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Our opinion on the current state of SEAHARVST(SHG)Sea Harvest Group (SHG) stands out as South Africa’s leading frozen fish brand, commanding approximately 38% of the market. The company, which is majority-owned by Brimstone with a 54.92% stake, specializes in catching, processing, and freezing fish primarily for local and export markets. Sea Harvest has recently expanded its operations through strategic acquisitions, including the purchase of Viking’s business operations. Viking, with a 40-year history, employs about 1,600 people and operates a fleet of 30 vessels across various South African and Mozambican ports. This acquisition included 50% of Viking’s aquaculture business, making Sea Harvest a significant player in South Africa’s aquaculture industry. The total acquisition cost was R565 million, funded partly by cash (R315 million) and partly through the issuance of 19.2 million Sea Harvest shares. Further diversifying its portfolio, Sea Harvest ventured beyond its traditional fishing business with the acquisition of Ladismith Cheese Company for R527 million. This move into the dairy sector, based on Ladismith’s after-tax profit of R58 million for the year to January 2018, indicates Sea Harvest’s strategic intent to mitigate the risks associated with the fishing industry. Additionally, in March 2023, Sea Harvest increased its stake in Viking Aquaculture to 82% for R210 million, reinforcing its commitment to growing its aquaculture division. For the fiscal year ending 31st December 2023, Sea Harvest reported a revenue increase of 6%, although headline earnings per share (HEPS) declined by 5%. The company’s net asset value (NAV) improved by 7% to 1216c per share. The company attributed its performance to strong demand and improved pricing in its markets, coupled with a 43% hard currency exposure which provided a buffer against the weakening rand. However, challenges such as difficult fishing conditions, above-inflation cost increases, load shedding, and global pressure on prawn prices constrained its performance. The Sea Harvest share has demonstrated volatility with reasonable trading volumes since its listing in March 2017. The stock has largely moved sideways with a recent downward trend, influenced significantly by the acquisition of Viking which has substantially altered the company's business dynamics. Factors such as weather conditions affecting catch volumes and potential changes in regulatory environments regarding fishing quotas continue to pose risks. Most recently, on 15th May 2024, Sea Harvest announced that its acquisition of 100% of Terrasan, another step in its expansion strategy, received approval from the Competition Tribunal. This approval likely provides a further diversification of its business portfolio, which could influence its market dynamics and investment attractiveness. Overall, while Sea Harvest is navigating through several challenges and leveraging acquisitions to diversify its business model, the share price, after a recent uptick, remains fairly valued. Investors should consider both the opportunities presented by the company’s strategic acquisitions and the inherent risks of the fishing and aquaculture industries when evaluating its shares.
JSE:SHG
by PDSnetSA
Our opinion on the current state of STEFSTOCK(SSK)Stefanutti Stocks (SSK) is a South African construction company that has long been a player in both the local and international markets, including sub-Saharan Africa and the United Arab Emirates (UAE). The company offers a broad range of services, including roads and earthworks, marine construction, concrete structures, and more. Despite its diverse service offerings, Stefanutti faces significant challenges that cast a shadow over its investment potential. The construction industry in South Africa is notoriously volatile, heavily dependent on economic conditions and government projects. Stefanutti's share price reflects this instability, having plummeted from a high of 2650c in November 2007 to about 56c currently, without any dividends being paid to shareholders. This decline is indicative of the broader struggles within the sector and the company's specific operational challenges. Stefanutti has been implicated in controversies, such as the accusation by Eskom in July 2020 of being overpaid R1 billion for work on the Kusile power plant, a claim the company denies. These issues further complicate its public and financial profile. Amidst falling order books, the company is undergoing a significant downsizing effort, which includes retrenchments and a restructuring plan aimed at financial recovery. This plan involves selling non-core assets and plant equipment and attempting to secure an additional R430 million in funding to mitigate the impacts of COVID-19. The company's efforts to divest from non-essential operations and assets are crucial for its survival but signal deep-seated financial troubles. For the six months ending on 31st August 2023, Stefanutti reported a 16% increase in contract revenue but still recorded a headline loss of 22.4c per share, showing some improvement from a 25.0c loss in the previous period. These results highlight ongoing struggles despite some gains in revenue. Looking forward, the company provided a trading statement for the year ending 29th February 2024, predicting a further deepening of losses to between 52.29c and 60.03c per share. This forecast underscores the dire financial straits in which the company finds itself. The management's disposal program aims to offload certain operations, classifying them as discontinued in anticipation of their sale within the next 12 months. Recent share price movements suggest a mild resurgence in investor interest, possibly linked to advancements in the negotiation to sell its 49% stake in Al Tayer Stocks (ATS). However, Stefanutti remains a high-risk investment, teetering on the brink of insolvency. Potential investors should be wary, as the company could follow the unfortunate path of many peers towards consolidation or business rescue if current restructuring efforts fail to stabilize its financial position. This background positions Stefanutti Stocks as a less favorable investment, particularly for those averse to high risk.
