PIC bulks up interest in cement-maker PPC

By staff Writer

Cement producer PPC said on Monday the Public Investment Corporation (PIC) had increased its shareholding in the company‚ which is currently mulling bids from several parties that are vying for its shares.

AfriSam‚ supported by Canada’s Fairfax Africa Investments‚ tabled an offer in September to buy R2bn of PPC ordinary shares at R5.75 a share. The offer includes a R4bn recapitalisation of AfriSam before any merger.

The PIC‚ which invests funds on behalf of state-owned entities‚ said it had increased its shareholding in the cement company to 21.22%‚ from 15%.

PIC also owns 66% of the unlisted AfriSam‚ which believes a merger would unlock value for shareholders of both companies.

At least two of PPC’s larger shareholders have publicly disapproved of the of AfriSam Fairfax proposal‚ arguing that it undervalued PPC.

Source:BDproDate: 2017/10/17

Sibanye changes its mind on Rustenburg closures that would have cut output by as much as 300‚000oz

By Alan Seccombe

Sibanye-Stillwater backed away from a decision to close up to 300‚000oz of annual platinum group metal (PGM) production from its Rustenburg mines‚ saying it had saved unprofitable shafts through improved cost management.

This is hardly the news that would cheer the platinum market‚ which needs a reduction in metal coming from SA‚ the world’s largest supplier.

It also indicates producers’ unwillingness to make serious production cuts to stimulate prices at a time when the outlook for platinum demand is volatile.

The palladium price‚ which has only three times in history been greater than that of platinum‚ has broken through $1‚000/oz‚ while platinum continued to languish at the $940/oz level.

Sibanye CEO Neal Froneman talked tough after taking ownership of the Rustenburg mines from Anglo American Platinum‚ telling the market that the company would not tolerate loss-making ounces in its platinum portfolio.

He also said the board had given the assets until the end of this year to improve or face selective suspension that could cut between 200‚000oz and 300‚000oz of PGM output a year.

However‚ on Monday Sibanye said its work at the mines had averted the closure of marginal shafts.

“Sibanye-Stillwater is now pleased to advise that as a result of the realisation of substantial synergies‚ post the successful integration of Rustenburg and Aquarius into the larger Sibanye-Stillwater group‚ the closure of these conventional business units has been averted‚” it said.

Instead of cutting output‚ Sibanye has revised upward its outlook for full-year PGM production for 2017 from its mines in SA and Zimbabwe.

“In addition‚ realisation of cost and operational synergies has exceeded expectations and has been significantly ahead of initial forecasts‚” it said‚ adding that it had in the first half of this year realised R550m of the R800m of annual savings it had identified when taking over the Rustenburg and Aquarius mines.

Sibanye has now set the annual cost savings target at R1bn.

“This is significantly earlier than the three-year period we had initially guided to‚ to realise these benefits‚” it said.

“While we anticipate further opportunities to reduce costs and unlock operational synergies over time‚ the South African PGM operations are now well positioned to benefit from firmer PGM prices‚” Froneman said.

Source:BDproDate: 2017/10/17

Impala Platinum takes stake in Canadian group’s Waterberg prospect in USD30m deal

By Alan Seccombe

Impala Platinum‚ the world’s second-largest producer of the metal‚ has bought a minority stake for $30m in the undeveloped Waterberg prospect owned by Canada’s Platinum Group Metals.

The acquisition fits in with new CEO Nico Muller’s stated intention of looking for large‚ shallow resources to offset the risk of operating deep-level platinum mines.

“We have made it a priority to increase Implats’s strategic optionality and this investment represents an important step to create the potential to develop a significant‚ lower-cost‚ lower-risk resource‚” Muller said in a statement.

Implats is buying the 15% stake in the Waterberg prospect on the Northern Limb of the Bushveld Igneous Complex for cash from Platinum Group Metals‚ which has just sold its only operating asset to Royal Bafokeng Platinum‚ and Japan Oil‚ Gas and Metals National Corporation (Jogmec)‚ with an agreement to take control of the project after a definitive feasibility study on it.

