- Standard Bank has provided a voluntary trading update for the five months ended May 2022 and a trading statement for the six months ending June 2022. In the five-month period, the group achieved low double digit revenue growth. Costs grew high single digits, which means that operating margin has increased. This scenario is described as “positive JAWS” – revenue growth exceeding expense growth. The credit loss ratio is at the lower end of the through-the-cycle target range of 70bps – 100bps. Liberty has been 100% consolidated since 1 February 2022 and has made a marginally negative contribution to group earnings due to treasury share adjustments. I wouldn’t see this as reflective of the underlying operational performance. Return on equity was described as being close to cost of equity, which is 14.7%. The trading statement notes that HEPS for the six-month period will be at least 20% higher than the comparable period, which means at least 865 cents. More specific guidance will be provided once there is greater certainty over earnings. The share price closed 2.4% higher.
- Telkom released annual results for the year ended March 2022. The share price fell 9.5%, which tells you most of what you need to know. Revenue is down 1.1% and underlying headline earnings per share (HEPS) is up just 2.5% if you exclude retrenchment costs from the base year. The growth in the mobile business isn’t happening quickly enough to offset the decline in the fixed and IT businesses. Here’s the really nasty number: free cash flow was negative R2 billion, mainly (but not entirely) attributed to investment of R1.1 billion in spectrum. Ouch.
- Sibanye-Stillwater is dealing with water that is anything but still. A flood has impacted the PGM operations in Montana, USA. Operations have been suspended and thankfully no injuries have been reported. The share price fell over 5% in response to the news.
- Investors in Remgro should take note that the company held its inaugural capital markets day. The CEO gave a presentation on the portfolio and focused on its fibre investments (Dark Fibre Africa and Vumatel) held through Community Investment Ventures Holdings. As a reminder, this business is executing a substantial strategic transaction with Vodacom that is subject to regulatory approval. If it goes ahead, Remgro will hold 57% of the enlarged entity. For more details, you can download the presentation at this link.
- Exxaro’s wholly-owned subsidiary Cennergi Holdings has announced that its 80MW Lephalale Solar Project has been registered by the National Energy Regulator of South Africa (NERSA). This is the first phase of the decarbonisation of Exxaro’s flagship operations in the Limpopo province. Exxaro has developed a significant pipeline of multi-technology solutions (wind, solar and storage) that will decarbonise the group and provide energy security in a country that struggles to keep the lights on. Over time, there are also cost reduction benefits. These types of projects are music to my ears.
- Harmony Gold has obtained regulatory approvals to allow the company to proceed with the Kareerand expansion project. This will ensure the continued retreatment of surface depositions at Mine Waste Solutions, which Harmony acquired in October 2020. This will produce 100,000 ounces of gold per annum and add 16 years’ life of mine at an all-in sustaining cost of around R572,000/kg over the life of the mine.
- Christo Wiese has sold put options in Shoprite with a strike price of R204.25 per share, which means the buyer of the contract can force him to buy the shares at that price. He has also bought call options with a strike price of R223.83 per share, which means he profits to the extent that the share price moves above that level. With the current price at R209, this means that Wiese has effectively taken a positive view on the upside and has helped pay for it using the premium earned from selling the put option. If the share price drops below the strike price on the put, it can become a painful trade. The maturity date is 15 December 2022.
- The CFO of Famous Brands is having a solid punt at the shares. There’s no management alignment quite like leveraged alignment. By buying CFDs on the stock, he has taken a position that is worth much more than the cash he has put down for the shares. The total value of exposure is nearly R1.4 million.
- When it comes to director dealings, Des de Beer doesn’t play games. Entities associated with him have been buying up shares in Lighthouse Properties. The latest acquisition is worth R21.9 million, which we can all agree is a proper pile of cash.
- The Spar share price has been under pressure recently, as I detailed in my feature article about my position in the company that didn’t work out as planned. The company secretary of the company has also sold shares worth just over R270k. It’s a small number but still isn’t a great market signal when a stock is already taking strain.
- While many Thungela shareholders shake their heads in sadness at recent price action (down 21% in the past month), the company secretary of the business bought the dip. Well, one of the dips at least. The purchase price was R230 and the share price closed yesterday at R212.28 – on the plus side, it was a small trade of R43.7k.
- A director of MiX Telematics has bought shares in the company worth around $138.5k. I did some research and the director in question (Ian Jacobs) used to work for Berkshire Hathaway – yes, the famous investment firm run by Warren Buffett and Charlie Munger!
- Buffalo Coal has announced that Belvedere Resources has acquired a whopping 82.58% partially diluted stake in the company through a single transaction with Resource Capital Fund V as the seller. The “partially diluted” description is because Belvedere has acquired shares and a convertible loan, so the equity stake of 82.58% is based on the assumption that the loan is converted to shares.
- The directors of a material subsidiary of Chrometco, Black Chrome Mine (Pty) Ltd, have resolved to place the company under business rescue. Chrometco is a penny stock, closing at 6 cents per share yesterday. The share price has lost nearly 70% of its value in the past five years.
- Onelogix has renewed the cautionary announcement related to the potential delisting of the company. The process may have been derailed by the floods and the company is still assessing the impact of this disaster and other prevailing economic conditions. Shareholders have been reminded that any outcome is still possible from here.
- The CEO of Choppies has bought shares in the company worth around R450k.
- The chairman of Thungela Resources has acquired shares in the company worth over R105k.
- An associate of the Chairman of Pick n Pay has bought shares in the company worth R399k.
