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Ghost Bites (Anglo American | ArcelorMittal | Hammerson | Liberty Two Degrees | Sirius | Spur | Super Group | Trustco)

The Finance Ghost
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Ghost Bites (Anglo American | ArcelorMittal | Hammerson | Liberty Two Degrees | Sirius | Spur | Super Group | Trustco)

Anglo American reports a big drop in earnings (JSE: AGL)

A drop of 55% in HEPS isn’t pretty

The mining industry has been dealing with a drop-off in commodity prices this year. Cycles are nothing new to mining, with volatile earnings as standard practice in this game. That’s even true for the likes of Anglo American, with a diversified portfolio.

Over five years, you’ve still done alright in these names:

For the six months to June 2023, EBITDA fell by 41% in an environment of lower commodity prices. The basket price across the group fell by 19% and unit costs increased by 1%. Volume increases of 10% partially offset the impact, with group revenue down by 13%.

Net debt of $8.8 billion is less than 1x annualised EBITDA, so the balance sheet is ok. This is why the dividend payout policy of 40% has been maintained.

Here’s one for the books though: attributable free cash flow fell from $1.56 billion to -$466 million. Yes, that is negative free cash flow! Welcome to mining, where capital expenditure is huge.

Return on Capital Employed has fallen from 36% to 18%. This isn’t a good enough return for the risk in my opinion.

ArcelorMittal releases detailed results (JSE: ACL)

A headline loss of R448 million broke the share price when warning was first given

Let’s kick off with a share price chart, showing you exactly when news broke of how bad these ArcelorMittal numbers will be:

As you can see, the price partially recovered, although the downward trend is clear.

In the six months to June, a drop in realised rand prices of 8% ruined the fun. Although volumes were up 3%, there’s so much operating leverage in this business that EBITDA crashed by 86%. Operating leverage refers to the extent of fixed costs, something that is incredibly important in manufacturing and mining businesses. With vast fixed costs, a small drop in revenue can cause havoc for profitability.

EBITDA of R499 million was eaten up by the banks before we get to the headline loss of R448 million. Net borrowings increased from R2.8 billion to R2.9 billion, so ArcelorMittal is the poster child for the dangers of combining operating leverage and financial leverage.

As you’ve probably guessed, there is no dividend here.

With cash from operations of R891 million and a huge capital expenditure bill of R818 million, free cash flow is almost non-existent here. The company will need to make some major internal changes before it can make a dent in the debt.

Hammerson is paying dividends again (JSE: HMN)

This is important for local fund Resilient

A property fund that doesn’t pay dividends is about as useful as a leaky bucket. Nobody is buying property funds purely for capital growth, that much I can promise you.

After considerable pressure from shareholders (not least of all local fund Resilient), Hammerson has returned to paying cash dividends with the release of interim results. The disposal of £215 million worth of non-core assets has helped repair the balance sheet. Net debt to EBITDA is now at 7.7x vs. 10.4x at the end of the last financial year. The more common metric is loan-to-value, which is at 33% vs. 39% at the end of the last financial year.

Adjusted earnings increased by 15%, although most of that is because of lower net finance costs because debt was reduced. Like-for-like net rental income only increased by 2.3%.

The interim cash dividend is 0.72 pence per share, which works out to around 16 ZAR cents. The current share price is around R5.88.

A massive payday for Liberty Two Degrees shareholders (JSE: L2D)

There’s nothing quite like a 42% jump in the share price in a single morning

Liberty Group wants to take Liberty Two Degrees private. This will be via a scheme of arrangement, with a proposed cash price of R5.55 per share. Liberty Two Degrees closed at R3.90 the day before the announcement, so that’s a lovely premium for shareholders. Well, recent shareholders at least. If you held since listing, then I’m afraid you’ve had a bad time:

The net asset value per share at the end of December 2022 was R7.51, so Liberty is also getting a pretty good deal if we believe that number.

You may recall that Liberty Group is now a wholly-owned subsidiary of Standard Bank Group. This deal is ultimately a big property play by Standard Bank.

Liberty group already owns around 61% of the shares in Liberty Two Degrees It also owns 66.7% in the underlying portfolio, with Liberty Two Degrees holding 33.3%. In other words, this transaction is about taking out the minority shareholders.

Mazars Corporate Finance was appointed as independent expert on this one, concluding that the transaction is fair and reasonable to Liberty Two Degrees shareholders.

Non-binding letters of support have been received from Coronation (holding 22.5% of the shares or 61.1% of shares eligible to vote) and Sesfikile Capital (holding 1.3% of the shares or 3.6% of shares eligible to vote). This gets them very close to having a successful scheme of arrangement, which requires 75% approval.

Hot potato Royal Bafokeng Platinum is loss-making (JSE: RBP)

Impala Platinum will need to work this asset

Things aren’t great in the platinum group metals (PGM) industry at the moment. Royal Bafokeng Platinum is dealing with additional issues, like operational challenges at the Styldrift mine and a decrease in production.

Even if production went according to plan, it’s hard to do well when the rhodium price tanked by 50% and the 4E basket price fell by 23.6%. As a further squeeze on profitability, mining costs increased by more than CPI inflation.

The headline loss per share is a nasty -113.8 cents, which is way off HEPS of 767.3 cents in the comparable prior period. Impala Platinum is about to own this entire thing, so hopefully it can only get better from here.

Sirius recycles capital in the UK (JSE: SRE)

In other words, it has bought properties after recently selling a couple

In the property sector, funds are forced to “recycle capital” because raising money is expensive. There was a time on the JSE a few years ago when property groups could raise seemingly endless capital in literally a couple of hours. The days of accelerated bookbuilds are long gone, so management teams must earn their salaries by buying and selling properties intelligently.

Sirius Real Estate has announced that UK subsidiary BizSpace has acquired two mixed-use industrial assets for £9.5 million on a net initial yield of 9.6%. This comes after recent sales in the UK at a combined premium to book value. Sirius will want to demonstrate value creation to shareholders by actively managing these new assets.

Spur: people with a taste for Italian (JSE: SUR)

I have fond memories of the Doppio Zero group from my Joburg days

The Doppio Zero / Piza e Vino / Modern Tailors group is focused on Gauteng, so don’t feel bad if you haven’t heard of the restaurants in other provinces. In fact, with a footprint of 37 franchised and company-owned restaurants, only 4 of them are outside of Gauteng.

