Spar released a solid update this week and has now given further guidance on the dividend policy, after noting in November that it would be decreasing its payout ratio to preserve cash for growth. The dividend cover (headline earnings dividend by the dividend) will increase from 1.45 times to 2.90 times. Expressed as a payout ratio, it will decrease from nearly 70% to nearly 35%. The Spar share price is up over 5% in the past 5 days based on a promising update and now clarity around the policy.
Renewable energy company Kibo Energy has obtained bridge financing of up to GBP3 million for a term of 36 months. This will be priced at a fixed rate of 3.5%. This is a hybrid debt structure, as there is an equity element to it in the form of warrants. In simple terms, this means the funder will have the right to subscribe for shares up to a value of 30% of the drawdown on the loan (the amount Kibo actually uses). Each right to subscribe lasts for 36 months from the time of the drawdown and is priced at 130% of the prevailing price at the time of that drawdown. In other words, it is only valuable to the funder if the share price increases by more than 30% over that period. This is a really interesting and unusual structure. The company doesn't disclose the identity of the funder.
Tharisa plc has concluded agreements with the B-BBEE shareholders in Tharisa Minerals to acquire their interest for R390 million, settled through the issuance of new listed shares in Tharisa. This moves the B-BBEE shareholders to the top structure and allows the subsidiary to benefit from the "once empowered always empowered" position recently clarified by the courts.
Blue Label Telecoms climbed over 9% after releasing a trading statement for the six months ended November 2021. HEPS is up between 47% and 51%, a solid result by any measure. The announcement is light on details, so we must wait for the full result to see what happened. Blue Label is still trading under cautionary, which means significant news could be on the horizon.
DRDGOLD is a tailings business, which means it processes mine dumps and tries to extract gold from them. The margins are thin, so the sensitivity to commodity prices is even more severe than in traditional mining groups. For the six months to December 2021, revenue fell 16% and HEPS fell 48%. An interim dividend of 20 cents per share has been declared. The Premier share price closed 2.3% higher at R12.46 and the AEEI share price is illiquid.
Emira Property Fund has reported a marginal decrease in distributable earnings for the six months to December 2021. Despite this, the dividend is up 8.8% vs. the prior period as risks in the sector have decreased.
Nedbank has decided that it doesn't want African Equity Empowerment Inves tments (linked to Iqbal Surve) as a client anymore. The bank gave the company a month's notice that it intends to close its transactional banking facility. AEEI initially went to the High Court but was sent to the Equality Court instead. Another Surve-linked entity, Premier Fishing and Brands, received the same notice from Nedbank. That share price tanked over 28.5% in response to the news.
Afristrat Investment Holdings literally needs to rebuild its business from the ground up. The investment in MyBucks is essentially worthless, as the Luxembourg tax authority has now placed that company into bankruptcy. One can only speculate what the next chapter in this group's life may hold; I suppose it can only go better than the previous chapter!
Insimbi Industrial Holdings, a group operating in the alloy, refractory materials and plastics markets, has released a trading statement for the year ended February 2022. HEPS will be u p by at least 20%, which is the minimum disclosure required for a trading statement. With a small cap like this, it's anyone's guess what the actual increase might be. The share price climbed 3%.
Jasco Electronics has released results for the six months to December 2021. Revenue increased 1% and HEPS swung from a loss to a profit. The company recently raised R48.3 million via a rights offer.
Have a lovely Thursday!
The Finance Ghost
