| Thursday 24 March 2022 Good morning Voornaam,
Bell Equipment previously released a trading statement in November with an expectation of HEPS for the year ended December 2021 of at least 300 cents. This guidance has been updated and slightly lowered, with HEPS expected to be between 291 cents and 297 cents. This is still a huge turnaround from a headline loss per share of 31 cents in 2020. The Bell share price is up around 27% this year.
Trustco is one of those companies that always seems to have an unusual story around it. The latest relates to a debt facility offer that was previously received for the Meya Mining Operations. The idea was to scale the operation to 1 million carats per annum through a USD150 million debt facility. The provider would've also had the right to acquire a 55% equity stake in the mine at a nominal price. The hope was to finalise the deal in the first quarte r of 2022, but the counterparty has subsequently become a "sanctioned entity" and Trustco cannot deal with the entity because Trustco has financial arrangements with international funders situated in Europe. Although Trustco doesn't explicitly say it in the SENS, I feel that we can reasonably speculate that the entity in question is Russian.
Fairvest has released a pre-close and operational update for the period ending 31 March 2022. The merger with Arrowhead Properties was implemented with effect from 31 January 2022. Fairvest's R11.78 billion portfolio split is as follows: retail 67%, office 23% and industrial 10%. The fund also has a 61% stake in Indluplace Properties (residential) and an 8.6% interest in Dipula Income Fund. A dividend paid by Arrowhead in December and investments in solar and other capital initiatives have driven an increase in the loan-to-value ratio from 38.2% to just below 40%, but the merger creates noise in this comparison. I nterestingly, Fairvest has highlighted increased enquiries for office space, which is great news for investors in this sector.
Impala Platinum (Implats) has increased its stake in Royal Bafokeng Platinum (RBPlat) by a further 0.87% of shares in issue, taking the stake to 37.27%.
Europe Metals has released results of the X-Ray Transmission ore sorting testwork at its Toral lead, zinc and silver project in Spain. Again, I'm certainly no geologist, but the company describes the results as positive and talks about the ability to efficiently exploit the resource at Toral.
ARB Holdings, which is currently under offer from Masimong Electrical Holdings (backed by Sabvest), has distributed the circular for the deal. Independent expert Nodus has opined that the terms of the offer are fair and reasonable to ARB shareholders. ARB's independent board has thus recommended that shareholders accep t the offer and vote in favour of the scheme of arrangement.
Stor-Age shareholders should note that the company has released a pre-close update presentation. The company has delivered strong growth since 2015 and has significantly outperformed the property index. With a loan-to-value ratio of around 30% (in the middle of the target range of 25% to 35%), the balance sheet is supporting the growth strategy in South Africa and the UK. With occupancies of over 90% in SA and the UK, Stor-Age is a favourite of many investors. Refer to the company website for the detailed presentation.
Investec Property Fund has also released a pre-close presentation. The loan-to-value ratio is stable at 38%, slightly above the fund's target range of 30% - 35%. The office portfolio is 38% of the SA portfolio and has a steady vacancy rate of 14%, largely attributable to a single vacancy. Overall, metrics are heading in the right direction in th e South African and European portfolios and the expected distribution per share is between 106.75 and 108.75 cents per share, up between 10% and 12% year-on-year. Refer to the Investec Property Fund website for the full presentation.
Today's feature articles are on Grand Parade's interim results with Mac Brothers as the latest headache, PPC's investor update with cement imports as an ongoing headache and Balwin's update on its financial performance with the market's lack of interest as a long-standing headache.
With all those headaches floating around, it's good to remind yourself of what a really tough investment environment looks like. In Episode 67 of Magic Markets, we welcomed Omid Gholamifar to the show to talk about investing in his country of birth, Iran. Omid's history is fascinating and he has extensive experience in the investment industry. These are insights that you simply won't hear anywhere else. Follow this link to listen to the show.
Finally, Jaltech brings you an update on cryptocurrency regulations and their thinking around the potential impact on the crypto market.
Have a terrific Thursday!
The Finance Ghost
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