“Waterberg represents a large-scale platinum group metal resource with an attractive risk profile given its shallow nature. This facilitates fully mechanised production with the potential for the project to have among the lowest operating costs in the PGM (platinum group metals) sector‚” Implats said.

Implats will from now be closely involved in the definitive study of the Waterberg prospect and will then have 90 working days once the study is complete to decide whether it will take up a 50.01% stake in the project by buying a further 12.19% from Jogmec and investing $130m into developing a mine at Waterberg for a 22.18% stake in the project which Implats will manage.

Source:BDproDate: 2017/10/17

Discovery receives its banking licence

By Karl Gernetzky

The Register of Banks has granted Discovery a banking licence‚ putting the health and life insurance group a little closer to its goal of establishing a retail bank by 2018.

The granting of the licence to NewDisc Limited‚ shortly to be renamed Discovery Bank‚ was still subject to certain regulatory conditions‚ including shareholder and Competition Commission requirements‚ the company said in a statement.

“Discovery awaits the Competition Commission’s final response and is in the process of assessing the implications of the conditions. Shareholders will be informed of further developments and progress in the development of Discovery Bank Limited when appropriate‚” the statement read.

The company has said previously it would spend about R2.1bn to establish the bank‚ and had already begun investing in the necessary infrastructure.

Discovery had first received authorisation from the Registrar of Banks in October last year to establish a banking presence in SA. It was a number of companies at the time to receive such authorisation‚ the others including PostBank‚ and TYME - a local mobile payments start-up acquired by Commonwealth Bank of Australia in 2015.

At 1.10pm Discovery’s share price was up 0.26% to R143.18.

Source:BDproDate: 2017/10/16

Astral Foods share rises after trading statement predicts doubled earnings

By Robert Laing

Poultry producer Astral Foods expects to report doubled earnings thanks to higher prices and no further bird flu outbreaks.

Astral’s share price rose 4.5% to R182.50 after it issued a trading statement on Monday saying it expected to report on November 20 that its headline earnings per share (HEPS) for the year to end-September would be about twice the previous year’s R9.65.

Astral said it was raising its previous forecast issued on September 20‚ which said HEPS would grow more than 65%‚ thanks to “the fact that no further losses were incurred as a result of the outbreak of avian influenza for the remainder of the 2017 financial year”.

“The all-round trading results for the month of September were also significantly better than expected at the time of the trading update published‚” Astral said.

Source:BDproDate: 2017/10/16

Combined Motor Holdings shares surge on increased dividend‚ earnings leap

By Robert Laing

Vehicle dealer chain Combined Motor Holdings’ share price jumped 9.4% to R29 on Monday after it raised its interim dividend by 11%.

The group’s revenue for the six months to end-August declined 3% to R5.1bn‚ partly because it closed two dealerships.

But after-tax profit jumped 33% to R96m thanks to “stable net interest charges‚ and a reduced tax rate”‚ the results statement said.

It declared an interim dividend of 61c‚ up from 55c in the year-earlier period.

SA’s recent recession led national vehicle sales to decline 0.7% during the reporting period.

“Of further concern has been the considerable decline in the level of units sold in the luxury segment. A drop of some 18% this year followed a 15% decline in the previous year‚” CEO Jebb McIntosh said in the results statement.

“This is a clear indication that the middle and upper class consumers are feeling the effects of the sustained economic downturn‚ and that the financial investment in new vehicles has declined in excess of the fall in unit sales.”

McIntosh said the drop in new vehicle sales would have been worse than 0.7% if manufacturers had not cut prices while “higher demand and stock shortages have increased used vehicle prices”.

“A stable contribution from a 4.8% increase in used vehicle sales‚ and pleasing growth in the service departments provided welcome support.”

Source:BDproDate: 2017/10/16

Calgro shakes up its business portfolio

Housing developer Calgro M3 said on Monday it intended to split operations into three business units‚ each of which will have its own senior management.

