding load shedding, in which case it fell 3.7%. That’s really impressive.
Headline earnings increased by 20.7% and recurring headline earnings grew by 14.7%. HEPS was only up by 11.1% though and the dividend for the full year was 7.1% higher. The difference between headline earnings growth and HEPS growth isn’t because of a change in the number of shares. It’s actually because of a large increase in non-controlling interest year-on-year. HEPS is calculated based on headline earnings attributable to ordinary shareholders of KAL Group.
Overall, KAL Group has done well, but the announcement sets out the many challenges being faced in the agri environment. The PEG fuel business is doing well, with the company showing a mature approach by disinvesting from four underperforming sites that don’t meet return on invested capital requirements.
The market liked it, with the share price closing 5.9% higher.
Mahube Infrastructure: powered by the sun and the wind (JSE: MHB)
A trading statement drove a jump in the share price – but watch the spread
Whenever you see a big jump in a small cap, make sure you check the intraday chart to see whether there were various trades or just one. Here’s the intraday Mahube Infrastructure chart from Moneyweb:
As you can see, it’s not the most liquid chart around. When it looks more like a tetris piece than a worm, you need to tread very carefully. The best bid is R4.03 and the best offer is R4.85.
This lack of liquidity is despite HEPS for the six months to August moving higher by between 56.6% and 73.1%, driven by higher dividends from the solar businesses in which Mahube is invested, as well as a positive fair value movement linked to the wind power plant investments. That move is based on an upward revision in long-term assumptions around the project.
I would give the dividend a lot more weight than the fair value moves.
Detailed results are due to be published on 30 November.
Read the Mr Price numbers very carefully (JSE: MRP)
This period was all about the inclusion of Studio 88 in the numbers
Whenever a group has executed a major acquisition, you need to be really careful with how you interpret the growth rates. Companies can literally buy growth in revenue etc. through acquisitions. That doesn’t tell you anything about how the rest of the group is performing.
For example, in the 26 weeks to 30 September, Mr Price’s revenue is up 26.4% including Studio 88 and just 3.5% without it. Comparable store sales fell 0.8% despite being in an inflationary environment, which means volumes were sharply negative.
There’s another nuance here. When a company makes acquisitions for cash, then headline earnings per share should be boosted by the acquisition, although funding costs can offset that benefit. When an acquisition has been paid for with shares, the rubber hits the road at headline earnings per share level, as there are more shares in issue. And of course, there’s still the core group business to consider and how it performed in the same year as the acquisition.
Mr Price paid for Studio 88 using existing cash resources, so one would expect to see a jump in HEPS because earnings have been bought for cash rather than shares. Instead, we see HEPS down by 9.3%. That’s a really poor outcome.
Reasons for this range from load shedding through to a highly promotional environment that hit gross margin. Mr Price also notes that Studio 88’s revenue is seasonal and weighted more towards H2. Another important point is that Studio 88 is a lower margin business than the rest of the group, contributing to a drop of 170 basis points in gross margin. If we exclude Studio 88, we see gross margin down 100 basis points for this period. It was a tale of two quarters, down 350 basis points in Q1 and up 190 basis points in Q2 as excess inventory was cleared.
Perhaps the gross margin trend is what the market liked about these results, as I can’t see much else to like. The fact that expenses excluding Studio 88 grew by 6.1% certainly doesn’t help.
Perhaps the market took some heart from the Apparel segment growing retail sales by 5.1% excluding Studio 88, although comparable sales only grew 0.5%, so that’s really clutching at straws. The Homeware segment saw sales drop 1% and comparable retail sales fall 5.5%, with the only real highlight being Yuppiechef with double digit growth because that business has strong market positioning. The rest of the players in this market are a dime a dozen, with ever-increasing levels of competition.
Another headwind is that Mr Price funded the deal using existing cash, so the net finance expense is up 88.3% to R336 million.
And on top of all this, there are huge issues at the ports that are likely to cause supply challenges over the festive season.
Despite all this, the market decided to put 10% on the Mr Price share price in morning trade. I’ve learnt enough hard lessons in the market not to ignore the price action. I just for the life of me cannot see the good news story here.
