| Wednesday 16 March 2022 Good morning Voornaam,
Old Mutual has released results for the year ended December 2021. It's been a big year, with the unbundling of 12.2% in Nedbank in November 2021. Although gross flows in investment and wealth were positive, net client cash flows were just R0.1 billion due to Covid-related mortality claims. Value of new business grew sharply vs. 2020 and margins improved as well, now just below the medium-term target range. Return on net asset value increased from 3.8% to 9.0%, HEPS increased by 41% to 163.8 cents and the final dividend is 46% higher at 51 cents per share. This takes the full year dividend to 76 cents per share, a yield of around 5.8% on yesterday's closing price.
Homechoice International has released results for the year to December 2021. Revenue increased 4.8% despite retail sales decreasing by 4.8%. The explanation for this lies in the 73.8% jump in loan disbursements. Trading profit increased by 46%, a measure of profitability before impairments and staff restructuring costs. HEPS increased by 24% to 203.5 cents and a final dividend of 20 cents was declared. The share price closed 7% higher on tiny volumes - be careful of reading too much into share price movements in illiquid counters with low volumes and wide spreads.
ADvTECH has released a trading statement covering the year ended December 2021. HEPS will be between 30% and 35% higher than the prior year, coming in at between 119.1 and 123.7 cents per share. This puts the stock on a trailing Price/Earnings multiple of around 13.5x. Operating profit increased across the divisions and net financing costs as borrowings were reduced. Detailed results are expected on 28th March.
AfroCentric Investment Corporation has posted a 10% gain in revenue for the six months to December 2021. This has only transl ated into a 1.3% increase in profit after tax and a 3.2% increase in HEPS to 26.86 cents. The interim dividend of 17 cents per share is identical to the comparable period. The share price closed 3.8% higher at R4.88.
I don't usually focus on director changes at listed companies unless they are particularly important, but Laurie Dippenaar stepping down from the Rand Merchant Investment Holdings board is one such change. He is the last of the founders of the iconic RMI group to leave the board and has timed his departure based on the announcements to unbundle the holdings in Discovery and Momentum Metropolitan.
Onelogix has renewed its cautionary announcement related to a potential delisting of the company with a cash offer of R3.30 per share. The share is trading at around R2.93, so there is some fat on the bones (around 12.6% in this case) to take into account the risk of an offer never being made as well as the tim e value of money linked to implementation.
Zeder received unanimous support at its shareholder meeting for the disposal of The Logistics Group. Shareholders are clearly itching to get the value unlocking process finalised.
Nutritional Holdings continues its journey of releasing announcements that you probably won't see from anyone else. In this case, the company has worked backwards and realised that there were a large number of share transactions that should've been announced at the relevant times, but weren't. It's all very entertaining, primarily because I don't have any money tied up in that thing.
Over the past three months or so, Labat has issued shares for cash, raising approximately R6 million in the process. I have to guess that number, as the company only gives a price range in which the shares were issued (between 21 cents and 34 cents per share). This has increased shares in issue by less than 5% and the proceeds will be used to expand the cannabis healthcare business and provide working capital.
In today's feature articles, I look at Blue Label's extremely complicated deal to recapitalise Cell C, Famous Brands' voluntary operating update and Ascendis providing financial information on the businesses that are part of the proposed disposal to settle creditors.
In the latest episode of Magic Markets, Petri Redelinghuys of Herenya Capital Advisors joined us to discuss his market positioning during the Ukraine crisis, including some thinking around how it might unwind. Be sure to listen to the show here.
Finally, OrbVest has written on the US real estate market and the opportunities they offer to South African investors.
Have a productive day!
The Finance Ghost
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