Steinhoff seems to be achieving some momentum in its legal battles, with the Dutch courts rejecting an appeal linked to the suspension of payments proceedings. I do not have a firm understanding of the detailed legal process taking place in Europe. I do however understand that positive narratives help share prices catch a bid, with Steinhoff up 8% in the past month.
I also understand balance sheets, which is why I highlighted a few days ago that Steinhoff is by no means out of the woods. It's worth a read if you missed that article.
In other news, Aspen has completed its sale of the European thrombosis business for a total consideration of EUR642m excluding the cost of inventory. EUR263m had already been received by Aspen in November 2020 and the balance is now in Aspen's bank account.
A nod must be given to Sabvest Capital, an investment holding company that has managed to grow its net asset value (NAV) by at least 7.5% since December 2020. That's at least a 20.8% increase since June 2020, which is a commendable result. The NAV will be at least R80 per share, so yesterday's closing price of R49.49 per share is a discount of 38% to NAV.
Today's lead story goes to Tongaat Hulett, the sugar business that has walked an incredibly tough road. After the market was gushing over the new management team at the end of 2020, the narrative isn't as sweet anymore as operational challenges have come to the fore. The company is in a critical negotiation with its lenders.
There's a strong trading statement out of RCL Foods, which made the right choice in recent years to diversify away from chicken. That division continues to struggle, while the other food businesses in the group are doing well.
If you haven't read it yet this week, I took a harsh look at "caretaker" CEOs on my website and the spectacular amount of money they earn to achieve very little. One of my greatest annoyances in life is when corporate bosses use their positions to enrich themselves at the expense of shareholders. It's even worse when employees were retrenched in the same year.
In case you haven't noticed in the past month on InceConnect, I'm not shy to look through the corporate narrative and focus on the bits that companies were hoping we wouldn't notice.
As always on a Friday, DealMakers closes off the week with a round-up of all the deal activity on the market. There isn't space in InceConnect for everything, so it's always good to read through those articles and see what you missed. Their contribution this week includes an incredibly entertaining article by international technology strategist Donald Farmer, in which he discusses the important concept of a "moat" when assessing companies.
My first month at the helm of InceConnect came to an end this week. I truly hope you've enjoyed it as much as I have. If you think there are things I should be doing differently or better, please reach out accordingly.
Finally, remember to support your local restaurant this weekend!
The Finance Ghost
