Nampak – Trading Update
Key message: No clarity on requirement for a capital raise – but operational performance improving.
Nampak – Repackaged
Key message: Relaxations from lenders on debt reduction targets signal Nampak is emerging from its balance sheet challenges.
Mpact – 1H FY22 Results
Key message: Strong local demand for paper continues, but cost pressures will force a large price increase in October 2022. Management aim to maintain profitability but margins may decline.
Mpact – 1H FY22 Trading Update
Key message: Increased local demand for containerboard boosted revenue, and margins increased despite cost pressures. Some once-off items impacted results (floods, fruit export delays).
Diversified Industrials, Construction & Materials
Key message: Outperformance in CY21 was driven by a general rapid recovery from the Covid lockdowns, with margins in particular recovering strongly as costs were cut. Activity levels are mostly still short of pre-Covid levels. We believe that the Mid Cap industrials still offer value relative to some of the larger companies.
Mpact – 1H FY21 Results
Key message: Volumes recover well with paper margins boosted from switching low-margin paper exports to the local market. Some cost pressures should be recovered through price increases in 2H.
Nampak – FY20 Trading Update
Key message: Debt covenants have been revised, removing the short-term liquidity risk. Nampak is in full defensive mode, aiming to strengthen the balance sheet in a competitive market.
Nampak 1H FY20 Results
Key message: Weakness in all regions before any Covid-19 impact means cash flows remain under pressure, and currency liquidity in Angola and Nigeria is deteriorating. Debt covenants remain a concern, with a relaxation most likely required for year-end.
Nampak – Adjusting for Corona Impact
Key message: In the absence of certainty, we adjust our numbers to reflect 3-months of lost revenue to test robustness.
Coronavirus Chronicles – This too shall pass
Key message: Unprecedented volatility. Beware companies with too much operational gearing. The Construction Sector emerging as a potential safe haven (how times change!).