| Tuesday 07 December 2021 Good morning Voornaam,
It's amazing how far KPMG has come since the various reputational nightmares a few years ago. FirstRand has announced that the firm has been appointed as joint auditor alongside Ernst & Young. Banks must have joint auditors and they need to rotate, so current auditors Deloitte and PricewaterhouseCoopers will rotate off in 2024 and 2026 respectively. Whilst it is a reality that there are only four big audit firms and the maths was in KPMG's favour, it's still good to see that the institution has managed to clean up its act.
Despite the best efforts of Transnet to hurt our mining exports, Thungela had a cash balance of R8 billion on 30 November and only needs R6 billion as a liquidity buffer. The share price closed 15% higher as investors digested the news of how much cash is embedded in this business.
Italtile's growth has slowed considerably due to the high base effect and the general easing of restrictions that has shifted consumer spending away from home improvement. Retail sales for the five months to November were up 3.1%, supply chain was flat and manufacturing sales were up 1%.
In a pre-close update, Grindrod flagged healthy growth in its ports and logistics businesses. R350 million in private equity debt was settled using the disposal of non-core assets. A further R100 million is expected by the end of the year.
Embattled sugar business Tongaat Hulett released a trading statement noting that the headline loss per share for the six months to September 2021 will between -197 and -179 cents. This is despite profit before tax growth of more than 20%. The effective tax rate for the period is an incredible 97% due to non-recognition of deferred tax assets for tax losses and the existence of other non-deduc tible losses. The share price is down nearly 42% this year after being one of the great recovery stories for a short period.
Onelogix, a small cap logistics company with a market cap of nearly R670 million, released a trading statement for the six months ended November. HEPS has collapsed from 10.1 cents to between -0.5 and 1.5 cents. The culprit is a hailstorm that damaged passenger vehicles at the Umlaas Road facility in September. Group insurance is only available for significant damage, with Onelogix responsible for minor damage.
In horrible timing, the company was processing large shipments of vehicles at the time. Damages net of insurance proceeds were between R20 million and R25 million. Other issues highlighted by Onelogix are the civil unrest and the global supply chain disruptions impacting the supply of vehicles. The balance sheet is fine, so this seems to be a once-off mess. The share price is incredibly illiquid w ith the bid at R1.01 and the offer at R2.61, so a share price drop of 1.96% on the day doesn't reflect the economics of this announcement.
Irongate Group will be included in the FTSE EPRA Nareit Global Developed Index with effect from 20th December. Being included in a global index is important for companies as it promotes liquidity and credibility with investors. Conversely, dropping out of an index is generally seen as bad news.
All conditions required for Nedbank's offer to its preference shareholders have been fulfilled. The shares will be suspended from trading on 14 December and shareholders will be paid on 20 December.
Around 8.8% of Stor-Age shareholders elected the dividend reinvestment programme. This helped the fund retain R21.6 million in cash. A cash dividend of R222 million was paid to other shareholders.
Labat Africa has announced a listing o n the Frankfurt Stock Exchange. Germany is pushing for legalisation of cannabis, so the country is hoped to be a friendly market to raise capital for these endeavours. This is certainly one of the more colourful companies on the JSE.
Premier Fishing and Brands has reminded shareholders that it is still in negotiations to dispose of a subsidiary. The company refers to the potential deal as the "Spanish Transaction" which gives a decent clue of what it might be up to.
Today's feature articles are on dealmaking between Sanlam and Alexander Forbes, an update from Fortress REIT on its property portfolio, retail REIT Hyprop's performance over the recent four months and Nampak's stunning turnaround in the year to September 2021.
If you are interested in forex services, also be sure to check out the Currency Assist update.
Finally, if you missed it yesterday , Ep 54 of Magic Markets is out in the wild. With my co-host Mohammed Nalla, we discussed how the latest variant of Covid widens the gap between the haves and have-nots. We also touched on other impacts in various sectors.
Happy Tuesday!
The Finance Ghost
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Local and Offshore Market News |
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