Spur is acquiring a 60% stake in the chain, as well as the central supply business and bakery. The sellers are the founders, who will remain as executives of the group for a minimum of five years.

The rationale for the deal is to almost double the size of Spur’s “speciality” portfolio, which includes The Hussar Grill, Nikos and Casa Bella.

The Doppio Zero group generated total sales of over R600 million in the year ended February 2023. That’s impressive for a group that was only founded in 2002 as a bakery and cafe in Greenside! There are 669 employees.

The announcement doesn’t disclose the transaction value. It also doesn’t indicate whether there are put / call option structures over the remaining 40%. For the sake of the founders, I hope they negotiated a liquidity mechanism to realise the rest of the value after the five year period as executives.

Super Group reports a super jump in earnings (JSE: SPG)

These are properly impressive numbers in this environment

For the year ended June 2023, Super Group has reported a 20% to 27% increase in HEPS. That’s juicy. Even more impressive is the fact that the base period included once-off benefits of 38.8 cents per share in the HEPS number of 380.7 cents.

The narrative sounds good, with market share gains on the top line and solid cost management to boost profitability. On top of this, the group remained highly cash generative. This supports the ongoing strategy to look for useful acquisitions to supplement organic growth.

The earnings range for the period is 456.8 cents to 483.5 cents. The share price is just over R35, suggesting a Price/Earnings multiple of around 7.5x.

Trustco finally announces the Meya Mining deal (JSE: TTO)

Perhaps unsurprisingly, it’s complicated

The overall story here is that Trustco has raised $75 million for the completion of the Meya Mining development, a diamond mine in Sierra Leone. If you read carefully though, it looks like only $50 million is confirmed.

Sterling Global Trading is subscribing for shares in Meya Mining for $25 million. This gives the company a 70% shareholding. Trustco Resources will hold 19.5% and Germinate will hold 10.5%.

On top of this, Sterling will advance a loan of $25 million to Meya. A mystery market lender is going to lend another $25 million, taking the total to $75 million. It sounds like only the $50 million has been finalised, though.

Trustco is going to subordinate its shareholder loan of $45.4 million in favour of this new debt. In other words, the new debt is repaid first and takes preference in a liquidation event.

Trustco has invested $116 million in this asset since inception. I’m not sure if this included any debt that has been previously repaid, but the current subscription price implies an equity value of $35 million. If we add in the shareholder loan, we get to Trustco having total value here of $45.4 million + $6.8 million = $52.2 million. That sounds like a significant loss, but I’m happy to be corrected here.

This is a Category 1 transaction and so a circular will need to be distributed to shareholders. Irrevocable undertakings have been received in respect of 63.26% of shares in issue, so that should be a done deal as it only needs an ordinary resolution.

Little Bites:

  • Director dealings:
    • An independent non-executive director of RECM & Calibre (JSE: RAC) bought shares worth R516k.
    • An independent non-executive director of Balwin (JSE: BWN) has bought shares in the company worth R135k.
    • Weirdly, the CEO of Argent Industrial (JSE: ART) is now selling shares after buying just a couple of weeks ago. The sale was for R51.8k.
    • A director of Mantengu Mining (JSE: MTU) has bought shares worth R31k.
  • Anglo American Platinum (JSE: AMS) has named Craig Miller as the incoming CEO to replace Natascha Viljoen from 1 October. Viljoen is moving into the COO role at Newmont Corporation. Miller is currently the finance director, a role he has held since 2019. This means that the company needs to find a new finance director, with no successor named as of yet.

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

Liberty Group (LGL), a subsidiary of Standard Bank, has announced its intention to acquire the remaining shares not already held in Liberty Two Degrees (L2D). L2D shareholders have been offered a cash consideration of R5.55 per share in a deal worth c.R1,9 billion. The share price closed 44% up on the day. Coronation Asset Management and Sesfikile Capital have confirmed that they will support the scheme and together they represent 64.4% of the shares that may vote.

Spur Corporation, in a move to strengthen its position in the day-time speciality dining space and enter the coffee speciality market, has acquired a 60% stake in the Doppio Group. The stake was acquired from founders Paul Christie and Miki Milovanovic. While financial details of the transaction were undisclosed, it was disclosed in the announcement that the Doppio Group generated total sales of over R600 million in the financial year ended February 2023.

Trustco aims to raise c.US$75 million which will be used to complete the Meya Mining development. Sterling Global Trading (SGT) will subscribe for shares valued at $25 million and will hold a 70% stake in Meya Mining. Trustco Resources will reduce its shareholding to 19.5% and Germinate SL will own a 10.5% stake. SGT will advance a $25 million loan and will work with Meya Mining to raise a further $25 million. The funds will ensure that Meya is fully capitalised and will enable the mine to scale production at an accelerated pace.

Labat Africa has acquired the remaining 30% stake in CannAfrica from H Maasdorp for a consideration of R6,43 million to be settled through the issue of 29,9 million Labat shares and the balance in cash of R2,8 million.

A preferred strategic equity partner (SEP) has been selected for Tongaat Hulett, currently in Business Rescue. The selected SEP is Kagera Sugar, a sugar manufacturing company situated in the North-Western part of Tanzania. The transaction will comprise the acquisition of the complete sugar division of Tongaat Hulett in South Africa and the investments in Zimbabwe, Mozambique and Botswana. Financial details were undisclosed.

Sirius Real Estate, through its UK subsidiary BizSpace, has acquired a portfolio of two mixed use industrial assets located in Liverpool and Barnsley. The assets have a combined area of 71,957 square feet of predominantly workshop accommodation. Sirius acquired the portfolio for £9,5 million representing a net initial yield of 9.6%.

The offer in Q4 2021 by Impala Platinum (Implats) to Royal Bafokeng Platinum (RBPlat) shareholders finally closed this week with RBPlat shareholders holding 121,437,384 shares (96.21% of shares not held by Implats at the time of the offer) accepting the offer. In aggregate Implats now holds 98.35% and will invoke section 124(4) of the Companies Act to compulsorily acquire all the RBPlat shares not already held. Application will be made for the termination of the listing of the RBPlat shares on the JSE which will become a wholly-owned subsidiary of Implats.

ArcelorMittal South Africa is proposing to modify its existing 2016 B-BBEE transaction which, according to the company’s announcement, has not yielded the envisaged value for the empowerment partners and employees. The modified transaction will see the BEE parties (Amandla We Nsimbi, Likamva Resources and the Isabelo 2 Share Trust) holding a 21.75% direct stake in the company. The transaction is subject to shareholder approval and will require the issue of a circular setting out the full terms and conditions of the transaction.

