R82bn share buyback planned for Prosus, Naspers
Naspers subsidiary Prosus plans to spend $5 billion (R82 billion) on buying its own shares, as well as shares in Naspers, on the market.
The company announced on Friday that it will spend up to $1.37 billion on buying back its own shares, and $3.73 billion on buying Naspers shares.
"The board of directors of Naspers believes the purchase of Naspers N shares and the repurchase of Prosus ordinary shares N represent a timely investment in the group's strong internet portfolio and a sensible use of capital given full market valuations evident in consumer internet and the groups sizeable consolidated discount to net asset value," the company said in a statement.
Both Naspers and Prosus are trading far below their net asset value. Both share prices jumped by almost 3% in opening trading on Friday,
The company will announce its interim results on 23 November.
As the NPN discount to Tencent holding continues to widen further and further —>Prosus seeks to buy approx 5% of NPN shares in open market (+ buyback own shares too). Directors say buying NPN shares and repurchase of PRX is sensible given “sizeable consolidated discount to NAV” https://t.co/o0sVkl9m59— Delphine Govender (@Delphine_DG) October 30, 2020
MTN data income jumps by almost a third
MTN this morning reported a 32% increase in revenue from data from the past quarter as the work-from-home trend continues. Voice income rose 4%. Its profit (EBITDA) rose by 14%. It added 12 million new users to reach 273 million in 21 countries.
On Thursday, MTN announced that it will become a mobile virtual network operator (MVNO), which will allow other companies – including new competitors - to use its mobile network infrastructure to carry their services. Current examples include Virgin Mobile, FNB Connect and Mr Price Mobile, which all use the Cell C infrastructure.
Implats output climbs
Implats this morning reported strong growth in output of 6E metals (platinum, palladium, rhodium, ruthenium, osmium and gold) Total 6E concentrate volumes grew by 11% to 859,000 ounces. While Implats Rustenburg saw a decline in output due to the effect of Covid-19 on “labour availability”, declining reserves and load shedding, its Marula operation in Limpopo saw strong gains. Implats saw more than 2,100 Covid infections.
Nedbank sees recovery in SA
In a trading update for the nine months to end-September, Nedbank said that applications for home loans and vehicle finance have recorded a full recovery to above pre-lockdown levels. Banking transaction levels, including on its point of sale devices and digital channels, were 3% higher in September this year than in the same month last year. In April, at the height of lockdown, volumes were almost half than in the same month last year.
Medium-term budget blues
The medium-term budget policy statement painted a grim picture of South Africa’s debt situation, and offered an equally grim plan to tackle it: R300 billion in spending cuts over the next three years and a public sector wage freeze.
The rand weakened from R16.09 on Tuesday to R16.36 this morning – but this was not only due to the downbeat budget statement. Across the world, markets were slaughtered as more European countries – including France – moved into hard lockdown. The JSE’s all share index declined the most – almost 3.3% - since March 27, when SA’s own lockdown started. US indices fell by an even bigger margin overnight.
Canal+ hikes shareholding in Multichoice
The French media company Groupe Canal+ has pushed up its stake in Multichoice from 6.5% to 12%. Canal+ is owned by Vivendi, which is also the owner of one of the biggest record labels in the world, Universal Music Group, as well as the advertising giant Havas.
Good news from Luiperd
Total announced that its drilling at the Luiperd prospect – off the coast of Mossel Bay – was successful and that more condensate gas was found.
Trellidor buys UK franchisee
In a deal worth more than R33 million, Trellidor has bought Really Secure Company in the UK, which is a franchisee of the company.
African Bank retrenches staff
African Bank is retrenching almost 10% of its staff – due to a spike in bad debt amid Covid-19, but also as the bank moves towards digital banking.
Another storm to hit Sasol plant
Sasol’s share price dropped more than 10% in a single session as yet another storm approaches its embattled US Lake Charles operation.
Germany's T-Systems sheds SA business
The black-owned IT group Gijima is taking over T-Systems South Africa, which is part of a German conglomerate ultimately owned by Deutsche Telekom.
T-Systems has been providing IT and communication solutions in South Africa for more than two decades.
“This transaction is the result of T-Systems International’s strategic review of its global portfolio and its decision to refocus on its core markets in Europe and the Americas,” the companies said in a joined statement.
As part of the acquisition, which is still subject to approval from the competition authorities, Gijima will now own a large data centre, which it says will help its expand its portfolio of services to new markets and clients such as retail, manufacturing, private healthcare and automotive.
Some 40% of Gijima executive members including its CEO Maphum Nxumalo, previously worked at TSSA.
DRD Gold doubles profit
DRD Gold more than doubled its Ebitda profit in the past quarter to R770 million – this is thanks to a 60% increase in gold sold and a 6% increase in the average rand gold price received (R1,029,893/kg).
Its cash operating cost per kilogram of gold sold fell by 10% from the previous quarter to R489,750/kg.
