Today in business: AYO in legal bid to stop FNB from closing accounts | Rand at best level in more than a year
Rand at best level in more than a year
The rand is on a tear - on Friday morning, it was at its best level in more than a year: at R14.26/$, R19.61/pound and R16.98/euro.
The currency is gaining as the market priced in the Fed's assurance that US interest rates will stay low for longer. US bonds are in retreat.
AYO in legal bid to stop FNB from closing accounts
FNB has decided to sack Iqbal Survé-linked IT company AYO Technology Solutions as a client from 3 May, Fin24 reports.
For its part, AYO has filed an urgent high court application to interdict the bank from terminating its bank accounts.
Italtile sees 19% increase in sales
Italtile released a trading update, which showed an 18.5% sales increase for the nine months, while like-for-like retail store sales grew by 17.1%.
PSG Konsult declares dividend as profits grow 8%
Investment company PSG Konsult, which is sitting on R1.6 billion in cash declared a dividend, increasing it by 9% to 24.5 cents. Headline profits for the year to end February rose 8% to R696 million compared to R644 million in the period prior.
The company’s insurance arm grew the most, delivering 24% growth in earnings to R151 million, while the Wealth business grew 19% to R447 million. The Asset Management unit was the laggard and tumbled 28% to R104 million from R146 million previously.
African Bank gets a new CEO
Banker Kennedy Bungane was on Wednesday appointed as the African Bank’s new CEO following the departure of Basani Maluleke in February.
Basani was instrumental in rebuilding the bank after it emerged out of curatorship.
Kennedy’s banking experience spans over 20 years and he has held key senior positions including CEO of Corporate and Investment Banking for Standard Bank as well as chief executive for Barclays Africa. He spearheaded the sale of Barclays Africa to Absa.
His most recent stint was at Phembani Group where he was CEO.
J&J demands support letter
Health Minister Zweli Mkhize says Johnson & Johnson won't sign off on the 20 million Covid-19 vaccines doses for the country until they get a letter expressing support for their investment in local pharmaceutical brand Aspen. The company has told the government not supplying the letter makes their global leadership nervous and is viewed as not showing political support for its plans.
Retail sales bounce in Feb
Annual retail sales increased by 2.3% year-on-year in February. This is the first annual increase in ten months since April 2020.
SAA gets new interim CEO
Meanwhile, Air Traffic Navigation Services director Thomas Kgokolo has been appointed as new interim CEO of SAA.
Meanwhile, the SAA Pilots' Association is launching urgent legal action to prevent the airline from using outside labour. SAAPA members have been locked out by the rescue practitioners since 18 December.
Group reportedly interested in Shoprite Nigerian business
Reuters is reporting that Nigerian property group Persianas wants to buy Shoprite’s business in Nigeria.
EOH profits grow 83% despite a revenue tumble
Despite total revenue dropping 29% to R4.4 billion from R6.2 billion, EOH reported an improvement in headline earnings, which grew 83% during the six months to end January 2021.
During the period, customers delayed spend on large planned IT projects, particularly in the hardware space, which negatively affected revenue.
The company, which has been going through a strategic overhaul, has over time disposed of some non-core assets and dumped under-performing operations, helping to stabilise the business, the EOH’s CEO, Stephen van Coller said in the results statement on Wednesday.
It also made progress in settling five out of eight of its so-called problematic public sector legacy contracts.
The company generated a profit of R59 million after recording a loss of R915 million in the prior period.
The company said it directly benefited from digital adoption and transformation accelerated by the Covid-19 pandemic, especially in its iOCO business.
Zeder to sell more of its assets
The agricultural group Zeder said this morning that it "received several approaches from third parties interested in acquiring a number of Zeder portfolio investments".
Zeder, which was established by PSG, sold its stakes in Pioneer Foods and Quantum Foods last year. The company still owns majority stakes in Capespan and Zaad Holdings, as well as a 40% stake in Kaap Agri.
Capitec profit down 27% - but its dividend doubled
Capitec's headline profit for the past year fell by 27% to R4.6 billion - although the company did see a strong recovery in the past six months. During the first part of lockdown, the bank offered R7.5 billion in repayment relief to clients. In the first month in which payments were due again, 80% of clients who took breaks resumed payments. Capitec's number of active clients increase by 14% to 15.8 million. Retail deposits grew by R17.8 billion to R105.3 billion.
Capitec more than doubled its total dividend per share.
