| Monday 18 October 2021 Good morning Voornaam,
Mediclinic and Netcare dominated the top 100 leaderboard on Friday, with Mediclinic closing 11.4% higher and Netcare up 6.5%. This was driven by a half-year trading update by Mediclinic which is one of the feature stories this morning.
Advanced Health didn't have such happy news to share on SENS. The company announced that the reviewed headline loss for the year ended June 2021 of 2.1 cents per share was in fact a loss of 3.89 cents per share. In other words, the number reported on 27 August has subsequently changed due to adjustments on the sale of assets of the Advanced Vergelegen Surgical Centre and associated tax and lease liabilities.
This is a highly unusual situation, as the norm is to see a company issue a "no change statement" along with its AGM notice, which means that the reported number has not changed since it was announced. Accounting rules can be incredibly complex, so smaller caps in particular can have these unfortunate outcomes from time to time.
Nutritional Holdings renewed its cautionary announcement as the company is busy with negotiations for the potential injection of additional funding into the group. I'm not sure which brave souls might be looking to invest in this company, but I wish them luck.
Dipula Income Fund has announced the details of a capital restructure that is being implemented at the insistence of Resilient. There's a fresh raise of R1 billion for Dipula, with R404.5 million from Resilient in the form of a sale of property to Dipula in exchange for shares. The balance will be raised in cash from the market and is underwritten by Resilient. This means that if the full amount can't be raised, Resilient will put in the shortfall.
The planned restructure includes a repurchase of the Dipula A shares under a scheme of arrangement. This is an old-school property structure, with one class of shares that is dividend-focused and another class that participates in residual profits. The problem is that this can lead to highly illiquid shares, as volumes are split across two classes of shares. If the transaction goes ahead, this will be a major step forward for Dipula.
My other feature article today is on Karooooo, which long-standing readers of my work will know is a favourite of mine. I read the second quarter result and earnings transcript in det ail, so it's a meaty read for you this morning.
There's also the latest episode of Magic Markets, in which we discussed the supply chain challenges globally and what they mean for different types of companies. If you want to get up to speed with that issue, make time to listen to the show.
We also have the usual Monday feature from Chris Gilmour, which highlights the key political and macroeconomic news that is moving markets.
Have a great Monday!
The Finance Ghost
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