News / Industry

Monday 16 - 20 October 2017

 

CORPORATE NEWS

Reinet said on Friday its net asset value dropped EUR424m to EUR5.4bn in the three months to end-September‚ mainly reflecting a drop in the value of its investment in British American Tobacco (BAT). The share price of BAT‚ which makes up two-thirds of the Reinet’s asset value‚ was down about 15% for the review period in pound terms. The drop in the share price was partly attributable to reports that US regulators could cut nicotine in cigarettes to non-addictive levels.

 

Opening 19 new stores‚ taking the total to 118‚ helped Dis-Chem Pharmacies grow interim revenue 14% to R9.95bn. After-tax profit jumped 37.4% to R409m for the H1 to end-August from the matching period in 2016‚ which was before the pharmacy chain listed on the JSE on November 18. Despite an 8% increase in its shares in issue following its IPO‚ Dis-Chem managed to grow its HEPS by 38.1% to 46.8c. Its first interim dividend as a listed company was set to 18.73035c/share. Retail turnover grew 15%.

 

Trematon Capital’s share price jumped 7% to R3 on Friday morning‚ after the owner of Club Mykonos Langebaan said it expected to report a 12-fold increase in HEPS. The investment holding group said it expected to report on November 20 that its HEPS for the year to end-August would grow to between 20.2c and 20.4c‚ from the matching period’s 1.7c. Basic EPS would be nearly six times the prior year’s 22.8c‚ and its net asset value per share would be more than 50% higher than the R2.55 in 2016.

 

Harmony Gold said on Thursday it had swooped on a set of AngloGold Ashanti gold and uranium assets in a USD300m deal that it could partially fund through a rights issue to grow its domestic output by a third and boost cash generation. The transaction will add 280‚000oz of gold output at an all-in sustaining cost of USD884/oz‚ well below the USD950/oz target Harmony set for its acquisition aspirations.

 

Lewis Stores said on Thursday it was acquiring the United Furniture Outlets chain for R320m. The furniture retailer said it would buy the 30-store chain for cash. United Furniture Outlets's net assets were R66.4m and its attributable profit was R21.9m for its financial year to end-February. Lewis said it would withhold R16m of the R320m agreed price until this net asset value had been confirmed.

 

Trading in Oando’s shares was halted on both the Lagos and Johannesburg stock exchanges on Thursday following an order by Nigeria’s SEC. Oando’s listing had been suspended “pending clarification following the review of subsequent correspondence received on October 18 from the Nigerian Stock Exchange and SEC”.  Oando said it would “provide a full statement of the company’s position as soon as possible”.

 

Quantum Foods shares surged as much as 18% on Thursday‚ after issuing a trading update stating they expected a much improved financial performance. The producer said it expected its HEPS in the year to September to rise by up to 85%‚ benefiting from lower input costs. Its shares were up 13.49% to R3.28 on the JSE‚ giving the company a market value of R7.29m.

 

BHP Billiton said on Wednesday that its shares fell 0.5% to AU$27.17 in Sydney after reporting lower production for all commodities except copper in Q1 of its financial year. Its shares closed 0.43% lower at R250.87 on the JSE on Tuesday. The miner reported copper production increased 14% to 404‚000 tons‚ metallurgical coal production was flat at 11m tons‚ energy coal production fell 2% to 7m tons‚ iron ore production fell 3% to 56m tons‚ and petroleum production fell 8% to 50m barrels.

 

African Bank said on Wednesday CEO Brian Riley intended to step down in five months’ time‚ and would probably be replaced by Basani Maluleke. Maluleke had been identified as a potential successor earlier in 2017 and she was appointed to the executive team in July‚ African Bank said.

 

South32 said on Tuesday its net cash position had grown USD33m to USD1.7bn for the quarter to end-September‚ after stronger commodity markets offset an increase in working capital. The miner said that industry cost curves‚ however‚ continued to steepen as a result of US dollar weakness‚ rising raw material input costs and environmental policy responses in China. South32’s share price was down 2.39% to R33.15. The company has gained 21.7% so far this year.

 

De Beers on Tuesday reported revenue of USD370m for the eighth of ten annual sales‚ down from the USD494m it realised at the same period a year earlier and well below the USD507m recorded in its seventh sale this year. The miner said cutting back the size of its offering because of reduced demand as a result of religious holidays in India and Israel‚ contributed to the drop.

 

Richemont said on Tuesday it expected H1 net profit to rise by more than two-thirds‚ partly benefiting from the nonrecurrence of exceptional items. It said it expected net profit for H1 to September to rise by 80%‚ as there were none of the inventory buybacks that hit earnings a year ago. Total sales rose for the period rose 10% on an actual currency basis. On a constant currency basis‚ total sales were up 12%.

 

Pick n Pay on Tuesday posted an impressive 15% growth in after-tax profit and raised its interim dividend by 12%. The grocery chain grew its pretax profit by 14.6% to R605.2m and its after-tax profit by 15% to R438.8m. It raised its interim dividend by 12% to 33.4c from 29.9c. Diluted HEPS grew 13% to 90.36c. The group’s overall interim revenue grew 5.5% to R40bn during the H1 of its financial year.