Capitec results year to Feb. Earnings down as expected, but dividend up strongly as did not declare a final dividend last year or an interim dividend this year. Total dividend for this year is R16 compared to R7.55 for last year. So a big catch-up in dividends.— Wayne McCurrie (@WayneMcCurrie) April 13, 2021
Big blow for Myeni
Former South African Airways chairperson Dudu Myeni's attempts to reverse the lifetime declaration that she is a delinquent director may have come to a dead end, Fin24 reports. The Supreme Court of Appeal has dismissed Myeni's application for appeal with costs, saying there were no reasonable prospects that she'd succeed in her argument.
MTN values mobile unit
Covid loan guarantee scheme extended
The Covid-19 loan guarantee will be extended by another three months, allowing drawdowns to continue until 11 July 2021. There has been a limited uptake of loans so far.
Hammerson plans sale of retail parks for £350 million
JSE listed UK mall owner Hammerson confirmed on Monday that it is in the process of selling its retail parks as it tries to bolster its balance sheet.
The news comes after reports from the Sunday Times in the UK, stating the company is planning on offloading its retail parks portfolio and selling it to Brookfield, a Canadian private equity company.
It said Brookfield would buy Hammerson’s seven retail parks for about £350 million (more than R7 billion).
The company, whose assets include Brent Cross in London and Bullring in Birmingham, has been adversely affected by uncertainty brought on by Brexit and the pandemic.
Rand takes a hit after recent high
After hitting its best level in almost two months last week, the rand weakened after the dollar was bolstered by better-than-expected US economic data. The rand was last at R14.64/$.
Industrial metal prices came under pressure this morning after China’s premier said the country will strengthen control of commodities prices that have hurt businesses, Reuters reports.
EasyEquities sees 200% increase in revenue
Purple Group reported a 80% increase in half-year revenue to R100.6 million, with the company posting a profit attributable to shareholders of R8.3 million, compared to R800,000 in the previous period.
EasyEquities revenue increased by 197.6% to R85 million. Purple also owns GT247.com, and Emperor Asset Management.
Purple's share price fell by almost 8% on Friday, after recently reaching a record high.
Hulamin loss to shrink
Hulamin expects a headline loss per share of between 64c and 70c per share in the past year - compared to a loss of 76c previously. The improvement in the expected headline loss per share is largely due to the once-off restructuring costs in 2019, the company said.
RMB Holding investors to get massive special payout
RMB Holdings declared a special dividend of 80c a share, returning capital which was earmarked for a property development in Bucharest. The planned development didn't meet the conditions for the investment to go ahead.
SA gets $1bn loan from Brics Bank
South Africa is set to receive a new $1 billion loan from the New Development Bank, Fin24 reports. The NDB was established by Brazil, Russia, India, China and South Africa. The bank said the loan would "finance creation of employment opportunities" as part of the first phase of the Presidential Employment Stimulus. The loan is the second provided by the NDB to help SA overcome the impact of the pandemic after it approved a $1 billion emergency loan in June 2020.
Pick n Pay takes profit hit
Pick n Pay's headline profit for the year to end-February is expected to fall by between 15% and 25%, the company said on Thursday.
Group turnover rose by 4.3%, with sales in South African stores up 5%.
The sales bans on alcohol and cigarettes during lockdown cost the company R4 billion in sales. Clothing sales were also prohibited during the initial phase of the lockdown - but the retailer's clothing unit still managed to grow sales by 1.3%.
By late afternoon, Pick n Pay's share price was down 1.5%.
Anglo American to list SA coal company on the JSE
Thungela Resources will be listed on the JSE, with a secondary listing on the London Stock Exchange. Anglo American shareholders will receive one share in Thungela for every 10 Anglo shares they hold.
"Anglo American has been pursuing a responsible transition away from thermal coal for a number of years now. As the world transitions towards a low carbon economy, we must continue to act responsibly – bringing our employees, shareholders, host communities, host governments and customers along with us. Our proposed demerger of what are precious natural resources for South Africa, allows us to do exactly that," says Anglo CEO Mark Cutifani.
Anglo says the proposal will allow Thungela to attract new shareholders and "to access new sources of capital as an independent company offering direct exposure to thermal coal".
Anglo American will provide an initial cash injection of R2.5 billion and further capital support until the end of 2022 if thermal coal prices fall below a certain threshold.
