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Our opinion on the current state of YRKYork Timber Holdings (YRK) is a prominent forestry company in South Africa, boasting ownership of plantations, processing plants, and a wholesaling distribution network. Established by Russian immigrant Herman Katzenellenbogen in 1916, the company has been listed on the JSE since 1946 and holds a significant position in the country's plywood and timber market. Over the years, York Timber Holdings has faced challenges stemming from the construction industry's downturn, particularly since the onset of the sub-prime crisis in 2008. Despite reaching a peak in July 2007 with shares valued at R40, the company has experienced a downward or sideways trend in its share price since then. Recent announcements have further impacted investor sentiment. A strike at the company's Escarpment operations, responsible for 51% of its revenue, was reported on May 13, 2022, contributing to production disruptions. Additionally, a decision to conduct a rights issue to raise R250 million, announced on December 5, 2022, led to a sharp decline in the share price. In its financial results for the year ending June 30, 2023, York Timber Holdings reported a 9% decrease in revenue and a headline loss per share of 76c, compared to a restated profit of 53c in the previous period. The company attributed the loss to various factors, including costs related to load shedding, diesel, external log purchases, and reduced sales, resulting in a decline in net asset value (NAV) from 857c to 579c per share. Despite these challenges, York Timber Holdings remains accessible to private investors, with approximately R183,000 worth of shares traded daily. However, the company's technical outlook indicates a downward trend since the beginning of 2022, underscoring its volatility and its sensitivity to construction-related factors. In a trading statement for the six months ending December 31, 2023, the company projected a further decline in headline earnings per share (HEPS) by 62% to 67%, citing expectations of significantly lower cash generated from operations compared to the previous comparative period. Investors should consider these factors when evaluating York Timber Holdings as an investment opportunity.
JSE:YRK
by PDSnetSA
Our opinion on the current state of CLIClientele Life (CLI) operates as a small insurance company specializing in the sale of short- and long-term policies and underwriting insurance products. The company distributes its products through agents, brokers, and tele-sales channels. In its financial results for the year ending 30th June 2023, Clientele Life reported a 15% increase in headline earnings per share (HEPS) and achieved a return on average shareholders' interest of 43%. Additionally, the company attained a return on embedded value of 12%. Clientele Life highlighted the challenging trading environment marked by factors such as low economic growth, persistent load-shedding, and difficulties in premium collections. On 3rd November 2023, Clientele Life announced the acquisition of 1Life Insurance for R1.914 billion, to be funded by issuing 117,815,756 ordinary shares in Clientele. Despite anticipating a decline in HEPS ranging between 37% and 57% in the trading statement for the six months ending 31st December 2023, the company emphasized its sound solvency and liquidity position, with continued strong positive cash flows. Trading at a price-to-earnings (P:E) ratio of 7.8, the company's shares appear attractively priced. Moreover, Clientele Life's shares witness sufficient trading activity to accommodate most private investors. From our perspective, the current valuation offers reasonable value, with potential for direct benefits as the South African economy shows signs of improvement. Investors should consider these factors when evaluating investment opportunities in Clientele Life.
JSE:CLI
by PDSnetSA
Our opinion on the current state of MCZMC Mining (previously "Coal of Africa") (MCZ) operates as a small metallurgical coal-mining company primarily focused on its single producing mine, Uitkomst. In addition to Uitkomst, the company is actively developing several projects including the Makhado project, the Vele colliery, and MbeuYashu. Among these, the Makhado project stands out as the flagship operation situated in the Limpopo province. This opencast mine boasts a projected lifespan of 16 years with the potential for extension. A significant milestone for the Makhado project was reached in January 2019 with the announcement of the acquisition of surface rights, crucial for its viability. Production at Makhado is anticipated to commence by the end of 2020, aiming to produce 800,000 tons of hard coking coal and 1 million tons of export thermal coal. This acquisition substantially reduces risks associated with the project, enhancing its attractiveness as an investment opportunity. To support the Makhado project, the Industrial Development Corporation (IDC) has provided R245 million in funding, yet an additional R530 million is still required. The company holds a 69% stake in Baobab Mining and Exploration, the entity that owns the Makhado project. In its financial results for the six months ending 31st December 2023, MC Mining reported a remarkable 80% increase in revenue. However, the company experienced a headline loss of 145c (US) per share, a significant increase from the loss of 50c in the previous period. Despite challenging international thermal coal prices, Uitkomst Colliery delivered encouraging results, generating revenue of $16.3 million and operating cash flows of $5.1 million for the period. From a technical perspective, the share price of MC Mining exhibited a spike between July and September 2022, followed by a subsequent decline to lower levels. As a volatile commodity share, MC Mining faces inherent risks associated with mining exploration and development, coupled with high debt levels. On average, approximately R280,000 worth of shares change hands each day, indicating relatively low liquidity in the market for this stock. Investors should carefully consider these factors before making investment decisions.
