Sasol’s assets nosedive in value, but what about a rights issue?
Sasol released a trading statement today that used the word “impairment” many times. That isn’t usually good news for shareholders, but Sasol was up over 4% regardless. Let’s unpack how that might be possible. What is an impairment? An impairment is an accounting entry that recognises a drop in the value of an asset. Auditors place a lot of focus …
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City Lodge forces a shareholder check-in
City Lodge has had a shocking year, which came to a head this week amid a flurry of market activity and shareholder shock. Lockdown has crushed the business. Forced to close for months on end, the hotel industry is reeling. Despite being a respected, JSE-listed company, City Lodge is on its knees. the_ad id=”3223″ It’s a financial catastrophe Everyone knew …
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This economic mocktail tastes bitter
The alcohol ban really has gotten to the point of being ridiculous. The old saying of “cutting off your nose to spite your face” applies here. On one hand, government runs around trying to attract investment. Failing that, we take out loans from international finance organisations to keep the country afloat. On the other hand, we systematically destroy our sources …
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Deal-It-Yourself: Cashbuild takes a risky punt
In challenging times, companies often decide to stick to their knitting. They dispose of non-core businesses, especially when those businesses are underperforming and are dragging on shareholder returns. The cash is often used to pay down debt, de-risk the group and allow for complete focus on what the group is actually good at. This exact playbook has been used by …
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Telkom moves into financial services
Telkom is an excellent example of a company that has had to move away from its traditional business model, although the journey has been anything but straightforward. As Telkom emerges from a painful retrenchment and restructuring phase, the company is looking to the future. With more than 12m customers and a market share in the SA mobile market of more …
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Courage Through Crisis
It’s a difficult word, courage. Brimming with emotive imagery, it unleashes thoughts of what you would do if you were plunged into the situations that heroes find themselves in. Getting to grips with the concept of courage requires us to consider potential scenarios that we hope won’t come to pass. These scenarios sometimes become reality, which is when crisis sets …
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Kumba, Kumba, stand…by me
If you are too young to figure out the Disney reference here, you need to do some Googling. “The Lion King” was around long before people paid ridiculous prices for shares in electric car manufacturers that are barely profitable. Dinosaur industry Unlike Tesla and other new-age companies, Kumba Iron Ore is an absolute dinosaur of a company. When Pumba was …
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Emigration nation: should you get on the plane?
Is there a more emotive topic for the South African middle class than emigration? We are staring down the barrel of the toughest economic times this country has faced since democracy. It makes the 2009 Global Financial Crisis look tame (the numbers don’t lie: real GDP fell -1.5% in 2009 and we are expecting worse than -7% in 2020). When …
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Domino’s falling
Illusions of grandeur. Hubris. These are fancy words for the root cause of much destruction of shareholder value across the JSE: corporate egos. Once upon a time, Taste Holdings operated a business called Scooters Pizza. It was a home-grown brand that proved to be successful. At a time when JSE companies were being used as acquisition machines, it maybe even …
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SMElls like trouble
Let’s turn our attention away from listed companies for a day. Small and Medium Enterprises (SMEs) are the lifeblood of the South African economy and there is much to be concerned about. SMEs contribute 39% of South Africa’s GDP but they are hanging on by a thread. the_ad id=”3223″ Small boats in rough seas If listed companies are struggling to …
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