Barloworld – Tongaat Hulett Starch Acquisition
Key message: Barloworld lost its MAC (Material Adverse Change) claim and has been forced to honour the original purchase agreement. We look at the impact on Barloworld’s financials.
Super Group – FY20 Results
Key message: Conservative balance sheet means no Covid-related capital issues, with acquisitions still a strong driver of growth. Offshore operations struggling.
Motus Holdings – FY20 Results
Key message: A good result and management positive in outlook. However, Motus is becoming more capital intensive to maintain vehicle sales – this will hurt returns. High rental car exposure in the Import and Distribution division remains a risk, in our opinion.
Bidvest – FY20 Results
Key message: Still somewhat noisy with non-trading items large (excl. Covid impacts). Large divisions Services and Freight look set for a good FY21.
KAP Industrial Holdings
Key message: Volatility in polymer margins continues to impact KAP, with average margins declining 15% YoY. We value KAP at what we consider to be the mid-range operating margin of 5% in the Chemical division.
Cashbuild – FY20 Results
Key message: Solid results with strong cash generation notwithstanding the COVID impact. Strong sales growth post YE is providing FY21 with a good start – but pent-up demand levels (and supply disruptions) are distorting the real underlying demand levels.
Auto Anemometer
Key message: Vehicle sales have stabilised in June, July and August at 30-35% down on 2019 – this looks to be the new normal level for the remainder of the year.
Sephaku Holdings: Feedback from Management Meeting
The cement market has been very strong post-lockdown as blenders and imported volumes have declined.
Bidcorp FY20 Results
Key message: The Foodservice market has proved to be resilient and has not faced structural changes due to Covid restrictions. Activity levels are back at 90% of prior periods.
Imperial Logistics: FY20 Results
Key message: A shift to a new business model brings risk. An acquisition-led growth strategy in and around Africa is brave – we are concerned the increased complexity and risk is not well understood.