JSE:MCZ
by PDSnetSA
Our opinion on the current state of LBRLibstar (LBR) is a recently listed decentralised food and beverage company that specializes in producing "consumer packaged goods." The company successfully raised R3 billion in an initial public offer (IPO) in May 2018. Libstar boasts ownership of prominent brands like Denny, a leading mushroom supplier, and Lancewood, renowned for its dairy products and other food brands. With a diverse portfolio, Libstar manufactures over 9000 products and has introduced 88 new products in the past six months alone. One of Libstar's key strategies involves producing private label brands for major retailers such as Spar, Woolworths, Pick 'n Pay, and Shoprite. The company operates with a decentralized structure, where autonomous production units receive support and investment from a centralised head office. Additionally, Libstar actively engages in acquisitions, providing capital, expertise, and support to bolster its operations. However, Libstar faces challenges stemming from various economic factors, including load-shedding, civil unrest, retrenchments, high unemployment, the lingering effects of COVID-19, and recent developments in central Europe. Given its heavy reliance on consumer spending, these factors significantly impact its performance. In its financial results for the year ending 31st December 2023, Libstar reported a 5.2% increase in revenue, while normalised headline earnings per share (HEPS) declined by 11.2%. The company attributed 10.0% of its sales growth to selling price inflation and mix changes. However, sales volume experienced a 4.8% decline across retail, industrial, and export channels. Moreover, Libstar faced a notable increase in net finance costs on interest-bearing debt, rising by 53.3% due to the full-period impact of the Johannesburg interbank average lending rate (JIBAR) compared to the previous period. Currently, Libstar trades at a multiple of 7.34 with a dividend yield (DY) of 3.43%. From a technical standpoint, the share has been on a downward trend for some time. It is advisable to wait for a clear break above the long-term downward trendline before considering further investment.
JSE:LBR
by PDSnetSA
Quilter Seeking A Cycle LowQuilter is in the timing band for a daily cycle low, we will know this is confirmed when price closes above the pink resistance line set over recent price action. Investors who missed the bus can consider this as a safer entry point, higher risk accepting investors can buy before confirmation by considering how price is bouncing off the support of 200DMA, dashed trendline & horizontal black line, triple support is much stronger support to break on pullbacks.
JSE:QLTLong
by runyamhere
SSW.JSE Sibanye Stillwater Up +45% from Recent Low.Sibanye Stillwater - SSW Listed on the JSE is up +45% from the Recent Low. I did a Fibonacci Trace from the recent Low to the High to plot the Key Level Targets. This will obviously take a long time and assumes no serious bad news events. Like most of us I am also Down on this one, and I'm DCA any extra spare cash in. Hit that Rocket Boost Button to Show your Appreciation for my Chart Studies. Invest wisely and get a few Experts Advice before making any Decisions'. Regards Graham.
JSE:SSWLong
by hitchcoxg
Our opinion on the current state of RTOThis share represents an example of extremely thinly traded companies listed on the JSE, rendering them impractical for private investors in their current state. RTO, established in 1937 and listed on the JSE since 1945, specializes in manufacturing and marketing clothing and accessories through a nationwide chain of Queenspark and J. Crew stores. Additionally, it holds a portfolio of properties in the Cape Town area. The group is under the control of a consortium led by Marcel Golding and his partner Hugh Roberts. Recently, the group made a significant investment of R81 million to acquire a 33.8% stake in Sembcorp Siza, a company specializing in water reticulation and specialist pipe services operating in Natal. With a robust balance sheet, the company has been actively seeking diversification opportunities. In its financial results for the year ending 30th June 2023, RTO reported a remarkable 35.1% increase in revenue and a substantial 78.2% surge in headline earnings per share (HEPS). The company's net asset value (NAV) also saw a notable 41% rise to 1888c per share. RTO attributed the revenue growth primarily to an increase in turnover within the retail segment, while other revenue streams, including media and broadcasting income, rental income, tenant recoveries, and management fee income, experienced a significant uptick, mainly driven by the acquisition of Telemedia and property assets. Investment income also saw a healthy increase of 34.7%. However, a trading statement for the six months ending 31st December 2023 forecasted a substantial 62.2% decrease in HEPS. Unfortunately, neither its ordinary nor its "N" shares trade at levels sufficient to attract investor interest at this time.