JSE:SSK
by PDSnetSA
Our opinion on the current state of UPARTNERS(UPL)Universal Partners (UPL) is an investment holding company with a robust portfolio, primarily listed in Mauritius and secondarily on the Alt-X of the Johannesburg Stock Exchange (JSE). Since its inception in 2013, Universal Partners has strategically invested in diverse businesses across various sectors, demonstrating a keen eye for value and growth opportunities. The company's investments include: 1. Dentex Healthcare Group - An entity that owns 56 dental practices in the UK, reflecting UPL's focus on the healthcare sector. 2. Yasa - Originally a distributor of controllers for high power density electric motors. Yasa was notably sold to Mercedes Benz for GBP 42.8 million, marking a significant exit for UPL. 3. SC Lowy - A firm specializing in market-making for distressed and high-yield debt, primarily in Asia, indicating UPL's inclination towards financial services with high-risk, high-reward potentials. 4. Propelair - A company that supplies water-efficient toilets in the UK, aligning with global trends towards sustainability and resource conservation. 5. JSA Services - A provider of personal service companies, payroll, and umbrella services to temporary workers in the UK, suggesting UPL's investment in essential business services. In the financial results for the six months ending 31st December 2023, Universal Partners reported a net asset value (NAV) of GBP 1,267 and headline earnings per share (HEPS) of 0.09 pence, a significant improvement from a loss of 2.25 pence in the previous corresponding period. The company highlighted its successful track record with six investments made since listing and two successful exits, demonstrating its effective investment strategy and execution. However, by the end of the three months to 31st March 2024, UPL reported a headline loss of 0.37 pence per share with an NAV of 1293 pence per share, indicating some fluctuations in performance. Such volatility is not uncommon in investment holding companies, especially those dealing in varied markets and sectors. Despite its strategic diversification and active management, Universal Partners is described as too thinly traded to capture the interest of private investors, primarily due to the limited liquidity which might hinder buying and selling shares at desired times or prices. For investors who do not require high liquidity and are interested in a diversified investment holding company with exposure to international markets and sectors, UPL might still present a noteworthy opportunity. However, for those requiring more liquid investments, it may be less appealing.
JSE:UPL
by PDSnetSA
CPR.JSE Copper 360 Trend Cloud and Fibonacci Study.Copper 360's sudden Trend change is very interesting, after comments by the CEO of possible Price manipulation. I have plotted the FIB's to see where the price action might show targets or resistance. As will most of these risky Trades or Investments, getting in early is the secret to giving you a decent Buffer and Headroom for future management. Congratulations if you did. Unfortunately the Trend Cloud Indicator is not Free. Should you wish to Purchase this, message me and I will put you in contact with the Author. As always, please get a few outside Expert's Advice before taking Trade or Investment Decisions. Should you appreciate my Chart Studies, Smash That Rocket Boost Button. It's Just a Click away. Regards Graham.
