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Our opinion on the current state of PBT-GROUP(PBG)PBT Group (PBG) is a fledgling IT company in the general finance sector. It has operations in South Africa and Europe, having recently exited operations in the Middle East and the rest of Africa. The company operates in data analytics, data visualisation, application development, strategic consulting, the cloud, and data platforms. The company did a 10-for-1 consolidation earlier. The group has established agreements with a number of European companies to expand its operations into Europe. Agreements have been concluded in the Netherlands and Ireland and are imminent in the UK. This is a company that will probably benefit from COVID-19 because it is involved in digitalisation and the facilitation of remote work sites. In its results for the year to 31st March 2024, the company reported revenue up 3% and headline earnings per share (HEPS) down 23,8%. The company said, "The decrease in our gross margin is a function of higher-than-usual non-billability in our consultant base due to client budget constraints, as well as not entirely passing through the increase in the cost of consulting to our clients." We suggest that since this company has been radically re-invented, you may need to allow some time for the direction of the trend to be established and for the effect of its new European operations to become apparent. The share has been drifting down for most of 2023 and 2024 so far. You should wait for a new upward trend to emerge.
JSE:PBG
by PDSnetSA
Our opinion on the current state of SEAM(SXM)This is a very thinly traded mining exploration company. It bought two gold projects in the DRC in 2020. In its results for the year to 28th February 2023, the company reported a headline loss per share of 143,34c compared with a loss of 141,76c in the previous period. The company has a negative net asset value (NAV) of 741,36c per share. In its financials for the six months to 31st August 2023, the company reported zero revenue and a headline loss per share of 70,65c compared with a loss of 55,58c in the previous period. In a trading statement for the year to 29th February 2024, the company estimated that it would make a headline loss of between 45c and 55c compared with a loss of 171,88c in the previous year. The share is virtually untraded on the JSE. We would strongly advise that you leave this share alone.
JSE:SXM
by PDSnetSA
Our opinion on the current state of NAMPAK(NPK)Nampak (NPK) is Africa's largest packaging company with interests in South Africa and ten other African countries. About 60% of its turnover comes from South Africa, but only 36% of its trading profit. The rest of Africa accounts for 59% of trading profit and only 31% of turnover. The company also has small interests in the UK and Ireland. It produces four kinds of packaging products - plastics, metals, paper, and glass. The great preponderance of its trading profits come from metals - which consists mainly of beverage cans. Nampak has been able to remove R3,5bn (US$265m) of surplus cash from Zimbabwe, Nigeria, and Angola. Importantly, management appears to have the ability to repatriate profits from the various African countries where it operates. It has halted its strategy of expanding into Africa after writing down its businesses in Angola and Nigeria by R3bn. COVID-19 and the fall in the oil price have impacted its results in Nigeria and South Africa. It is also benefiting from the news that it will not need to sell assets or do a rights issue to pay back debt of just under R6bn. The announcement that it would raise R1,35bn through a rights issue to reduce debt caused the share to fall 30%. The rights offer was reduced from R2bn to R1,5bn, and shareholders finally gave permission to raise up to R1bn on 30th June 2023. On 20th April 2023, the CEO, Eric Smuts, resigned with immediate effect and was replaced by Phil Roux. In its results for the six months to 31st March 2024, the company reported revenue up 7% and headline earnings per share (HEPS) of 5 393.9c per share compared to a headline loss of 11 027.3c in the previous period. The company said, "Despite declines in revenue in DivFood and Bevcan Angola, Metals recorded a 6% increase in revenue boosted by growth achieved with Bevcan South Africa, while Plastics and Paper posted 9% and 10% increases in revenue respectively." On 16th May 2024, the company announced that it had sold its entire Nigerian operation for $68,5m. This resulted in the share giving a clear on-balance-volume (OBV) buy signal. A second OBV buy signal came on 20th June 2024 at R228 per share. Since then, it has moved up to R285.50. We believe that it will continue to perform.
