Our opinion on the current state of BELL(BEL)Bell (BEL) is a manufacturer and distributor of heavy equipment, earth-moving equipment to the mining, construction, agriculture, and waste management industries. As such, it has been directly impacted by the slowdown in construction since 2008 and the collapse of the mining industry. Bell's articulated dump trucks are exported worldwide from South Africa and Germany. Bell also has dealerships for a number of other global manufacturers, giving it a product range of over 120 products. Roughly 60% of its business comes from outside South Africa. The company employs 3200 people, of whom 88,6% are in South Africa.
The CEO of Bell, Gary Bell, has indicated to *Business Day* that the company would consider delisting with 1A Bell making an offer to minorities (but he did not disclose at what price). Some of those minority shareholders are now saying that the board has a fiduciary duty to put the company up for sale to the highest bidder. On 18th February 2021, the company announced that a deal had been struck for 1A Bell to buy a further 31,4% of Bell, giving it a 70% stake at R10 per share—a 13% discount to the share price.
In its results for the six months to 30th June 2024, the company reported revenue up 6% and headline earnings per share (HEPS) down 6%. The company said, "Demand for ADTs in the USA remained surprisingly strong and despite high inventory levels across the entire industry, which made for a significantly more competitive environment, we were successful in improving our market share position over the period in this strategic market. Certain southern hemisphere markets for our ADT product, including South Africa and Zambia where demand is traditionally driven by mining, proved more resilient than the northern hemisphere market across Europe and the UK."
In a trading statement for the year to 31st December 2024, the company estimated that HEPS would fall by at least 40%. The company said, "The expected decrease in earnings for the year ending 31 December 2024 is mainly due to these weaker conditions in most of the markets that the group is active in." The share trades over R3m worth of shares on average each day, making it suitable for a private investor.
There was an on-balance-volume (OBV) buy signal on 7th September 2023 at 1752c per share. Since then, the share has moved up to 4200c. On 15th July 2024, the company announced that the Bell family had made a firm offer to buy out the 30% of Bell which it did not own at R53 per share—which is an 82,3% premium to the 30-day volume-weighted average price (VWAP) of the price of 11th July 2024 (3100c). The offer was not accepted by a general meeting of shareholders held on 12th September 2024, causing the share price to fall heavily. Since then, it has been drifting down.
On 23rd October 2024, Bell announced a restructuring plan aimed at consolidating operations and reducing costs in underperforming segments, particularly in the northern hemisphere markets. While management remains optimistic about maintaining a foothold in key markets, the overall market conditions have presented significant challenges, causing some hesitation among investors.
