Sabvest HEPS jump on underlying investment gains

On Friday, Sabvest ended unchanged at R34.45 per share, in spite of the group releasing a solid set of results for the year ended 31 December 2015. On the 31st of December, the group’s net asset value stood at 3,719 cents per share, a 38.6% increase over that of the previous corresponding period. This was mainly due to the gain on the sale of Set Point, while Brait and Transaction Capital experienced sharp increases in their share prices. In addition, the group saw its headline earnings per share increase by 125.7% to 1,004 cents. Lastly, the board declared a final dividend of 29 cents per share, bringing the total dividend for the year to 50 cents per share.

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JSE confirms bumper year as market activity jumps

It was a busy day on the SENS feed yesterday as company after company reported.

The JSE delivered a solid set of results for the year ended 31 December, with the group’s earnings after tax increasing by 42% to R899mn. This increase was primarily driven by double-digit revenue growth across all operating divisions, thanks to significantly higher market activity. The Primary Market saw a 20% increase in revenue to R161mn, while the Equity Market saw a 26% increase in revenue to R501mn. As a result, the group saw its earnings per share increase by 42% to 1,051 cents, while headline earnings per share rose by 40% to 1,206.3 cents. Lastly, the board has seen fit to declare both an ordinary dividend and special dividend at 520 cents and 105 cents respectively.
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Rand tanks after Budget Speech

The rand weakened dramatically on Wednesday, falling more than 50 cents, from a previous close of R15.238/$. It managed to hold its ground for most of the day, moving to R15.29/$ at 13:00. Nevertheless, it began to wobble in the run-up to Finance Minister Pravin Gordhan’s Budget Speech, and accelerated losses as the speech progressed. It’s tempting to blame the movement on disappointment over the SA Budget, but, it must also be noted, Moody downgraded Brazil’s sovereign rating to junk just as the Budget Speech began. It is very likely this exacerbated the losses as the EM currency basket took a hammering. After stabilising overnight, the rand is currently trading just below the R15.63/$ level.
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Aspen Pharmacare surges 9.42%

Former JSE darling, Aspen Pharmacare featured as one of yesterday’s top performers, surging 9.42% after it released a trading statement for the period ended 31 December 2015. In it, the group advised shareholders it expects an earnings per share increase of between 32% and 37%. However, headline earnings per share are expected to decline by between 21% and 26%, mainly due to the once-off effect arising from the devaluation of Aspen’s Venezuelan business. As a result, the group advised shareholders to rather consider the normalised headline earnings per share figure, which is expected to increase by between 11% and 16%, to between 635.7 cents and 664.3 cents.
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AngloGold Ashanti cuts net debt by 30% in 2015

In its results for the year ended 31 December 2015, AngloGold Ashanti reported a significant improvement in free cash flows of $141mn, compared to an outflow of $112mn in 2014. The group was also able to reduce its net debt by 30% to $2.19bn, in part thanks to the sale of its Cripple Creek and Victor operations. During the period, the AngloGold’s production came in at 3.947Moz, with the figure being at the upward end of the revised guidance range. Total cash costs came in at $712/oz, a 9% decrease on the previous year, while all-in sustaining costs dropped by 11% to $910/oz. Lastly, the group reported adjusted headline earnings of $49mn, up from a loss of $1mn in the previous corresponding period.
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Steinhoff makes £1.4bn bid for Britain’s Home Retail Group

On Friday, Steinhoff International ended marginally lower, down 0.78%, at R78.80. However, after European markets closed for the day, Steinhoff released a statement confirming it had made a £1.4bn bid to acquire Britain’s Home Retail Group. The all-cash offer, which values Home Retail at 175 pence per share, is substantially higher than the 161.3 pence offer in cash and stock Sainsbury agreed to pay earlier this month. A takeover of Home Retail would further increase Steinhoff’s exposure to Europe, while also marking the group’s largest acquisition since it bought Pepkor Holdings for R62.8bn in 2015.
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Grindrod beats expectations but warns of rough seas ahead

Grindrod featured among the top performer’s yesterday, up 7.79%, after the battered shipping and logistics company released a better-than-expected trading statement. The group, which has fallen 32.5% in 2016 and around 50% over the last year, announced that it expects its headline earnings for the year ended 31 December 2015 to come in at between R545mn and R580mn. This marks a decrease of between 20% and 25% from the R729.4mn reported a year ago. However, when including a number of impairments, the group is expected to record a loss of between R1.35bn and R1.5bn, a decrease of between 235% and 250% compared to earnings of R1bn in 2014.
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Discovery gets slammed 5.56% on trading statement

Discovery fell 5.56% yesterday after releasing a trading statement advising shareholders to expect the groups basic earnings per share to decrease by between 45% and 55%. Earnings per share are expected to come in at between 266.7 cents and 325.9 cents, down from a restated amount of 592.6 cents in the previous corresponding period. Meanwhile, headline earnings per share are expected to come in at between 264 cents and 322.6 cents, a decrease of between 45% and 55%, down from 586.6 cents a year ago. The group also provided a normalised headline earnings per share figure, which management believes is the most relevant indicator of business performance. This normalised earnings figure is expected to increase by between 0% and 5%, to between 335.9 cents and 352.7 cents, up from 335.9 cents previously. The group’s results are expected to be released on the 25th of February 2015.
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Tiger Brands warns weak rand will increase cost base

Tiger Brands featured among the worst performers during yesterday’s session, after the group shed 4% to close at R300.00, following the release of a trading update for the four months ending 31 January 2016. In it Tiger Brands recorded a 7% increase in turnover compared with the corresponding period. Domestic sales were slightly lower as a result of increased levels of pricing pressure and a slow-down in consumer demand. This was offset by an improved underlying performance in exports and international business. Lastly, the group warned rand weakness would result in inflationary pressures on raw material cost base over the course of the year.
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Anglo American downgraded to junk

Yesterday, Anglo American’s surged 8.27%, yet, in spite of the strong performance, Moody’s Investors Service became the first credit-ratings agency to downgrade Anglo American’s credit rating, by three notches, to junk status. As it stands, Anglo American now has a credit rating of Ba3 from Moody’s, from Baa3 previously, while the ratings agency has also maintained its negative outlook on the group given the risks associated with executing its restructuring plan and reducing its net debt. It will be a busy day on the market for Anglo, with the group also expected to release results this morning.
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