JSE:NPK
by PDSnetSA
UPDATE: Absa Target reached at R181.95 what next?Cup and Handle formed on Absa, broke up and out of it. On 12 June I said it was imminent for a breakout to the upside, but I had NO clue how fast this thing was going to rally. And it was only a Medium Probability Trade Price>20 Price<200 Now that the price has shot up, it obviously is silly to just buy and go long without waiting for a trend confirmation signal in my case. But we do have a DOWN gap (Breakaway gap) that has a 70% chance of closing based on history. However, we need some bullishness before we do anything.
JSE:ABGLong
by Timonrosso
🐯TIGER BRANDS🇿🇦 FORECAST Q2 FY24' : BEARS VS TIGERSOne last bullish impulse before the tank The ranging net income over the years, with worsening free cash flow and okay 12% debt to equity for its industry tells me they arent concerned with growth right now, and the dividend yield is a good strategy but it will backfire cause its a bluff when ur fcf is not easy on the eyes ....But since 2019 the whole Industy has been taking a decline in share price as for the reason i dont know and dont feel like investigating that far it just part of the cycles i guess Conslusion They are maintaing a good defensive position in whatever this industry is going through so price might not complete a full bearish impulse maybe a reversal at the target labelled1 or 2 Financials are here on TV and below on investing.com za.investing.com
JSE:TBSShort
by Bekiumuzi_Dube
Our opinion on the current state of BRAIT(BAT)Brait (BAT) is an investment holding company which owns 78% of Virgin Active, 93.7% of Premier, and 18.5% of New Look (a clothing retailer in the UK). It sold its stake in Iceland Foods for R2.4bn in June 2020 and used the proceeds to pay down debt. It is itself 46% owned by Christo Wiese's company Titan. The company's most important performance measure is its net asset value (NAV). The NAV was impacted by a change in the valuation multiple for Premier, which was reduced from 12.4 times to 11.4 times. The turnaround at New Look is very important to the group. In January 2019, Brait announced that it had come to an agreement which would see its holding of New Look reduced to just 18.5%. This was done through a debt-swap which takes New Look's debt down from GBP 1.35bn to GBP 0.35bn. The news of this capitulation saw Brait's share price drop by over 20%. Virgin Active is 65% of the Brait portfolio and has been battling with the impact of COVID-19. Business Day (14/11/22) reported that Brait will have a cash pile of R2.1bn after the Premier listing. Technically, Brait had a series of falling tops at around R170 in 2015 and 2016 that would have scared any private investor. This was followed by a collapse of the share price down to 231c in March 2020. Since then, the share has been moving sideways but spiked up on its latest results. The announcement of the R3bn rights offer in its latest results did not please the market, and the share fell over 10%. In its results for the year to 31st March 2024, the company reported that its net asset value (NAV) had fallen from 706c per share a year ago to 652c. The company said, "Virgin Active’s strong performance and operational turnaround has continued with all territories now EBITDA positive. Robust operating performance across key territories with active membership increasing to 1.021 million over the past twelve months combined with 10% average yield enhancements across the portfolio." The company's headline loss for the year was 13c per share, following a 70c loss in the previous year. We feel that Brait has lost some of the appeal that it once had, and Christo Wiese is under a cloud since the collapse of Steinhoff. In our opinion, this share is not a buy at the moment. The share has become a penny stock trading for less than 100c and has been trending down since 2021. Technically, it needs to break above resistance at 500c before it becomes interesting - and that is a long way away.