Rand at best level in a month
Wall Street slumped yesterday as investors weighed both a lack of progress on US fiscal stimulus negotiations and a record number of daily Covid-19 cases. US daily coronavirus cases surpassed 80,000 on both Friday and Saturday. Asian markets were weaker this morning.
Still, the rand hit its best level in a month, and is now trading at R16.16/$.
Gold benefited from market jitters and returned to above $1,900/oz.
New CEO for MTN Nigeria
Ferdi Moolman has resigned as CEO of MTN Nigeria, and will return to the company's local head office as the new group chief risk officerKarl Toriolam, currently vice president of West and Central Africa (WECA), was appointed as the new MTN Nigeria CEO.
Steinhoff warns of delayed results
Steinhoff says its annual results for the past year won't be released in January, as previously planned, but will have to be delayed by a month for release on February 26th. This is due to Covid-19 as well as group restructuring, the company said.
Astral Foods expects profit drop
The poultry group Astral Foods has warned that its headline profit will by fall by up to 17% for the year to end-September.
Famous Brands suffers loss
Famous Brands - owner of Steers, Wimpy and Debonairs Pizza - saw its sales halve in the six months to end-August, with the company reporting an operating loss of R110 million. "Black Friday in November and the holiday season which follows in December are historically the industry's peak trading period, however, it is difficult to accurately predict consumer behaviour or spend in the months ahead. The school holidays will be both later and shorter than previously, international tourism is likely to be muted, and domestic travel and leisure activities will be constrained by reduced disposable income," the company said. It is now focussed on right-sizing the business and reducing costs.
It has now written off its total investment in its failed UK investment in Gourmet Burger Kitchen, which has been placed in administration.
Rand weakens ahead of medium-term budget
The big news of the week: the medium-term budget will be announced on Wednesday. Government is facing falling tax income while debt is ballooning - it could hit the equivalent of SA's GDP soon, economists predict. After strengthening to R16.19 on Friday - its best level in a month - the rand is back at R16.27 this morning.
Clicks jumped 13% on Friday after reporting strong sales and a 14% rise in headline profit. It also declared a solid dividend of 340c.
Massmart sales down 9%
Massmart - owner of Makro, Game and Builders Warehouse - has reported that its total sales (R60.5 billion) for the 9 months to end-September fell 9% compared to the same period last year. Prices at its stores rose by 4.5% in that period.
Foschini warns of loss
The Foschini Group has warned that it will report a loss for the six months to end-September. While trading in South Africa has "steadily improved" since the first phase of lockdown, it remains "volatile". In the UK, it saw "significantly lower than usual" visits to its stores.
More load shedding expected
In a quarterly update, Eskom has warned of continuing stage 1 and 2 load shedding in the near future. This is due to urgent repairs are needed at its coal-fired power stations, most of which are past midway of their operation life.
Rex Trueform suffers loss
Clothing company Rex Trueform has warned that its annual headline profit will slump by 218% to a loss of 86c per share. “Lost and subdued trade as a result of the COVID-19 pandemic and the government imposed lockdown regulations (…) negatively impacted the retail segments revenues and gross profit margins,” the company said. Its financial performance was also hit by impairments and the implementation of the new lease accounting standard (IFRS 16 Leases).
Embattled EOH starting to recover
In a trading update for the year to end-July, the ICT company EOH said it saw a positive EBITDA, while its headline loss will be between 70% and 76% smaller.
The company is struggling with debt, but says that notwithstanding large payments to lenders, cash balances remain healthy at R943 million as at October 19.
Last year, EOH also admitted “over-invoicing” on government contracts. It agreed with the Special Investigations Unit to repay R42 million for two contracts. It is still finalising a similar agreement for the third and final contract.
The JSE recently fined EOH Holdings R7.5 million over past financial reporting errors.
Umgeni Water CEO quits
Umgeni Water's CEO Thamsanqa Hlongwa has resigned with immediate effect. Nomalungelo Mkhize, the current Chief Financial Officer, will be assume the position of acting CEO.
Umgeni Water, which supplies KwaZulu-Natal with water, is the second largest water board in the country with an annual turnover of more than R2.4 billion.
Amplats output down 2%
In a production update for the quarter to end-September, Amplats says its total output of 1,112,900 ounces was 2% lower than last year - predominantly from the joint operations of Modikwa and Kroondal, as well as lower production from Amandelbult. This was largely offset by strong production performance from Unki, Mogalakwena and Mototolo who increased production 12%, 9% and 6% respectively. Platinum production was down 2% to 516,400 ounces and palladium production was flat at 352,200 ounces.
Oceana profits from strong fish demand, good catches
The fishing group Oceana expects its profit for the year to end-September to climb by as much as 18% thanks to a strong demand for its products, which are predominately consumed at home – and not at restaurants. Oceana owns Lucky Star, among other businesses. Its fish catches also improved, the company said.