The integrated residential development business will be the first to undergo the transition‚ led by group executive Manda Nkuhlu.

The other two divisions are real estate investments and memorial parks.

“The group remains firmly committed to achieving the goal of equal profit contribution from our three businesses‚” the company said in a statement.

Calgro said the integrated residential development business was also looking at the possible sale or exit of non-core strategic land parcels and projects.

For the six months to August‚ the company said headline earnings per share (HEPS) dropped 26.74% to 47.71c‚ even as revenue rose 40% to R1bn.

It said that the construction of rental units in partnership with SA Corporate and Afhco had affected financial performance.

The first 1‚372 units of the phase 1 project in partnership with SA Corporate and Afhco are nearing completion‚ with handover due before end of February 2018.

Source:BDproDate: 2017/10/16

Group Five receives unsolicited offer for its European unit from Greenbay

By Robert Laing

Group Five received an unsolicited R1.6bn offer from Greenbay Properties for its European division after the market closed on Friday‚ the construction group said in a statement on Monday morning.

JSE-listed Greenbay raised R4.5bn in an accelerated bookbuild on August 21. Group Five said the firm intention letter it received from Greenbay included confirmation that it had R1.6bn cash held in escrow by Webber Wentzel Attorneys.

Group Five said it appointed an independent board as required by the Companies Act. The independent board will proceed to select an independent expert to get advice on whether to accept Greenbay’s offer or not.

The construction group’s European assets include its highway toll road business‚ Intertoll Europe.

Monday’s statement followed an announcement on October 6 that Group Five’s new board — appointed at an exceptional general meeting called by institutional investor Allan Gray on July 25 — was developing a turnaround strategy.

“As previously disclosed‚ the board also confirms that it has received a number of expressions of interest from credible parties‚ and continues to receive new expressions of interest. These relate to various assets and businesses within the group‚” Group Five said on October 6.

Source:BDproDate: 2017/10/16

FirstRand weighs acquisition of UK bank Aldermore

FirstRand is considering a R19.4bn acquisition of Londonlisted lender Aldermore in a deal that would accelerate the banking group’s UK expansion and put surplus capital to work.

News of the potential transaction broke on Friday after a double-digit surge in the share price of Aldermore forced it to come clean about FirstRand’s approach. Aldermore, with its “unique operating model, market positioning and strength in deposit-taking would provide the ideal platform” for FirstRand to fulfil its expansion strategy on an “accelerated basis”, FirstRand said on Friday. It was still undertaking a due diligence. “There can be no certainty that any firm offer will be made,” it said.

Aldermore ended the week 18.6% higher at 303.5p — just shy of its record of 316p, and not far off FirstRand’s possible offer level of 313p per share, which would give the deal a value of about £1.1bn. FirstRand’s share price closed 1.89% weaker on Friday at R53.35.

FirstRand would, if the deal materialises, join a growing list of South African companies that have deployed capital in foreign markets as economic growth stagnates at home.

Further, financial services companies including FirstRand, Discovery and Rand Merchant Investment Holdings, have outgrown SA and would be blocked from doing large deals here by competition authorities.

FirstRand’s rationale behind the Aldermore deal is to clinch a deposit franchise in the UK to fund its expansion in that market more sustainably. It already owns vehicle and asset finance business MotoNovo.

Aldermore, established in 2009, is primarily a digital bank with no branch network.

At the end of June, it had a loan book of £8.1bn. This compares with FNB SA’s loan book of more than R500bn.

Aldermore’s customer deposits grew 10% in the six-month period to £7.3bn, while pretax profit increased 32%, to £78m.

Liam Hechter, an analyst at Anchor Capital, said on Friday an acquisition was likely to be earnings accretive in the short term. But there was more work to be done on the part of FirstRand to determine whether it was a long-term strategic fit.

Mike van Dulken, head of research at Accendo Markets, said that challenger banks, such as Aldermore, Virgin Money and Metro Bank, had struggled to compete with the likes of Barclays and HSBC. “The regulatory set-up becomes a hurdle for smaller players,” he said.