JSE:BAT
by PDSnetSA
Our opinion on the current state of EXXARO(EXX)Exxaro (EXX) is a BEE coal company with interests in iron and heavy minerals. It has interests in Australia, America, and Europe. Exxaro is a provider of coal to Eskom's Medupi power station. The company initially aimed to increase coal production from 48 million tons to about 60 million tons by 2022, but this policy might be changed due to the lower demand for coal in the global market. The price of export coal has dropped from $100 per tonne at the end of 2018 to as low as $60 per tonne. This is an immensely cash-generative operation that is usually profitable, depending on coal prices. While demand for coal both locally and in the export market has been strong, the shift towards renewable energy poses a long-term threat to the business. It is becoming increasingly difficult to obtain funding for new coal-fired power stations as banks face pressure from environmental groups. On 9th April 2021, Exxaro announced that it had sold its interest in Exxaro Coal Central (Pty) Ltd and Leeuwpan Coal Mine operation. In its results for the year to 31st December 2023, the company reported revenue down 17% and headline earnings per share (HEPS) down 22%. The company said, "The revenue contribution from our energy operations was 16% higher than FY22. Energy generation from the Cennergi operating wind assets was higher, driven by improved wind conditions compared to the prior year. Group EBITDA decreased by 29% to R13 399 million (FY22: R19 001 million), mainly attributable to the 36% decrease in Coal EBITDA." The share has been moving down since the beginning of 2023. Initially, the Ukraine conflict had a beneficial impact on this share through higher commodity prices, but that effect has now disappeared. The company announced that, with the lower price of coal, it was no longer viable to transport coal to port by truck - something it had been forced to do because of the inefficiency of the South African rail and port systems. Exxaro remains a volatile commodity play, currently on a downward trend but possibly bottoming out. In a pre-close update on 25th June 2024, the company said, "Total coal production (including buy-ins) and sales volume for 1H24 are expected to decrease by 14% and 12% respectively, mainly due to the reduced demand from Eskom at Grootegeluk, based on their latest internal plan."
JSE:EXX
by PDSnetSA
Our opinion on the current state of KAPKAP International Holdings (KAP) is a diversified industrial company that produces and markets timber, chemicals (PET and related chemicals), bedding, and car parts. It also has a logistics division. The acquisitions of Safripol and Hosaf were integrated into a polymers business under the Safripol name. The bedding division showed strong growth with new investment in infrastructure and manufacturing capability, while growth in the automotive parts division was muted. This company was 43% owned by Steinhoff, which has now divested completely. The renewal of the government's Automotive Production and Development Programme (APDP) until 2035 will be a boost for KAP's parts manufacturing business. The timber division is ramping up after the lockdown, and demand for its products has remained buoyant. The automotive components division was severely impacted, and the post-lockdown recommencement has been slow. The bedding division was able to operate through the lockdown with strong demand for medical and agricultural needs. Polymers also operated throughout the lockdown. In a report on 20th April 2022 regarding the flooding in Natal, the company said, "The Company’s operations in the region have experienced some temporary operational and supply chain disruptions, which are in the process of being resolved." In its results for the six months to 31st December 2023, the company reported revenue decreased by 2% and headline earnings per share (HEPS) down 36%. The company's net asset value (NAV) increased by 1% to 478c per share. The company said, "EBITDA decreased by 13% to R2.0 billion, while operating profit before capital items decreased by 17% to R1.3 billion, mainly attributable to Safripol." There was a 20% increase in finance costs due to higher interest rates. In a trading statement for the year to 30th June 2024, the company estimated that HEPS would not differ by more than 20% from the previous year's 47,3c. Technically, the share made a low of 127c in March 2020 and subsequently made a cycle low of 201c on 10th October 2023. Since then, it has been trending up on improved international prospects. Obviously, the logistics problems at Transnet are having an impact. We think it may represent good value at current levels, but it is volatile.