Gordhan, Mboweni make peace over SAA
Public enterprises minister Pravin Gordhan told Business Day that cabinet is backing a plan to provide SAA with R10.5 billion, and that differences between himself and finance minister Tito Mboweni have been resolved.
Clicks profit close to R2 billion after strong sales
In the year to end-August, Clicks saw its sales grow by almost 10% to R34.4 billion, with its headline profit up 12% to R1.9 billion. The company now has 743 stores, after opening another 39 stores, and it has increased its pharmacies by 40, to 585. It warned that trading in the past few weeks were impacted by protest action at Clicks stores over an offensive shampoo ad, and it also expects that sales will be further affected by the widespread job losses expected in the aftermath of the pandemic. A dividend of 450c per share (2019: 327.0c) was declared.
Sasol: No damage from Delta, but all units still not open after Laura
Sasol says Hurricane Delta, which hit on 9 October - a couple of weeks after Hurricane Laura – has not resulted in further damage to its troubled Lake Charles Chemicals Complex in Southwest Louisiana. Laura cost Sasol 170 kilotons in total net saleable tons in the past quarter. All of its operations are not yet online following Laura, but Sasol says all remaining units are expected to return to operation by the end of the month.
Cashbuild sees 25% sales jump in SA
The building supplies retailer Cashbuild saw sales jump by 25% in South Africa in the past quarter. The group has opened 13 new stores since July 2019. Across the group, including other African businesses, its sales climbed by 22%.
Death near Exxaro mine
Exxaro says a resident of Lephalale was shot dead by a private security firm near its Grootegeluk mine, which supplies Eskom with coal. “The deceased was part of a community protest that entered the private property owned by Exxaro near its Grootegeluk mine operations, which protestors set fire to a part of the veld and a conveyor belt leading out of the mine.”
Sportsmans Warehouse saved by strong demand for home exercise equipment
Long4Life’s revenue fell to R1.4bn in the six months to end-August, from R1.8bn in the same period last year. Its headline profit slumped from 14.5c per share to 0.8c. Its Sportsmans Warehouse stores saw sales fall by 14% - although team sports were banned during lockdown, this was somewhat offset by increased demand for home exercise equipment, home games, running, cycling and fitness merchandise. Sorbet stores were unable to trade until end of June 2020. Revenue in Sorbet declined by 69%.
Distell trading ahead of expectations
In a quarterly update to the end of September, Distell saw a low single-digit revenue decline compared to the same period last year. This was due to the second alcohol ban, which was lifted in mid-August. Currently, overall performance is tracking ahead of expectations.
Good Distell update.. Better than expected, particularly with cash generation, debt reduxtion and African/International volumes.— Keith McLachlan (@keithmclachlan) October 21, 2020
SABC wants Netflix, DStv users to pay licence
Deputy Minister of Communications Pinky Kekana presented a proposal to parliament that may mean that South Africans who watch video streaming services like Netflix or pay-TV services like DStv or StarSat will be forced to pay a SABC TV licence fee. SABC is in severe financial distress, with more than 600 jobs in danger.
Steinhoff receives maximum fine from JSE
The JSE has fined retailer Steinhoff a total of R13.5 million for breaching its listing requirements. This includes a maximum possible fine of R7.5 million for publishing "incorrect, false and misleading" information in its previous financial statements."
Standard Bank’s distressed client update
In an update, Standard Bank said that its “client relief portfolio” – where payment holidays have been granted on home loans, loans and credit cards – has declined from R107 billion as at 30 June 2020 to R61 billion. On the lapsed accounts (i.e. where the payment holiday period granted had expired and the relief had not been extended) the average monthly instalment payment rate was more 95% for the secured portfolios (including mortgages), more than 90% for the unsecured portfolios (card and personal unsecured) and 100% for business lending. Of the extended portfolio (i.e. where the payment holiday period granted had expired and the relief period had been extended), 83% thereof was secured.
Pick n Pay profit slumps
This morning, Pick n Pay released its results for the past year: Sales in South Africa rose 3.4%, but its headline profit fell 56%. It says the lockdown results in R2.8 billion in lost sales over the period. But online sales doubled in the past year.
Pick n Pay also announced that it is buying the online grocery service Bottles. Bottles was launched in 2016 as South Africa’s first alcohol on-demand delivery app, with more than 350,000 registered users.
CMH says used car sales are only 5% below last year
Combined Motor Holdings (CMH) suffered a headline loss for the six months to end-August, with its revenue down 38% amid the lockdown. CMH has various car dealerships, as well as a car-hire operation and financial services. Its sales were hit by the first phase of lockdown, when all its outlets were closed for weeks.
New vehicles are currently around 70% to 75% of prior year levels, and used vehicles at around 95%.