JSE:CPRLong
by hitchcoxg
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Our opinion on the current state of VODACOM(VOD)Vodacom, as South Africa's largest provider of airtime and data for cell phones, plays a crucial role in the telecom sector. It operates as a subsidiary of the international conglomerate Vodafone, facing competition from MTN, Cell-C, and Telkom. The industry has seen a significant shift with a decline in voice revenue, although this has been somewhat offset by a dramatic increase in data usage. One of the challenges Vodacom faces is its ownership structure, with a foreign parent company, which has shown to impact its market valuation negatively. For instance, concerns about Vodafone potentially being pressured to divest its non-European subsidiaries led to a 7% drop in Vodacom's share price over two days. Vodacom's operations span several countries including Mozambique, Tanzania, the DRC, and Lesotho, and it is also exploring opportunities in Ethiopia, which is Africa's fastest-growing economy with a population of over 105 million. Regulatory challenges have also affected Vodacom. On 2nd December 2019, the Competition Commission mandated a reduction in interconnect fees by 30% to 50%, significantly impacting Vodacom's revenue, as a substantial portion comes from these fees, causing a 5% drop in its share price. Innovations such as the launch of a "super-app" in collaboration with Jack Ma's Alipay aim to boost Vodacom's non-voice revenue. Additionally, a strategic partnership announced on 10th November 2021 with Remgro to create "Infraco" sees Vodacom holding an initial 30% stake, potentially increasing to 40%. This venture, integrating Remgro’s Dark Fiber Africa (DFA) and Vumatel, represents Vodacom's ambitious plan to dominate the fibre market in South Africa. The company has also invested R4 billion to mitigate the effects of load shedding, highlighting its proactive approach to dealing with operational challenges. For the fiscal year ending 31st March 2024, Vodacom reported a significant 26.4% increase in revenue, although headline earnings per share (HEPS) decreased by 10.8%. The acquisition of operations in Egypt significantly contributed to a 29.1% rise in group service revenue, supported by strong performance in South Africa. Despite global economic pressures, a 6.4% increase in net profit reflects the effectiveness of Vodacom's strategic and operational adaptability. From a technical standpoint, the share price has been on a downward trend since reaching a high of 16214c on 1st April 2022. Given the current trend, it may be prudent for investors to wait for a clear upward break through the downward trendline before considering an investment. Despite its attractive dividend yield of around 5.13%, Vodacom operates in a dynamic and often unpredictable environment characterized by rapid technological changes and regulatory shifts, presenting a considerable risk.
JSE:VOD
by PDSnetSA
Our opinion on the current state of RAUBEX(RBX)Raubex is a well-established construction company that started operations in 1974 and went public on the Johannesburg Stock Exchange in 2007. The company operates across three main divisions: construction, materials, and infrastructure. Recently, Raubex has diversified its portfolio in response to the reduction in road-building work, particularly from Sanral, which has significantly cut the value of the tenders it issues. This diversification includes venturing into renewable energy sectors, securing R500 million in contracts for projects such as the Droogfontein photovoltaic farm and the Copperton wind farm in the Northern Cape. Raubex has also expanded its geographical footprint beyond South Africa, with operations in Cameroon, Namibia, Botswana, and Zambia, and owns Westforce Construction in Western Australia. The company’s expansion and diversification strategy have positioned it well to capitalize on a broader range of opportunities across Africa. In addition to renewable energy projects, Raubex has seen a resurgence in contract work from the South African government and Sanral, from which it has secured R6 billion in orders. This is a testament to its robust management practices and its ability to closely control costs while maintaining a strong balance sheet. For the fiscal year ending 29th February 2024, Raubex reported a 13.8% increase in revenue and a 21.3% rise in headline earnings per share (HEPS). More impressively, the company’s order book grew by 27.5% to R25.55 billion. Detailed financial results showed significant increases in operating profit, profit before tax, and profit after tax, with group earnings attributable to owners of the parent reaching R847.6 million, up from R704.3 million in the previous year. Given its current performance and strategic initiatives, Raubex appears to be undervalued with a price-to-earnings (PE) ratio of 7.24, making it an attractive buy in periods of economic optimism or when market conditions show signs of improvement. Technically, the stock has been on an upward trend since March 2023 and recently broke through resistance at around R30 per share. It was added to the Winning Shares List (WSL) on 21st March 2024 at a price of 3031c. Overall, Raubex is positioned to benefit from any significant upswing in the South African economy, making it a compelling option for investors looking for exposure in the construction and infrastructure sectors, particularly those geared towards renewable energy and African markets.
JSE:RBX
by PDSnetSA
Our opinion on the current state of CALGRO-M3(CGR)Calgro M3 Holdings (CGR) is a South African developer known for creating large-scale integrated residential properties, rental units, and memorial parks. Since its inception in 1995 and subsequent listing on the Johannesburg Stock Exchange in November 2007, Calgro has specialized in acquiring land, planning developments, and either selling or renting the resultant residential or memorial park units. A significant challenge for Calgro has been dealing with illegal land invasions, which notably impacted its operations, costing the company about 25% of its turnover in the half-year period ending in August 2019. Despite these hurdles, Calgro has continued to expand and secure additional financing, most recently obtaining $25 million to fund new development projects. In its most recent financial report for the year ending 29th February 2024, Calgro showed positive developments. The company managed to hand over 1,794 units, with an additional 1,748 units under construction. There was a notable increase in headline earnings per share (HEPS), which rose to 189.87c from 153.18c in the previous period. This improvement reflects the company's ability to manage costs and enhance profitability efficiently. Moreover, Calgro reported its highest ever net asset value (NAV) per share, which increased by 40.60% to R13.37, up from R9.51 the previous year. This growth in NAV per share is significant, particularly as it indicates the company's successful enhancement of asset value while maintaining conservative valuation principles, valuing assets at the lower of cost or net realisable value. From a technical perspective, Calgro's shares have been in a strong upward trend since March 2023, suggesting growing investor confidence. However, like many companies in the property sector, Calgro’s shares are still trading well below their net asset value, which could represent a compelling value proposition for investors looking for opportunities in the real estate development sector. This undervaluation, combined with the company's recent financial improvements and strategic funding to support new projects, positions Calgro as an attractive option for investors seeking exposure to property development with potential for growth.
