News / Industry

Monday 21 - 25 August 2017

CORPORATE NEWS

Adcock Ingram reported on Friday that it had managed to turn its rest of Africa operations profitable‚ contributing to a tripling of after-tax profit in the year to end-June. The pharmaceutical group grew overall revenue by 7% to R5.96bn and after-tax profit was up 213% to R561m in the year to end-June. It declared a final dividend of 76c.

 

Northam Platinum said on Friday it recorded a strong operational performance during a year of hefty investment in growth‚ but a large preference share dividend payment plunged the group into a FY loss. The miner's operating profit for the year to end-June rose to R614m versus R383m in the previous year. Profit before the payment of the preference share dividend was R611m against R666m a year earlier.

 

Woolworths’ clothing division remained its biggest profit centre‚ despite flat sales and squeezed margins, the retail group showed on Thursday. Overall revenue for the 52 weeks to June 25 grew 3.7% to R69bn. While its food division contributed 40% of group revenue‚ its contribution to pretax profit was 36%. Its clothing and general merchandise division‚ meanwhile‚ contributed just 21% of revenue but 39% of pretax profit. The final dividend was maintained at R1.33.

 

Massmart on Thursday reported a 10.7% drop in H1 net profit to R337.1m‚ which it attributed to a tough macroeconomic situation putting pressure on consumer spending. The retailer also attributed the drop to a technical recession which it said dented the business and consumer confidence and the stronger rand which it said tempered  its performance‚ as it has a large footprint in sub-Saharan Africa and was hit by currency translations.

 

African Rainbow Capital said on Thursday it would list some of its assets on the main board of the JSE in September‚ raising about R4bn in the process. Through a vehicle called ARC Investments‚ it would list nearly half of its financial services interests‚ which would include stakes in retirement administrator Alexander Forbes‚ short-term insurer Santam and fledgling stock exchange A2X.

 

South32 on Thursday posted a dramatic return to profit for its 2017 financial year‚ as its operations benefited from higher commodity prices and cost controls. The miner increased funds allocated to the share buyback programme by 50% to $750m‚ reflecting the rude health of the company after a year in which net profit grew to $1.23bn by end-June from a $1.62bn loss before.

 

Bidcorp pulled off a 9.4% rise in FY HEPS to R11.81‚ despite a stronger rand, it said on Thursday. On a constant currency basis‚ HEPS rose 19% in the year to June. The company‚ which was spun out of industrial group Bidvest in 2016‚ declared a final dividend of R2.50. The share price was little changed at R309.13 in early trade on the JSE‚ valuing the company at R104bn. Group trading profit was up 6.9% to R5.5bn‚ but rose 16% on a currency-neutral basis. This was off total revenue of R130bn.

Shares in Workforce dropped almost 3% on Thursday‚ after reporting a 5.1% increase in HEPS for the H1 ended June. The company said ebitda increased 4.7% to R69m‚ while revenue during the period increased 14.5% to R1.4bn. The government’s employment tax incentive scheme had a substantial effect on the group’s results.

 

Tharisa secured an offtake agreement for a quarter of its annual chrome concentrate output for the next five years with one of its main Chinese customers, said the miner on Thursday. This came after it struck an agreement with Shanxi Taigang Wanbang Furnace Charge‚ to supply it with 240‚000 tons of metallurgical-grade chrome concentrate annually from September 2017. At steady state‚ Tharisa produces 1.3m tons of chrome concentrate.

 

OneLogix on Thursday reported a single-digit growth in trading profit as once-off retrenchment costs tempered its performance. Trading profit was up 7% to R161.3m in the year to June‚ after incurring R4.4m in retrenchment costs relating to its vehicle delivery services business. The company declared a final dividend of 5c. No dividend was declared in the previous comparable period.

 

Share price of Astral Foods fell 4% to R148.16 on Thursday after it warned shareholders that outbreaks of bird flu at two of its poultry breeding farms had cost it about R50m. It said despite efforts to limit the outbreak of bird flu to the single shed in Welbedacht it was initially discovered in‚ it had spread to other sheds on the farm.

 

Blue Label Telecoms reported on Thursday that it had sufficient cash to pay its shareholders a 40c dividend, despite the R5.5bn it is paying for 45% of Cell C. It said revenue for the year to end-May remained flat at R26bn, while aftertax profit grew 12% to R821m. The company raised its dividend by 11% from the prior year’s 36c. It said the reason its revenue did not grow was mainly due to the way it accounts for a consumer shift in mobile airtime prepaid purchases to “PINless top-ups”.

 

Naspers’s share price hit R3‚000/share on Wednesday‚ trading at a PE ratio of 115. It was up 48% for the year so far. It crossed R2‚000 on December 29 2016. Naspers started the day at R2‚935.35‚ and soon picked up despite weather-suspended trade on the Hang Seng in Hong Kong where its 33%-held Chinese subsidiary Tencent is listed. At 3.05pm Naspers was at R2‚997.80‚ 2.44% higher from the opening.

 

Long4Life gained almost 2% on Wednesday after announcing its third potential acquisition‚ Gauteng-based Inhle Beverages. Long4Life was offering a cash and share deal‚ valued to R360m. The investment holding company said the purchase consideration was based on a six-times multiple of Inhle’s forecast of earnings before interest‚ tax and depreciation for the 2018 financial year of R60m. Approval for the deal is expected to be secured by October 31.

 

Grindrod said on Wednesday it was looking to list its shipping business separately to unlock its potential value. Transport and logistics group said the decision to proceed with the listing will be known before the end of the year.