Unlisted Companies

Five35 Ventures a Johannesburg-based pan-African female-focused venture capital fund investing in early-stage tech start-ups, has made an undisclosed investment in Zuri Health. The Kenyan startup provides customers with affordable, convenient and quality healthcare services via its app, SMS and WhatsApp. Zuri Health’s services are available in Ghana, Nigeria, Senegal, South Africa, Uganda, Tanzania and Zambia.

Kasha Global, a Kenyan women-led and focused healthcare retail platform has raised US$21 million in a Series B round led by Cape Town-based Knife Capital. Kasha sells and delivers pharmaceutical products, household goods and consumer health products to low-income consumers, resellers, pharmacies and health facilities in East Africa.

The Competition Tribunal has conditionally approved the acquisition of a 51% stake in SAA by Takatso Aviation. SAA entered business rescue in December 2019. In terms of the deal, Takatso’s major shareholder Harith has raised R3 billion which it will commit to SAA. The Department of Public Enterprises will continue to hold the remaining 49% stake in the airline.

DealMakers is SA’s 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

Zeder Investments will distribute to shareholders a special dividend of 5 cents per share from income reserves. The company has 1,54 billion shares in issue and will distribute, on 28 August 2023, R77 million to shareholders in terms of the special dividend declaration.

The result of the odd-lot offer by CA Sales to shareholders holding less than 100 CA Sales shares, was announced with the company repurchasing a total of 100,025 CA&S ordinary shares representing 0.02% of the total issued shares of the company. The shares were repurchased for a total consideration of R706,283 and the number of shareholders was reduced by c. 35%. The shares will be delisted and the total issued ordinary share capital of the company will be reduced to 474,870,057 with no treasury shares.

Invicta which has odd-lot holdings equal to 36,349 shares has announced an odd-lot offer price of R29,82 per share. The offer is set to close on August 4, 2023.

Prosus and Naspers continued with their open-ended share repurchase programmes. During the period 17-21 July 2023, a further 2,308,036 Prosus shares were repurchased for an aggregate €155,3 million and a further 427,172 Naspers shares for a total consideration of R1,42 billion.

Three companies issued profit warnings this week: Aveng, Ellies and Royal Bafokeng Platinum.

Five companies issued or withdrew a cautionary notice: Trematon Capital Investments, Afristrat Investment, Ellies, enX and Trustco.

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

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

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

DealMakers AFRICA

Meridiam has acquired 100% of Rift Valley Energy Tanzania for an undisclosed sum. This is the company’s first acquisition in Tanzania. Rift Valley Energy owns a portfolio of 30MW of renewable energy generation assets in operation, construction and development stages.

Acumen Resilient Agriculture Fund has led a US$4,1 million pre-Series A funding round in Kenya’s FarmWorks. Other investors include Livelihood Impact Fund, Vested World, a number of family offices and some angel investors. The funding will be used to strengthen its data analytics capabilities and brings the total raised by the company since it started in 2020, to $5,6 million.

Nigerian data and marketing technology company, Terragon announced a US$9 million Series B round. Orange Ventures led the round with participation from TLcom Capital, LoftyInc, Sango Capital, VestedWorld and Western Technology Investment.

South Africa’s gender-lens venture capital firm, Five35 Ventures, has invested an undisclosed sum in Zuri Health. This is the second investment this year for the Kenyan e-health platform – Morocco’s UM6P announced it was backing Zuri in January.

Clafiya, a Nigerian healthtech startup, has raised US$610,000 in a pre-seed round. Norrsken Accelerator, Acquired Wisdom Fund, Hustle Fund, Voltron Capital, Microtraction, Ajim Capital, HoaQ, Bold Angel Fund, the Shivdasani Family and other angel investors participated in the oversubscribed round. Funds will be utilised to accelerate growth, product development and new staff hires.

East Africa’s Kasha Global has raised US$21 million in a Series B round led by Knife Capital. Other participants in the round included Finnfund, DFC, Tim Koogle, Beyond Capital ventures, Altree Capital, BLOC Smart Africa Fund and Five35 Ventures.

Kavango Resources has signed an exclusive six-month option agreement to acquire two gold exploration projects in Matabeleland, Zimbabwe. The Leopard Project and Hillside Project will expand Kavango’s existing footprint in the country. Both projects contain historically producing mines.

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

Ghost Global: Hunting for Green Flags

The Finance Ghost and Dominique Olivier
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Ghost Global: Hunting for Green Flags

Whether you love him or hate him, you can’t deny the irony in the fact that DJ Khalid’s 7th studio album, titled Suffering from Success, was met with lacklustre reviews after it was released almost a decade ago.

What should have been a winning recipe, including guest appearances by big names like Nicki Minaj, Drake and Lil Wayne and collaborations with producers like Timbaland, ended up giving a so-so performance on the charts and was panned by the majority of critics.

As it turns out, 7 was not DJ Khalid’s lucky number after all. Sometimes, success is elusive, even when it seems so guaranteed that you (pre-emptively) name your whole album after it.

Perhaps it wasn’t time for Another One? If DJ Khalid references are lost on you, then don’t despair. We are moving on now.

Products and services that seem destined for triumph may do exactly the opposite. In our Magic Markets research, we often encounter businesses that appear to have all the right ingredients, but end up falling flat (or more annoyingly, sideways). 

And then sometimes, we find the bright side – a business that spots a gap in the market, addresses it with a great solution and nails the pricing. Sometimes, it just works, and as business enthusiasts, we love to see it.

Although luck undoubtedly plays a role in this, we’ve learnt enough over the years to know that there are certain markers – green flags, if you will – that go a long way towards predicting a good outcome for shareholders. 

Here are two examples from our research:

Green flag #1: A coherent ecosystem

Earlier this year, we delved into MercadoLibre, a South American eCommerce platform that looks and sounds as exciting as a Mexican wrestling match. 

Operating in a high growth region with a business model that clearly works, MercadoLibre is a bit of a unicorn: a technology-driven firm that not only makes great profits, but manages to spend those profits wisely.

The appeal of MercadoLibre lies in its seamless integration of growth engines that complement its eCommerce platform. This end-to-end approach reflects a deep understanding of the consumer journey, where every pain point is addressed with a tailored solution. Unlike some conglomerates that attempt to incorporate unrelated services under one umbrella (looking at you, Amazon), MercadoLibre’s cohesive ecosystem offers a strategic advantage that makes it stand out in the market.