Source:Business DayDate: 2017/10/16

NGO firm to take on Lewis board

Active Shareholder, a company recently established by a group of nongovernmental organisations to actively manage the voting of their share portfolios, is taking a stand on corporate governance at Lewis Stores.

The company, which will focus on social and governance policies at JSE-listed companies, is voting against the re-election of several of Lewis’ long-standing directors at Tuesday’s annual general meeting.

It is also voting against the group’s remuneration policy.

Executive director Sahra Ryklief said Active’s mandate was to engage on behalf of its shareholding clients, with listed companies on their effect on society. “The Lewis holding was something of a legacy and was instrumental in our realisation that we had to become active.

“There may be a point at which it becomes impossible to hold the share — we shall see where we get to with Lewis,” said Ryklief. The NGO-aligned activist investor is voting in support of only four of the 14 resolutions put to Lewis shareholders. It is particularly concerned that the majority of Lewis’ directors have been on the board for 10 or more years. Daphne Motsepe and Adheera Bodasing, appointed in 2017, are the only new board members.

Active Shareholder is keen to see evidence of more independence in the audit committee, which comprises only longstanding directors, one of whom is a former Lewis CEO.

“You don’t need the backdrop of the KPMG debacle to realise the critical need for audit committee independence,” said Ryklief. It was voting against the reappointment of David Nurek as a director. “We are relieved he has stepped down as chairman but in the context of his appointment to head the audit committee, even on a temporary basis, we are concerned about his independence. He has been on the board since 2004,” Ryklief said.

Active Shareholder is also voting against Hilton Saven’s appointment as a member of the audit committee. Saven joined the board in 2004 and was chairman of the audit committee. He has swapped roles with Nurek. He is chairman of the board and is hoping to be elected a member of the audit committee, contrary to good corporate governance. Although described as an independent director, Saven has been on the Lewis board for 13 years.

Active Shareholder was voting against the remuneration report because there were insufficient details about the policy and the members of the remuneration committee.

Ryklief said the NGOs had decided to become engaged in the management of their portfolios because they were concerned about evidence of unacceptable corporate governance at JSE-listed companies.

Source:Business DayDate: 2017/10/16

Milpark deal beefs up Stadio portfolio

In its largest deal yet, and its first since listing, Stadio Holdings, the tertiary-education unit spun out of private-school group Curro, will acquire Milpark Education for R320m from international education group Apollo Global.

“The reasoning behind the acquisition of Milpark was to get hold of a faculty of commerce because [Milpark has] a series of lovely business-inclined qualifications,” Stadio CEO Chris van der Merwe said on Friday.

The acquisition would use half of the R640m that Stadio was likely to raise in a rights issue now under way, Van der Merwe said. The remainder would be used for further acquisitions and to pay off debt owed to Curro for the Embury Institute for Higher Education.

In terms of the deal, Stadio and its black economic empowerment partner, Brimstone, will acquire interests of 70% and 30%, respectively, in a new private company, Milpark Investments. Milpark Investments will acquire 100% of MBS Education, which owns Milpark.

“Our broad strategy is to accumulate product by buying several brands and once we have enough brands, we will then develop our first greenfield [operation], which we refer to as a multiversity, where one can actually have several brands on several sites close to each other,” Van der Merwe said.

Stadio, which listed on the JSE on October 3, owns Embury, film and performance school Afda and Southern Business School.

The acquisition takes its student numbers from 13,000 to about 30,000, making it about the same size as Stellenbosch University or the University of Cape Town.

“We are heading for interesting times in terms of growth in Stadio,” said Van der Merwe.

There is massive demand in SA for affordable higher education, which public universities have struggled to meet.

The National Development Plan targets an enrolment of 1.62-million students in higher education by 2030.

There were now about 1-million students in public universities and another 150,000 in other tertiary institutions, said Van der Merwe.

“There’s a [large] opportunity to grow in Stadio; especially if you make products affordable.”