“Dealers are experiencing shortages of popular new vehicle models and this will inhibit growth in the short-term. Despite the reduced interest rate, and consequent lower monthly repayments, customer finance approval rates have improved only marginally over the last two months, and are still well below the pre-Covid-19 levels,” the company said.
The rebound following the re-opening of business has seen parts and service trading levels at 80% to 90% of the corresponding months last year.
Astral Foods exec resigns
Andrew Crocker, managing director of Astral Foods’ commercial division and executive director of the company has resigned, with effect from 31 January 2021, “due to his decision to immigrate (sic)”.
Sappi share price rallies
The paper producer Sappi jumped more than 17% by later afternoon on Monday.
According to JC Louw, CEO of Sharenet, this was due to the investment house JP Morgan upgrading its recommendation on the share to "overweight", which indicates that it believes Sappi will outperform some other shares. JP Morgan thinks Sappi shares should reach R34.
On Monday afternoon, it was trading around R26.
Afrox to leave JSE
The industrial gas company Afrox looks set to leave the JSE after 57 years. Its key shareholder, the German international company Linde, wants to buy out all minority shareholders.
Omnia to sell unit for more than R2 billion
This morning, SA chemicals and fertiliser company Omnia announced that European company Rovensay will buy its international Oro Agri, the international crop protection company AgriBio for $146.9 million (R2.4 billion).
American eyeing producing nuclear power in SA
Bloomberg reports that the US government's development finance institution is backing American nuclear company NuScale Power to develop a nuclear plant that could deliver 2,500 megawatts of power in South Africa.
Rand weaker despite rescue plan
The rand weakened from below R16.50/$ to R16.70 after president Cyril Ramaphosa announced government’s Economic Reconstruction and Recovery Plan, which Treasury reckons should help to raise growth to around 3% on average over the next 10 years. But there were doubts about the specifics, with no indication about how plans to create jobs and fix SOEs will be funded. The rand was last trading at R16.64.
Gold losing ground
Gold is heading for its first weekly decline in three weeks, and is now down 2% over the past month. The market is weighing the possibility of a second US fiscal stimulus package after the presidential election It was last trading at $1,903/oz.
Cartrack on a tear
The vehicle tracking company Cartrack’s share price has now gained 20% since it it reported a 21% increase in its interim headline profit earlier this week. Its half-year dividend per share jumped 335% to 87c.
Pepkor profit to fall by 20%
In a trading update, Pepkor, owner of Pep and Ackermans, said its headline profit will fall by at least 20% for the year to end-September. The company said the process to refinance R5 billion in debt due for repayment in May 2021 was successfully concluded, and the debt is now repayable in September 2023.
Adcorp sees weaker demand for personnel placement
Adcorp, which focuses on personnel placement and training, says its revenue fell by 10% to 12% for the six months to end-August largely due to the interruption of classroom-based training in South Africa, as well as a fall in demand for new personnel. Still, its operating profit rose by 11% to 22% in SA and in Australia by 79% to 98%.
Famous Brands' UK outlet bought - report
The BBC reports that Ranjit Singh Boparan, a British fast-food tycoon known as the “Chicken King”, bought Gourmet Burger Kitchen from SA’s Famous Brands, the owner of Steers and Wimpy.
Yesterday, Famous Brands said its struggling UK operation Gourmet Burger Kitchen (GBK) has entered into administration. Administrators have been appointed, who will consider the “insolvent sale” of the business.
According to the BBC, 35 sites and 669 jobs will be saved by the deal with Boparan. However, 26 restaurants and 362 jobs will be lost.
Famous Brands bought GBK in 2016 to reduce its dependence on South Africa, but announced recently that it will cut funding to the struggling food operation due to a deterioration in sales caused by the coronavirus pandemic.
PSG sees decline in value of investments
On Thursday, the PSG Group reported its results for the six months to end-August, its first financial report since the unbundling of an effective 26% of its 30.7% interest held in Capitec and disposing of 1.9 million Capitec shares for R1.7 billion cash.The group still owns stakes in PSG Konsult, Zeder, Curro and other companies. Taking into account the fair value of all its investments (i.e. the Sum-Of-The-Parts value), its SOTP amounted to R75.86 as at 31 August 2020, which is down 20% from February. "The decrease is indicative of depressed equity markets and the challenging trading conditions brought about by the Covid-19 pandemic and associated national lockdown," PSG said.
$JSEPSG PSG Group H1 results webinarCEO Piet Mouton comments that they will "consider buying back shares" this was not (really) considered before in prior webcastsGiven current discount of -42% seems best use of cash on hand unless there is a compelling new investment pic.twitter.com/OYf07MOm6j— Smalltalkdaily Research (@smalltalkdaily) October 15, 2020
Mondi warns of 20% profit fall
In a trading update, Mondi warned that its underlying EBITDA for the third quarter of 2020 was down 20% compared to the same time last year.
"Good volume growth in uncoated fine paper and fibre-based packaging products and ongoing strong cost control were more than offset by the impact of planned maintenance shuts, negative currency effects and lower average selling prices," the company said.