By providing solutions for transactions, money transfers, credit services (Mercado Credito), and insurance, they create a comprehensive and convenient environment for users. This all-inclusive approach not only enhances customer satisfaction but also strengthens customer loyalty, as users find all their needs met within a single platform.

What does that look like in practice? Well, see for yourself:

Green flag #2: An understanding of the consumer base

More recently, we looked at Lovesac, the luxury furniture business that claims to be the bestselling couch in America. That’s a big statement to make, but after looking at the numbers, we wouldn’t be surprised if they were correct about that.

Lovesac has doubled both revenue and net income between 2021 and 2023. It’s the fast-growing furniture business most punters have never heard of, let alone looked at from a numbers perspective.

Lovesac’s exceptional ability to cater to the needs of its Millennial consumer base is rooted in a deep understanding of their preferences and lifestyle choices. By recognising the transitional phase that many Millennials find themselves in as they move to new homes and seek high-quality furnishings, Lovesac has strategically positioned itself as a brand that offers both comfort and aspirational value.

Unlike traditional luxury brands that may focus solely on exclusivity and prestige, Lovesac recognizes that its Millennial target audience values practicality. They understand that Millennials work hard for their money and expect products that can withstand the rigours of day-to-day life.

By catering to families with pets and small children, Lovesac ensures that its furniture meets the demands of real-life usage while maintaining its premium image.

Lovesac’s distribution model is perfect for today’s consumer. It’s been built as an omnichannel business from the start, with boutique showrooms and a solid online capability to back it up. By avoiding large expensive showrooms, the trading density (sales per square metre) metrics are fantastic.

The five-year story is nowhere near as exciting as the MercadoLibre performance, but a furniture manufacturer faced a different reality during lockdowns to a technology platform. We think that Lovesac is one to keep an eye on.

Spot successes in the making with our help

Nobody likes betting on a flop. That’s why it’s cardinally important that you research companies before you invest in them. 

With nearly 90 research reports on global stocks available in the library, a subscription to Magic Markets Premium for just R99/month gives you access to an exceptional knowledge base that has been built since we launched in 2021. And if you don’t feel confident enough to spot those green flags yourself just yet, we will help point them out for you. Perhaps most importantly, we also point out as many red flags as possible.

There is no minimum monthly commitment and you can choose to access the reports in written or podcast format. Sign up here and get ready to learn about global companies>>>

Ghost Bites (Advanced Health | AECI | Altron | AVI | British American Tobacco | De Beers (Anglo) | Labat | Naspers + Prosus | RAC)

The Finance Ghost
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Ghost Bites (Advanced Health | AECI | Altron | AVI | British American Tobacco | De Beers (Anglo) | Labat | Naspers + Prosus | RAC)

Advanced Health releases the delisting circular (JSE: AVL)

The proposal is to take the company private at 80 cents per share

After a firm intention announcement was released back in June, Advanced Health has now released the circular for the offer being made by Eenhede Konsultante. There are certain shareholders who are moving into the private space with the offeror, with a collective existing holding of 71.13% in the company. In other words, the scheme will be voted on by shareholders who have 28.87% of the company.

The offer price is more than double the 30-day VWAP before the date of the firm intention announcement. A big premium like this is rare, though it becomes necessary when there is a small voting class.

Based on the opinion from BDO, the Independent Board has determined that the scheme is fair and reasonable to shareholders.

Kudos to the corporate advisors Questco for putting together such a fresh looking scheme document. Circulars are normally very ugly things, but this circular looks fantastic.

AECI: earnings up and dividend down (JSE: AFE)

There’s too much debt at this point in the cycle, so the banks are first in line for cash flow

In the six months ended June 2023, AECI posted a solid set of numbers until you get below the EBIT (Earnings Before Interest and Taxes) line. Let’s start at the top.

Revenue increased by 19%, which is a solid start to any story. Operating margins also look good, with EBIT up by 20% despite a R180 million loss in the problematic Schirm Germany business. This is significantly worse than the loss of R86 million in the prior period. A turnaround strategy is underway in Germany.

EBITDA and EBIT margins were stable at 10% and 7% respectively. This brings us to the end of the good news.

HEPS has only increased by 5%, a direct result of net finance costs increasing from R124 million to R274 million. This is because net debt is up to R5.7 billion, which is pretty chunky vs. interim EBITDA of R1.8 billion. You would need to annualise that number to work out a net debt to EBITDA ratio. The company indicates net debt to EBITDA of 1.6x.

The company acknowledges that gearing is too high at this point in the cycle. Reducing this is a priority, helped by a solid working capital performance that saw cash from operations increase by 20%, ahead of EBITDA growth of 18%.

The clear need to focus on the debt is why the dividend is 48% lower at 100 cents per share.

Altron: a creative use of “once-offs” (JSE: AEL)

The slide in the share price continues

Altron’s recent financial reporting has highlighted some incredibly dubious “once-offs” – theoretically, unusual items that shouldn’t happen again. A problem in the core business that is a clear business risk is not a once-off.

For example, Altron Nexus (now a discontinued operation) engages in public sector work. We know that this is risky stuff, so the fact that the contract for phase 3 of the Gauteng Broadband Network (GBN) contract wasn’t awarded to the business despite having personnel and infrastructure in place from phases 1 and 2 isn’t a once-off. It’s a business risk of a contract not being awarded or renewed!

As another example, the heavily debt burdened City of Tshwane owes money to Thobela Telecoms. Altron Nexus is the EPC contractor to Thobela and won’t get paid unless Thobela gets paid. Again, the government not paying people isn’t a once-off.

Altron Nexus just keeps taking bullets, as there is also litigation underway by Aeonova (a sub-contractor on the GBN contract). It initially looked like the possibility of an arbitration award was remote, but subsequent proceedings have led to a revised view. No provision has been raised as of yet for this matter, so this issue may still be coming in the numbers.

Total provisions for R336 million have been raised for Altron Nexus, which is held as a discontinued operation. Cash restructuring costs of R11 million have also been incurred. There’s a further goodwill impairment of R33 million.

But wait folks, there’s more.

After the failed disposal of Altron Document Solutions, new management was appointed to restructure the business. With two of its large customers facing financial difficulties, provisions of R95 million have been raised against this asset which is also recognised as a discontinued operation.

