| Friday 11 February 2022 Good morning Voornaam,
Barloworld has given an update for the quarter ended December 2021. With a 4.3% rally in the price, you know it was a goodie. The Equipment Southern Africa business has benefitted from strong coal, copper and oil prices. The Equipment Eurasia business has not been impacted by geopolitical tensions in the region and is generating record results in Russia. The car rental business is running at 81% utilisation (600bps ahead of the prior year). The group is disposing of its logistics businesses on a piecemeal basis. The balance sheet remains strong, which has been a feature of Barloworld's business throughout the pandemic.
Oceana's financial controls are smelling fishier by the day. With the CFO suspended, the latest update is that the auditors raised a new concern regarding the dating of signatures on an internal document pertaining to an insurance claim of USD4 million. It was recognised in the financial year ended September 20 21 and paid out in October 2021. The likely outcome is that the insurance will be recognised in the 2022 financial year, so 2021 will be restated. This is yet another delay to the provisional report and the finalisation of audited annual financial statements. Although the share price closed flat on the day, shareholders must be scratching their heads at this stage about what other gremlins might be waiting to spring out.
A censure has been imposed by the JSE on Ms Mbuso Khoza and Mr Telang Ntsasa, both former non-executive directors and members of the audit and risk committee of AYO Technology Solutions. This relates to the 2018 interim results which had so many errors that they did not comply with IFRS. Ms Khoza and Mr Ntsasa have received public censures from the JSE and have been disqualified from holding the office of a director of a listed company for at period of 5 years.
Transaction Capital's credit ratings have been upgraded one notch by GCR Ratings. This is across the company's national scale and international scale ratings, with the latter upgraded to B+ from B. This is a debt rating rather than an equity rating, so it talks to the strength of the balance sheet and cash flows rather than any kind of view on the share price at current levels.
Kaap Agri has given an update on performance during the first three months of the 2022 financial year. Revenue is up a whopping 24%, helped along strongly by inflation of 20%. If the fuel price inflation was excluded, that inflation number would be 7.7%. Total group fuel litres fell 4%, perhaps as consumers have cut back in response to higher prices. Recurring headline earnings for the quarter increased by 15.1% to R130.6 million. Despite this strong update, the price closed 0.83% lower on the day.
Specialised technology solutions company SilverBridge has a tiny market cap of less than R 36 million. In a trading statement, the company has given guidance for HEPS for the six months to December 2021 of between 8.20 and 9.44 cents, an increase of between 32% and 52%. The share price is extremely illiquid.
The Industrial REIT cash or scrip dividend election results are in. Holders of just 0.48% of shares in issue have elected to receive more shares in lieu of a dividend. The company will settle this scrip dividend using treasury shares.
Net 1 UEPS Technologies reported results for the quarter ended December 2021. Revenue decreased 4% year-on-year due to lower hardware and prepaid airtime sales. Although there is still an operating loss, it has improved by 38%. USD1.5 million was incurred in expenses related to the Connect Group acquisition, with more coming in the next quarter. For further context, the operating loss this quarter was USD9.4 million and the group has cash on hand of USD182.4 million.v>
PSV Holdings is still in business rescue and isn't making great progress to change that status. The shareholders, creditors and business rescue practitioners (BRPs) are battling with everything from the recapitalisation plan through to the fees payable to the BRPs. Without a recapitalisation of the company, liquidation is the likely outcome with no prospect of any payments to shareholders.
Today's feature articles are on ArcelorMittal's bumper year in 2021 and Italtile's interim earnings update, which reflects a significant slowdown in spend by South Africans on im proving their homes.
To finish off the week, we have the usual summaries by DealMakers of the corporate actions in the market.
Have a stunning weekend!
The Finance Ghost
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