- Novus Holdings has released results for the year ended March 2022. The printing and packaging company is only down 2% this year and paid out a special dividend in February of around 17% of the start-of-year share price, so it has way outperformed the market this year. Revenue for the year is 6.2% higher and headline earnings per share (HEPS) swung heavily into the green, posting a profit of 53.2 cents per share. The share price is only R2.30 and the closing cash position is R567.9 million vs. the market cap of nearly R800 million. It’s not all a bed of roses though, with the company noting that Covid inflicted permanent damage to the print industry e.g. magazine titles that are gone forever. The company is now facing a gauntlet of global pulp and paper shortages and excessive price increases, which is why the share price performance has been modest when viewed against the improvement in profitability. No final dividend has been declared, which is another clue that the board is playing a cautious game here.
- Capital & Counties Properties Plc and Shaftesbury Plc have reached agreement on the terms of an all-share merger, so this is a deal recommended to shareholders by the boards of both companies. This is a far better scenario than a hostile takeover. The structure is that Capital & Counties will own 100% of Shaftesbury if the deal goes ahead, paid for through the issuance of new shares in Capital & Counties. The existing shareholders of Shaftesbury would hold 53% of the combined group with the existing shareholders of Capital & Counties holding the remaining 47%. It’s important to note that Capital & Counties already holds 25.2% in Shaftesbury. The merged portfolio would be 670 buildings in London’s West End. The split would be 35% retail, 34% hospitality and leisure, 17% offices and 14% residential. The loan-to-value ratio would be 29% and there would be GBP500 million of available liquidity in the group. JSE investors will be pleased to learn that Capital & Counties will retain its listing on the JSE, so the merged group is something that local investors can participate in. The deal is expected to become effective by the end of 2022 if all goes to plan and shareholders should look out for the circular to be issued within 28 days.
- The CEO of Equites Property Fund has sold shares in the company worth R5.3 million. The COO isn’t far behind, having sold shares worth R1.4 million. When top executives in the company are selling at the same time, it sends a pretty strong message to the market about the share price. Equites is down 16.6% this year and is slightly up over 12 months.
- Glencore released a trading update on a day that was extremely painful for investors in the resources sector. The share price fell 5.8% but that was in line with the bloodshed across the sector. Coal prices are through the roof and government is a major beneficiary of that, with higher royalties as a result. There’s substantial inflation in input costs like energy and logistics as well, so the unit cost has also risen significantly. Glencore’s Marketing segment is expected to achieve $3.2 billion in interim adjusted EBIT, at the top end of the through-the-cycle guidance. That’s good news for investors, though you would never say it by looking at the share price.
- Having sold its petroleum assets to Woodside and its stakes in Carrejon and BHP Mitsui Coal in prior transactions, BHP has been reducing its exposure to fossil fuels. The company has announced that it will retain New South Wales Energy Coal in its portfolio, with a plan to extend its mining licence until 2030 (it is due to expire in 2026). BHP tried to sell this asset and ran a process to receive offers, but they weren’t satisfactory, so this is Plan B. Once the mine is shut down, there will be a 10 – 15 year rehabilitation process. The provision for this process was $700 million in the 2021 financial statements.
- Marshall Monteagle Plc has released a trading statement for the 18 months ended March 2022. This is a weird reporting period that is a result of the company changing its financial year end from September to March. The group has swung into the green, with headline earnings per share (HEPS) over the period of $7.90 cents. Keep in mind that you can’t use this in calculating a price/earnings multiple as this number covers an 18-month period (rather than a 12-month period).
- Vodacom’s B-BBEE scheme YeboYethu is separately listed on the JSE and has released results for the year ended March 2022. The total dividends declared for the year were 213 cents per share, so the scheme is trading on a dividend yield of around 5%. The share price has ended up flat over the past year, so the dividend has been the only return for shareholders.
- Steinhoff Investments has released results for the six months ended March 2022 and there’s a very important nuance here: this is the subsidiary that has issued listed preference shares, not Steinhoff International Holdings which is the ordinary shares that most Steinhoff investors hold. A gross dividend of 293.55308 cents was declared for the period, so the interim dividend yield was nearly 3.8% and the annualised yield would be double this number. The preference shares trade under the ticket JSE: SHFF and the ordinary shares are JSE: SNH.
- Royal Bafokeng Platinum shareholders will be pleased to note that the legal risks related to the Maseve deal from 2017 have been put to bed. Royal Bafokeng acquired the Maseve assets for $70 million and was subsequently on the receiving end of legal proceedings by Africa Wide Mineral Prospecting and Exploration (holder of 17.1% of Maseve prior to the deal) that sought to have the transaction declared unlawful and invalid. The arguments were based on consents needed for the deal. The High Court wasn’t buying that story, dismissing the proceedings with costs.
- In case you’re itching to travel to Eastern Europe (or invest in property there), NEPI Rockcastle has been hosting a property tour and has made the presentation available online. It includes a useful overview of the company and many details about the underlying properties. You can find it at this link.
- Trencor Limited has announced that African Phoenix Investments has increased its stake in the company from 12.56% to 16.16%.
- Montauk Renewables is now being included in the Russell 3000 Index. It was also recently added to the MSCI Global Small Cap Indexes within the MSCI USA Small Cap Index. This is important because it means that index tracking funds will need to buy the stock in proportion to its weighting in the index.
- Randgold & Exploration Company has announced that its legal fight with certain minority shareholders of the company has been fully and finally settled among the parties.
