| Wednesday 13 April 2022 Good morning Voornaam,
Karooooo, the owner of Cartrack and one of my favourite growth plays in my portfolio, will release full year results on 27th April. In the meantime, the company has indicated that subscriber numbers for the year ended February 2022 increased by 17%. The rate of growth (the number of net subscriber additions) accelerated by 23%. The cost of acquiring a customer is high relative to the initial monthly payments under a new contract, so I don't expect profitability to tell a great story. I'm waiting to see what the story is in Asia, where the company has invested heavily in a growth team.
Afrimat has one of the best track records on the JSE for profit growth over the past decade, so any trading statement or earnings update from the company is always big news. HEPS for the year ended February 2022 is expected to be between 19% and 29% higher, coming in at between 526 cents and 570 cents. At the midpoint, this puts Afrimat on a P/E multiple of around 12.5x.
Platinum and chrome producer Tharisa has released a production report for the second quarter ended March 2022. Production was slightly lower than the previous quarter, which was a record quarter to be fair. On a half-year basis (i.e. the two quarters combined), PGM and chrome production increased by 22.2% and 6.3% respectively. The positive net cash position increased by $1.5 million to $25.9 million.
Italtile has been range-bound for ages (this means that the share price has been trading sideways rather than on a clear trajectory up or down). Over five years, the share is up nearly 37% in total, a compound annual growth rate (CAGR) of just 6.5%. Ex-CEO Jan Potgieter has sold around R8.5 million worth of shares. At the time of stepping down, news reports were that he was planning to emigrate to Europe. Thi s would explain a reduction of South African exposure. Still, investors should always keep an eye on sales by directors.
After keeping shareholders in suspense for an incredibly long time, Zeder has withdrawn its cautionary announcement. The company sold its holding in The Logistics Group and has unbundling its shareholding in Kaap Agri. For now, that's the only value unlock on the table, as other approaches for assets are too up-in-the-air to justify Zeder remaining under cautionary.
In a SENS announcement that weirdly committed several crimes against the English language, Renergen updated the market that the final commissioning of Phase 1 of the Virginia Gas Project is imminent. The company has promised to keep shareholders updated over the coming weeks. I just hope they remember to proofread their announcements amidst all this excitement!
Exemplar REITail Limited (that really is the na me) has almost no liquidity on the JSE. In the unlikely event that you are a shareholder, you would want to know that the distribution per share for the year ended February 2022 will be between 35.2% and 41.1% higher.
New Frontier Properties is currently suspended from trading because the backlog of outstanding financial reports would make even the worst municipalities in South Africa blush. The previous auditors resigned and publication of results has been delayed. The primary listing is on the Stock Exchange of Mauritius (SEM) which (bizarrely) requires quarterly reporting, so the company is behind on several releases. An extension has been granted by SEM until 30 June 2022 for the company to get its house in order, otherwise termination of the listing may be considered by SEM.
Another suspended company is Efora Energy, with business rescue proceedings at Afric Oil causing a delay to publication of the 2021 financial results. Efora sold its stake in Afric for R10 million and the new owner has appointed an auditor to complete the 2021 audit. Efora hopes that this will be concluded by the end of May, which will enable the company to finalise its own financials. In other news, Efora has settled with Encha Group to receive a further payment of R40 million. This takes the total amount recovered to R45.75 million out of R75 million that was owed excluding interest. Efora has been fighting for this amount since 2016.
Today's first feature article is on Capitec, which has released another fantastic result. Despite the enormous valuation, the share price just keeps going. Interestingly though, the share price has lagged the other major banks this year. Read about the latest results here.
The second feature article is on TWK Investments, a strong agriculture business listed on the Cape Town Stock Exchange. This is a perfect example of the types of gems you can find if you look a little deeper. Read about the record interim results here and be sure to register for Unlock the Stock this Thursday, where TWK Investments and Mpact Limited will be presenting their businesses and taking your questions.
Have a great day!
The Finance Ghost
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