Mediclinic revenue falls 19% in SA during lockdown
Mediclinic reported a 7% fall in revenue for the past six months, in a trading update on Thursday. In South Africa, revenue fell by 19%, while in the Middle East revenue rose by 8.5%."We have seen a good rebound in trading since May 2020, particularly in Switzerland and the United Arab Emirates, as the initial peak of the pandemic passed," Mediclinic said.
Its Hirslanden private hospital group in Switzerland contributed 47% of its revenue, followed by 29% from Mediclinic Southern Africa and 24% from Mediclinic Middle East, at the end of March.
Cartrack dividend up 335%
The vehicle tracking company Cartrack, which has operations in SA, Europe and South East Asia, reported a 21% increase in its headline profit for the six months to end-August.
Its half-year dividend per share jumped 335% to 87c. Its subscribers increased by 13% to almost 1.2 million.
Its share price jumped more than 7% on Wednesday.
Coronation profit increased by more than 10%
In a trading statement, fund manager Coronation said its headline profit for the year to end-September will be between 10% to 20% higher. Coronation’s total assets under management at end-September was R569 billion.
The company also appointed three new directors: Neil Brown (co-founder of Electus Fund Managers), former Eskom CEO Phakamani Hadebe and Saks Ntombela, group CEO of Hollard Insurance.
Mboweni wants to delay medium-term budget
Finance Minister Tito Mboweni has requested that the Medium Term Budget Policy Statement be postponed by a week to 28 October 2020.
It was originally tentatively scheduled for 21 October, but given the "complex and unusual circumstances" created by the pandemic he is asking parliament for a postponement.
Truworths gets green light for takeover
The Competition Tribunal has given Truworths the green light to acquire Barrie Cline, a clothing manufacture in Cape Town. More local fashion retailers are trying to increase their local production capacity.
IMF lowers expected outlook for SA
The IMF expects the South African economy to shrink by 8% this year, and it lowered its outlook for South Africa for next year to growth of only 3% - from 3.5% previously, reports Reuters.
Takeover bid for Omnia unit in final stretch
Omnia says it has reached the point of "final negotiations" with a bidder for its international agri-chemical company Oro Agri. "If a transaction is concluded, this may affect the price at which Omnia’s securities trade."
Ramaphosa's economic recovery plan for SA
It appears that President Cyril Ramaphosa's economic recovery plan, which will be submitted to parliament on Thursday, has been leaked. News24 reported that the 48-page draft document, titled the South African Economic Reconstruction and Recovery Plan, outlines eight priority areas to "rebuild and grow the economy" after the economic shock of Covid-19. The document also includes plans for a controversial nuclear build programme, through a public-private partnership.
Moir replacement named
The controversial former CEO of Woolworths, Ian Moir, will leave the company after two decades. Most recently he was CEO of David Jones in Australia, and will now be replaced by Scott Fyfe, the CEO of Country Road. Moir oversaw Woolworths’ disastrous expansion to Australia, which destroyed billions in value – still, he continued to received massive pay packages. For example, he will get more than R22 million for the next year as “notice pay”, Business Day reported.
Steinhoff jumps 36%
Steinhoff's share price jumped 36% to above R1 yesterday. On Friday, the company said it is making "real progress" in a $1 billion settlement with various litigants.
More competition for Shoprite, Checkers in malls
Following an agreement with the Competition Tribunal, Shoprite and Checkers will drop exclusive clauses with shopping centres, which means that they must allow small and independent retailers to compete with them in the same malls.
Murray & Roberts rallies thanks to big contract
Construction company Murray & Roberts’ share price jumped 9% to 678c after the group announced that its Australian company was awarded a large contract, as part of a joint venture.
Murray & Roberts’ Clough – via a joint venture - won the AU$1.5 billion (R18 billion) contract to work on power grids in South Australia and New South Wales. The joint venture will construct four substations and approximately 700km of 330kV transmission line.
As at June 2020, Murray & Roberts had an order book of R54.2 billion, which includes several multi-year contracts.
Harmony workers killed
Two employees at Harmony's Tshepong mine, near Welkom, were killed in an incident related to "a fall of ground" the company said in a release.
Rand on the front foot
The rand is starting the week at R16.48/$, still benefiting from a bout of dollar weakness – which also bolstered the gold price.
On Friday, the White House announced that it is preparing a $1.8 trillion coronavirus relief offer – its largest yet. This could put US government finances under pressure, and the prospect weighed on bonds and the dollar.
The gold price, which has gained more than 12% in the past six months, was trading at $1,927/oz on Monday morning. On Friday, Harmony, DRDGold and Gold Fields all saw their share prices rally by more than 6%.
