| Thursday 18 November 2021 Good morning Voornaam,
It's not every day that you see Spar and Woolworths as the two worst performers in the Top 100. Both retailers released disappointing updates yesterday, although I was surprised at just how severely the market dished out some punishment.
RFG Holdings, which many of you might know as Rhodes Food Group, released results for the year ended September. Revenue increased slightly (1.5%) and normalised operating profit margin expanded by 40 basis points. Headline earnings increased 1.4% and normalised headline earnings increased 18%. The adjustments in this number relate to impairments, acquisition costs and a fight with a municipality over a massive electricity bill (R39 million).
MTN will sell around 5,700 of its South African towers to IHS Towers and lease them back, comprising 4,000 greenfield and 1,700 rooftop sites. There is also a "power as a service" agreement for a further 7,100 third-party sites. MTN will unlock R6.4 billion in the process, which will be reinvested into strategic growth initiatives.
Reinet is a Johann Rupert company that was established in 2008 when Richemont was unbundled. The company has achieved 8.4% compound annual growth in euro terms since 2009. Reinet's largest investments are Pension Insurance Corporation Group (a leading provider in the UK pension risk transfer market) and British American Tobacco. In the six months to September 2021, the NAV per share unfortunately decreased by 11.2%.
Dipula Income Fund, a listed REIT, has increased its B-share distribution by 64.7% and its A-share distribution by 3.9%. There's a lot of commentary on Twitter currently about opportunistic plays in the REIT sector, with certain funds achieving significant returns for investors.
Safari Investments expects its distribution per share for the six months to September 2021 to be between 24 cents and 26 cents, an increase of between 41% and 53% compared to the prior period.
Investec Property Fund's distributable income per share for the six months to September is up 11.8% vs. the prior period, assisted greatly by a stabilisation of the South African business.
Brikor released its results for the six months to August 2021. Revenue increased 19.2% and HEPS swung from a loss of 0.2 cents to a profit of 1.1 cents per share. This is a small company with tight margins, evidenced by a need to highlight in the SENS announcement that one of the major capital investments was an eating area for employees!
Argent Industrial has released results for the six months ended September 2021. This company is doing really well at the moment, with HEPS doubling to 148.7 cents pe r share. No dividends were declared, as excess funds will be used for share buybacks.
Kaap Agri has released a cautionary announcement, noting that one of its subsidiaries is in negotiations for a potential acquisition. Naturally, we need to be patient for more details, as nothing is finalised at this stage.
As noted, the feature articles today include Spar's struggles in Poland and Woolworths' struggles in Australia. Tongaat was the real shock on the market yesterday, announcing a massively dilutive rights offer.
For those who haven't listened to it yet, I made a guest appearance on Talking with Traders, hosted by Garth Mackenzie. We talked about my portfolio style and sectors I like investing in, with some time allocated for a personal discussion about my journey over the past year as well. Listen to it here.
Good luck today!
The Finance Ghost
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