JSE:KAP
by PDSnetSA
Our opinion on the current state of ORIONMIN(ORN)Orion Minerals (ORN) is an Australian exploration company listed on the JSE (September 2017) and on the Australian Stock Exchange in Sydney. The company is seeking funding for its copper and zinc mine in Prieska. The Prieska mine was previously operated by Anglovaal, which ceased operations in 1990 after 20 years, having extracted more than 1 million tons of zinc and 430,000 tons of copper concentrate. A significant challenge for the mine is flooding, which requires substantial investment in pumping out nearly 9 million cubic meters of water from the existing structure before production can begin, expected in 2024. Orion aims to exploit this resource with a mechanized approach and minimal labor. Vedanta Resources, which operates the Gamsberg mine adjacent to Orion's resource, is considering building a smelter that could serve all mines in the area, including resources from Namibia. Mining exploration, especially for Orion, is one of the riskiest investments on the JSE. The company is engaged in a highly volatile penny stock venture. On 8th September 2022, Orion announced it had secured R34,5m from the Industrial Development Corporation (IDC) for a 43,75% stake in its new Okiep copper mining company. On 21st October 2022, the company agreed on a R250m line of credit with the IDC. In its results for the six months to 30th June 2023, Orion reported a loss of A$15,2m, unchanged from the previous period. The headline loss per share was 31c compared with a 33c loss in the previous period. The company stated, "The IDC to become a strategic funding partner at project level in both the Okiep Copper Project and Prieska Copper Zinc Mine, with pre-development funding agreements reached, providing a total of ZAR 284.58M for Orion’s two flagship projects." In a report on the three months to 30th September 2023, the company reported, "Updated PCZM +105 Mineral Resource reported, increasing the resource to 2.3Mt at 1.7% Cu and 1.6% Zn, including an Indicated Resource of 1.9Mt at 1.82% Cu and 1.70% Zn, and increases the total PCZM Mineral Resource to 31Mt grading 1.2% Cu and 3.6% Zn." At 30th September 2023, the company had $15,74m in cash. Regarding the Okiep copper project acquisition on 17th April 2024, the CEO said, "We are extremely pleased that we have finally received confirmation that the majority of the outstanding conditions have been fulfilled for the acquisition of the Okiep mineral rights first announced on 2 February 2021." On the same day, Orion requested a halt on trading in its shares because of a "material announcement on exploration results at Okiep copper mine." On 22nd April 2024, the company announced a "Spectacular High-Grade Copper Intercept at Okiep Copper Project, Flat Mines Area 49m at 4.89% Cu including 10.23m at 12.47% Cu," causing the share price to jump from 19c to 24c. Investors should be very cautious with this loss-making penny stock and maintain a strict stop-loss level. On 24th June 2024, Orion reported strong assay results: "at Okiep Copper Project, Flat Mine East – High-Grade Potential Confirmed 9.27m at 3.01% Cu and 15m at 4.80% Cu within 78m averaging 1.57% Cu." On 25th June 2024, the company requested an immediate stop to trading in its shares pending an announcement.
JSE:ORN
by PDSnetSA
Our opinion on the current state of ETHOSCAP(EPE)Ethos Capital Partners (EPE) is a private equity fund (PEF), incorporated in Mauritius, which invests in unlisted companies for long-term capital appreciation on behalf of its investors. Like most investment holding companies, Ethos trades at a significant discount to its net asset value (NAV). Fifty-six percent of their assets are in South Africa and 39% in the rest of Africa. It has stakes in Tymebank, Ster Kinekor, and Brait. The risk in this company appears to be minimal since it does not invest a significant proportion of its funds in any one investment, and its investments have performed well in the circumstances. It does not pay dividends, so the investor has to look for a capital gain. In its results for the six months to 31st December 2023, the company reported net asset value (NAV) down 15% at 731c per share. The company said, "The value of the unlisted portfolio was slightly down (3%) over the six-month period, with positive returns from Synerlytic, Crossfin, Gammatek and TymeBank and Twinsaver offset by devaluations in Echo, Kevro and Optasia (which was impacted by the significant devaluation in the Nigerian Naira ('NGN'))." In an announcement on 24th June 2024, the company reported that its NAV on 31st March 2024 was 10,24c and announced the imminent unbundling of its holding of Brait shares. Ethos shareholders will get 0,50857 Brait shares for every Ethos share held on 9th July 2024. EPE is well-traded with an average of over R560,000 worth of shares changing hands every day. It made a low at 370c on 25th March 2020 and has since started to move up as its investments recover from COVID-19 restrictions and more recently from the sell-off due to the Ukraine crisis. In our opinion, this should turn out to be a good investment at current levels where it is still trading well below its NAV, depending on the progress of the current trend in world markets.