JSE:RTO
by PDSnetSA
Our opinion on the current state of EXXExxaro (EXX) is a BEE coal company with interests in iron and heavy minerals, operating in Australia, America, and Europe. It is a significant provider of coal to Eskom's Medupi power station. The company aims to increase coal production from 48 million tons presently to about 60 million tons by 2022, although this plan might be revised due to the lower demand for coal on the global market. The price of export coal has declined from $100 per tonne at the end of 2018 to as little as $60 per tonne. Despite fluctuations in coal prices, Exxaro is a cash-generative operation, usually profitable depending on coal price movements. However, the long-term viability of the coal business is challenged by the shift towards renewable energy. Obtaining funding for new coal-fired power stations has become increasingly difficult as banks face pressure from environmental groups. On 9th April 2021, the company announced the sale of its interest in Exxaro Coal Central (Pty) Ltd and Leeuwpan Coal Mine operation. In its results for the year to 31st December 2023, Exxaro reported a 17% decrease in revenue and a 22% decrease in headline earnings per share (HEPS). The company attributed the decline in EBITDA to a 36% decrease in Coal EBITDA, despite a 16% increase in revenue contribution from its energy operations. The share price of Exxaro has been declining since the beginning of 2023. While the Ukraine conflict initially boosted the share price due to higher commodity prices, this effect has since dissipated. The company announced that, due to the lower price of coal, it was no longer economically viable to transport coal to port by truck, highlighting challenges with the inefficiency of the South African rail and port systems. Exxaro remains a volatile commodity play, currently experiencing a downward trend, but there are indications it may be bottoming out. However, ongoing shifts in the energy landscape and global market dynamics continue to pose challenges to the company's long-term prospects.
JSE:EXX
by PDSnetSA
Our opinion on the current state of AILAfrican Rainbow Capital (AIL) is a BEE investment company that was formed in 2015 and listed on the JSE in September 2017. Since it was formed, AIL has invested in more than forty listed and unlisted investments in a wide range of industries from telecommunications to mining, construction, energy, property, agriculture, insurance, asset management, and banking. ARC Investments is 44.4% effectively owned by African Rainbow Capital Proprietary Limited (ARC), which in turn is 100% owned by Ubuntu-Booth Investments Proprietary Limited (UBI). UBI effectively owns 51.2% of ARC Investments. AIL is thus owned through Ubuntu-Botha Investments by the Motsepe family through their trusts. In the South African context, it has a significant advantage in finding suitable companies in which to invest because it can offer them a solid, reliable BEE shareholder. AIL has benefited from an investment by Sanlam and owns a stake in the Sanlam subsidiary, Santam. The company acquired 100% of TymeDigital which has launched a digital bank in partnership with Pick 'n Pay. It offers digital banking, especially for those who cannot afford normal banking, via their phones, and had the distinction of being the only bank in South Africa not to charge transaction fees. It competes with other new banks in South Africa like Discovery Bank and Bank Zero. AIL has taken a hit on its investment in EOH (which may now be improving) but has done well in most other areas. Roughly half of the AIL portfolio is in what it describes as "early lifestyle stage businesses" such as Tymebank, Rain, and Kropz. These investments are seen as disruptive in their sectors, but will take time to mature. It also owns 7% of Afrimat having reduced its stake from 18.4%. If there is a criticism of this investment holding company, it must be its lack of focus. It appears to be invested in a very diverse range of industries without significant synergies or economies of scale. The need of most South African companies to have a stable BEE partner gives it an edge in finding and negotiating good deals, but its lack of focus may eventually become a problem. The share trades at a fraction of its intrinsic NAV. It was 59% of its NAV after falling about 25% in the last six months to 2023. The discount makes it good value and may result in "unbundling" some of that value into the hands of shareholders in due course. The directors have said that they will consider delisting from the JSE if the discount persists because the listing cannot be used to raise further capital at current share prices. On 21st November 2023, the company announced a rights issue to raise R742.35m. Shareholders will get 11.06579 new shares for every 100 shares that they hold at a 7.32% discount to the volume-weighted average price on 10th November 2023. In its results for the six months to 31st December 2023, the company reported intrinsic net asset value (NAV) up 12.9% to 1115c per share. The company said, "ARC Fund acquired investments amounting to R 632 million, as part of its strategy to support the existing investments where there are expansion plans and to grow financial services. These transactions included additional investments in Rain, Tyme Global, and Kropz. The ARC Fund’s net fair value gains amounted to R784 million. The main driver in these gains is an increase from the Financial Services portfolio." The share still trades for much less than half its net asset value (NAV). Technically, the share has been falling since March 2023. We recommend applying a 200-day moving average and waiting for a clear upside break before investigating further.