Even in the tough economic environment, families would reprioritise their budgets to ensure they could buy an educational product, he said.

The Milpark deal was a “classic PSG acquisition policy”, where a new listing raises rights-issue money and “immediately afterwards spends it on a slew of acquisitions”, said Vunani Securities analyst Anthony Clark.

“Milpark I expect to be the first of a series of transactions to give Stadio critical mass and scale on the tertiary side.”

Existing operators already offered most of the accreditation courses Stadio intended to offer, Clark said. “There are probably only 10-12 transactions in the tertiary space that perhaps would be of interest to Stadio.”

Source:Business DayDate: 2017/10/16

A2X streaks ahead of rival market pioneers

Moyagabo Maake

Stock exchange newcomer A2X Markets (A2X) has outpaced slightly older rivals ZAR X and 4Africa Exchange in the market capitalisation stakes, listing firms worth a collective R40bn on its launch two weeks ago.

A2X has signed up fund manager Coronation, financial services group Peregrine and investment company African Rainbow Capital as secondary listings on the exchange.

“We have a nice pipeline of companies looking to secondary list on A2X,” says CEO Kevin Brady. “We are obviously unable to announce the names of these companies until they have formally applied and been approved.”

This has left ZAR X’s Senwes, Senwes Beleggings, and TWK Investments – which listed between November 2016 and June 2017, and are worth a collective R3.3bn — in the dust.

“TWK is the first of a series of listings we will be announcing in the next several weeks,” ZAR X CEO Etienne Nel said on TWK’s listing in June. “The other listings will cover different industry sectors, but TWK is significant for us in that it joins Senwes and SenwesBel, our first issuers, in demonstrating the value of agriculture as an asset class.”

The other listings have yet to materialise just over three months later. ZAR X had not responded to questions on this at the time of publication.

And the media-shy 4Africa Exchange’s NWK and NWK Holdings’s combined R725m, both listed in September, are a blip on A2X’s radar.

It is perhaps unfair to compare A2X with 4Africa and ZAR X. As Brady has previously said, the stock exchange is gunning for the JSE’s top 40 or 60 companies. “We have extended our target market to the top 100 largest companies listed on the JSE.”

Asked if those companies had expressed interest, Brady reiterated that A2X had a strong pipeline in place. In the week it has been trading, it has taken the JSE’s lunch. On Thursday, there were 139,000 trades in Peregrine shares on the A2X exchange, compared with 94,000 on the JSE.

JSE boss Nicky NewtonKing previously told Business Day she was confident the bourse could compete in any segment of its market.

However, it will lose revenue to newcomers.

“A2X is unlikely to get massive market share from the JSE,” says Simon Brown, founder of Just One Lap. “At [the] top end, I would think maybe 15% to 20%, but that will take years.... Bottom line is [A2X] will hurt JSE revenue.”

The main attraction to A2X seems to be its lower cost of trading, as it offers the same settlement window as the JSE. The costs of transacting on A2X are more than 40% lower than on the JSE.

“For every R1m transacted, a broker will save R400,000 by executing on A2X,” says Brady.

“While this may seem like a small number, in a market that trades R15bn to R20bn per day, it adds up quickly,” he says.

The savings are in the endto-end transaction costs on the exchange. A2X has identified five key pricing points on the JSE: a fee for members to connect, a transaction fee, a clearing fee, broker dealing accounting fees and live market data fees.

Brady says A2X only has two pricing points, which are transaction and clearing fees.

“We do not charge to connect or be a member and live market data is free for the first two years.... relative to fees on comparable global markets, SA remains a highcost destination.”

4AX and ZAR X obtained licences in August 2016.


Source:Business DayDate: 2017/10/16

MICROmega shares jump after sale of subsidiary

MICROmega’s share price jumped more than 13% on Friday to close at R11.20 after the investment holding group announced the sale of subsidiary Nosa for R750m to global asset manager The Carlyle Group.