JSE:EPE
by PDSnetSA
Our opinion on the current state of INVICTA(IVT)The Invicta Group consists of five operational segments, namely: 1. Replacement Parts, Services, & Solutions: Industrial 2. Replacement Parts, Services & Solutions: Auto-agri 3. Capital Equipment 4. Replacement Parts, Services & Solutions: Earthmoving Equipment 5. Kian Ann Group Christo Wiese (of Steinhoff fame) is the chairperson and owns a 37.57% shareholding. In its results for the year to 31st March 2024, the company reported revenue up 7% and headline earnings per share (HEPS) down 4%. The company said, "...the gross profit margin increased by 0.5%, from 32.5% to 33.0%. Selling, administration, and distribution costs were 10% higher. The inclusion of Imexpart Limited acquired during the current financial year contributed 4% to the base cost. Further, we took asset impairments of R22 million in the current financial year." Technically, the share gave a solid on-balance volume (OBV) buy signal on 5th June 2020 at 644c per share. Since then, the price has risen to 2760c but it is still well below its NAV of 5250c per share. We believe that it will continue to perform.
JSE:IVT
by PDSnetSA
Our opinion on the current state of MC-MINING(MCZ)MC Mining (previously "Coal of Africa") (MCZ) is a small metallurgical coal-mining company with a single producing mine, Uitkomst. Aside from Uitkomst, the company is developing the Makhado project, the Vele colliery, and MbeuYashu. The Makhado project is the company's flagship operation in the Limpopo province. It is an opencast mine with a life of 16 years and the potential to be extended. In January 2019, the company announced the acquisition of surface rights which will make the Makhado project viable. Production is now expected to commence at the end of 2020, and the mine is expected to produce 800,000 tons of hard coking coal and 1 million tons of export thermal coal. The Makhado purchase improves the risks substantially and makes this into a viable investment. The IDC has provided R245m for the project, but a further R530m is still needed. The company owns 69% of Baobab Mining and Exploration, which owns the Makhado project. In its results for the six months to 31st December 2023, the company reported revenue up 80% and a headline loss of 145c (US) per share - up from a loss of 50c in the previous period. The company said, "International thermal coal prices remained under pressure during the period and the average API4 export coal price for the six months was $112/t (H1 FY2023: $265/t). Despite the depressed coal prices, Uitkomst Colliery generated pleasing results for the period with revenue of $16.3 million (H1 FY2023: $14.0 million), yielding a gross profit of $1.5 million (H1 FY2023: $3.9 million) and operating cash flows of $5.1 million." On 8th April 2024, Business Day reported that Goldway Capital had received acceptances from shareholders amounting to 83.67% of the issued shares - more than the 82.15% required for the takeover to proceed. On 24th June 2024, the company announced that Godfrey Gomwe would resign with effect from 30th June 2024. Technically, the share spiked up between July and September 2022 before falling back again to lower levels. This remains a volatile commodity share with about R280,000 worth of shares changing hands on average each day, high debt levels, and all the risks of mining exploration and development.
JSE:MCZ
by PDSnetSA
Our opinion on the current state of NASPERS-N(NPN)Naspers (NPN), Africa's largest company, is a massive international social media, gaming, and IT company whose main asset is 73% of Prosus (PRX), which in turn owns 26% of Tencent - a Hong Kong-listed company that provides social media services and gaming in China. Tencent has 10 of China's 20 top mobile applications, reaching over 1.1 billion users. Naspers itself has an archaic capital structure dominated by its 907,128 unlisted "A" ordinary shareholders. Each "A" ordinary share has 1000 times the voting power of the 438.3 million "N" shares which are listed - so they effectively control the company with 67.4% of the vote. Naspers has many other interests, mainly in e-commerce, and operates in 120 countries worldwide. It has recently bought a further $500 million worth of shares in Letgo - an American classifieds platform that has more than 100 million users. It also owns Takealot and Mr. D Food in South Africa among other interests - but all those other investments are dominated by Tencent. The share's discount to its inherent value is mainly because of its "N" share structure which is frowned upon in the investment community. Naspers has retained its online shopping operations, Takealot, Mr. D Food, PayU, and Autotrader. On 11th September 2019, Naspers separately listed Prosus on the Euronext in Amsterdam, which houses all its international assets including its stake