This year at Spar was not Good For You (JSE: SPP)
Hopefully, the worst is now behind them
Spar has released a trading statement for the year ended September 2023. Operating profit has fallen sharply from R3.4 billion to between R1.6 billion and R2.0 billion. Based on that, it’s little surprise that HEPS is down by between -53% and -43%. That’s an expected range of 545.4 cents to 661.5 cents, with the share price at R113 in morning trade.
Aside from the obvious competitive challenges and the state of the South African consumer, there was a disastrous SAP project at the KZN distribution centre. Spar reckons this had an impact of R720 million in lost profits.
Earnings per share is down by between -86% and -76%, with the bigger hit vs. HEPS coming from various impairments, including in the international operations.
And in addition to the operating profit pressures, there was an increase of R433 million in net finance costs due to higher interest rates. The group highlights that financiers are supportive of the group and have agreed to amendments to banking covenants.
When a company makes a comment like this, you know it’s been rough: “At this stage, the Group does not intend to raise any capital from Shareholders.”
Trematon is returning capital to shareholders (JSE: TMT)
The company is frustrated with the realities of being listed
Trematon makes it quite clear in its results for the year ended August that structural issues in the local market mean that investors in JSE-listed investment holding companies will find it difficult to exit at full value. In other words, the discount to intrinsic net asset value (NAV) is an unavoidable problem.
There’s a strong element of truth in this, although most investment holding companies on the JSE have brought these problems upon themselves with high management fees and mediocre performance. Trematon wants to get to the point where all the portfolio companies are self-funding, at which point the annuity income will either improve the market rating or the company will look at other ways to return value to shareholders.
Trematon’s intrinsic NAV is 439 cents and the share price is R3.00. I’ve seen far worse in the way of discounts on the local market. Generation Education and Aria Property Group make up 63% of the group’s intrinsic NAV.
For those interested in the Generation business, operating profit increased from R9.5 million to R17.1 million and the group has acquired a new school in Modderfontein, Gauteng. Despite this, the value of Generation in the intrinsic NAV has fallen based on a more conservative approach to revenue forecasts in the discounted cash flow model.
Unfortunately, much as Trematon may bemoan the structural issues on the JSE, the reality is that intrinsic NAV has fallen from 487 cents to 439 cents. It’s tough out there and investors know it. Here’s the breakdown:
In an effort to try narrow the gap, a capital distribution of 32 cents has been declared, down from 40 cents in the prior year.
Little Bites:
Director dealings:
The CEO of MTN (JSE: MTN) has bought the dip in a big way, investing R8.8 million in shares in the company. MTN is now back above R100.
The CEO of Life Healthcare (JSE: LHC) has bought shares in the company worth R3.5 million.
The Mouton family has bought more shares in Curro (JSE: COH), this time to the value of nearly R3 million.
A director of a major subsidiary of Woolworths (JSE: WHL) sold shares worth R1.4 million.
An associate of a director of Sanlam (JSE: SLM) sold shares worth over R900k.
Various directors of Richemont (JSE: CFR) have bought shares worth over R580k.
A prescribed officer of Barloworld (JSE: BAW) bought shares worth nearly R500k.
An associate of a director has disposed of shares in Wesizwe Platinum (JSE: WEZ) for R132k.
Mantengu Mining (JSE: MTU) released a trading statement for the six months to August. It reflects a headline loss per share of between 9.5 cents and 10.5 cents, which is worse than the headline loss of 5 cents per share in the comparable period.
There is yet another delay in the publication of the Tongaat (JSE: TON) amended business plan. It’s been pushed out by a week to a publication date of 29 November and a meeting date of 8 December.
There’s also an extension for the fulfilment of suspensive conditions for Conduit Capital’s (JSE: CND) disposal of CRIH and CLL. The date has been pushed out to 31 January 2024.
2023 has seen global capital markets dwindle, with higher borrowing costs and lower valuations leading to more frugal investments. For African countries, market size and liquidity have always been an issue, made even more so by the current challenging global conditions. Activity in these markets is few and far between (SA excluded), so the Latin saying, “fortune favours the brave” indeed applies to these three companies – Airtel Africa, Beltone Financial Holding and Oryx Properties – who defied market conditions, announcing an IPO and listing and capital raises respectively, during H2 2023.