JSE:CGR
by PDSnetSA
Our opinion on the current state of ANGLO(AGL)Anglo American (AGL) is a globally diversified mining company that has effectively mitigated the typical risks associated with commodity stocks through strategic diversity in its mineral portfolio and maintaining a robust balance sheet. This diversification helps cushion the impact should any single mineral enter a bear trend, while a strong balance sheet provides the resilience needed to withstand economic downturns. Historically, commodity prices have shown a tendency to follow distinct trends. Starting from 2016, there was a steady upward trajectory until the COVID-19 pandemic triggered a downturn in March 2020. However, a recovery is evident, and the upward trend has resumed, fueled partly by economic expansions starting in America and spreading to Europe and Asia. Additionally, the conflict in Ukraine has driven up prices, particularly for precious metals, due to heavy sanctions on Russia. A key project for Anglo American is the Quellaveco mine in Peru, a massive copper venture where Anglo owns a 60% stake. With a construction cost of $5.6 billion, the mine is expected to achieve a rapid payback within approximately four years, thanks to its production potential and a projected 30-year operational lifespan. Despite these positive aspects, Anglo American has faced challenges, such as unreliable rail services from Transnet, particularly impacting its Kumba operations. The company has ambitious plans to meet 100% of its energy needs from renewable sources in South Africa by 2023. However, the share price has experienced significant volatility; it surged six-fold in under three years pre-pandemic, fell during the pandemic, and has since recovered impressively, although recent commodity price drops have affected it. For the year ending 31st December 2023, Anglo reported a 13% decrease in revenue and a dramatic 94% drop in earnings per share (EPS) in US dollars. Operational highlights included the full ramp-up of Quellaveco, producing 319,000 tonnes of copper at a cost of 111 cents per pound, and a strategic reduction plan aiming to cut annual costs by approximately $1 billion and capital expenditures by about $1.6 billion over the next three years. Despite these measures, a significant revenue impact from cyclical lows in PGMs and diamonds contributed to a 31% decline in underlying EBITDA. Recently, Anglo's stock has shown technical signs of further declines after completing a head-and-shoulders pattern and breaking down through the neckline at R525. However, following an acquisition offer from BHP on 13th May 2024, which proposed exchanging 0.8132 BHP shares for each Anglo share, the stock price rallied from 47926c to 63480c. Anglo rejected this second offer from BHP, signaling potential for an even more favorable proposal, possibly from competitors like Rio Tinto or Glencore. Given these dynamics, Anglo American presents a potentially exciting but volatile investment opportunity, directly benefiting from global economic growth and the strategic management of its diverse mineral portfolio. The future could see significant developments, especially with the ongoing interest from major players in the mining sector.
JSE:AGL
by PDSnetSA
Our opinion on the current state of TREMATON(TMT)Trematon (TMT) is an investment holding company based primarily in the Western Cape, with a diverse portfolio that includes subsidiaries, joint ventures, and associate companies. The firm initially focused largely on property investments but has since broadened its scope to include various sectors, including both listed and unlisted shares. Among its notable assets is Club Mykonos, a well-known leisure destination. In its financial results for the year ending 31st August 2023, Trematon reported a 13% increase in revenue. However, the company saw a significant drop in headline earnings per share (HEPS), which fell by 59%. Additionally, the net asset value (NAV) of the company slightly decreased by 1% to 366c per share. The company highlighted that Generation Education and Aria Property Group constituted 63% of the group’s investment net asset value (INAV). Over the past 11 years, Trematon has returned approximately R240 million to its shareholders through distributions and share buy-backs, underscoring its commitment to shareholder value. Looking ahead, Trematon issued a trading statement for the six months to 29th February 2024, estimating that HEPS would decline further by between 66.1% and 68.8%. Despite these challenges, the company's daily trading volume is relatively low, with only about R41,000 worth of shares changing hands each day, making it a less practical choice for private investors due to liquidity concerns. Nevertheless, Trematon's expanding involvement in the education sector, particularly through Generation Education, presents potential growth opportunities post-pandemic. This shift towards education could prove to be a strategic move, aligning with broader societal needs and potentially creating a more robust business model in the longer term. This makes Trematon an interesting consideration for investors looking at niche markets and education sector growth in a post-pandemic environment.