Nosa provides occupational health, safety and environmental risk management services and solutions. Occupational health was enjoying above GDP growth, especially in emerging markets, Carlyle’s Sub-Saharan Africa Fund MD Eric Kump said.

Carlyle would tap into its global expertise to help Nosa grow its geographic footprint.

“Right now we are excited about China, but we might as well start closer to home … subSaharan Africa is a natural point of expansion,” Kump said.

He said that the occupational health and safety sector was particularly attractive across emerging markets as adoption and compliance rates align with developed countries.

Annually, Nosa educates and services more than 90,000 individual scholars and professionals, and more than 4,000 organisations to ensure a safe and compliant working environment in emerging markets around the world.

Nosa had grown substantially over the past 12 years from being an unprofitable operation at acquisition in 2005 to generating taxed profits of R68.8m for the financial year to March, MICROmega CEO Greg Morris said. “The investment by Carlyle will support the ongoing growth of Nosa whilst allowing us to realise value for our shareholders,” he said.

Morris also announced the appointment of Andy Fenn who will take over as CEO of Nosa once the deal is completed. Kump expects it to be concluded in the first quarter of 2018.

Morris said the group's strategy was to “pursue the best value for our shareholders”.

For some time now, the value of MICROmega’s underlying businesses had substantially exceeded its market capitalisation, the group said. “There is no indication that this will change in the foreseeable future and it is, therefore, incumbent on the board to look for opportunities to consider disposal if such sales can provide greater value to shareholders — by way of distributed dividends from the sale proceeds — than the prevailing price of the share,” it said.

MICROmega has a market cap of R1.2bn. Its other businesses are in information technology and software and water management technologies.

Source:Business DayDate: 2017/10/16

Strong returns for SA investors in UK

UK-based or exposed property stocks are providing strong returns for JSE investors despite the delayed Brexit process and uncertainty around it.

Industrial and logistics assets are enjoying good tenant demand, especially from companies involved in online shopping. South Africans can access numerous UK-based or exposed property companies.

Atlantic Leaf Properties, which invests only in the UK and in warehouses in secondary cities, and Equites Property Fund, which has exposure to top-end UK distribution centres, are performing well compared with other JSE-listed property funds. Atlantic Leaf’s share price is up about 10.6% year to date, while Equites’ share price has climbed nearly 33%.

Companies like Amazon and Wal-Mart need to store goods in high-quality distribution centres. More of these centres are being built in secondary cities outside London.

This is so that customers living across the UK can receive goods that they buy online more quickly.

Keillen Ndlovu, Stanlib’s head of listed property, said that UK property stocks could offer good value at current levels. Recent good performers were industrial and logistic stocks including LondonMetric, Shaftesbury and Segro, he said.

Outside of these industrial- focused property groups, South Africans can also invest in Covent Garden-owner Capital & Counties, retail tycoon Christo Wiese’s Tradehold, Redefine International, Intu Properties, New Frontier Properties, Capital & Regional and Stenprop.

One of the largest property stocks on the JSE, Hammerson, has managed to pull back some losses it made on its share price after the Brexit referendum in June 2016.

Year to date, the R75bn-sized owner of UK and West European shopping centres’ share price has fallen only 1.09%. Its share price closed 0.41% lower at R94.63 on Friday. Hammerson was trading at R89.30 a share on March 24.

Source:Business DayDate: 2017/10/16

Standard Bank's new vehicle finance chief begins catch-up mission

By David Furlonger

Standard Bank hopes to start making up lost ground among South African car buyers through its activities in sub-Saharan Africa‚ Simphiwe Nghona‚ its new head of vehicle and asset finance (VAF)‚ said on Thursday.

The bank used to be the main challenger to WesBank in providing vehicle finance to South Africans.

But loss of focus has seen it slip to a distant fourth place‚ behind WesBank‚ Absa and Nedbank. Nghona reckons it now clings to about 12% of the market.

It has negligible representation on vehicle dealership floors and‚ unlike the main competition‚ no finance joint ventures with major motor companies.

However‚ Nghona said most joint ventures were limited to SA and VAF had begun seeking partnerships elsewhere.