 

Board of MAS Real Estate announced on Tuesday that Morné Wilken would take over as CEO with effect from January 1, 2018. Wilken joined the board as a non-executive director in August 2014.

 

Impala Platinum said on Monday it had bought a minority stake for USD30m in the undeveloped Waterberg prospect owned by Canada’s Platinum Group Metals. The acquisition fits in with new CEO Nico Muller’s stated intention of looking for large‚ shallow resources to offset the risk of operating deep-level platinum mines. Implats will from now be closely involved in the definitive study of the Waterberg prospect and will then have 90 working days once the study is complete to decide whether it will take up a 50.01% stake in the project by buying a further 12.19% from Jogmec and investing $130m into developing a mine at Waterberg for a 22.18% stake in the project which Implats will manage.

 

Combined Motor Holdings said on Monday its share price jumped 9.4% to R29 after it raised its interim dividend by 11%. The group’s revenue for the six months to end-August declined 3% to R5.1bn‚ partly because it closed two dealerships. But after-tax profit jumped 33% to R96m thanks to 'stable net interest charges‚ and a reduced tax rate'‚ said the dealer. It declared an interim dividend of 61c‚ up from 55c in the year-earlier period.

 

Mediclinic International warned shareholders on Monday its interim earnings would fall about 10%. It said it expected to report on November 16 that its underlying EPS for the H1 to end-September would be about 11.5p‚ down from the matching period’s 12.8p. Its Southern African division grew revenue 4.1% to R7.6bn‚ with a 7.7% rise in revenue per bed offsetting a 3.3% decline in inpatient bed days.

 

PPC said on Monday the PIC had increased its shareholding in the company to 21.22% from 15%. PPC said it was mulling bids from several parties that were vying for its shares, including AfriSam which tabled an offer in September to buy R2bn of PPC ordinary shares at R5.75/share.

 

Astral Foods said on Monday it expected to report doubled earnings thanks to higher prices and no further bird flu outbreaks. Its share price rose 4.5% to R182.50 after it issued a trading statement saying it expected to report on November 20 that its HEPS for the year to end-September would be about twice the previous year’s R9.65.

 

Discovery said on Monday the Register of Banks had granted it a banking licence‚ putting it a little closer to its goal of establishing a retail bank by 2018. The granting of the licence to NewDisc Limited‚ shortly to be renamed Discovery Bank‚ was still subject to certain regulatory conditions‚ including shareholder and Competition Commission requirements.

 

Sibanye-Stillwater on Monday said it backed away from a decision to close up to 300‚000oz of annual platinum group metal production from its Rustenburg mines. It said it had saved unprofitable shafts through improved cost management.

 

Calgro M3 said on Monday it intended to split operations into three business units‚ each of which would have its own senior management. The integrated residential development business will be the first to undergo the transition and the other two divisions are real estate investments and memorial parks, said the housing developer.

 

ECONOMIC NEWS

Statistics showed on Wednesday that inflation‚ as measured by the annual change in the CPI‚ accelerated to 5.1% in September from 4.8% in August. This was worse than the economists’ consensus of 4.9%‚ but remained comfortably within the Reserve Bank’s target range of 3%-6%. Food inflation continued to moderate. Food and nonalcoholic prices rose 5.5% from a year earlier in September‚ after a 5.7% increase in August and a 6.8% rise in July.

 

Statistics showed on Wednesday that retail sector did better than expected in August‚ signaling stronger economic growth in Q3. Retail trade sales rose by a significant 5.5% y/y in August 2017. The highest annual growth rates were recorded for retailers in household furniture‚ appliances and equipment (90%); followed by all 'other' retailers (25.3%); and retailers in food‚ beverages and tobacco in specialised stores (5.7%).

 

Agri SA said on Wednesday it would release a land-ownership audit on November 1‚ after which it planned to launch a litigation fund to protect farmers’ property rights. The association said the fund needed to protect farming and SA’s agrarian industry. SA exports 40% of its annual produce‚ a large chunk of which goes to nearby African countries‚ according to Executive director Omri van Zyl. So far in 2017‚ agricultural produce has increased 22% on 2016’s figure.

 

Public Investment Corporation (PIC) said on Wednesday it would consider investing in state-owned enterprises such as SAA if they met its investment criteria. CEO Dan Matjila told Parliament the corporation was not closing the doors for SAA and would consider invest if the state-owned carrier implements its turnaround strategy and improved governance.

 

Transnet National Ports Authority said on Monday SA’s bulk export volumes fell by 7.3% y/y in September to 13.8m tons after a 7.2% drop in August to 11.7m tons‚ and surging by 34.5% in July to 15.6m tons. This brought the increase for the first nine months to 5.1% y/y‚ showing that mining and agricultural bulk exports are boosting the SA economy.

 

MD of the Banking Association of SA Cas Coovadia said on Monday Finance Minister Malusi Gigaba must rebuild confidence to put SA onto an inclusive growth path when he delivers the medium-term budget statement. Coovadia said Gigaba needed to prioritise working with the private sector to address ongoing failures of governance and management issues at state-owned enterprises.

SOURCE: BD PRO

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