Sanlam posted a tasty 4% rally after releasing a trading statement for the year ended December 2021. HEPS is expected to increase by between 22% and 32% to between 420 and 455 cents. The result has been driven by more favourable equity markets, an improved result from Santam and some unpleasant credit exposures in the comparable period that did not repeat in 2021.
Speaking of Santam, that company also released its results for the year ended December 2021. The share price closed 8% higher as the company declared an ordinary dividend of 790 cents and a special dividend of 800 cents. HEPS was vastly higher at 2,495 cents vs. 905 cents the year before. The reputational damage suffered during the pandemic doesn't seem to have had much impact, with gross written premium growth of 5%.
FirstRand also jumped nicely, with a 4.3% gain in response to results for the six months ended December 2021. Return on Equity (ROE) is the key metric, with a 20.1% return in the middle of the group's targeted range of 18% to 22%. This is a strong return and is the reason why the group trades at a substantial premium to book value. Notably, the credit loss ratio fell from 1.46% to 0.61%, helping to drive a 43% increase in normalised earnings. FirstRand has declared an interim dividend of 157 cents per share, up 43% in line with earnings.
Sasfin was another financial services result on the day, with a different share price outcome to its peers. Despite HEPS more than doubling in the six months to December 2021 vs. the prior year, the share price fell 7.2% on the day. This was driven by an improvement in the credit performance. Unlike FirstRand, Sasfin's total income decreased vs. the comparable period, which is what I suspect drove the drop in the share price. An interim dividend of 33.95 cents was declared.
Grindrod released results for the year ended December 2021, reflecting a swing in profitability from a headline loss of 24.8 cents in 2020 to HEPS of 92.2 cents in 2021. There were record mineral volumes at the ports and Grindrod Bank put in a solid but cautious performance. The car carrier business has been disposed of and the sale of the fuel carrier business has moved forward. Grindrod sold its Grindrod Shipping shares, generating R338 million in the process. The major remaining headache is the KZN north coast property portfolio in the private equity business. Grindrod has declared a final dividend of 20.1 cents per share.
Mondi also released annual results for 2021, with a drop in the share price of 5.8% reflecting the underlying exposure to Russia rather than these results. Mondi sourced 12% of group revenue and 20% of underlying EBITDA from Russia in 2021, so the market has panicked. F ocusing on the 2021 result, return on capital employed increased to 16.9% and profit before tax was up 28%. Net debt to underlying EBITDA of 1.2x is evidence of a strong balance sheet, which supports an 8% increase in the full year dividend to 65 euro cents per share.
African Rainbow Capital released results for the six months to December 2021. Despite HEPS falling by 27%, the interim dividend of R12 per share is 20% higher than the comparable period. The ferrous and platinum businesses saw sharp decreases in earnings, while the much smaller coal business swung from a loss into a profit. Net cash improved from R8.2 billion to over R11 billion.
Exxaro's results for the year ended December 2021 reflect revenue growth of 13% and an increase in HEPS of a whopping 58%. Despite this, the final dividend of 1,175 cents per share is 5.5% lower than in the comparable period. Dividends for the full year tell a different story, up 72% vs. the prior period at 3,252 cents per share. That's a yield on yesterday's closing price of 14.8%!
Heriot REIT and Safari Investments RSA have laid the foundation for a merger between the companies. Heriot currently holds 32.2% of Safari and the parties approached the Competition Commission for a merger approval even though there hasn't been a merger. The approval has been granted, so Heriot has cleared that hurdle in advance of any potential move being made on Safari.
Trencor Limited has updated its trading statement related to the year ended December 2021. The company originally expected to make a small loss, but the updated guidance reflects a swing into profitability. After posting a headline loss in 2020 of 22 cents per share, the company expects HEPS of between 3 and 4 cents for 2021.
Property fund Putprop expects HEPS for the six mon ths ended December 2021 to increase by between 10.55% and 30.55%.
If you are a shareholder in Bauba Resources or Raubex Group, you should note that the circular related to Raubex's mandatory offer to Bauba shareholders is expected to be sent to shareholders before 1 April, a month later than planned.
My feature article today is on
Sibanye's results for the six months to December 2021. The company is always in the news and is going through a particularly tricky period, with commodity prices flying on one hand and noise around labour issues and other distractions on the other.
Read about it here.
As is customary on a Friday, the DealMakers team has given us great summaries of the corporat e activity this week, as well as an article on trends in the M&A landscape in 2022.
Try to have a good weekend, despite the heartaches elsewhere in the world.
The Finance Ghost