JSE:AIL
by PDSnetSA
Standard Bank just made a huge signal to SELL to R150Standard Bank has formed an M Formation. The nature of the analysis is down and is a sell as it's broken below the neckline and the price is below both the 20 and 200MA> So it looks like the next target is R150.00. FUNDAMENTALS Fundamentals also came out today and yesterday which could influence the price and the large candle today. Standard Bank Group Says FY Headline Earnings Per Ordinary Share At 2590.4 Cents Standard Bank posted a 27% in annual profit. And there was an appointment of a non-executive director
JSE:SBKShort
by Timonrosso
Our opinion on the current state of SFNSasfin (SFN) is a banking group specializing in various finance services for small businesses and high net-worth individuals. Despite being listed on the JSE since 1987, the company has faced challenges, including a downward trend in its share price. Investors were advised to await a measurable turn in the price, such as an upside break through its long-term trendline, before further investigation. On 16th October 2023, Sasfin announced its decision to dispose of its capital equipment finance and commercial property finance businesses to African Bank Limited, causing a sharp rise in the share price. However, the impact of COVID-19 has hindered the share's recovery. In its results for the year ending 30th June 2023, Sasfin reported a 7.31% increase in total income but a 19.42% decline in headline earnings per share (HEPS). The net asset value (NAV) rose by 4.49% to 5122c per share. Total costs were affected primarily by increased costs within the Business and Commercial Banking pillar, as well as expenses related to an investigation into financial misconduct by former employees. Furthermore, on 27th February 2024, Sasfin received a civil summons from the South African Revenue Services (SARS) for a damages claim of R4.782bn plus interest and penalties, related to income tax, value-added tax (VAT), and penalties allegedly owed by former foreign exchange clients of the bank. Sasfin has a relatively small market capitalization of R484m and experiences thin trading volume, with an average daily turnover of about R55,000 worth of shares. These factors contribute to the risk associated with investing in Sasfin. Investors should carefully consider the company's financial performance, ongoing legal issues, and market conditions before making investment decisions regarding Sasfin.
JSE:SFN
by PDSnetSA
Our opinion on the current state of QFHQuantum (QFH) operates in the chicken industry with divisions focused on animal feeds, eggs and layers, broilers, and sales of related products in Africa. While the company faced challenges due to the Southern Africa drought, it has since benefited from improved conditions and lower feed costs, leading to higher egg prices. However, the chicken business is known for its challenges, including labor issues, working capital constraints, disease threats, and competition from imported chicken. Recent events, such as an unprotected strike and disease outbreaks, have affected Quantum's operations and financial performance. In its results for the year ending 30th September 2023, the company reported revenue growth of 15.5% but suffered a headline loss of 17.4c per share due to various challenges, including avian flu outbreaks. The risk of avian flu remains high, impacting the company's outlook for the financial year ending 30th September 2024. Quantum faces volatility in its business environment, making investment in the company subject to considerable risk. The company struggles to pass on increased raw material costs to consumers amid the current economic climate. From a technical perspective, the share price has been on a sideways to downward trend since August 2020, with this pattern expected to persist. A recent sale of a significant portion of shares by Astral Foods sparked a jump in Quantum's share price amid speculation of a potential takeover. However, Country Bird Holdings (CBH) subsequently indicated that it had no intention of making a takeover bid, adding further uncertainty to the company's future. Investors should carefully consider these factors before investing in Quantum.
