Challenge to cement future pricing power - Financial Mail Investors Monthly
The promise of a quickly growing international business was, until September last year, propping up PPC’s shares despite a weak South African market. But the stock’s gains were whittled away during a four-month boardroom drama, which was finally resolved in late January after the board was reconstituted at the company’s AGM, and new CEO Darryll Castle was given a vote of confidence by shareholders. In early February, the cement company’s shares were worth a third less than at a peak in September, prior to Ketso Gordhan’s acrimonious exit as CEO. With a new CEO and board now in place, the question to ask is whether or not the PPC share is a buy at these depressed levels. Victor Seanie comments.
Discovery to grow Vitality in the US with new partner - Business Day
Discovery has partnered with a major US life insurer to launch products developed on the Vitality model in April. The US insurer, which Discovery has not yet named, will launch a suite of products similar to those of Discovery Life in SA. The Discovery Life model offers lower premiums to customers with healthier behaviour. The insurer benefits from lower claims and improved mortality. Justin Floor comments.
Discovery vows to shake up life insurers - Business Day
Insurance group Discovery will use the bulk of a R5bn rights issue to grow its UK life insurance business in its bid to become the leader in a market it has vowed to shake up. CEO Adrian Gore said R3bn of the capital to be raised would be used in its UK VitalityLife business and as much as R2bn would be used to fund what he called “adjacent markets” in SA. Mr Gore would not be drawn on what this meant but said more information would be made available on March 10, when the details of the rights offer would be finalised. The funding would be for “an expansion of what we are doing in a slightly different space”, Mr Gore said of Discovery’s plans in SA. Justin Floor comments.
Imperial’s vehicle import unit stalls in half-year results - Business Day
Imperial Holdings performed to market expectations in deteriorating trading conditions in the six months to December, as the weaker rand depressed margins and affected competitiveness. Group revenue grew 9%, mainly on acquisitions, but operating profit fell by the same percentage in the period. This saw core earnings per share fall 14% in the year, even as cash flow from operating activities rose 73% to R1bn. Qaqambile Dwayi comments.
Nedbank African units boost profit - Business Day
Nedbank’s operations in the rest of Africa contributed almost 4% to full-year earnings, with the inclusion for the first time of its recently acquired stake in the West African Ecobank Transnational Incorporated. Headline earnings from the South African group’s rest of Africa operations rose from a low base of R8m in 2013 to an estimated R133m last year. Total headline earnings were R9.9bn. SA’s four largest banks — Nedbank, FirstRand, Standard and Barclays Africa Group — are all pursuing growth strategies in the rest of Africa as SA’s economy slows. Jihad Jhaveri comments.
Sun International may look to the East - Business Day
Gaming and leisure group Sun International could turn its attention to Asia after proposals to consolidate its Latin American units into a bigger entity. In its half-year to end-December results, the group said all key properties (barring Sun City) showed increased profits after cost cuts last year. Recently Sun International announced a merger of its Latin American casino operations with similar-sized Latin American casino operator Dreams. Dirk van Vlaanderen comments.
Aveng earnings fall as revenues drop - Business Day
Aveng saw revenues fall 14% as net operating earnings dropped 19% and headline earnings a share plunged 58% in the six months to December. Along with many of its JSElisted peers the construction and engineering group is feeling pressure from a decline in mining investment and the poor rollout of government infrastructure in SA. Rubin Renecke comments.
Clover holds lots of promise – Business Day
Clover Industries could boost its operating profits by about a third if it reaches a medium-term target to have 15% market share in custard and yoghurt. Dirk van Vlaanderen discusses our investment case for Clover.
China’s boom and boon for SA workers – Business Times
In December 2011, more than 6 000 workers at South African company, Kumba Iron Ore each received a pay-out of R576 045. They were being rewarded for the good fortune of being employed by a company that supplied commodities to the booming Chinese market. Gavin Wood comments on growth in China and the country’s role in the global commodities market.
Craft beer: Still in its infancy - Finweek
In South Africa, more than 50 microbreweries have found an opportunity in the shadow of market leader South African Breweries (SAB) to cater for a new market of beer drinkers, but compared to international counterparts, SA’s craft beer industry is still relatively untapped. Dirk van Vlaanderen comments.