Together, Altron Nexus and Altron Document Solutions contributed 21% to group revenue in the year ended February. They were loss-making, so no profit will be lost here once they are out of the system.

The continuing operations are Netstar and Altron Systems Integration, with the update giving a more positive outlook on their profitability.

For the six months ending August 2023, Altron expects to generate HEPS from continuing operations of between 43 cents and 51 cents, representing an increase of between 5% and 24%. They really need to sort out the troublesome businesses though, as the headline loss per share from total operations will be between -64 cents and -57 cents, an ugly swing from headline earnings per share of 34 cents in the comparable period.

I could only laugh at this comment in the announcement. If management intervention is required to ensure that “once-offs” do not recur, then they weren’t once-offs in the first place!

AVI managed to push through selling price increases (JSE: AVI)

Even I&J increased revenue – but only just!

For the year ended June 2023, AVI managed to increase revenue by 7.8%. The star of the show was Snackworks, with growth of 11.9% and a contribution of 35% to revenue. As we’ve seen in PepsiCo on the global stage, people are willing to cut their food cost but not when it comes to their favourite snacks!

Footwear & Apparel also did well with a 12.3% increase, though it is the second-smallest segment in the group. The laggard was I&J, up just 0.5% and contributing 16.7% to group revenue. There were various reasons for this, including a fire at one of the I&J facilities.

The overall revenue increase was attributed to selling price increases. Gross profit margin improved slightly, which I think is very impressive in this environment. The revenue mix is a factor here, with higher margin categories doing well in this period.

A less ideal situation is that selling and administrative expenses increased at a rate above inflation, with fuel prices as the major culprit. There were other costs pressures as well.

So, despite revenue growing 7.8%, operating profit was only 6.9% higher. I&J’s earnings were lower because of the sideways performance in revenue. Every other segment experienced positive earnings growth.

Cash conversion sounds promising, with the company noting a decrease in working capital. Net debt is within target range, despite an increase in capital expenditure vs. the prior year as the group caught up on projects that had been delayed during Covid.

As there are more shares in issue than before because of incentive schemes, consolidated HEPS will only increase by between 3% and 5%. AVI is a remarkably defensive business but the share price has been the victim of a valuation that was simply too high.

British American Tobacco is crawling along (JSE: BTI)

Low single-digit growth remains the order of the day

I don’t really understand the appeal of British American Tobacco to investors. I get the arguments around being a rand hedge, as well as the high dividend yield, but that doesn’t make it a great investment. There’s an argument around how defensive the model is, yet I’m quite sure that pharmaceuticals and perhaps alcohol businesses will offer more defensive characteristics in years to come, especially as the British American Tobacco business transitions into “non-combustibles” with unproven profitability.

Interestingly, neither British American Tobacco nor AB InBev have done well over 5 years, though the cigarettes offer a much higher dividend than the beers:

In the six months to June 2023, British American Tobacco achieved revenue growth of 4.4% (or 2.6% in constant currency). New Categories grew by 26.6% and is now 16.6% of group revenue, yet still isn’t profitable.

Reported profit is up substantially because of major once-offs in the base. Adjusted profit is up 3.6% in constant currency, with margin up 40 basis points to 44.3%.

Adjusted net debt has decreased by 2.3% to £37 billion. Yes, billion. This group is an absolute monster, with a market cap of R1.47 trillion. Yes, trillion.

The company is currently paying a quarterly dividend of 57.72 pence per share. That’s roughly R13 per quarter, or R52 a year off a share price of R612.

Are lab-grown diamonds starting to hurt De Beers? (JSE: AGL)

The company is blaming macroeconomic challenges for a slowdown in sales

Luxury groups like Richemont and more recently LVMH have flagged a slowdown in US sales, although Asia seems to be doing just fine. Diamonds are a bit different to these luxury products in my view, as social pressures means that most married couples have bought a diamond at some point even though they can’t possibly afford a Richemont or LVMH product.

This makes diamonds more vulnerable to economic slowdowns than true luxury brands. If that’s the real reason for the drop in sales value at De Beers (part of Anglo American), then so be it. There’s another potential reason though: lab-grown diamonds. I can’t find a reliable estimate of lab-grown diamond market share, but it isn’t insignificant and it is definitely growing quickly.

I suspect that it will be a long time until De Beers publicly acknowledges this issue in a sales value update. With Cycle 6 sales of just $410 million vs. $456 million in Cycle 5 and $638 million in Cycle 6 of 2022, can we really attribute the drop purely to macroeconomic conditions?

Labat is making progress, but is paying big multiples (JSE: LAB)

Acquisitions and store rollouts are underway

Labat Healthcare (the cannabis business) seems to be making progress.

On the acquisition front, the company will acquire the remaining 30% in CannAfrica for a price of R6.4 million, partly settled through the issuance of Labat shares at R0.12 per share. That’s higher than the current price of R0.07 per share. There’s also a cash payment of R2.8 million.

CannAfrica’s profit before tax for the year ended May 2023 was R672k and the net asset value was -R2.4 million. Ignoring the negative net asset value, that’s a gigantic valuation. If we scale up that price to a 100% stake, it implies a value of over R21.3 million or a Price/Earnings multiple of 31.7x! I can see why shares are being issued at a premium to the current price to pay for it.

Importantly, the rollout of Labat Healthcare stores seems to be going rather well. There were 10 franchised stores and four owned stores in the recent financial period, with two of the owned stores sold to franchisees after the end of the period. It’s a good sign that people are willing to buy the stores, as this suggests that the economics are decent.

There’s a long list of identified locations for further store rollouts. That’s meaningless until the stores actually exist.

Naspers publishes the cross-holding removal circular (JSE: NPN | JSE: PRX)

The unwind of the century is upon us

Naspers wants to make sure that shareholders have seen this notice. In fact, they’ve published the full notice in Ghost Mail here.

The other thing you need to read (including if you are a Prosus shareholder) is the actual circular, which you’ll find at this link.

Although the Naspers – Prosus structure is still complicated and has no shortage of critics, this is at least a step in the right direction:

A brief update from RAC (JSE: RACP)

The owner of Goldrush has given an update at the AGM on trading conditions

In an update from RECM and Calibre (RAC), we learn that alternative gaming business Goldrush has seen its trade “recover somewhat” during the first four months of the new financial year. The issue here has been load shedding. You can’t play electronic bingo without electricity, unfortunately.

