London Finance & Investment Group will wind up its business and delist (JSE: LNF)

Will anyone actually notice?

There are a bunch of companies listed on the local market that you would easily be forgiven for never having heard of. This is one of them, despite London Finance & Investment Group having a market cap of R484 million.

Sadly, daily average trading volume is 193 shares, or less than R3k a day. This isn’t just illiquid; it’s practically the Sahara Desert.

It’s a waste of time for this company to be listed and the board has recognised this, with a decision to rather dispose of the investments on the balance sheet and return around 70p per share to shareholders, which is the estimated net asset value (NAV) net of closure costs. They will also delist from the JSE and the London Stock Exchange.

At the current exchange rate, this works out to a return of cash of around R16 per share. The current share price is R15.50, so there’s no real opportunity here unless you got in closer to the 52-week low of R7.60! Even then, based on the illiquidity, you wouldn’t have been able to build a large position.

Powerfleet gives updated disclosure on its post-transaction numbers (JSE: PWR)

This takes into account the MiX Telematics and Fleet Complete deals

Powerfleet has released a useful update that helps shareholders understand what the combined group looks like from a financial perspective. It’s been a busy year, with the MiX Telematics deal happening in April this year and the Fleet Complete deal being far more recent, with that deal being completed in October.

This means that the shape of the group has changed completely, as has the balance sheet due to the acquisitions. The group has released pro-forma numbers to illustrate what the combined financials would’ve been for the six months to September 2024, had all the businesses already been in the group. It’s still not a perfect indication, as Fleet Complete is based on numbers for the six months to June.

Still, it shows that the combined group generated interim revenue of $214 million and a loss from operations of $17.9 million. Once you take interest expenses into account, the net loss attributable to shareholders is $35 million. Remember, this is only for six months!

With total liabilities on the balance sheet of over $460 million, this is a highly leveraged platform business that needs to scale into profitability.

Schroder European Real Estate is fighting with the French tax authorities (JSE: SCD)

The exposure is €14.2 million

Tax is a complicated thing, which is why it’s not uncommon to see large companies dealing with disputes with tax authorities. There are big numbers on the table when you’re talking about groups the size of Schroder European Real Estate.

The French tax structure is currently being audited by the French tax authorities and Schroder has received a “Proposal for Adjustment” – a love letter from the authorities stating that they believe that Schroder owes them €14.2 million.

Schroder’s initial guidance based on the audit was that they expected a range of potential outcomes from nil to €12.6 million, excluding penalties. Although the €14.2 million is higher than the guided range, it includes interest and penalties.

Based on professional advice, Schroder believes that there will be no outflow here, so they will continue to argue against this assessment. If South African matters are anything to go by, this can be a long and painful process in court.

Nibbles:

• Director dealings:
  • Although not a trade at this stage, the chair of Primary Health Properties (JSE: PHP) has pledged shares as security for a £2.5 million loan. If things go wrong with the loan, then this can lead to forced selling down the line.
  • A director of a subsidiary of Growthpoint (JSE: GRT) sold shares worth R5.5 million.
  • A director of Afrimat (JSE: AFT) sold shares in the company to the value of R2.15 million.
  • A director of a major subsidiary of Vodacom (JSE: VOD) sold shares in the company worth R834k.
  • An executive director of Momentum Group (JSE: MTM) bought shares worth R149k.

• AECI (JSE: AFE) has announced a couple of big-hitter appointments to the board. Although I usually don’t cover non-executive director appointments, the importance of the mining sector to AECI’s business means I can’t ignore these ones. July Ndlovu (current CEO of Thungela) must have some free time in his diary, as he’s now a non-exec director at AECI as well. Billy Mawasha also joins, bringing with him a wealth of experience at major mining groups including a stint as country head of Rio Tinto South Africa.

• Even though Trustco (JSE: TTO) plans to put together a Nasdaq listing and step into an incredibly regulated environment, they are late in the release of their annual financial statements. One of the reasons is that the auditors couldn’t get Namibian visas in time! They are going to need to get it together if they plan to make a success of the Nasdaq listing, as that type of story isn’t going to fly in the US.

• Ahead of its delisting, DRA Global (JSE: DRA) announced that Apex Partner Holdings now has a 30.9% stake in the company, up from 25.01%. This was in all likelihood driven by the recent share repurchases from minority shareholders.

• Pepkor (JSE: PPH) announced that Moody’s affirmed its credit rating with a stable outlook. Although this is for the benefit of debt holders rather than equity holders, it does indicate that the business is in good health.