JSE:QFH
by PDSnetSA
Our opinion on the current state of EOHEnterprise Outsourcing Holdings (EOH) was Africa's largest information technology company with involvement in almost every aspect of computer applications. At one point, the company had 11,000 staff members, but that has now been reduced to 6,151. Until August 2015, the company was the darling of the JSE because it had a long track record of steadily improving profits. It made a peak of R178 per share at a P:E of 35. An unsuccessful attempt to exceed that high (i.e., a double top) came a year later in September 2016, and since then, the share has fallen steadily to reach a low of 146c in February 2023. This fall was initially accompanied by allegations that the company was involved in and owed its success to state capture in collaboration with the Guptas. The CEO and founder, Asher Bohbot, resigned in May of 2017 and handed over to Zunaid Mayet, who has now handed over to Stephen van Coller. Usually, when a company is run by a strong charismatic leader and that leader (like Bohbot) resigns, it is time to sell the share. The company's 200 subsidiaries have been consolidated into three divisions with centralized debt collection and procurement. On 6th July 2021, Business Day reported that EOH could possibly be "blacklisted" by the government as a result of its past tender frauds. This would obviously be very negative for the company. On 11th November 2022, the company announced a R500m rights issue and a R100m private placement mainly to reduce debt and on 13th February 2023, it announced that the offer had been 135.8% over-subscribed. In its results for the year to 31st July 2023, the company reported revenue from continuing operations up 3.3% and a headline loss of 19c per share compared with a loss of 45c in the previous period. The company said, "EOH generated an operating profit from continuing operations of R135 million for the year ended 31 July 2023 ("FY2023") following an operating profit from continuing operations of R100 million for the year ended 31 July 2022 ("FY2022"), an increase of 35%." In an update on the six months to 31st January 2024, the company reported, "EOH has managed to maintain stable gross margins as previously reported in FY2023, illustrating the continued commitment from our customers. The Group Debtors' days remained constant and net cash balance is stable at R232 million on 29 January 2024." The company's interest bill is expected to fall following the R600m capital raise. In a trading statement for the six months to 31st January 2024, the company estimated that revenue would increase by between 5% and 7%. The company is expected to make a headline loss of between 10c and 12c per share compared with a 17c loss in the previous period. The company said, "The core Digital Enablement business, including International, has seen good revenue growth, however, this has been offset by reductions in other areas, particularly in the Operational Technologies division which has been negatively impacted by delays in closing Public Sector contracts and contracting delays with large mining customers." Technically, the share is still falling as investors wait for the company to reduce debt and reinvent itself. To us, it looks like the EOH share is consolidating at lower levels. It may be close to its worst point, but it remains risky.
JSE:EOH
by PDSnetSA
Write off Kibo Energy off your time wastersThese are the type of stocks that I don't even give one breath of a time to see. Yes I'm doing that now, but the thing is there are MANY traders who think these are the stocks they can buy at 1 cent and hold to 4c - 400% return and this can lead to one of three ways. 1. You hold forever 2. You strike lucky and it actually does go there 3. It goes to 0 and gets liquidated and you lose your money But as traders, these are time wasters. There is no liquidity, no volume, there is no action. I can't analyse this type of stock and this is purely for the savvy Penny Stock INvestors who have read the fundamentals, share ratios and have seen the proespects for a POTENTIAL future for the stock. Other than that for traders - I leave it alone.