It had recently signed up with Ford Credit in Botswana‚ Namibia and Swaziland‚ and hoped to strike deals with other companies elsewhere.

VAF is operating in 14 countries as it tracks its Standard Bank parent’s progress across Africa.

“We intend to expand to more‚” said Nghona‚ who joined VAF after 19 years at market leader WesBank.

He said it was also talking partnerships with ride-hailing service Uber’s new East African operation‚ based in Nairobi.

In Kenya alone‚ Uber was receiving up to 2‚000 driver applications a month. Many of them would require finance assistance to buy cars.

The big prize‚ though‚ remained SA. “We are conscious of our past performance in this market‚” says Nghona.

“However‚ given that Standard Bank is such a big player in financial services‚ there is no reason we cannot compete and we believe we can position ourselves to do so. But it will require a lot of investment.”

Source:BDproDate: 2017/10/13

Record imports of iron ore by China boost Kumba and Assore on Friday

By Robert Laing

Iron ore miner Kumba rallied 6% to R249.60 and Assore 4% to R294.95‚ following the release of Chinese balance of trade data which showed record imports of the base metal.

Chinese imports grew 18.7% in September from the same month in 2016‚ far higher than an economists’ consensus of 13.5% from a poll by Trading Economics.

The data showed Chinese iron ore imports reached a record 102.8-million tons in September‚ 10.5% higher than the 93-million tons imported in September 2016.

The rally by iron ore miners also buoyed steel maker ArcelorMittal whose share price rose 4.2% to R5.43.

While China’s imports beat forecasts‚ its exports grew disappointing 8.1% vs the expected 8.8%.

The lower-than-expected export growth saw China’s trade surplus in September fall to $28.47bn from $40.94bn in the same month in 2016‚ and far below the expected $39.5bn.

Source:BDproDate: 2017/10/13

Super Group raises R500m in accelerated bookbuild

By Staff Writer

Transport and logistics group Super Group said on Friday that it had raised R500m‚ which would be channelled to funding several acquisitions.

Earlier in 2017‚ the company acquired the Slough Motor Company‚ which owns a network car dealerships in the UK‚ as well as Servicios Empres‚ based in Europe.

Super Group raised the funds by placing 12‚422‚360 of its ordinary shares at R40.25 per share‚ which represented a 3.2% discount to the closing price on Thursday.

The share price was off 3.18% to R40.24 in early afternoon trade on the JSE‚ valuing the company at R14.5bn.

Source:BDproDate: 2017/10/13

FirstRand could buy UK lender Aldermore — but no certainty of an offer

By Hanna Ziady

Banking group FirstRand could buy UK lender Aldermore‚ the companies said on Friday‚ responding to moves in Aldermore’s share price.

London Stock Exchange-listed Aldermore Group’s share price shot up 18.5% to a 52-week high in Friday afternoon trade.

Aldermore responded by issuing a statement disclosing that FirstRand had approached it about a possible offer for 100% of the group.

“FirstRand has been assessing opportunities to build a sustainable long-term deposit franchise to fund its strategy to grow and diversify the revenues of its current UK business‚” FirstRand said via the Stock Exchange News Service (Sens).

“The possible acquisition of Aldermore‚ with its unique operating model‚ market positioning and strength in deposit taking‚ would provide the ideal platform for FirstRand to fulfil this strategy on an accelerated basis.”

FirstRand has been actively pursuing funding possibilities for its UK vehicle and asset finance business‚ MotoNovo.

“The making of any firm offer would be subject to the satisfaction of a number of preconditions including‚ but not limited to‚ due diligence to the satisfaction of FirstRand‚ and the unanimous recommendation of the Board of Aldermore‚” FirstRand said.

“There can be no certainty that any firm offer will be made.”

In accordance with the UK takeover rules‚ FirstRand is required to make a public announcement on whether or not it planned to make a firm offer for Aldermore by November 10.