Ramaphosa to announce economic rescue plan
President Cyril Ramaphosa will outline his economic recovery plan in parliament on Thursday, 15 October, following approval from cabinet and Nedlac. The joint sitting is a week before Finance Minister Tito Mboweni is expected to deliver his medium-term budget, which he on Friday warned would not be popular.
Post Office workers to strike
Post Office workers plan to strike over concerns that their medical aid and retirement benefits - which were deducted from their payslips but not paid to administrators - might have been misappropriated by the parastatal. The Post Office says this is due to its financial crisis due to a “dramatic decline” in revenue.
Lake Charles hit by second hurricane
Sasol’s embattled Lake Charles Chemicals Project in Louisiana has been hit by a second hurricane in six weeks. But while it remains shut, there was no apparent damage to equipment following the landfall of Hurricane Delta.
In August, Hurricane Laura caused "moderate wind damage" to cooling towers, as well as some insulation and building damage.
Absa looking for new chairperson
Absa has launched a succession search to replace its chairman Wendy Lucas-Bull, whose term ends in March 2022. She will have served 9 years on the board by that time, the limit in terms of reserve bank directives.
It was recently announced that Lucas-Bull would replace Christo Wiese as a chairman of Shoprite next month.
Vodacom Lesotho's licence drama
Lesotho’s telecommunication regulator revoked the operating licence of Vodacom, Business Day reports.
According to Techcentral, the regulator contends that Vodacom Lesotho failed to pay a part of a R134m fine for "conflict of interest" allegations, related to the hiring of an auditing firm allegedly owned by the sister-in-law of the firm’s chairman.
PPC suffers loss amid lockdown, imports
Despite lockdown, a depressed construction sector and an increase in cement imports, PPC posted a R1.87bn loss attributable to shareholders for the year to end-March.
While cement sales in South Africa declined by 15%, average selling prices for cement in South Africa increased by 8% to 10%. The company reported that cement imports increased by 36% to 1.3 million tonnes over the past year. PPC says there has been a strong recovery since lockdown: in South Africa and Botswana, cement sales grew by double-digits since June, compared to the previous year.
Sorbet's owner warns of profit wipe-out
Long4Life, the owner of Sorbet salons and Sportsman's Warehouse, warned that its profit for the six months to end-August will be down by between 90% and 100%.
Sorbet was forced to shut its doors for months during lockdown.
Civil servant pension manager now owns 10% of Makro, Game
The Public Investment Corporation, which manages civil servant pensions, now owns more than 10% of Massmart, owner of Game, Makro and Builders Warehouse.
The company suffered a R1.2 billion loss in the first half of 2020. Recently, its American CEO Mitch Slape, used his own money to buy almost R8.2 million in shares in Massmart.
Spur restaurants busier than expected
In an update, Spur says its restaurants have recovered faster than it expected.
In September, Spur restaurants saw sales that were 18% below the same month last year. In May, sales were 91% down.
Sales at the group’s upmarket Hussar Grill chain was only 6% below the same month last year, while RocoMamas was at 13% lower.
The recovery in restaurant turnover post lockdown has exceeded management’s expectations,” CEO Pierre van Tonder said. “The improving monthly growth trend is particularly encouraging in the tight consumer environment where spending is under intense pressure.”
Markets rally after Trump U-turn
Overnight, markets rallied after US president Donald Trump appeared to backtrack after abruptly calling off negotiations on a stimulus bill in the US. Trump tweeted that he would support a separate bill that would support sending $1,200 cheques to support Americans.
The rand was last trading at R16.59/$ this morning.
VBS CFO heads to jail
Former VBS head of finance Phillip Truter will serve seven years in prison after entering into a plea agreement with the State. Truter made several admissions, including how he manipulated the bank's financial statements, and submitting false returns to SARS. Truter will be the State's "ace witness" in the VBS matter, News24 reported.
Pick n Pay profit halved
Its sales of liquor and tobacco sales, which were banned for a large part of the lockdown, fell by almost 48%. Clothing sales - partially banned for some time - dropped by 4%. Group turnover increased by 2.6% year-on-year. Prices rose by 3.4% over the six months at its stores.
Sales of food and groceries rose by almost 10% in South Africa.
Pick n Pay's share price rose by 2% to R46.86 - which is still down 27% from the start of the year.
Foschini invests in SA factory
The Foschini Group announced that it is investing in local factories to cut down on its reliance on China. It only takes 42 days for clothing to reach the shelves when locally produced as opposed to over 100 days when imported.
Implats approached about stake in Zim mine
The owners of a Russian-backed project to build Zimbabwe's biggest platinum mine want to sell a stake of at least 20% in the mine - and it has approached Impala Platinum, Bloomberg reports.
Rand takes a hit after Trump shocker
The rand has weakened to R16.63/$ as investors dumped risky assets following a shock over the US economic stimulus plans. Markets faltered overnight after US president Donald Trump unexpectedly stopped negotiations over the plan.
The Dow plummeted as much as 1.5% immediately after the announcement.