JSE:KBOLong
by Timonrosso
Murray and Roberts big curve pointing up to R4.75?I always feel hesitant making big predictions for Penny Stocks. Especially after they've been through hell and more hell. Well, all I can say is there seems to be some stability around the lows of 49 cents, where the demand and buying keeps pushing the price back up. So if we get a break above the brim of the cup, we could see this market rally to R4.75. There does need to be stronger volume coming in to ignite this stock. ABOUT THE COMPANY Established in 1902: Murray & Roberts has over a century-long history, initially starting as a house builder in the Cape Colony. Global Presence: Today, the company is recognized as a multinational project life cycle group with operations in Sub-Saharan Africa, Europe, Southeast Asia, and the Americas. They focus on resources, industrial, energy, water, and specialized infrastructure market sectors. Transformation and Growth: From 2000 to 2010, the company saw significant growth with its project order book increasing exponentially to R42 billion and revenues quadrupling to R32 billion, partly fueled by the 2010 FIFA World Cup infrastructure investments in South Africa. Operating Platforms: Murray & Roberts operates several platforms, including Power, Industrial & Water, and Mining, providing a wide range of services from feasibility studies to construction and maintenance. Major Projects: The company has been involved in high-profile projects, such as the Gautrain rapid rail link in South Africa and the Jumeira Palm Islands in Dubai. Acquisitions and Divestments: Over the years, Murray & Roberts has made strategic acquisitions like Cementation Africa in 2004 and Clough in 2013, and divested from segments like construction to focus on core areas. Recent Financials: As of 2023, they did not declare dividends for several years, reflecting a cautious financial strategy in response to market conditions.
JSE:MURLong
by Timonrosso
UPDATE: Target Reached Aspen R206.03 - Next target higherSymmetrical Triangle was a a text book trade. The previous trend was up. Price broke above the apex 3/4s in and the momentum continued up. We had further indicators of confirmation for upside to come. Price>20 Price>200 Target 1 R206.03 So what now? Well we can expect somewhat a consolidation, and a potential Cup and Handle to form. Then we have the next target above R221. It might be messy to buy now, but in good time it should present a great opportunity. I'll let you know.
JSE:APNLong
by Timonrosso
Our opinion on the current state of BATBrait (BAT) is an investment holding company that 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 GBP1.35bn to GBP0.35bn. The news of this capitulation saw Brait's share price drop by over 20%. Virgin Active, which constitutes 65% of the Brait portfolio, has been battling with the impact of COVID19. 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 six months to 30th September 2023, the company reported active membership up 10% and "Continued strong performance in HY24, with EBITDA growth of 24% to R1 billion (LTM EBITDA of R1.9 billion), driven by strong growth across all divisions except for the Mozambican business." The company's net asset value (NAV) fell 3% to 684c per share, and headline earnings per share was 1c compared with a loss of 32c in the previous period. In a pre-close trading update, the company said, "Revenue in the MillBake business continued to see inflationary price increases that were delivered during the period. ... Virgin Active South Africa increased its active membership base from 606k as at 30 September 2023 to 625k as at 29 February 2024... against the backdrop of a soft and competitive UK retail market, New Look had a reasonable Christmas Quarter." 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 been trending down and 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 GPLGrand Parade Investments (GPL) is an investment holding company with interests in the gaming industry. The company is a BEE company which was listed on the JSE in 2008. It decided to terminate its Dunkin' Doughnuts and Baskin Robbins franchises in February 2019 and Burger King in February 2020. It had sold its remaining 10% in the Spur Corporation back to Spur in June 2019. On 15th June 2022, the company announced that it had unbundled its 9.28% shareholding in Spur on the basis that shareholders in GPL received 1 Spur share for every 56 GPL shares that they held on Friday 10th June 2022 (the unbundling record date). In its results for the six months to 31st December 2022, the company reported revenue dropped to R3.8m from R8.4m in the previous period and headline earnings per share (HEPS) increased to 9.9c from the 4.8c in the previous period. The company said, "The performance was driven primarily by the continued improvement of the hospitality sector and the associated performance of the Group’s gaming investments coupled with a reduction in corporate head office costs over the period." On 20th October 2022, the share gave a strong on-balance volume (OBV) buy signal and it was rumored that it might be the subject of a takeover. On 25th October 2022, the company reported that GBM Liquidity, a private company, had bought a 27.88% stake in the company. That has now been increased further to 35.14%. Then on 11th November 2022, the company announced that Sun International had increased its holding to 10.56%. The share gave another strong OBV buy signal on 8th November 2022 at 330c. Clearly, something was going on. On 11th April 2023, the company announced that GBM Liquidity Corporation (a family trust of Greg Bortz) had obtained control with 53.65% of the company's issued capital. In a trading statement for the six months to 31st December 2023, the company estimated that HEPS would increase by between 11% and 31% compared with the previous year.
