Libstar has released a trading statement and update for the year ended December 2021. The loss-making household and personal care businesses will be recognised as a discontinued operation, as Libstar has received an offer for these businesses. This excludes Glenmor Soap, which is not part of the deal. All intangible assets related to Glenmor (R59.8 million) have been impaired in this period and the business contributed less than 1% of group revenue and normalised EBITDA.
With that background out the way, Libstar's group diluted HEPS increased by between 3.2% and 13% and HEPS from continuing operations increased 16.3% to 21.3%. This demonstrates the extent to which the household and personal care businesses were dragging down the food operations.
Trellidor had an interim period that it will want to lock up behind a security door before throwing away the key. Revenue only increased 0.7%, impacted by the riots and the three-week metal strike in October, causing the manufacturing facility in Durban to be closed. The Trellidor segment increased revenue by 5.4%, which means the pain was felt in the Taylor segment (blinds and shutters) where revenue fell 6.4%, a trend in line with other listed companies selling home improvement and DIY products.
When combined with supply chain issues and rising input costs, HEPS for the six months to December 2021 fell by 17%. It gets worse before it gets better, as a Labour Appeal Court judgment requires Trellidor to reinstate 42 employees with back-pay from 2017. That's a R25 million impact, the nail in the coffin for the interim dividend which has not been declared. On the plus side, the group still achieved a solid return on invested capital in this period of 17%.
Metrofile released results for the six mo nths to December 2021. Revenue increased by 4% and EBITDA by 1%. There was some expansion in the equity value thanks to a 5% reduction in net debt. On the plus side, the dividend per share is up 29% even though HEPS is only up 1%.
Sephaku released an update on the performance of Sephaku Cement, in which it holds a 36% interest. The second half of 2021 saw a 15% decrease in volumes (thanks to a massive base and unplanned plant outages in this period), driving a 1% drop in volumes in 2021. The cement industry's application for a tariff on imported cement has stalled and annual imported cement volumes increased 7%, which didn't help. Despite the pressure on volumes, Sephaku Cement's revenue increased 7% thanks to selling price increases. EBITDA fell by 1.8% to R374 million. The story is different on an after-tax basis, with profit sharply increasing from R44.4 million in 2020 to R81.6 million in 2021.
South32 has notified the market that the sale of the Metalloys manganese alloy smelter will not proceed, as certain commercial conditions were not satisfied. The smelter is owned by a joint venture in which South32 has a 60% stake. Metalloys will remain on care and maintenance and future options will be assessed.
Alphamin has declared a maiden mineral resource on Mpama South, making it the second highest grade publicly reported tin mineral resource globally and one of the largest in terms of contained tin. Drilling continues on the site. The key here is that Alphamin already operates Mpama North which absorbs fixed costs, so this would bring the overall operation well down the cost curve. Alphamin also announced record fourth quarter EBITDA (USD74 million) and production, with a net cash position of USD68 million.
Deutsche Konsum, a specialist REIT on the JSE that buys neighbourhood shopping centres in Germany, has acquired another three pr operties for a total purchase price of EUR6.5 million. The average acquisition yield is 8.6%, the weighted average lease term is 4.3 years and the vacancy rate is 1.6%. This takes the total number of acquisitions in this financial year to 13 properties! The total portfolio now stands at 176 properties (including the latest acquisitions).
MAS is another European property player, operating in Central and Eastern Europe. With that kind of exposure, the share price has obviously been under selling pressure during the invasion of Ukraine. The tangible net asset value increased from EUR1.24 per share as at 30 June 2021 to EUR1.31 per share by 31 December 2021, a 5.6% increase over six months. Adjusted distributable earnings grew 5.3% year on year. The group managed to sell Western European assets at premiums to book value, a strategy which no doubt seemed like a good idea at the time. An interim distribution of 2.96 euro cents has been declared.
The final update on property relates to Redefine and EPP. The former's offer for the latter was accepted by holders of 90.79% of shares in EPP. This will take Redefine to a holding of 95.35% and EPP's listing will be terminated on 8th March.
EOH has started engaging with potential investors as it looks to raise R750 million as part of a plan to refinance R1.5 billion in debt. The company has made the roadshow presentation available to everyone. If you want to understand more about EOH, you'll find it
at this link.
Cognition Holdings announced a 1.6% decrease in revenue and a headline loss per share of 0.70 cents. The business is in a turnaround phase, so there is no interim dividend.
Good luck in the markets today!
The Finance Ghost
