| Friday 08 October 2021 Good morning Voornaam,
Yesterday was a monster for platinum miners. Palladium climbed 5.8% and took major players with it. Northam even hit a 52-week high, with Implats, Royal Bafokeng and Amplats all posting gains of over 7%. In news beyond PGMs, Aspen recorded a notable drop of over 4%, with the share price running out of puff after a major run. It remains more than 54% up over 90 days.
In company news and in a victory for small businesses, Santam lost in court. Good and proper.
The Supreme Court of Appeal ruled in favour of Ma-Afrika, with the insurer needing to pay 18-months' worth of business interruption claims linked to Covid. This will impact a third of Santam's 3,200 notified claims. Payments of more than R2.1bn have been made to date, including relief payments of R1bn made in August 2020 ahead of th e legal proceedings to obtain "legal clarity" on the matter.
It seems as though Santam may have been expecting this outcome, with no change required to the R1.7bn net claims estimate that the company recognised at 30 June 2021.
PSG Group has released a trading statement noting that the net asset value (NAV) per share is expected to be between R109 and R111, an increase of around 50% over the past year and around 20% higher than in February. Like Zeder, PSG also doesn't recognise a deferred tax liability against each investment. Unlike Zeder, PSG isn't pushing a "value unlock" narrative with approaches for various portfolio companies.
PSG is trading at R76.50 per share, a discount to NAV per share of over 30%. Detailed results will be published on 14th October.
Luxe Holdings, the sad aftermath of Taste Group with a market cap of R23m and investments in jewellery bu sinesses like NWJ and Arthur Kaplan, expects a headline loss per share of between -34.8 and -14.4 cents. Group sales are 13% higher than in 2019, which hasn't been enough to take the group to a profit.
Calgro M3 expects HEPS of between 41.48 and 44.10 cents, a mammoth turnaround from a loss of 26.29 cents in the comparable period. Revenue growth of more than 40% in each business unit helped increase operating margin and reduce debt. The share price jumped 42.46% but just 0.1% of the market cap traded on the day, so it was on thin volumes.
Jasco Electronics needs to "stabilise" the balance sheet and is pursuing a rights offer of at least R50 million, partly underwritten by Community Investment Holdings. The market cap is only R89 million, so this is a massive equity issue for the group.
In light of Invicta's transaction to acquire Dartcom in a part-shares, part-cash deal, I've included the latest Magic Markets episode as a feature article. I normally wait until a Monday, but the show is a perfect complement to the Invicta story, as we discussed the theory behind using cash or shares to pay for deals. It's a lucky example of theory and practice playing out together.
There are also stories on Foschini's trading statement and Mondi's trading update on its latest quarterly performance.
DealMakers took a break this week, so your Friday is filled with my content instead of theirs! I hope you learnt a lot this week and had success in the markets.
The Finance Ghost
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