| Friday 15 October 2021 Good morning Voornaam,
For the past six months, Hulamin traded sideways. The share price started trading upwards on Monday before rocketing 42% by Wednesday. Yesterday, a cautionary announcement drove a further increase of nearly 27%. I sincerely hope that the JSE Market Surveillance department is having a good look at the trades early this week for evidence of insider trading.
The announcement itself was utterly boring - a bland cautionary with no details of the discussions that the company is having. My opinion is that details of the potential deal leaked earlier this week and Hulamin decided to put out a cautionary in response to the share price action.
Based on the IPO price for IHS Towers of USD21 per share, MTN has announced that it will hold a stake worth USD1.79bn after the listing. MTN has been one of the most exciting shares o n the JSE this year, with a year-to-date return of around 130%.
UK-incorporated and JSE-listed property fund Capital & Regional Plc fell more than 4% after announcing a debt restructure linked to four of its malls in the UK. This will include a capital raise of GBP30 million of fresh equity, which has been fully underwritten by Growthpoint.
South32 has entered into binding conditional agreements to acquire 45% in the Sierra Gorda copper mine in Chile. The initial payment is USD1.55 billion, with continent payments of up to USD500 million payable based on performance until 2025. The mine produces copper, molybdenum (no, I don't know what that is either), gold and silver. The initial payment is based 3.3x FY21 EBITDA.
Raubex has added more balloons to the construction industry party, with an updated trading statement and a higher expected range for HEPS than before. HEPS for the six months to August is now expected to be between 131.9 and 140.6 cents, which is 125% - 140% higher than even the 2019 comparable period (2020 was a loss). The share price is up around 55% year-to-date.
Steinhoff holds around 79% in the Pepco Group, a pan-European variety discount retailer. In the year ended September 2021, revenue in Pepco increased 19.4% and EBITDA is expected to be around 45% higher than last year. There's obviously a significant base effect here, but this does show that Steinhoff's underlying investments continue to perform well. Unfortunately, ongoing risks in the creditor settlement process and a deferral of the court date to January 2022 sent the share price down 14% on the day.
Coronation has indicated that earnings will be between 20% to 30% higher for the year ended September 2021. Assets under management (AUM) of R633 billion provide a reminder of how enormous Coronation is. Most boutique asset managers have between R3bn and R7bn in AUM.
After a significant reporting period for PSG which saw the exit of its stake in Capitec for R2.5bn, the NAV per share is R112.13 of which 11.3% is attributable to cash. The largest holding is PSG Konsult (39% of NAV) followed by Curro at 18%. Zeder contributed 10% of NAV, with ongoing discussions around a "value unlock" in that group.
Today's feature article is on Long4Life's interim results, which included a couple of bombshells related to the group. Make sure you read the article. We also have the usual content from DealMakers to finish off the week.
If you just can't wait for Monday, you'll find the latest episode of Magic Markets here. We discussed the supply chain challenge globally and the impact it is having on listed companies.
Have a terrific weekend!
The Finance Ghost
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