in Tencent, Mail.Ru, and other internet brands. Naspers held 73% of Prosus and there was a 25% free float. The company has a secondary listing on the JSE. One of the benefits of the Euronext listing is that it removes the risk inherent in the rand. Prosus is now Europe's largest consumer internet company. Tencent continued to grow through the pandemic as more people turned to online gaming. In its results for the year to 31st March 2024, the company reported revenue up 8% and core headline earnings up 88% to $2.1 billion. The company said, "This was mainly driven by the improved profitability of our Ecommerce consolidated businesses and equity-accounted investments, particularly Tencent, as well as higher net interest income during the year. Headline earnings from continuing operations rose US$1.2 billion to US$1.4 billion. At corporate level, Naspers has a net debt position of US$737 million, comprising US$14.6 billion in central cash and cash equivalents (including short-term cash investments), net of US$15.4 billion in central interest-bearing debt (excluding capitalised lease liabilities). In addition, we have an undrawn US$2.6 billion revolving credit facility." Technically, since October 2022 the share staged a recovery, and then moved sideways between March 2023 and April 2024. Since then it has broken to new higher levels but still has not risen above its all-time high of R4090 made on 21st November 2017. We still regard this share as under-priced at the current price. On 18th September 2023, the company announced that Bob van Dijk would resign as CEO with immediate effect. On 17th May 2024, the company announced that Fabricio Bloisi would take over as CEO of both Naspers and Prosus with effect from 1st July 2024.
JSE:NPN
by PDSnetSA
Our opinion on the current state of ORIONMIN(ORN)Orion Minerals (ORN) is an Australian exploration company listed on the JSE since September 2017 and on the Australian Stock Exchange in Sydney. The company is currently seeking funding for its copper and zinc mine in Prieska, South Africa. The Prieska mine was previously operated by Anglovaal, but ceased operations in 1990 after 20 years, during which it extracted more than 1 million tons of zinc and 430,000 tons of copper concentrate. A significant challenge for the mine is flooding, and Orion aims to exploit this resource using a mechanized approach with minimal labor. Vedanta Resources, which operates the nearby Gamsberg mine, is considering building a smelter that could service all mines in the area, including resources from Namibia. Before construction can begin on the Prieska mine, nearly 9 million cubic meters of water must be pumped out from the existing structure. Production is expected to commence in 2024. Mining exploration is one of the riskiest investments on the JSE, making this a volatile penny stock engaged in a particularly high-risk venture. On 8th September 2022, the company announced securing R34.5m from the Industrial Development Corporation (IDC) for a 43.75% stake in its new Okiep copper mining company. Additionally, on 21st October 2022, Orion agreed to a R250m line of credit with the IDC. In its results for the six months to 30th June 2023, Orion reported a loss of A$15.2m, unchanged from the previous period, with a headline loss per share of 31c compared to a 33c loss in the previous period. The company stated, "The IDC to become a strategic funding partner at project level in both the Okiep Copper Project and Prieska Copper Zinc Mine, with pre-development funding agreements reached, providing a total of ZAR 284.58M for Orion’s two flagship projects." In a report on the three months to 30th September 2023, Orion updated the PCZM +105 Mineral Resource, increasing the resource to 2.3Mt at 1.7% Cu and 1.6% Zn, including an Indicated Resource of 1.9Mt at 1.82% Cu and 1.70% Zn, bringing the total PCZM Mineral Resource to 31Mt grading 1.2% Cu and 3.6% Zn. As of 30th September 2023, the company had $15.74m in cash. On 17th April 2024, the CEO confirmed the fulfillment of most outstanding conditions for the acquisition of the Okiep mineral rights, initially announced on 2nd February 2021. The same day, the company requested a halt on the trading of its shares due to a "material announcement on exploration results at Okiep copper mine." On 22nd April 2024, Orion announced a "Spectacular High-Grade Copper Intercept at Okiep Copper Project, Flat Mines Area 49m at 4.89% Cu including 10.23m at 12.47% Cu," causing the share price to jump from 19c to 24c. Investors should exercise caution with this loss-making penny stock and maintain a strict stop-loss level. On 24th June 2024, the company reported strong assay results at the Okiep Copper Project, Flat Mine East, confirming high-grade potential with intercepts of 9.27m at 3.01% Cu and 15m at 4.80% Cu within 78m averaging 1.57% Cu.