Beltone – one of the fastest-growing investment banks in Egypt – successfully completed the issue and listing of 5 billion shares, raising EGP10 billion (c.US$323 million). The capital raise marked the largest in the history of the Egyptian Stock Exchange, with the second round of the rights issue oversubscribed by 5.49 times. Namibia’s largest property fund, Oryx Properties, raised N$312.85 million ($17,2 million) with unit holders subscribing for a total of 26,947,033 (82.4%) linked units. Airtel Africa, a provider of telecoms and mobile money services, undertook an IPO and listing of its Ugandan subsidiary on the USE. While disappointing – as the offer received only a 54.45% subscription rate – the company listed 4,36 billion shares, attracting some 4,600 investors and raising Shs211 billion (c.$56 million).
The JSE, Africa’s largest stock exchange, comparatively has an active ECM market; however, it is not immune to difficulties. In a move to ease the challenges faced by companies seeking to raise capital in South Africa, a new fintech company, Utshalo has just been launched to address the challenge.
The African M&A environment has faced similar challenges, such as economic and political instability, market fragmentation and limited availability of target companies, currency and exchange rate risks, and infrastructure constraints. The value of deal activity, as captured by DealMakers, for the 2023 year to end-September was 49% down, at $7,9 billion off 363 deals, when compared with 2022’s figure of $15 billion (522 deals) over the same period. Deal activity was highest in East Africa (110 deals), more specifically, Kenya (71 deals), followed by Nigeria (62 deals) and Egypt (47 deals).
According to the DealMakers’ private equity analysis, in cumulative terms, the value of deals in Africa (excluding South Africa) was $1,3 billion for the year to end-September 2023, a quarter of that recorded in the same period in 2022 ($4,1 billion) and $1 billion down on the value reported in 2021.
Of the top 10 deals for the period, six involved targets in the energy and resources sector. The largest deal by value remains the acquisition by China Natural Resources of Williams Minerals in Zimbabwe, announced in February 2023, with a deal value of $1,75 billion.
On a positive note, the slow growth in sub-Saharan Africa is expected to rebound in 2024 as tough financial conditions ease, inflation continues to come down, and as the global economy rebounds.
PPC’s wholly-owned subsidiary PPC International is to dispose of its 51% stake in CIMERWA (Rwanda) for US$42,5 million. CIMERWA, which is listed on the Rwanda Stock Exchange, will be purchased by a privately-owned company, National Cement Holdings, which is part of the Devki group, one of the largest manufacturers of clinker and cement in East Africa.
Burstone Group (formerly Investec Property Fund) has, via its newly formed Australian joint venture with Irongate Group, acquired its first industrial property in New South Wales, Australia for A$57,25 million. The Irongate joint venture will provide the 20% co-investment equity, alongside APAC-focused private equity real estate investment group Phoenix Property Investors (80%), and the fund management capabilities for the deal.
Delta Property Fund has entered into an agreement with Slip Knot Investments to dispose of a property at the corner of CJ Langenhoven Drive and Cape Road in Gqeberha for R33 million. The disposal is part of Delta’s ongoing strategy to dispose of non-strategic assets. The proceeds will be used to reduce debt and the Loan to Value (LTV) by 0.2% from 61.4%.
Unlisted Companies
Payments24, a South African global payments platform provider specialising in payment and loyalty solutions in the digital and fuel payment ecosystem, has invested in Inergy 24, a Swiss-headquartered European-based technology service provider. The two businesses collectively will provide customers throughout Europe access to the Pay24 platform including fleet management, loyalty and rewards, mobile, retail and electric vehicle payments and Cloud Switch solutions.
24 Bit Games, a Unity focused technical game development studio based in Johannesburg, has been acquired by Annapurna, an American video game publisher and developer. The companies have worked together for many years and this next chapter will enable 24 Bit Games to grow its development team and existing technology toolkits for its client base and future projects.
Kgodiso Development Fund, an independent fund founded by PepsiCo South Africa, has invested into agri-tech digital platform Khula! The platform enables small and medium-sized agricultural enterprises, commercial farmers and distributors to participate in the agricultural value chain. The undisclosed investment will be used by Khula! to develop innovative ways to sustainably finance emerging farmers.
The asset management firm Anchor Capital is to merge with London-based boutique wealth manager Credo. The combined entity will have assets under management of R230 billion with Anchor shareholders owning 80% of the combined entity.
Springs Car Wholesalers (SCW Group) has acquired the SANI Car Rental brand and will operate as franchisees under the brand in South Africa and Namibia. Financial details were undisclosed.
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