JSE:GPL
by PDSnetSA
Our opinion on the current state of HILHomechoice (HIL) is South Africa's largest home shopping retailer, operating through two divisions - retail and financial services. It offers a broad range of home appliances, clothing, fashion, footwear, and related products through a variety of showrooms and online. The share is very tightly held, with over 92% of issued shares held by the controlling shareholder, Richard Garrat, and his family. A planned issue of shares was shelved because conditions in the retail sector are depressed. This would have significantly improved the liquidity and tradability in the share, but it has been postponed until conditions are more favorable. In our view, the share is too thinly traded even for small private investors but could be a good investment if liquidity in the share is improved through an issue of shares. Homechoice has been rolling out brick-and-mortar stores and has five open with another twenty-five planned. These stores are bringing in new customers both for its retail offering and its micro-loans business. It has extended its offering to micro-loans, insurance products, and funeral cover, and this has become an important part of its business since it often sells on credit as well. In this tough economic environment, the company has had to increase its provisions for impairments on both its retail credit and micro-loans. The 27% growth of Fin Choice to 40% of group earnings indicates that the company might eventually become a financial services company with a retail sideline. The company mostly sells to women in the Living Standards Measure (LSM) categories from 4 to 8, and it has more than 870,000 active customers. It has been investing heavily in its digital offering to improve its online shopping experience. The company is seeing good growth in offering online loans to customers and is signing on 20,000 new customers per month. The company is rolling out "bright pink" container shops in the townships where clients can collect products that were ordered online or obtain a business loan. In its financials for the year to 31st December 2023, the company reported retail sales 23.6% down and headline earnings per share (HEPS) up 7.2%. Fintech, which contributes 92% of profits before group costs, had revenue up 30.5%. The company said, "HIL has delivered a strong set of results with exceptional growth from Weaver Fintech, contributing 92% of the group's operating profit." We feel it is a great pity that this share is so thinly traded.
JSE:HIL
by PDSnetSA
Our opinion on the current state of OMUOld Mutual (OMU) is a premium African financial services group that offers a broad spectrum of financial solutions to retail and corporate customers across key market segments in seventeen countries. Old Mutual's primary operations are in South Africa and the rest of Africa, and it has niche businesses in Latin America and Asia. This company is what is left after Quilter, Brightsphere and most of Nedbank were unbundled from the original Old Mutual Plc which was listed on the London Stock Exchange. Some estimates indicate that Old Mutual is about 30% below the company's embedded value. Currently, the company has about R1 trillion under management. A large part of its loss in the period was the R8bn write-down in its investment in Nedbank which is now recovering. The company unbundled 62m Nedbank shares into the hands of shareholders worth about R10.4bn in the ratio of 1.32 Nedbank shares for every one hundred Old Mutual shares held. Obviously, insurers like OMU are vulnerable to the impact of the pandemic and the company announced a R2bn increase in its provisions in this regard. In its financials for the six months to 30th June 2023, the company reported headline earnings per share (HEPS) down 8% and group equity value (net asset value) up 3% at 1880.6c per share. The value of new business rose by 2.6% and gross written premiums increased by 16%. The company said, "Sales grew by 14% across our segments driven by improved productivity levels, which contributed to strong growth in the value of new business." In a voluntary update for the 3 months to 30th September 2023, the company reported Life APE sales up 4% and loan and advances up 2%. Gross written premiums increased 15%. The company said, "Excluding China, Life APE sales recorded strong growth of 13% from the nine months ended 30 September 2022 (the "prior period")." In a trading statement for the year to 31st December 2023, the company estimated that adjusted HEPS would rise by between 14% and 34%. The company said, "Old Mutual recorded robust results from operations ("RFO") growth due to strong operational performance underpinned by exceptional growth in new business and value of new business as we continue to gain market share across our segments." On a PE of 10.08 and a dividend yield (DY) of 5.44%, we see this blue-chip share as relatively cheap now. Technically, the share has been falling since October 2021. Our advice was to wait for a clear break above the downward trendline - which came on 10th November 2022 at 1097c. Since then, the share has moved up to 1221c.
JSE:OMU
by PDSnetSA