JSE:ORN
by PDSnetSA
Our opinion on the current state of PBT-GROUP(PBG)PBT Group (PBG) is a fledgling IT company in the general finance sector. It has operations in South Africa and Europe, having recently exited operations in the Middle East and the rest of Africa. The company operates in data analytics, data visualisation, application development, strategic consulting, the cloud, and data platforms. The company did a 10-for-1 consolidation earlier. The group has established agreements with a number of European companies to expand its operations into Europe. Agreements have been concluded in the Netherlands and Ireland and are imminent in the UK. This is a company that will probably benefit from COVID-19 because it is involved in digitalisation and the facilitation of remote work sites. In its results for the six months to 30th September 2023, the company reported organic revenue growth of 7.6% and headline earnings per share (HEPS) down 18.6%. The company said, "Profit after tax increased by 9.9% to R47.9 million with profit attributable to the owners increasing by 0.8% to R29.7 million. The business remains sound and continues to generate healthy cash flows. During the past 18 months, PBT Group (Australia) Proprietary Limited (PBT Australia), a wholly-owned subsidiary within the Group, underperformed compared to the rest of the Group. The company has resolved to dispose of PBT Australia." In a trading statement for the year to 31st March 2024, the company estimated that it would make a headline loss of between 21.5c and 26.1c per share compared with a profit of 82.2c in the previous year. We suggest that since this company has been radically re-invented, you may need to allow some time for the direction of the trend to be established and for the effect of its new European operations to become apparent. The share has been drifting down for most of 2023 and 2024 so far. You should wait for a new upward trend to emerge.
JSE:PBG
by PDSnetSA
Our opinion on the current state of PPCPPC is a leading manufacturer and supplier of cement, aggregates, ready-mix, lime, limestone, and fly-ash in Africa. It has eleven cement factories in South Africa, Botswana, the DRC, Zimbabwe, Rwanda, and Ethiopia with a total production capacity of 11.5 million tons. It produces aggregates at its Mooiplaas quarry in Gauteng, which is the largest aggregates producer in South Africa. It has twenty-six batching plants for ready-mix in South Africa and Mozambique. Importantly, the company has managed to re-negotiate its lending so that it no longer requires a highly dilutive rights issue. No dividends have been paid for the last five years. The carbon tax which came into effect on 1st June 2019 costs PPC between R100m and R120m, which it intends to pass on to consumers. This will make its pricing less competitive against foreign imports unless tariffs can be increased. PPC is basing its hopes on growth from the rest of Africa. In our view, PPC has been suffering together with the entire construction industry from the lack of new government and quasi-government projects in South Africa. It has been compensating by cutting costs and investing in the rest of Africa, but we regard the cement industry as over-supplied currently, and therefore difficult to manage. The company has also been benefiting from the government's new "localisation" policy, in terms of which government operations have to buy locally produced cement. In its results for the year to 31st March 2024, the company reported revenue up 20.6% and headline earnings per share (HEPS) of 19c compared with a loss of 20c in the previous year. The company said, "The SA and Botswana group cement revenues increased only marginally by 5.2%, driven by price increases and increased sales of clinker to Zimbabwe, which positively offset the declining cement sales volumes. Revenue from the materials businesses declined by 6.0% relative to the prior year." Technically, the share was in a downward trend since its high of 568c in October 2021 and we advised waiting for a clear break up through a 65-day moving average which happened on 2-11-2022 at a price of 241c. Since then, the share has moved sideways and upwards to reach 369c, but remains volatile. The company is conducting a R200m share buy-back and has reduced its debt by 20%. On 26th January 2022, the company reported that the CEO and another director had sold about R240.5m worth of shares, which took the share price down sharply - but is not necessarily thought to be negative in the longer term.