JSE:TMT
by PDSnetSA
Our opinion on the current state of SIBANYE-S(SSW)Sibanye (SSW) is a dynamic mining house on an aggressive acquisition spree, accumulating assets in the platinum and gold sectors both in South Africa and the United States, and now expanding into base metals and so-called "green" metals crucial for modern technologies like electric vehicle batteries. Led by Neal Froneman, a respected figure in the mining industry known for his tenacity and deep expertise, the company is under guidance to potentially double in size before his projected retirement around 2024/5. Sibanye has expressed interest in expanding into crucial battery metals such as vanadium, copper, nickel, and lithium. On 1st June 2021, Sibanye announced a share buy-back program to repurchase up to 5% of its issued shares. The company furthered its investment in green technology by increasing its stake in Keliber, a Finnish lithium producer, to 80% for about R7.7 billion on 30th June 2022. On 9th November 2023, Sibanye also ventured into metal recycling by acquiring Reldan, a U.S.-based company, for $211.5 million. Despite recent fluctuations in share price, which some investors see as a buying opportunity, the company's strategic maneuvers are generally viewed positively, bolstered by Froneman's belief that the shares are undervalued—a sentiment echoed by some market analysts. However, its financial performance has shown vulnerabilities linked to volatile metal prices. On 25th October 2023, the company initiated section 189 consultations for retrenching 4,095 employees, and on 6th November 2023, it secured a five-year deal with AMCU at its Kroondal PGM operation that includes a minimum 6% per annum wage hike. Further financial maneuvers included a $500 million convertible bond issued on 21st November 2023, intended to pay 4% to 4.5% interest until 2028, which unfortunately led to a 20% drop in the share price due to shareholder turnover. For the year ending 31st December 2023, Sibanye reported an 18% decline in revenue and a significant loss of R37.4 billion, with Froneman commenting on the temporary nature of the PGM price weakness and an optimistic view on future demand. As of 11th April 2024, the company announced another section 189 process, planning to retrench 3,107 employees and about 900 contractors from its gold mines. Despite these challenges, the first quarter of 2024 showed a 3% increase in 4E PGM production, significant gains in Sandouville nickel production, and steady progress in the Keliber lithium project. Technically, Sibanye's shares have been in a downward trend since March 2022, largely due to falling commodity prices. However, a significant turnaround occurred on 2nd April 2024 when the shares broke through the downward trendline at a price of 2230c, subsequently rising to 2290c. This movement suggests a potentially volatile yet opportunistic future for investors, contingent on continued strategic management and market conditions.
JSE:SSW
by PDSnetSA
Our opinion on the current state of DRDGOLD(DRD)DRDGOLD (DRD) holds the distinction of being the Johannesburg Stock Exchange's (JSE) oldest listed company since 1895. It was followed by SA Breweries, listed in 1897, which has since been acquired by Anheuser Busch. Today, DRDGOLD focuses on gold surface treatment operations with an all-in sustaining cost (AISC) of extraction at approximately R627,247 per kilogram, contrasting with an average received gold price of R917,996. The company primarily engages in re-treating surface dumps, extracting trace amounts of gold left from previous mining activities using modern techniques. This type of operation offers significant advantages, notably its lower risk compared to underground mining. It faces fewer challenges related to labor unions and avoids the high costs and complexities associated with underground operations. Additionally, the life and grade of its deposits—and consequently its profitability—are well-determined, contributing to its operational efficiency. However, DRDGOLD's shares tend to be volatile, influenced heavily by the fluctuating gold prices. Despite this, the company maintains a debt-free balance sheet and robust free cash flows. A strategic move was made when Sibanye swapped its surface dumps for an additional 265 million DRD shares, increasing its stake to 38%. On 10th January 2020, Sibanye further raised its shareholding to 50.1% for R1,086 million. CEO Niel Pretorius has ambitions to expand operations by integrating other tailing projects in the West Rand to form a large-scale unified re-processing facility. Additionally, the company is investing in renewable energy with the construction of a 20 MW solar and battery facility. For the six months ending 31st December 2023, DRDGOLD reported a 12% increase in revenue and a 10% rise in headline earnings per share (HEPS). However, gold production declined by 7%, and gold sales decreased by 8%, although the average received gold price rose by 13%. The introduction of higher-grade material from legacy and clean-up sites and the commissioning of high-grade projects like the Valley Silts and Rooikraal sites provided some operational relief. In the subsequent update for the quarter ending 31st March 2024, the company experienced a 3% reduction in gold production and a 4% decrease in gold sales. Nevertheless, the average gold price received increased by 5%, and the AISC in US dollars decreased by 4%. Notably, the 4L3 and 5L27 sites at Ergo Mining Proprietary Limited ("Ergo") were commissioned in late January 2024, marking significant developments in their operations. Despite reaching a peak share price of 2458c on 9th May 2023, DRDGOLD's shares have since been on a decline. However, they are now poised potentially to break through the downward trendline. The stock remains a volatile commodity share, largely influenced by international gold prices.
