| Monday 22 November 2021 Good morning Voornaam,
KAP Industrial Holdings expects earnings for the six months to December 2021 to be at least 20% higher than the prior corresponding period. The PG Bison and Safripol polymers businesses seem to be doing well. Restonic bedding and Feltex automotive are dealing with supply chain challenges. Logistics division Unitrans performed well in most sectors with passenger transport as the drag on performance. HEPS for the six months to December 2021 is expected to be at least 24.7 cents.
Northam Platinum has completed its acquisition of 32.8% of the shares in Royal Bafokeng Platinum. The shares were bought from Royal Bafokeng Holdings at a fat premium to the traded price. This deal was partially settled in shares, which means Royal Bafokeng Holdings now owns 8.7% of Northam Platinum.
Brimstone Investment Corporation released its quarterly intrinsic net asset value (NAV) report. Like most investment holding companies on the JSE, Brimstone trades at a significant premium to what the directors believe the shares are worth. As at 30 September 2021 for example, the share traded at a discount of 52%, far worse than the discount at the end of 2017 of less than 30%.
Brimstone's fully diluted intrinsic NAV increased by 4.5% between December 2020 and September 2021. The two largest assets are a 54.2% stake in Sea Harvest and a 25% stake in Oceana, contributing a combined 77.5% of the portfolio based on value. Other significant exposures include investments in Equites, Phuthuma Nathi and Stadio. Brimstone's share price is up around 1.5% this year.
Crookes Brothers has a wide bid-offer spread and an even wider challenge in its income statement. For the six months to September 2021, the headline loss per share is expected to be between 46.2 and 56 .2 cents, a horrible result after positive HEPS of 151.1 cents in the prior period. The company attributes the negative swing to a decline in yields in the sugar cane and banana operations due to unfavourable weather. Primary agriculture is one of the toughest industries around.
Safari Investments is a REIT with an unusual portfolio of mainly Gauteng-based properties. These include malls and even a day hospital in Soweto. With vacancies of just 1.97% and a positive reversion rate of 1.9%, these metrics are among the best in the industry. The loan-to-value ratio is 39% and distributable income has increased by 31.3% in the six months ended September. A dividend of 25 cents per share has been declared, with the highly illiquid share price closing 2.9% lower on the day at R5 per share.
SANRAL has received a public censure from the JSE because its 2018 financial statements reflected a net loss of R260 million that was subse quently corrected to a net loss of R418 million. It certainly took the JSE long enough to finalise the censure. SANRAL has a debt listing on the exchange.
To kick off your week in the right way, today's feature articles are on Tiger Brands (a sorry state of affairs) and Pepkor (smiles all round). There's also a new Magic Markets episode in which we celebrated one year of the show by talking about US earnings in the latest q uarter and how inflation could affect certain industries.
Tomorrow is Tuesday, which means you could get Ghost Mail in your inbox at 6am if you are on the mailing list. Ghost Mail is my weekly letter in which I focus on sharing my thinking around investment concepts and strategies, with practical examples and a few laughs along the way. As the perfect accompaniment to reading InceConnect, you should sign up for it here.
Finally, be sure not to miss Chris Gilmour's overview of the week ahead. He touches on the key macroeconomic and political news that is moving markets.
Good luck for a new we ek!
The Finance Ghost
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