July Ndlovu, currently the CEO of Anglo American Coal South Africa, heads Thungela.
If approved, it is expected that trading in Thungela would start on 7 June 2021.
Canadian group launches cash bid for Adapt IT
The JSE-listed software group Adapt IT has received a cash buyout offer from the Canadian tech group Volaris.
Volaris is offering R6.50 per share, in cash. But shareholders can also keep their shares in the company. Adapt-IT was trading at R4.43 on Wednesday.
In January, the JSE-listed Huge Group launched an “unsolicited” takeover bid for Adapt IT. Huge Group offered to exchange each Adapt IT share for 0.9 Huge share, which works out to a value of R5.52 per share.
Volaris controls 70 companies across the world, with 150 offices in 30 countries, and is part of the Toronto-listed Constellation Software Group.
AdaptIT still seems like a steal at R6.50. Trailing twelve month PE of 8.9 odd times, balance sheet de-levering, portfolio de-risking, economic recovery to come. Oi.— Chantal Marx (@chantal_marx) April 7, 2021
EasyEquities owner's profit up more than 800%
In a trading update, the Purple Group - which owns EasyEquities, GT247.com, and Emperor Asset Management - said that it expects that its half-year headline profit will increase by between 834% and 854%.Its results for the six months to end-February will be published around 9 April.
Prosus to sell R212bn in Tencent shares
Prosus announced plans to sell 191.89 million shares in the Chinese tech behemoth Tencent, reducing its stake from approximately 30.9% to 28.9%.
Bloomberg reports that it could earn $14.6 billion (R212 billion) from the sale.
"Prosus intends to use the proceeds of the sale to increase its financial flexibility to invest in growth ventures, plus for general corporate purposes."
By midday, Prosus and Naspers shares declined by more than 4%.
JSE plunging with Prosus’ decision to sell 2% of it’s Tencent stake reducing it’s holding from an effective 30.9% to 28.9%. Promise won’t sell more for another 3 years. While receiving cash should reduce valuation gap between Prosus & Tencent the market has sent Prosus 4% lower.— David Shapiro (@davidshapiro61) April 7, 2021
Prosus has committed not to sell any further Tencent shares for at least the next three years, "in line with its long-term belief in the potential of the business".
PIC now owns more than 15% of Clicks
The Public Investment Corporation, which manages the Government Employees Pension Fund, has increased its stake in Clicks to above 15%, the retailer said in a statement.
Comair exits JSE
Comair will be delisted from the JSE on Wednesday. The company has been in business rescue since May last year as the pandemic dealt the struggling business a final blow.
In October last year, SA Bidco, a newly established company created by former Comair executives and directors, received approval to take control of the company.
Comair operates kulula.com and the British Airways franchise in South Africa. It has been listed on the JSE since July 1998.
Shareholders will be offered a buy-out offer of 4.26c per share. Comair was trading at 100c before its listing was suspended in May last year.
IMF hikes SA growth expectation
The IMF expects a stronger global recovery and has revised the growth outlook from 5.5% to 6% in 2021.
It also hiked the growth outlook for South Africa from 2.8% to 3.1%. By comparison, the South Africa Reserve Bank (SARB) expects the domestic economy to expand to 3.8%, and the National Treasury sees the economy rebounding to 3.3%, from a contraction of 7%. The World Bank expects the SA economy to grow to 3% in 2021.
Big fuel price hike
The rand (R14.51/$) was trading around its best levels in weeks, and oil prices have declined. But this won't save motorists from harsh fuel price hikes, which will come into effect on Wednesday: 93 unleaded petrol increases by 95 cents per litre and 95 unleaded petrol by 100 cents per litre.
Eskom, Oracle in fight over bill
Eskom is in a legal fight with Oracle about a R7.3 billion bill, Fin24 reports. The power utility uses Oracle’s products for load monitoring of electricity generation by power stations, but it says it owes Oracle only R166 million.
SARS beats expectations
SA Revenue Service (SARS) collected R38 billion more in tax for the past year than Treasury estimated in February. Total net revenue collection for the year to March was R1.25 trillion. Meanwhile, News24 reports that SARS has uncovered a scam which saw SA diplomats allegedly selling duty-free liquor, cheating SARS of more than R100 million in taxes every month.
Standard Bank rejects loan scheme proposal
Standard Bank has objected to proposals to revive the faltering government-backed Covid loans programme which could see loans swapped into grants.