JSE:DRD
by PDSnetSA
Our opinion on the current state of ANGGOLD(ANG)AngloGold Ashanti (ANG) is an international gold producer, once with significant operations in South Africa, including the now-sold Mponeng mine. The company still maintains assets across several countries including the DRC, Tanzania, Ghana, Mali, and the US. It encountered substantial issues in initiating production at the Obuasi mine and faced disputes with the Tanzanian government regarding royalties. Despite divesting from its South African assets, AngloGold has retained its listing on the Johannesburg Stock Exchange (JSE). On 14th July 2021, AngloGold announced its acquisition of Corvus Gold for R5.4 billion in cash, aiming to extend its exploration efforts in Nevada, USA. The gold market has seen fluctuating prices: peaking over $2000 in August 2020, then dropping below $1700 by March 2021, and since then oscillating sideways and upwards—especially amid heightened tensions from the Ukraine crisis—with current prices around $1900. For the quarter ending on 30th September 2023, AngloGold Ashanti reported a 3% increase in gold production compared to the previous quarter, from 652,000 ounces to 673,000 ounces. This rise was attributed mainly to processing higher ore tonnes, although it was partially offset by lower recovered grades. The company operates what it describes as a relatively marginal, short-life gold mine with an 11-year lifespan, contending with rising operational costs, diminishing ore grades, and the volatility of gold prices. In the subsequent update for the quarter ending 31st March 2024, gold production was up by 2%. Notable improvements were recorded at various sites, including Cuiabá (AGA Mineração) with a 55% increase and Serra Grande with a 40% increase, both benefiting from performance enhancement initiatives. Other increases were seen at Kibali (+19%) and Geita (+16%). The company's stock remains highly volatile, presenting a risky option for private investors, yet it could potentially capitalize on rising gold prices driven by ongoing global tensions, including those in Ukraine and the Middle East. AngloGold Ashanti is also transitioning its primary listing to the US, which may potentially improve its market rating. Technically, the stock has shown an upward trend since March 2024, indicating the possible onset of a new bullish phase.
JSE:ANG
by PDSnetSA
Our opinion on the current state of POWER(PWR)Powerfleet merged with Mix Telematics (MIX), a company specializing in vehicle tracking technology and the Internet of Things (IOT). It operates in various countries including South Africa, Australia, the UK, the US, Brazil, Thailand, and Romania. Being a service company, it boasts very low working capital and receives a significant portion of its income as annuity or debit-order income. This financial model is highly advantageous for private investors as it allows the company to expand its global presence virtually without limits and operate without a cumbersome workforce or significant capital tied up in assets. In Mixtel's financial results for the six months ending on 30th September 2023, the company reported a 13% increase in revenue and added 87,900 subscribers, bringing the total to 1,089 million. The company announced a profit for the period of R38 million with an adjusted EBITDA up by 58% year-over-year to R343 million, and an adjusted EBITDA margin of 24.8%. In the third quarter of the 2024 financial year, Mixtel reported the addition of 52,400 new subscribers and a revenue increase of 6%. The adjusted EBITDA rose by 13% year-over-year to $9.5 million, with an adjusted EBITDA margin of 24.4%, up by 220 basis points from the previous year. These results suggest that institutional investors might be starting to take notice and invest in this share. The share was added to the Winning Shares List on 28th December 2023 at a price of 590c and has since yielded an effective gain of over 106% after the merger with Powerfleet. On Tuesday, 4th April 2024, Powerfleet was listed on the main board of the Johannesburg Stock Exchange (JSE) through a secondary inward listing to ensure the continuity of trade. On 10th May 2024, the company announced a change of its fiscal year-end to 31st March. For the year ending 31st December 2023, the company reported a slight revenue decline of 1.6% and a net loss of 49c (US) per share due to the costs associated with the merger. For more detailed information on the merger, refer to our article titled "Reverse Takeover."
