Browsing: Equities

Innscor Africa Limited investment case

Post the Restructure, in January 2018, Probrands disposed of its dairy assets to a newly incorporated company, Prodairy, a dairy and dairy products processor.”

The company has a long history of brushes with the law.

In 2013 Innscor Africa Limited was fined US$ 60 million for not following the proper procedures in its acquisition of majority shareholding in National Foods Limited in 2013. The CTC, after conduction investigations on the transaction, found that Innscor acted against regulations when it purchased a majority interest in National Foods.

Innscor Africa Limited as in its most recent run-in with CTC did not notify them of their intention to acquire a majority stake in National Foods Limited which is a contravention of the Competition Act.…

Banking Industry in South Africa Primed for Growth in 2022 PWC
  • Banking industry in South Africa staged a strong come back in 2021 in report by PWC.
  • Banks enjoyed supportive credit conditions in the economy of South Africa.
  • Banking industry is widely seen as a proxy of the general economy in South Africa
  • South African economy has returned to pre-pandemic levels as evidenced by the financial performance of banks according to PWC

The banking industry in South Africa is in for good times according to a report by PWC. The banking industry sector analysis and report by the global management consulting firm published in March 2022 reports that the major South African banks delivered strong financial performance against what PWC described as “supportive conditions”.

The banking industry had combined headline earnings of ZAR 86.8 billion which represented a 99% increase from 2020 financial year levels. Banks had a combined return on equity (ROE) of 15.9% compared to 8.3% achieved in 2020, …

Padenga Holdings Limited A story of Gold and Crocodiles

Interestingly if the US$9 million which the company said it lost from the statutory surrender requirement is added back to the top-line revenue, it will take the company’s revenues for the 2021 financial year to just above US$ 24 million which would be higher than what it achieved in 2020. This policy position which the company lamented needs revision by the authorities as it is inflicting real financial harm to companies that are Zimbabwe’s biggest exporters and earners of foreign exchange.

In the 2021 financial year, Padenga Holdings Limited incurred higher interest expenses at US$ 10,138,637 which was up from US$ 6,665,084.00 the previous year. The increase in this cost category was due to leverage and borrowings which Padenga employed in rehabilitating the Eureka gold mine which is now in full production and is also responsible for the increase in group revenues.

The company enjoyed increased production from its gold …

Sasol Stable but not out of the woods

Sasol’s results presentation in February was an awkward affair. The session was pre-recorded and then aired on the company’s website.

It was not interactive. When the recording ended so did the webcast. Other corporate interactions and results announcements are usually interactive. The top executives of a company will meet in person with a group of individuals and the rest tune in online.

At the end of the session, the group of people in attendance are given the opportunity to speak to the executives of the company asking them questions and commenting on the financial results being presented. This was not the case with Sasol. But then again Sasol is not your typical company…

It left an impression that the top brass at the giant South African petrochemicals company does not like to take questions from stakeholders and analysts… Given that the company has just come out of severe financial distress …

The JSE has experienced a net decline in the listings on its main board as companies leave the bourse looking for alternative markets like private equity as sources of long term capital.

Listing activity on the Johannesburg Stock Exchange has been on the decline over the last 3 years. The largest and oldest bourse on the African continent reported in its financial results for 2021 that at least 25 companies de-listed from it during that year. In 2020 there were 20 companies that left the bourse and prior to that there were 24 de-listings. There were only 7 initial public offerings (IPOs) on the JSE in 2021 and only 4 in 2020. The net effect of these developments is that the number of companies listed on the JSE is shrinking. Its current state is a far cry from what it was like at its height in the nineties. At that …

africa investor

Other world markets followed suit documenting record lows across the board. On the Johannesburg Stock Exchange (JSE), Business Day reported that the worst losses around the same period were approximately ZAR3.3 trillion which was at that time around two-thirds of South Africa’s GDP.

“SA’s main stock index plunged almost 10% on Thursday (12th March 2020), the biggest drop since October 1997 when global markets were in the midst of the Asian financial crisis.” …