With power generation shortcomings resolved, the bingo and limited payout machine (LPM) divisions have generated revenue in line with the prior year. The retail sports betting and online divisions are up year-on-year, taking group level results into the green for this period on both a sales and profit basis.

Little Bites:

  • Shareholders of Steinhoff (JSE: SNH) have resolved to dissolve the company. I have no idea why the share price recently more than tripled from 4 cents a share to 13 cents a share. It’s back down to 7 cents.
  • Suspended company Efora Energy (JSE: EEL) is way behind on its financial reporting. The external auditor is reviewing the 2022 interim and annual results, with a plan to finish this process by the end of August.
  • 4Sight Holdings (JSE: 4SI) is changing its financial year-end from 31 December to 28 February. This means that annual results for the next period will be for a 14-month period.

Naspers Notice of Annual General Meeting and Circular 2023

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Naspers Notice of Annual General Meeting and Circular 2023

Distribution of Notice of the virtual Annual General Meeting and Circular

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Naspers shareholders are advised that notice is hereby given, in terms of the notice of annual general meeting posted to Shareholders today (Wednesday, 26 July 2023) that the virtual annual general meeting of Naspers will be held at 14:00 SAST on Thursday, 24 August 2023, entirely by electronic communication as permitted by the Companies Act 71 of 2008, and by Naspers’ memorandum of incorporation.

Read the full notice below:

Naspers-Notice-of-Annual-General-Meeting-

Ghost Bites (Cashbuild | Ellies | Kumba | MC Mining | Mpact | Orion | Reinet | Sasol | Shoprite)

The Finance Ghost
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Ghost Bites (Cashbuild | Ellies | Kumba | MC Mining | Mpact | Orion | Reinet | Sasol | Shoprite)

Cashbuild keeps grinding lower (JSE: CSB)

These economic conditions make revenue growth almost impossible

In the latest quarterly update from Cashbuild, the company shows us that the pain continues in this sector. South Africans are dealing with huge economic pressures and high interest rates, which is hardly the right environment to justify major renovation projects. Long gone are the heady days of the pandemic, with low interest rates and South Africans investing in their homes.

This quarter was the final quarter in the 2023 financial year, so we now know that full-year revenue fell by 4% for the period ended June. If we exclude the stores looted in 2022, it’s even worse with a 7% reduction.

Perhaps the only silver lining here is that the sales performance in Q4 was flat, with -2% in existing growth and 2% in new store growth. That’s a lot better than Q3, where sales fell 9% after existing stores tanked by 10%.

Although a relatively small contributor, P&L Hardware fell 6% in this quarter after an awful drop of 15% in Q3, taking the full-year decrease to 10%. It contributes 16% of the store footprint and even less than that in revenue, as a Cashbuild store is much bigger than a hardware store.

Ellies goes from bad to worse (JSE: ELI)

The core business is in serious trouble

For the year ended April 2023, Ellies expects to report a headline loss per share of between 10.02 and 11.62 cents. That’s a lot worse than the headline loss of 7.13 cents per share in the comparable period. For context, the Ellies share price is only 7 cents!

A restructure and retrenchment process contributed 2.24 cents of the loss in this period. This means that earnings still deteriorated year-on-year in the core business, even if we take this into account.

One of the major business lines is satellite installations. With the shift to streaming, I don’t need to tell you how badly that is going. In the parts of the business that do have decent demand, like solar and surge protectors, working capital was a problem and so there were stock shortages. Disaster.

To help address this, there’s a new line of funding with the banks. That helps, but throwing debt into Ellies is literally pouring petrol on a fire.

The acquisition of Bundu Power is about the only thing that shareholders can get excited about. This solar business grew revenue by 60% this year and saw profits after tax jump from R11.2 million to R32.4 million. To pay for the acquisition, Ellies needs to raise R120 million through a rights issue at 7 cents per share. With a market cap of just R56 million, existing shareholders will be heavily diluted.

Ellies truly is the small cap that keeps breaking hearts:

Kumba is down year-on-year, but still very profitable (JSE: KIO)

Return on capital employed of 77% is incredibly juicy

We may be off the highs of 2022, but the mining cycle is still firmly in favour of the companies in this sector. With an EBITDA margin of 52% and production increases of 6% in the six months to June 2023, Kumba’s diluted HEPS has come in at R29.98 and the dividend is R22.60, so most of the profits are going to shareholders.

Diluted HEPS is down 17% year-on-year, as revenue fell by 11% and costs came under pressure particularly at Sishen (cash costs up 13%). It did help that Kolomela experienced a 6% drop in cash costs per metric tonne.

Rail performance remains a major worry. It was the driver of sales dropping 4% in the first half, with a particularly rough 8% decrease in the second quarter.

The market outlook is all about China, where low inventory levels and economic stimulus measures are helping. Although Kumba can’t do much about Transnet, a drop in capital expenditure guidance from R11 – R12 billion to R9 – R10 billion will give free cash flow a boost.

MC Mining gets an IDC extension (JSE: MCZ)

But not by much…

MC Mining’s IDC loan of R160 million plus interest was due on 30 June 2023. That date has clearly come and gone, with an extension granted to 30 September 2023. That’s only a few weeks away, let’s face it.

The company is busy with fund raising initiatives for the Makhado Project, which are expected to be concluded in the second half of the year. The clock is ticking.

Mpact reports a big year-on-year jump in HEPS (JSE: MPT)

Most of the improvement in profitability is in the plastics business

In its continuing operations, Mpact grew HEPS by between 30.3% and 37.3% for the six months to June. Revenue only increased by 9%, so this is very much a story around profitability rather than high levels of growth.

Strategic initiatives in the plastics business helped drive improved profitability, like the investment in bins and crates. Higher selling prices in paper didn’t hurt either, with April 2022 floods in the KZN in the base period also playing a role.

Investors need to keep an eye on the balance sheet, as net debt increased by R313 million to R2.64 billion after investing R843 million in capital projects. Mpact is investing in South Africa which is great, provided return on capital will be sufficient.

The discontinued operation is the plastic trays and films business, Versapak. Discussions with potential buyers are currently underway. It helps that revenue increased from R510 million to R545 million and net earnings grew from R28 million to R34 million. Mpact is simplifying a potential deal by excluding most of the working capital from the sale (receivables / cash / payables), so the net asset held-for-sale has decreased from R337 million to R173 million.