JSE:PWR
by PDSnetSA
Our opinion on the current state of NAMPAK(NPK)Nampak (NPK) is Africa's largest packaging company, operating primarily in South Africa and ten other African countries. While 60% of its turnover originates in South Africa, the country contributes only 36% of its trading profit. The rest of Africa accounts for 59% of trading profit and 31% of turnover. Nampak also has a smaller presence in the UK and Ireland. The company produces four types of packaging: plastics, metals, paper, and glass, with the majority of trading profits coming from metals, mainly beverage cans. Nampak has successfully repatriated R3.5 billion (US$265 million) in surplus cash from Zimbabwe, Nigeria, and Angola, showcasing its management's ability to return profits from its African operations. After writing down its Angola and Nigeria businesses by R3 billion, the company halted its African expansion strategy. COVID-19 and the drop in oil prices have impacted its results in Nigeria and South Africa. Initially, Nampak aimed to raise R2 billion through a rights issue to repay its nearly R6 billion debt. However, the rights offer was reduced to R1.5 billion, with final approval to raise up to R1 billion on 30th June 2023. Despite reducing the rights offer, the announcement caused a 30% drop in the share price. In its financial results for the year ending 30th September 2023, the company reported revenue down by 2% and recognized a significant foreign exchange loss of R1.2 billion. The report showed net impairments totaling R2.8 billion, which included goodwill impairment in Bevcan Nigeria (R1.5 billion), asset impairment in Bevcan Angola (R827 million), DivFood asset impairment (R290 million), and Rigids impairment (R175 million). These impairments accounted for 61% of the group's previously reported shareholders' equity of R4.7 billion. The company experienced an attributable loss of R4 billion, resulting in a headline loss of R468.11 per share, compared to a profit of R75.89 per share in the previous year. The net asset value fell to 19,810 cents per share from 183,723 cents. In an update for the quarter ending 31st December 2023, Nampak indicated improved operational and trading performance in Bevcan SA and DivFood through margin management, cost reduction, and efficiency gains. Bevcan Angola saw a volume recovery, and reduced forex losses contributed to a better operating profit. The share, which once peaked at over R45 in November 2014, became a penny stock before a 250-for-1 consolidation on 26th July 2023. The company is seen as recovering, but its vulnerability to economic and political developments across African countries makes it a risky proposition, especially after recent challenges faced by other firms like MTN in Nigeria. On 20th April 2023, CEO Eric Smuts resigned, and Phil Roux took over. Investors are advised to wait for the share to break through the downward trend following the rights issue on 6th September 2023. On 9th May, the company announced that it would publish its interim results for the six months ending 31st March 2024 on 28th June 2024, following a "cyber incident."
JSE:NPK
by PDSnetSA
Our opinion on the current state of LESAKA(LSK)Lesaka (previously known as Net1 UEP Technologies), listed on the Nasdaq and JSE (LSK), is a fintech company offering payment solutions across multiple countries. Their Universal Electronic Payment System (UEPS) provides biometrically secure smart cards that facilitate real-time, offline transactions, enabling users to transact at any moment. In the third quarter ending on 31st March 2024, Lesaka reported revenue of R2.6 billion, an increase from R2.4 billion in the previous quarter, alongside a net loss of R76.4 million. They noted, "Fundamental earnings per share (a non-GAAP measure), positive for a second successive quarter, increased to $0.02 (ZAR 0.45)(1) compared to a fundamental loss per share of $0.02 (ZAR 0.35)(1) in Q3 2023." Despite trading an average of R21,000 worth of shares daily, the company occasionally experiences days without trading activity. On 5th December 2023, they announced that Chris Meyer would step down as CEO in February 2024. Shortly after, on 6th February 2024, Lesaka acquired Touchsides, a distributor of alcohol to shebeens and informal taverns.