The abrupt pause leaves the US economy to recover without fiscal support many have deemed essential for fueling a timely bounce-back.
"I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business," the president said in a tweet.
This means Americans will not receive any additional economic relief — neither stimulus checks nor expanded unemployment benefits — until at least after the November election.
Insisting that Democrats only want to "bailout poorly run, high crime, Democrat states," Trump said on Twitter that he would no longer negotiate with them over another stimulus package. Indeed, he insisted that the economy is "doing very well," despite there being 10.7 million fewer jobs today than there were six months ago, and said he would pivot instead to confirming his nominee Amy Coney Barrett to the Supreme Court.
On 1 October, the Democrat-led House of Representatives passed a $2.2 trillion coronavirus relief package that included a second round of $1,200 stimulus checks for every American, with parents eligible to receive another $1,200 for each dependent child. The bill also proposed an additional $600 in federal unemployment benefits and $436 billion in aid for state and local governments to help cover the cost of providing assistance to out-of-work Americans.
But Senate Republicans negotiators balked at the price tag, and the two sides were unable to reach a deal.
Cosatu strike gets underway
Cosatu's national stayaway strike got underway this morning in protest against corruption, retrenchments and unemployment, gender-based violence and attacks on collective bargaining. Motorcades are planned for Tshwane, Polokwane, Mbombela, Rustenburg, Mthatha, Bloemfontein and more.
KZN Cosatu members gather at the King DiniZulu Park to start embarking on their way to meet other members at Curries Fontein for their massive March in Durban. #CosatuNationalStrike #SAFTU Video: Motshwari Mofokeng / @AfriNewsAgency (ANA) pic.twitter.com/syAQT3RKi8— Daily News (@DailyNewsSA) October 7, 2020
Luxury cars seized
More than 25 luxury vehicles owned by businessman Edwin Sodi – who finds himself at the centre of a R255m asbestos audit tender scandal – and his firm Blackhead Consulting, were seized yesterday. The NPA reported that assets and cash totalling R300 million had been frozen. Sodi, along with ousted Mangaung mayor Sarah Mlamleli, the head of the Free State human settlements department Nthimotse Mokhesi and others face more than 60 charges tied to a tainted multimillion-rand asbestos audit contract, which envisioned an audit of 36 000 low cost homes in the province.
Meanwhile, the Hawks have dismissed rumours of an imminent arrest of ANC secretary-general Ace Magashule. Magashule has been on the radar of law enforcement over his links to corrupt deals in the Free State.
Oil surges after Trump leaves hospital
Stock markets rallied overnight after US President Donald Trump was released from hospital, and amid signs that US politicians are moving closer to a new stimulus package. Oil prices surged 6% - also due to a strike at oil and gas fields in Norway. The rand was last at R16.55/$.
Cosatu plans national strike tomorrow
Cosatu is urging workers to take part in a national "stayaway strike" tomorrow in protest against corruption, retrenchments and unemployment, gender-based violence and attacks on collective bargaining. Due to the Covid-19 pandemic, workers have been asked to stay at home, rather than congregate in the streets.
PPE suppliers at tribunal
A special tribunal will today hear arguments about whether the bank accounts of 40 Gauteng-based contractors who benefited from PPE contracts should remain frozen. Earlier, it granted an urgent application by the SIU to freeze R38.7 million held in the contractors' bank accounts. The companies are linked to a Gauteng health department PPE tender that was allegedly irregularly obtained.
Multichoice rockets 9% after Canal+ takes stake
The French media company Groupe Canal+ now holds 6.5% of Multichoice, the company announced on Monday. The share price of Multichoice, which owns DStv, rocketed by 9% in response.
Canal+ is owned by Vivendi, which is also the owner of one of the biggest record labels in the world, Universal Music Group, as well as the advertising giant Havas.
“As a publicly held company, MultiChoice regularly engages with its strategic partners and maintains an open dialogue with the investment community. The Group's policy is not to comment on its individual shareholders nor on its interactions with them. The Company remains committed to acting in the best interests of all shareholders and to create sustainable long-term shareholder value,” Multichoice said in a statement.
Fuel price cuts from Wednesday
From Wednesday morning, 93 petrol will be 23 c/l lower, while 95 petrol will decrease by 32c/l. Diesel will be lowered with some 90c. This is thanks to a stronger rand last month, and a falling oil price. The Brent crude oil price fell from an average of $44.78 per barrel in August to $40.82 in September, while the average rand level was R17.28 in August, and R16.72 in September.
On Monday, oil prices rebounded as US president Donald Trump’s doctors suggested that he could be discharged from hospital today. Trump’s illness triggered uncertainty in the market. Brent crude oil was back above $40 a barrel. The rand was trading firmer at R16.44/$.
