It was a busy day on the JSE yesterday and there isn't space for everything in InceConnect, but I do my best to cover a wide range of stories.
African Media Entertainment, which holds radio assets in various parts of South Africa, has released interim results for the six months ended September. Revenue is up 28% and profit numbers have recovered to a great extent, with HEPS coming in at 97.3 cents. The company has even managed to declare a dividend of 80 cents per share. Covid was bad for the industry as advertisers dropped off and events couldn't be held, so it's great to see that radio has made a comeback.
Ascendis has reminded the market that the potential disposal of Ascendis Pharma is ongoing and that shareholders should continue to exercise caution.
Accelerate Property Fund also released interims for the period ended September. There is no distribution to shareholders, despite distributable income of R135 million. Vacancies are a major concern at 17.3%. The weighted average lease expiry has increased but the fund had to give Covid assistance and suffer rental reversions to make that happen. The net asset value per share is R6.20 and the share price closed 9.7% higher at R1.36, a discount to NAV of 78%.
AVI is also trading under cautionary, as the group is still in discussions with Mondelez International as the potential acquirer of AVI's Snackworks division. The market thought that the entire company was in play, although Mondelez would never have had any interest in Spitz. AVI fell 6.9% as investors digested the news, which is EXACTLY why people should trade with caution until all the details are known.
It's hard not to laugh at Huge Group's results for the six months to August. The results themselves appear to reflect a strong recovery, with HEPS up dramatically from 6.57 cents last year to 34.63 cents in this period. Those who dig deeper will see that there are major accounting changes behind these results.
The comedy is that Huge has noted that it now believes it is an investment holding company based on its "recent conduct" (the attempted Adapt IT deal) and the experience of its directors particularly in mergers and acquisitions. This is the same company that bought a tiny stake in Adapt IT and subsequently had to dispose of it at a loss, while paying advisors along the way. This accounting change is bigger than you may realise, as it means that Huge can start accounting for investments based on fair value, which can drive major swings in profits.
Tower Property's acquisition b y RDC and subsequent delisting has now been approved by shareholders. Of the shares represented at the meeting, 98.04% were cast in favour of the transaction. Final dates for the transaction will be communicated to shareholders in due course.
In Santam's acquisition of Indwe brokers, which is classified as a small related party transaction under JSE rules, BDO Corporate Finance has acted as independent expert and opined that the deal is fair to shareholders. There are still regulatory approvals needed, but this is an important hurdle that Santam has now cleared.
Hyprop announced that GCR Ratings has rated Hyprop's debt as B+ and B for long-term and short-term debt respectively, with a stable outlook. This is driven by the quality of the properties and the levels of covenant headroom.
Good luck today!
The Finance Ghost
