Our opinion on the current state of LABAT(LAB)Labat (LAB) is a 57% black-owned investment holding company that listed on the JSE in 1999. The company buys and improves subsidiaries and then sells them for a profit.
At the moment, Labat has two operations - South African Micro-Electronic Systems (SAMES) and Labat Logistics.
On 14th April 2020, the company announced that it had acquired 70% of Biodata, an East London-based company that is focused on cannabis healing. The acquisition is to be paid for in shares. The market for cannabis in South Africa in 2020 was expected to be worth around R27bn.
On 5th May 2020, the company issued a profit forecast for the years 2021 and 2022 - in which it said it was raising R112m by the issue of shares and that it would generate a profit of R60m in 2021 and R162.3m in 2022, resulting in headline earnings per share (HEPS) of 10.9c and 29.9c respectively.
On 8th May 2020, the company announced that it had decided to put Force Fuel into business rescue because of a drop in volumes as a result of COVID-19.
In its results for the six months to 30th November 2023, the company reported revenue of R36.6m compared with R24m in the previous period. Headline earnings per share (HEPS) were 0.78c compared with a loss of 1c in the previous period.
The company said, "Group revenue for the year increased by 152% to R36.7 million (2022: R24.1 million) compared to the prior year. This increase was driven mainly by the 13 new retail wellness stores that were opened during the year."
In a trading statement for the six months to 30th November 2024, the company estimated that HEPS would increase by 98.72%.
The company's shares were suspended on the JSE in October 2023 and only commenced trading again on 2nd January 2025 with the publication of the interim results to 30th November 2024.
Even when trading, this is a volatile, often loss-making penny stock, so investors should probably leave it alone.