 

Sea Harvest tripled its H1 headline earnings as a result of the improved performance in its SA operations, said the company on Wednesday. The fishing group said headline earnings rose 217% to R111m from R35m in the six months to June from a year ago. The jump in earnings came as a result of investments in both fleet and land-based operations and strong global demand for Cape hake.

 

Share price of Tradehold jumped 7% to R18 on Wednesday after it announced a plan to move assets into a dormant AltX-listing called VestIn. The proposed split of R289bn market cap Steinhoff created less reaction than R4.3bn market cap Tradehold‚ with the retail group’s share price rising just 2.5%.

 

BHP Billiton increased HEPS to 107c for the year to end-June from a negative 16.3c in the year-earlier period‚ the group said on Tuesday. Attributable profit came in at $5.9bn and underlying ebitda were $20.3bn with an underlying ebitda margin of 55%. The group reported net operating cash flow of $16.8bn and free cash flow of $12.6bn‚ underpinned by higher commodity prices‚ a strong operating performance and improved capital productivity. A final dividend of 43c was declared.

 

Impala Platinum on Tuesday warned of a steep drop into a FY loss. The miner said it would report a basic loss per share of R10.30-R12.35 against a 10c loss a year earlier. It said it would record a headline loss per share for the year to end-June of 125c-150c versus HEPS of 12c a year earlier. The headline loss number excludes an impairment of a royalty prepayment.

 

Shoprite on Tuesday claimed in its results for the 52 weeks to July 2 that it was SA’s largest private sector employer.  Shoprite, which has a staff of 143‚802 people‚ said it added 6‚027 new positions during the reporting period as it grew to 2‚689 outlets in 15 countries. Over the period, total sales grew 8.4% to R141bn and aftertax profit 12% to R5.4bn. Shoprite declared a final dividend of R3.24.

 

Imperial on Tuesday reported a 10% drop in its FY HEPS‚ to R13.90‚ as foreign exchange hedging losses weighed. This came as the rand strengthened 11% to the dollar in the year to June‚ buoyed by favourable sentiment towards emerging markets. The eurozone accounted for 24% of Imperial’s operating profit. Group revenue was up 1% to R119.5bn and group operating profit edged up 2% to R6.53bn. The total dividend was 18% lower than a year ago‚ at R6.50.

 

Murray & Roberts announced on Tuesday that it was raising its ownership of the Gautrain from 33% to 50%‚ in a deal valued at R405m. The company said its partners had decided to divest from the Gautrain by each selling their remaining 8.5% of Bombela to M&R.

 

Afrimat’s share price rose 6.4% to R29.25 on Tuesday after announcing it is acquiring the 40% of iron ore miner Diro it does not already own. Afrimat completed its initial 60% acquisition of Diro for R276m in July. It said it had reached an agreement with Diro’s remaining shareholders to make it a wholly owned subsidiary.

 

Eastern Platinum said on Tuesday it had received a notice seeking the release of escrow and break-fee funds‚ related to the failed purchase of its Crocodile River mine by a Chinese entity. It said it had also received notice purporting to terminate the 2015 sale agreement‚ on the basis of breach or default.

 

Results showed on Tuesday that Group Five’s new board of directors booked R914m in losses from exceptional items in their first set of results since they were installed by fund manager Allan Gray in July. The accounting losses from exceptional items led Group Five to swing into a loss of R773m for the year to end-June‚ from an aftertax profit of R457m the prior year. Revenue fell 22% to R10.8bn.

 

Sasol reported on Monday that it grew its revenue measured in dollars by 6.4% to $12.7bn. But the rand strengthening over the year to end-June translated that into a 0.3% decline to R172.4bn measured in local currency. Sasol's HEPS decreased 15% to R35.15. The company said after-tax profit grew by 53% to $1.6bn‚ or 43% to R21.5bn in local currency.

 

AngloGold Ashanti on Monday posted a hefty interim loss, taking strain with local currency strength against the dollar. It said its SA mines weighed on the group as it began a process to shut two old mines and restore the region to sustainable profits. The gold miner reported a post-tax loss of $165m compared with a $61m profit a year earlier and an $80m profit at the end of its 2016 financial year.

 

Balwin Properties and Transcend announced an alliance on Monday to develop 8‚900 rental apartments worth about R6.4bn over the next six years. The companies said the venture would involve five projects in Gauteng. Balwin said it would be responsible for design and construction. It would also market and secure lease agreements for the apartments. Transcend would then have the opportunity to buy fully tenanted apartments in phases from Balwin.

ECONOMIC NEWS

 

Consumer inflation slowed much as expected in July‚ with the consumer price index rising 4.6% from a year earlier, Statistics SA’s data showedon Wednesday. That was slower than June’s 5.1% increase‚ and better than the expectations of 4.7%-4.8%‚ and meant inflation was within the Reserve Bank’s 3%-6% target band for the fourth month.  The data showed that food prices rose 6.8% from a year earlier in July‚ after a 7% increase in June. Fuel prices fell 3.6% compared with a year earlier‚ and 4.8% between June and July‚ while energy inflation was 2.1%. The CPI rose 0.3% in July from June.

 

The Reserve Bank’s composite leading business cycle indicator for June declined marginally‚ to 95.7 from 95.8 in May. The indicator‚ released on Tuesday‚ showed that a decrease in two of the nine components narrowly outweighed increases in the seven other components. The negative contributions were a decrease in the number of building plans passed‚ as well as a deceleration in the 12-month percentage change in job advertisement space.

SOURCE: BD PRO

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