If we include Versapak and look at total operations, HEPS increased by between 27.1% and 36.4%.

Despite such strong growth, the share price closed 1.6% lower on the day. Being a JSE-listed mid-cap is an extreme sport.

Orion moves closer to trial mining (JSE: ORN)

This is one of those junior mining announcements that requires a geology degree

Looking through all the technical stuff, this Orion Minerals announcement is all about moving closer to getting the Prieska copper-zinc mine to the point of trial mining. The mineral resource estimate has been updated and management sounds happy with the results and how this creates an attractive early mining opportunity.

The company is in negotiations with metallurgical processing and engineering groups regarding processing facilities under “Build-Own-Operate-Transfer” arrangements. Google tells me that this is a method used to finance large projects that is usually used by governments in public-private partnerships. In this case, I guess Orion is the “government” looking to bring someone in for a defined period of time.

The trial mining phase is fully funded by the IDC and Triple Flag facilities. Orion has already executed its first draw-down of R167 million, with a total availability facility of R370 million.

Reinet’s net asset value fell slightly this quarter (JSE: RNI)

Rupert’s “stay rich” investment vehicle is not trending in the right direction

Reinet is quick to remind the market that since March 2009, the compound growth rate (including dividends) is 8.6% measured in euros. That’s all good and well, but British American Tobacco as one of the key underlying assets is one that I just can’t get my head around.

You see, if you want something truly defensive, why not look internationally to businesses like PepsiCo or Johnson & Johnson? Locally, I would prefer to have AB InBev in my portfolio over the next five years than British American Tobacco. I barely know anyone who smokes. I know a lot of people who drink. Reinet is stuck with the stake, but you certainly aren’t.

Either way, the net asset value of Reinet dropped by 1.3% in the past three months. Compared to a year ago, it’s down just over 1%. In both cases, this is in euros.

Dividends of €57 million were received from Pension Insurance Corporation (the biggest asset in the portfolio) and commitments to new investments worth €38 million were made in this quarter. The other assets are generally private equity funds focused on regions like Asia.

Here’s how Johann Rupert chooses to stay wealthy, with most of the fun stuff happening in Remgro instead:

Sasol’s FY23 production is generally lower (JSE: SOL)

In several cases, the guidance had prepared the market for a year-on-year decline

As a precursor to the release of financial results, Sasol announces a detailed set of production and sales figures. This deals with the year ended June 2023.

In the mining business, export sales fell 13%. You guessed it! Transnet. Thankfully, most of the coal gets used internally at Sasol, so the focus is actually on production numbers which fell 3%.

In the gas business, the Mozambique operations achieved production at the upper end of the market guidance, which means a 2% year-on-year increase.

In fuels, the Secunda Operations production was 1% higher year-on-year and the run-rate at Natref was within market guidance, although 9% lower than FY22. Liquid fuels sales volumes fell by 2% vs. FY22.

In chemicals, external sales volumes fell by 4% and revenue was down 15%, as the basket price fell by 12%. There have been a number of issues here, with Transnet featuring strongly once more. In the American business specifically, far away from Transnet, revenue fell 8% despite a 9% increase in sales volumes, as market prices were lower than in the prior year. The business in Eurasia saw volumes drop by 19%, adjusting for the disposal of the European Wax business.

Group level revenue has fallen by 15% in US dollars.

Shoprite is smashing its competitors (JSE: SHP)

The Shoprite vs. Pick n Pay gap is just widening

Let’s start with a 5-year share price chart:

Shoprite’s 20% return over 5 years is nothing to get excited about. The pandemic was tough. Pick n Pay’s performance is really frightening though, especially as a stock that investors put in a “defensive” bucket.

The share price chart is a reflection of the difference in performance. In the 52 weeks to July, Shoprite grew group sales by a lovely 16.9%. Now, before you point out that the recent Pick n Pay update with lethargic growth only covered the last few months, I must note that Shoprite’s H2 growth (26 weeks to 2 July) was 17%. In other words, the halves were equally impressive.

The superstar is Supermarkets RSA, with 18.2% growth. Supermarkets non-RSA could only manage 15.2% and Furniture is up just 1%. In other words, Shoprite is literally ripping away market share from competitors in the grocery business, especially from Pick n Pay.

The grocery performance is strong across the LSM curve. Checkers and Checkers Hyper grew 18% and Shoprite and Usave grew 15.6%. These are astonishingly good numbers.

Of course, the sales performance is only part of it. The group has flagged a decrease in gross margin vs. the prior year (24.5%). The decline is expected to be less than the decline that was reported in the interim results (64 basis points).

Another important point is that Shoprite incurred R1.3 billion in diesel costs in this financial year. That’s a very big number, as headline earnings in the prior financial year came in at R5.9 billion and diesel costs weren’t significant in that period.

The net profit growth will be blunted by Eskom and pricing pressure. The shift in market share is clear though. I’m very happy to not be a Pick n Pay shareholder.

Little Bites:

  • Director dealings:
    • An associate of a non-executive director of Crookes Brothers (JSE: CKS) bought shares worth R267k.
  • The finance director of EOH (JSE: EOH), Megan Pydigadu, is on her way to a new adventure. She will leave the company on 31 October 2023 and the announcement hasn’t indicated her next move. A replacement hasn’t been announced as of yet.
  • Zeder (JSE: ZED) has declared a small special dividend of 5 cents per share. The share price is R1.74 and the announcement doesn’t give an explanation of the source of these funds or how this ties into the broader value unlock strategy at the company.
  • Invicta (JSE: IVT) has confirmed that the odd-lot offer price is R29.8298446 per share. This is a 5% premium to the 30-day VWAP. The current share price is R27.99 so the “arbitrage” here based on 99 shares is R184. Try not to spend it all at once.
  • enX Group (JSE: ENX) renewed the cautionary announcement related to the potential sale of Eqstra Investment Holdings.
  • Europa Metals (JSE: EUZ) has drawn down €137k from the Spanish Government’s Centre for the Development of Industrial Technology (CDTI), taking the total loan to €460k.

Unlock the Stock: Capital Appreciation and Spear REIT

The Finance Ghost
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Unlock the Stock: Capital Appreciation and Spear REIT

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.

We are also very grateful to the South African team from Lumi Global, who look after the webinar technology for us.

In the 22nd edition of Unlock the Stock, Capital Appreciation and Spear REIT returned to the platform to update investors on recent performance and the way forward.

