| Wednesday 23 March 2022 Good morning Voornaam,
Back in 2016, the South African Reserve Bank (SARB) took a 50% equity stake in African Bank as part of the latter's restructuring and curatorship process. The SARB has been trying to find a buyer for the stake but none of the interested parties have been suitable. Interestingly, the alternative is to list African Bank and allow the market to determine a price. It looks as though this business may be returning to the JSE!
Murray & Roberts rallied strongly after announcing that Australian subsidiary Clough is part of a consortium that has been selected as preferred tenderer to develop the Gowrie to Kagaru section of the Inland Rail project in Queensland, Australia. The total design and construction contract is worth AUD5 million of which around AUD1.5 billion is attributable to Clough. The irony isn't lost on me that a South African group w ill make money from upgrading Australian railways when our own infrastructure is in such dire need of repair. We have all the skills - we just don't have a government that wants to make it happen.
Sticking with the land down under, the Australian Government Takeovers Panel has received an application from the Head of Corporate Affairs at DRA Global Limited, the mining services company listed on the ASX and the JSE. This relates to a shareholder consortium that was put together in February 2022 to force a change of management. The application submits that the conduct of the consortium infringed the Australian Companies Act. The regulator will consider the matter and provide an update in due course.
The long-awaited ruling by the Takeover Special Committee regarding the Tongaat Hulett rights offer has finally been released. The complaints raised by the Artemis consortium regarding the exemption for Magister Investments Li mited from making a mandatory offer have been dismissed, although there is one technical matter that has been referred to the TRP for investigation. Tongaat will engage with the TRP on that investigation and remains committed to pursuing the rights offer.
Sirius Real Estate has proposed that the UK business be converted to a UK Real Estate Investment Trust (REIT). This move comes after the acquisition of BizSpace in the UK in November 2021. This is effectively a tax restructuring transaction and doesn't affect Sirius' current dividend policy of paying out 65% of annual funds from operations.
Zeder's unbundling of its 42.2% stake in Kaap Agri has received exchange control approval. The last date to trade for the unbundling is 29th March and brokerage accounts of the relevant shareholders will reflect the unbundled shares on 4th April.
Brimstone has updated its trading statement for the yea r ended December 2021 as the group has now received accounts from its associate Oceana Group. There's a good story here for Brimstone, with HEPS from continuing operations of between 234.9 and 237.1 cents, a monumental improvement vs. 2020's loss of 38.6 cents per share. Discontinued operations also turned positive after a significant loss in 2020. Results will be released on 29 March.
Gemfields has released a trading statement for the year ended December 2021. The result is a huge improvement, with net profit after tax of USD65 million after a horrible loss of USD93.2 million in 2020 and a profit of USD39.1 million in 2019. Over the three years, Gemfields is only USD10.9 million in the green. Both of the key operations achieved record-breaking auction results in 2021. HEPS of R0.70 means that yesterday's rally to R3.58 per share has taken the P/E multiple above 5x.
Kibo Energy has agreed to acquire the Victoria Falls S olar Park project in Zimbabwe from Broomfield International Limited. The deal is worth GBP10 million which Kibo will settle by issuing shares. The project is expected to deliver an equity internal rate of return (IRR) of 17.6% and Kibo is being granted first right of refusal to various other projects as part of the deal.
Workforce Holdings has released a trading statement that expects HEPS to be between 39.60 and 42.00 cents for the year ended December 2021. That's an increase of between 230% and 250% vs. the prior year. The share price is R1.51 so the P/E multiple is less than 4x. There is very little liquidity in the share.
Eastern Platinum has closed the sale of the Maroelabult resource property to Eland Platinum. R20 million was received by Eastern Platinum and the company will focus on restarting the Zandfontein underground at the Crocodile River Mine, a PGM and chrome tailings operation.
Nutritional Holdings will need to consolidate Nutritional Foods into the group results for the year ended February 2021. Your eyes are not deceiving you - those results are still outstanding. Nutritional Foods was in the process of being sold but the buyer couldn't secure funding, so Nutritional Holdings needs to take the reins of this business again. To add to the ongoing soap opera of this group, the Indiva Pharma deal is being unwound and the shares issued by Nutritional will be cancelled in due course. There are a number of steps needed before the suspension from trading will be listed, as the company needs to get its house in order and catch up all outstanding financial reporting.
Alphamin closed 5.6% higher yesterday after releasing drilling results. The SENS is indecipherable unless you are a geologist, but a couple of experts on Twitter put forward a view that the results are above global averages and Mpama North is looking far more lucr ative than Mpama South.
There are five articles to keep you very busy this morning. On the property side, I've written on Stor-Age's acquisition in the UK and Attacq's battle with office vacancies. In mining and resources, we finally have clarity on Thungela's maiden dividend - the lump of coal you wanted for Christmas! I've also written on Master Drilling's results (record revenue but no dividend) and Merafe's results (a spectacular year and plenty of dividends).
If you fancy something completely different, the latest episode of Magic Markets is a journey into the unknown. We welcomed Omid Gholamifar to the show, an exceptionally interesting investment professional who played football with Zlatan Ibrahimovic, sold a business to Spotify and now invests in Iran! There's just so much to learn from him. Listen to the show at this link.
That's all for another bumper edition of InceConnect!
The Finance Ghost
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