JSE:LSK
by PDSnetSA
Our opinion on the current state of PAN-AF(PAN)Pan African Resources (PAN) is a gold producer listed on both the London and Johannesburg Stock Exchanges. With its Elikhulu plant, it is set to produce approximately 700,000 ounces of gold annually at a cost of roughly R450,564 per kilogram, against a current gold price near R1 million. Over its lifespan, the plant is projected to generate around R15 billion in revenue, with R5.3 billion of that reinvested into the economy via mining expenses. The operation is also expected to employ 350 people. The company has approved the construction of a 10MW solar power plant. In its results for the six months to 31st December 2023, the company reported a 6.7% increase in gold production with all-in sustaining costs (AISC) of $1,287 per ounce, compared to a gold price exceeding $2,000. Headline earnings rose by 46.4%, and earnings per share (EPS) climbed by 46.1%. The company stated, "Liquidity remains healthy, with access to immediately available cash of US$31.3 million (2022: US$33.9 million) and undrawn facilities of US$86.4 million (2022: US$52.1 million) at the reporting period-end." In a revised production guidance for the year ending 30th June 2024, the company anticipated production of 186,000 to 190,000 ounces at an AISC ranging from $1,325 to $1,350 per ounce. Technically, the share has been in an upward trend since reaching a low of 288c in June 2023. While this is a promising operation, the volatility means there are considerable risks. Therefore, investors should proceed cautiously. However, with the gold price having convincingly broken above the long-term resistance of $2,060, this could be a favorable speculative opportunity.
JSE:PAN
by PDSnetSA
Our opinion on the current state of RHODES(RFG)Rhodes (RFG) is a Western Cape manufacturer of convenience foods, started by Cecil John Rhodes in 1896. It has several well-known South African brands like Bisto, Bull Brand, and Hinds. It operates 15 manufacturing plants in South Africa and a fruit processing plant in Swaziland. In its results for the year to 1st October 2023, the company reported revenue up 8.7% and headline earnings per share (HEPS) up 35.3%. The company's debt-to-equity ratio improved to 21.3% from 36.2%, and price inflation was at 12.9%. The company said, "Slower consumer spending and competitor promotional activity resulted in volume pressure in certain product categories as total group volumes declined by 8.3%. The rate of volume decline slowed as the year progressed, with regional volumes down 6.6% for the full year after declining by 8.0% for the first half." In a trading update for the five months to 29th February 2024, the company reported a revenue increase of 5.1%, with price inflation of 7.9% and volumes down by 5.2%. The company said, "After reporting good revenue growth for the first quarter of the financial year to December 2023, sales of long-life foods in particular slowed in January and into February. The meat products category has sustained the turnaround reported in the previous financial year, with the vegetable and salads categories reporting an improved performance. The fruit juice and dry foods categories both delivered good growth." In a trading statement for the six months to 31st March 2024, the company estimated that HEPS would increase by between 18% and 23%. Technically, the share has fallen from a high of 2900c in October 2016 due to a bear trend. We suggested waiting for it to break up through its long-term downward trendline, which happened on 13th November 2023 at a share price of 1220c. It is on a P/E of 6.99, which looks reasonably priced, even cheap. We believe that the share will recover over time as the economy and rand improve and as the war in Ukraine is resolved. Sales of tinned foods to China declined sharply in the short term.
JSE:RFG
by PDSnetSA
Our opinion on the current state of ENXGROUP(ENX)The enX Group (ENX) is a "...diversified industrial group that provides branded products and services to the petrochemical, fleet management, logistics and industrial sectors." It includes Austro, which distributes wood-working equipment and tooling. Finally, it includes New Way Power, which manufactures, installs, and maintains diesel generators. Its fleet division engages in fleet management and logistics as well as vehicle tracking. Then ENX Petrochemicals produces and markets oil lubricants, plastics polymers, rubber, and specialty chemicals in Southern Africa. The company disposed of the EIE group with effect from 1st April 2022. On 15th July 2019, the company announced that it had sold Eqstra, a fleet management company, to Bidvest for R3.1bn. On 15th April 2021, the company announced that it had sold its British fork-lift and container business for GBP31m. The proceeds will be used to pay down debt. This is clearly a company that will benefit directly from any improvement in the South African economy, but which is making acquisitions both locally and in the UK to ensure growth, no matter what happens. On 4th April 2022, the company announced a special dividend of 200c per share as a result of the sale of its subsidiary, EIE. On 1st August 2022, the company announced a special dividend of R1.50 per share as a result of the disposal of Impact Forktrucks and EIE Group. In its results for the year to 31st August 2023, the company reported revenue up 26% and headline earnings per share (HEPS) from continuing operations up 16%. The company said, "The results for the year ended 31 August 2023 reflect continued strong performance in all our business units notwithstanding the challenging economic conditions experienced." In a trading statement for the six months to 29th February 2024, the company estimated that HEPS would be between 192c and 200c compared with 70c in the prior period. The share is trading an average of R108,000 worth of shares changing hands each day, which makes it practical for private investors. It has also been in an upward trend recently.
JSE:ENX
by PDSnetSA