NUM to strike at De Beers, Exxaro
Members of the National Union of Mineworkers (NUM) are set to down tools at De Beers, Exxaro and Petra Diamonds after they failed to reach a wage settlement at the Commission for Conciliation, Mediation and Arbitration (CCMA).
The planned strike at the three companies had been given the go-ahead by the CCMA, with the union saying it was now finalising logistics.
The NUM wants an 8% increase at De Beers, while the company is offering 1.5%. Exxaro Coal is offering 5, against the union's 7.5% demand.
SAA, Mango strike agreement with technical services
After threatening to stop supplying services to SAA and Mango, South African Airways Technical reached an agreement with the airlines, who have agreed to pay in advance for maintenance work on their aircrafts. Both SAAT and Mango are subsidiaries of SAA, which is in business rescue and still awaiting a R10.5 billion bailout from government.
SAAT employees were paid only 25% of their salaries in September.
Gautrain workers start strike
Fin24 reports that Gautrain services will continue on Monday, even as workers go on an indefinite strike over a pay hike. The National Union of Metal Workers of South Africa (Numsa), is demanding an 8% increase for its members at Gautrain and has rejected the 4% offer on the table. Gautrain says it is implementing a “contingency plan”, which includes additional security.
Gold rallies, oil slumps after Trump diagnosis
Global equity markets and oil plunged on Friday, while gold spiked after US president Donald Trump said he and his wife had tested positive for coronavirus.
The Brent oil price was down 3% to below $40 a barrel, while gold jumped 3% to $1,909/oz.
Sasol in deal to sell half of Lake Charles
Sasol plans to sell a 50% stake in US base chemicals business, including its beleaguered Lake Charles project, to Dutch chemicals multinational LyondellBasell in a deal worth $2 billion. The proceeds will be used to lower Sasol's debt burden of $10 billion.
Lake Charles has been hit by huge cost overruns - it cost double the budgeted amount - and other technical problems.
The unit will become a joint venture between the South African company and LyondellBasell, Sasol said in a statement Friday. The deal is expected to be completed this year.
Sasol announces sale of 50% of lake Charles in USA for $2bn. Total cost was around $12bn. So around $8bn lost on lake Charles. Still say might be right offer next year but no immediate urgency. Could happen if share price goes up— Wayne McCurrie (@WayneMcCurrie) October 2, 2020
The article has been updated to reflect that Sasol is selling a stake in its base chemicals business in the US.
Two women take CEO, CFO positions at Spur
Val Nichas has been appointed as the new CEO of the Spur Corporation, which also owns Panarottis, John Dory’s, RocoMamas and Hussar Grill. Nichas was formerly the managing executive for quick service restaurants at Famous Brands, which owns Steers, Debonairs Pizza, Wimpy, Mugg & Bean, Fishaways and Milky Lane.
Spur also announced that its CFO, Phillip Matthee, has requested to stand down from his current position for personal reasons. He will take a senior operational role within the group’s finance department.
Cristina Teixeira, previously CFO of Group 5 and the Consolidated Infrastructure Group, will take his place.
Christo Wiese resigns as Shoprite chair after 41 years
Christo Wiese will retire as a chairman of Shoprite next month. Wiese has been Shoprite's chairperson since 1979, and will be followed up by the chairperson of Absa, Wendy Lucas-Bull. Last year, shareholders holding 61% of the shares in the company voted against his re-appointment as chairman.
Wiese was once South Africa’s richest man, Bloomberg reported. But much of his wealth was lost after he exchanged Pepkor for shares in Steinhoff. He was its biggest shareholder at the time 90% of its share value was wiped out, and is currently suing Steinhoff for R59 billion.
Rand at the best level in a week
The rand reached R16.67/$ this morning – its best level in a week. The currency has recovered from a low point of R17.23 a couple of days ago. Risk appetite improved overnight amid renewed hopes for a stimulus deal in the US, and positive US jobs data.
Also, South Africa's trade surplus increased in August, with the country exporting R38.9 billion more than it imported. Exports were up almost 9% than a year ago.
Big day for spectrum
Icasa is expected to publish an invitation for telecommunication companies to apply for spectrum today. Mobile operators have long blamed the lack of spectrum for SA's high data prices.
In July 2016, Icasa invited applicants for spectrum licences, but the courts halted the process. Government argued that its policy regarding spectrum had not yet been finalised and that the sale risked only benefitting big companies with access to capital.
Capitec rallies after results
Capitec’s share price gained another half a percent early on Thursday, after a rally of more than 5% yesterday. Its share price climbed above R1,000 after it released its results.
Capitec’s headline profit fell by 78% to R650 million in the six months to end-August.
The group impaired R5.8 billion for bad debts, and rescheduled payments for R7.5 million in loans.
“Banking clients’ income was negatively impacted by the lockdown and decreased by 25% in April 2020 compared to March 2020. By August income had returned to March 2020 levels,” Capitec said.
Its share price is still down 30% from its highest level over the past year, but has doubled from recent lows.
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