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:

Ghost Bites (Alphamin | Anglo American Platinum | Impala Platinum x Royal Bafokeng Platinum | South32 | Wesizwe Platinum)

The Finance Ghost
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Ghost Bites (Alphamin | Anglo American Platinum | Impala Platinum x Royal Bafokeng Platinum | South32 | Wesizwe Platinum)

Alphamin: production and EBITDA down (JSE: APH)

Tin pricing moved against the company in the past quarter

In Alphamin’s quarterly update, the company compares the numbers for the three months ended June against the three months ended March i.e. a quarter-on-quarter basis. That’s different to most companies that take the year-on-year approach. In reality, most entrepreneurial management teams are more worried about cadence (this approach) than the year-on-year approach that we find in financial markets.

The company processed 3% more ore but the grade deteriorated, so tin production was actually 1% lower. Sales were 3% lower and the average tin price was also 3% lower, so the combination was a nasty 14% decrease in EBITDA. This is despite all-in sustaining cost being flat for the quarter (i.e. similar to the preceding quarter).

Tin prices have moved higher since the end of the quarter, which bodes well for the next set of numbers. Another important point is that delayed sales should also clear during the next quarter.

Development at Mpama South is ongoing, with no issues noted and an expectation for the project to be completed within budget. That’s always an encouraging sign!

Alphamin’s cash on hand is $41.4 million and an interim dividend of $29 million has been declared. This works out to 40.3707 ZAR cents per share.

85% drop in the Anglo American Platinum dividend (JSE: AMS)

Exposure to a single commodity is risky

The mining industry has diversified players (like Anglo American or Glencore or South32) and mining houses focused on specific commodities, like Kumba Iron Ore or the star of this painful update, Anglo American Platinum.

When pricing goes the wrong way, like a 15% drop in the rand basket price of PGMs in this interim period, it’s unhelpful. When production challenges hit at the same time, like a drop in refined production of 13%, it’s disastrous.

A 24% decrease in revenue is never going to be a happy start to an income statement, with adjusted EBITDA down 69% and HEPS down by 71%.

It gets even worse by the time you reach the dividend, which is down 85% to R12 per share.

Despite this, return on capital employed was 30%. That’s a long way down from the astonishing 150% in the comparable period, but it remains a decent number overall.

Here’s a share price chart of the past five years, obviously excluding dividends:

Impala Platinum is taking Royal Bafokeng Platinum private (JSE: IMP | JSE: RBP)

The saga is finally over

After a long and extraordinarily painful process, Impala Platinum (Implats) has finally tasted success on the Royal Bafokeng Platinum (RB Plats) deal. With the results of the offer now in, Implats holds 98.35% of RB Plats’ issued shares.

This allows Implats to invoke section 124(4) of the Companies Act, which is a squeeze out provision that applies where an offer has been accepted by at least 90% of the holders of the shares in question. In such a case, the offeror (Implats) can force the remaining shareholders to sell on the same terms. This has the same effect as a scheme of arrangement (i.e. is binding on everyone) but is a different route to get there.

There was no guarantee of RB Plats being delisted in this process. With such a high acceptance rate for the offer, the delisting is now on the table along with the squeeze out.

Another JSE listing is outta here.

South32 finishes the year with a strong quarter (JSE: S32)

Production was up across the board in Q4’23, with year-on-year numbers less appealing

Full-year production numbers at South32 are a mixed bag, with increases in aluminium, copper and manganese. There were decreases in alumina, silver, lead, zinc, nickel and metallurgical coal. This is despite a strong fourth quarter, where production increased sequentially across every commodity. The year-on-year picture isn’t quite as good for the final quarter, but most commodities were higher.

Commodity prices fell in the 2023 financial year following record conditions for many commodities in the base period. The best performing commodity in terms of pricing was molybdenum. I also had to Google what that is, so don’t feel bad! Molybdenum is used in making steel alloys.

The biggest drops in price were seen in zinc, nickel and aluminium, all of which fell 20% or more.

The Taylor deposit has suffered a non-cash impairment of $1.3 billion based on delays from Covid, significant dewatering requirements and current inflationary pressures. This is part of the Hermosa project, which now has a carrying value of $1 billion. $428 million is attributable to the Taylor deposit and $519 million to the Clark deposit.

Labour unrest hits Wesizwe Platinum (JSE: WEZ)

This is exactly what our economy doesn’t need at the moment

An environment of rampant food inflation and high interest rates creates a recipe for social unrest. Although we haven’t seen anything major since the Sibanye gold strike, Hulamin recently had to deal with a NUMSA strike and now Wesizwe Platinum is dealing with something more worrying: an unprotected strike.

The Bakubung Platinum Mine has been closed as a result of the strike, with safety concerns as the obvious issue. Let’s hope the issues can be resolved soon.

Little Bites:

  • Director dealings:
    • Senior executives at Investec (JSE: INL) sold shares worth R10.4 million
    • Directors of Vunani (JSE: VUN) bought shares worth R300k
    • A director of Schroder REIT (JSE: SCD) bought shares worth £7.7k
    • The CEO of Spear REIT (JSE: SEA) continues to buy shares for his family, this time to the value of R21.4k
    • A director of Mantengu Mining (JSE: MTU) bought shares worth R6k
  • The odd-lots offer by CA Sales Holdings (JSE: CAA) resulted in the company repurchasing 0.02% of shares in issue for R706k. That sounds like practically nothing, yet it reduces the number of shareholders by 35% and comes with an administrative cost saving.
  • The CFO of Tiger Brands (JSE: TBS), Deepa Sita, has resigned to move to Australia. The effective date is 31 December and a replacement hasn’t been named as of yet.
  • Novus (JSE: NVS) announced that the group CFO (Keshree Alwar) will move into the CEO role at Maskew Miller Learning, now that the acquisition has been completed. A new CFO (Craig Wright) has been announced as an internal appointment from the Novus Print side of the business.
  • Legacy cash shell Trencor (JSE: TRE) released a trading statement for the six months to June. HEPS will be 64.8 cents vs. a headline loss of 0.3 cents per share in the comparable period.
    • Choppies (JSE: CHP) confirmed that after the recent rights offer, Ivygrove Holdings now has a 12.4% stake in the company.
    • Corporate disaster Afristrat (JSE: ATI) announced that the recent creditor application for a liquidation against the company has been withdrawn, pending the outcome of the shareholder liquidation application for which judgement was reserved in court. Talk about a rock and a hard place.
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