Source:BDproDate: 2017/10/13

Curro fledgling Stadio buys Milpark Business School in with Brimstone

By Robert Laing

Stadio is buying Milpark Business School for R320m in partnership with Brimstone‚ the recently listed tertiary education group announced on Friday.

Brimstone said it would pay R96m for a 30% stake in Milpark‚ to be settled from existing cash resources.

Stadio will pay R224m for its 70% of Milpark.

The group announced shortly after it was unbundled from Curro on October 3 that it intended raising R640m via a rights offer of 57 new shares for every 100 held at R2.50 each.

The stock was trading at R6.50 at 10.44am on Friday‚ down 0.76% from Thursday’s closing price.

Brimstone’s N shares gained 2.46% to R12.50 while its less liquid ordinary shares remained untraded at R13.

“Milpark’s flagship qualification‚ its Master of Business Administration degree (MBA)‚ has been ranked number one amongst private providers of the MBA in SA by for three consecutive years‚ from 2015 to 2017‚” Stadio said.

Milpark was established in 1997‚ making it one of the first institutions to gain registration from the Department of Higher Education and Training to offer management degrees.

It mainly offers distance education‚ with about 17‚000 registered students. It has campuses in Johannesburg and Cape Town‚ and a support office in Durban.

Source:BDproDate: 2017/10/13

Equites pays lavish dividend

Equites Property Fund, which is focused on high-end logistics assets, delivered double-digit growth in dividends for the six months to August, making it one of the top-performing listed real estate groups.

The company achieved a 12.02% increase in half-year dividends to August, one of the few double-digit income providers in 2017. It was also included in the FTSE/JSE South African Property Index (Sapy) for the first time.

Equites CEO Andrea Taverna-Turisan said the company, which has a market capitalisation of about R8.5bn, was well positioned as a specialist industrial fund and was only facing meaningful competition from one other listed group, the R63bn Fortress Income Fund.

“Our base portfolio is very strong and is spitting out good money. Our cost of capital is very attractive and we are effectively only competing with one group that owns similar assets and attracts similar tenants — Fortress Income Fund, which is also listed,” he said.

“We are able to have a crack at many major developments, especially while economic growth is weak and private industrial property groups have less liquidity and face challenges. Right now we are happy to compete with a solid operator like Fortress. We win some deals and we lose some deals to them,” he said.

Equites declared a half-year distribution of 60.98c per share, which was at the upper end of its guidance of 10% to 12%. Equites is the only specialist logistics property fund listed on the JSE.

Since listing in 2014, it has increased its portfolio of industrial and mainly logistics assets in SA and the UK from R1bn to R6.8bn. It is one of the top-performing real estate investment trusts (Reits) listed on the JSE, when measured by its annualised return of 28% over the past three years.

The company diversified into the UK by focusing on premium logistics distribution centres in key nodes, built to institutional specifications and let to investment-grade tenants on longdated upward-only leases.

Equites completed three acquisitions of logistics assets, which make up 15.6% of the total portfolio by rentable area. It concluded a further agreement to acquire a distribution centre in Coventry for £41m.

The UK shift is low risk and will feed off e-retail demand, according to commentators.

“Equites has been a star performer. The company has produced a total return of 39% compared with 10% for the Sapy index for the year to date. It’s a focused specialist fund … benefiting from the demand for modern logistics facilities as a consequence of e-retailing, which is expected to continue growing in SA and the UK where Equites operates,” said Len van Niekerk, senior property analyst at Nedbank CIB.

Fayyaz Mottiar, head of listed property at Absa Asset Management, forecast that Equites would achieve at least 10% growth in dividends for the next five years.

Garreth Elston, of Golden Section Capital, said Equites was one of the best-managed Reits in SA. “The company’s expansion in the UK has been done in a prudent manner and they have acquired very solid assets. The South African portfolio is performing well and we see ongoing demand for the company’s assets and developments.”

Source:Business DayDate: 2017/10/13

Trade tip

Dealing with sucessive losses in trading

Every trader, even the best out there, have periods where every trade they touch seem...Read more