InceConnect is thrilled to welcome
OUTvest as a brand partner, helping to make these free daily insights land in your inbox. OUTvest has launched the Global Wealth Builder, which you can learn more about
in this article.
Omnia released a cracking update that HEPS from continuing operations (i.e. excluding Oro Agri and Umongo Petroleum, both of which Omnia sold for a fat profit) will be between 270 and 295 cents for the six months to September 2021. This puts Omnia on an annualised Price/Earnings (P/E) multiple of around 11x, without accounting for the juicy cash to be received on the Umongo deal.
ARC Fund already holds 24. 8% in CSG via subsidiary Gemcap and has announced a firm intention to acquire all the shares in CSG that Gemcap doesn't already own. The cash price is 35 cents per share and will end in a delisting of CSG if the offer is successful. As usual, the rationale for the deal bemoans the lack of liquidity on the JSE and the burden of being a small, listed company.
Irrevocable undertakings have already been received from holders of 61.5% of the shares eligible to vote (i.e excluding CSG's existing stake), so the likelihood of a successful transaction is high.
BHP has signed an agreement to sell its 80% interest in BHP Mitsui Coal to Stanmore Resources Limited. The cash price is up to $1.35 billion, of which $1.1 billion is payable on completion of the deal. The deal was valued at 6.9x EBITDA excluding any earn-outs.
Sephaku Holdings is still performing well, noting that HEPS for the six months to September 2021 will be between 6.32 cents and 7.73 cents per share. With the share price up over 170% year-to-date to R1.93 at time of writing, the annualised P/E multiple is around 14x which is substantial for a company with a market cap below R500 million.
Lewis Group also released a trading statement for the six months to September 2021, flagging HEPS of between 318.9 and 342.5 cents per share. Operating margin has expanded further thanks to a strong sales performance and tight expense management. The annualised P/E multiple is around 6.7x and the share price has nearly doubled year-to-date.
MultiChoice highlighted a strong advertising revenue recovery as one of the positive drivers of the result for the six months to September 2021. This was mitigated by the absorption of deferred content costs from the previous financial year, the costing of major sporting events in the current period and a general ramp up in loca l content investment. HEPS is down between 35% and 40% to 200 - 229 cents per share. The annualised Price/Earnings multiple is around 27x, which feels like a big number for a company facing significant disruption from streaming.
ARC Financial Services, Sanlam and Santam all hold stakes in Indwe insurance brokers. The company will now be moved under Santam to simplify the structure, with a value of R125 million placed on the 76% stake that Santam doesn't already own.
Investec has updated its earnings guidance for six months to September 2021, with HEPS expected to be between 24.5 and 24.9 pence per share. Yes, pence, as Investec Plc reports in the Queen's currency.
Sirius is acquiring BizSpace Group for a cash consideration of GBP245 million, which necessitated an equity capital raise (called a bookbuild) of GBP135 million.
Finally, in case you haven't listened to it yet, Ep50 of
Magic Markets saw Duncan Lishman join us to discuss competition law and the impact it has on corporate transactions.
Listen to the show here.
Good luck in the markets today!
The Finance Ghost