JSE:PPC
by PDSnetSA
Our opinion on the current state of PROSUS(PRX)On 11th September 2019, Naspers (NPN) separately listed Prosus (PRX) on the Euronext in Amsterdam to house all its international assets including its stake in Tencent, Mail.Ru, and other internet brands. Naspers holds 73% of Prosus and there is a 25% free float. One of the benefits of the Euronext listing is that it removes the risk inherent in the rand, so Prosus is a rand-hedge which rises when the rand weakens and vice versa. Prosus is now Europe's largest consumer internet company. The main asset of Prosus is 26% of Tencent, a Hong Kong-listed company that provides social media services and gaming in China. Tencent has 10 of China's 20 top mobile applications reaching over 1.1 billion users. Tencent remains vulnerable to the authoritarian regulators in China and their involvement in the gaming industry. Prosus describes itself as, "...a global consumer internet group operating across a variety of platforms and geographies and is one of the largest technology investors in the world. The Prosus Group's businesses and investments serve more than 1.5 billion people in 89 markets and are the market leaders in 77 of those markets. The Prosus Group's consumer internet services span the core focus segments of Classifieds, Payments and Fintech as well as Food Delivery, plus other online businesses including Etail and Travel." On 18th May 2022, Tencent issued a statement saying that its profit in the March 2022 quarter was half of what it had been in 2021, leading to a negative impact on Prosus shares. On 24th June 2022, the company said that it intended to sell some of its Tencent shares to finance an extended open-ended share buy-back program. This caused the share price to jump up. On 24th October 2022, the re-election of Chinese leader Xi Jinping for a third term caused Prosus shares to fall heavily. Jinping is part of a faction in Chinese politics which aims to keep the "disorderly expansion of capital" under control. In its results for the year to 31st March 2024, the company reported revenue up 11% and core headline earnings up 84%. The company said, "We have created additional value for our shareholders by continuing the open-ended share-repurchase programme. Since its inception in June 2022, this programme has reduced the free-float share count by 21% and generated US$30bn of value for shareholders." Technically, the Prosus share has been trending up since November 2023. We still believe that the share is undervalued at current levels. On 18th September 2023, the company announced that CEO, Bob van Dijk, would resign with immediate effect. On 17th May 2024, the company announced that Fabricio Bloisi would take over as CEO of both Naspers and Prosus with effect from 1st July 2024.
JSE:PRX
by PDSnetSA
Our opinion on the current state of RCLRCL is a large producer of food, sugar products, and chicken in South Africa, which is owned 80.4% by Remgro. The company owns a number of very well-known South African brands such as 5 Star maize meal, Farmer Brown, and Yum Yum peanut butter. It competes with overseas imports of sugar, chicken, and other foods. It was impacted by the listeriosis outbreak, which damaged the market for processed meats and caused costs estimated at about R158m. The company has been impacted by the weak economy, low consumer spending, and high unemployment. The company, through the SA Poultry Association, is petitioning the International Trade Administration Commission (ITAC) for an 82% increase in the tariffs on imported chicken. On 2nd December 2020, the company announced that Remgro had increased its stake by buying 100m shares at R8,05 each. On 29th March 2023, the company announced that it had sold Vector Logistics for R1,25bn. In its results for the six months to 31st December 2023, the company reported revenue up 8,4% and headline earnings per share (HEPS) up 52,6%. The company said, "The Vector Logistics segment was classified as a discontinued operation during the second half of the previous financial year. Despite the negative impact of Avian Influenza in the current period, Rainbow delivered an improved result. Sugar's improvement was achieved, despite lower crop yields and largely attributable to higher market prices." The share has been moving sideways and downwards since its peak on 9th February 2022. On 4th June 2024, the company announced that it would unbundle and separately list Rainbow Chicken. RCL shareholders will get 1 Rainbow share for every RCL share that they hold on 25th June 2024. On 10th June 2024, the company published Rainbow's pre-listing statement, with the last day to trade being 25th June 2024. In a trading statement for the year to 30th June 2024, the company estimated that HEPS would rise by at least 75%. The company said, "The expected improvement in headline earnings is driven largely by Rainbow and Groceries." We recommended waiting for a clear break up through the long-term downward trendline - which came on 30th April 2024 at 1050c per share. It has since moved up to 1270c.
JSE:RCL
by PDSnetSA