Your daily market overview delivered in bite-sized bullets:

• Spar Group released interim earnings for the six months to March 2022. This is the one I’ve been waiting for, as I took a rather speculative position in the company in the hopes of a strong result. In some places, I got it right. There were some negative surprises though. At group level, turnover was up 5.2%, operating profit increased by 7.1% and diluted headline earnings per share (HEPS) was uninspiring with 3.7% growth. I’ve written a feature article on this result, including details on why I took the long position and how it performed in relation to that. Spoiler alert: the trade didn’t work out.

• Sanlam has released an operational update for the four months to April 2022 that includes some rather scary numbers. The floods have caused great pain in the insurance business, causing a drop in headline earnings for this short period of 31%! I cover this in more detail in this feature article.

• Etion Limited intends to sell 100% of the shares in Etion Create to Reunert, a listed electronics business. This is such a large deal for Etion that it triggers the need for a special resolution (75% approval), as it is the “greater part of the assets or undertaking of the company” – simply, this is triggered under s112 of the Companies Act when over 50% of the group’s assets are being sold. Etion Create specialises in customised electronic subsystems, so the fit with Reunert is clear. Etion is following a value unlock strategy with great success, as it has historically traded at a significant discount to the underlying intrinsic value. The purchase price is around R197 million and isn’t allowed to exceed R210 million after all adjustments. The net assets of Etion Create as at 30 September 2021 were R159.4 million. Etion intends to distribute the net proceeds to shareholders. There are many steps to be completed in this deal and Etion shareholders can expect to receive a circular on approximately 1 August 2022 with full details.

• Afrocentric holds a 71.3% stake in AfroCentric Health. That subsidiary has entered into an agreement to acquire the remaining 49% in AfroCentric Distribution Services for R75 million. This is a small related party transaction under the JSE listings requirements. This is part of AfroCentric’s strategy to build distribution capability to market the new generation products of AfroCentric and its other partners. In the six months to December 2021, this business generated profit before tax of R11.6 million. As this is a small related party deal, shareholders don’t need to vote on it but an independent expert does need to sign off that the deal is fair and reasonable. Mazars Corporate Finance has been appointed to provide an opinion.

• The JSE probably had to take a lot of dust off the podium and screens for a new listing event, but today Southern Palladium celebrated its dual listing on the Australian Stock Exchange (ASX) and the JSE. With a successful initial public offering (IPO) that raised $19 million, the company will focus on developing its Bengwenyama PGM project in the Bushveld Complex. Southern Palladium holds a 70% stake in the project.

• If you are a shareholder in MAS Real Estate, you should note that the company has released the circular for its proposed acquisition of six commercial retail centres in Romania. The counterparty happens to be the fund’s joint venture partner in the country, so this is a related party deal which means there are special JSE rules. The circular also deals with an extension to the joint venture. You can find the circular at this link.

• I don’t pay a lot of attention to shareholding changes related to local funds, as they trim and increase their positions regularly and are often restricted to the South African market. Global investment giant BlackRock has no such restrictions, so it is notable that the fund has increased its stake in The Foschini Group to 5.375%.

• If you are interested in Orion Minerals, then you can listen to a presentation at an investor conference in Australia at this link.

• If you’ve always wondered how bank balance sheets are managed, or if you simply feel the desire to stare at many numbers on your screen, you could check out Sasfin’s Pillar III Risk Management Report.