| Thursday 26 August 2021 Good morning Voornaam,
I can barely remember when last I went to a grocery store. These days, I order groceries online and pay a small fee that makes a world of sense to me. My time is a lot more valuable than the fee required for someone else to walk around a shop and bring a bag of groceries to me.
Massmart has taken a step towards reinventing itself by entering into negotiations with OneCart for a controlling stake. Going to Makro is a logistical nightmare on a good day, so any improvements to their online offer will help them in a fight against Takealot. The company hopes to finalise negotiations in the next few weeks.
The big question for me is: when and how will Spar properly respond to the on-demand grocery trend?
Dis-Chem has had a busy week. After releasing a trading update which I wrote about ye sterday, the controlling family reduced their stake significantly via a bookbuild. The Saltzman family raised R1.96bn through the process, so they won't be struggling to pay the rent anytime soon. This drops the stake in Dis-Chem to 45.2%. Assuming both the planned management retention scheme and B-BBEE tranche go ahead, the stake will drop to 31.4%. That's good news for liquidity and market perception of governance at the retailer.
Santam released an impressive trading statement noting that HEPS in the six months to June 2021 has improved by between 20% and 40% vs. the comparable period. In interim 2019, before the pandemic, HEPS was 990 cents. That's still higher than the current expected range of 796 to 928 cents.
Automotive group Motus jumped over 7% yesterday off the back of a trading statement covering the year to June 2021. HEPS should be between 1,149 and 1,208 cents, vastly higher than a catastrophic result la st year (thanks to lockdowns) and slightly higher than the 2019 result.
Telemasters Holdings is a tiny AltX company (market cap R70.7m) that has released a nasty trading statement. With revenue under pressure and issues around breach of contract by a major customer, the technology company has seen earnings swing by 350% in the wrong direction.
Advanced Health has almost made it back to the green this year, with last year's headline loss of 49.42 cents per share narrowing to a loss of between 1.68 and 2.52 cents per share in the year to June 2021.
Today's feature article is on attempted shareholder activism at Balwin Properties. It's a useful excuse to share my thoughts on the ingredients for successful activism.
Other stories include notes on DRDGOLD and Adcock's earnings results.
Before the next episode of Magic Markets is r eleased this week, make sure you are up to date by listening to Episode 39, in which we discussed the use of ETFs in our individual portfolios.
Have a great day in the markets!
The Finance Ghost
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