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Five things making headlines in South Africa today

Pioneer Foods, Barloworld and Adcorp results, Ramaphosa appoints head of anti-corruption unit, the rand is firmer.

Here’s what caught our attention on Monday:

1. Pioneer Foods results

The owner of Sasko bread, Bokomo Weet-Bix, Liqui Fruit juice and other brands, Pioneer Foods is reporting a 14% drop in headline earnings and headline earnings per share to R509 million and 272 cents respectively, for the six months ended March 31, 2019. The company’s revenue however increased by 11.5% to R11.039 billion, driven by volume growth in its key product categories such as bread, wheat, rice, beverages and cereals in the UK and sausage rolls in Nigeria. The company says this is an indication of a credible topline performance in the ‘significantly constrained local consumer market with consequent competitive pressures’. A gross interim dividend of 105 cents per share has been declared for the period, unchanged from 2018.

2. Barloworld results

Barloworld Limited, distributor of industrial equipment, is reporting a 14.1% increase in normalised headline earnings per share to 521.4 cents, against the backdrop of a challenging trading environment. The company says its Equipment Southern Africa and Motor Retail divisions contributed to its improved performance for the six months ended March 31, 2019. The company is in negotiations and carrying out due diligence to acquire a contiguous Equipment territory. Barloworld also notably completed its Khula Sizwe B-BBEE transaction and launched it to shareholders during the period. An interim dividend of 165 cents per share has been declared, up 13.8%.

3. Adcorp results

Recruitment firm Adcorp is reporting a 34% increase in underlying Ebitda to R518 million for the year ended February 28, 2019. Earnings per share increased to 240 cents from a loss of 517 cents per share in the prior period, while headline earnings per share from continuing operations increased by 320 cents to 234 cents compared with a loss of 86 cents per share in the prior period. Revenue decreased by 2% to R15 billion mainly due to macroeconomic challenges, increasing unemployment in SA and low GDP growth in Australia. The company however says, in keeping with its four strategic priorities, it was able to deliver improved financial performance. A dividend of 96.10 cents per share has been declared for the period.

4. President appoints head of anti-corruption unit

The ball is rolling in the new-era of Ramaphosa, as he announced the appointment of the head of his newly formed anti-corruption unit. Over the weekend, news emerged that Advocate Hermione Cronje, a veteran lawyer, would govern the Investigating Directorate, an arm of the National Director of Public Prosecutions. Reuters is reporting that the unit will be focusing on issues coming out of the ongoing commission of inquiry into state capture, with special focus on high-profile, complex corruption cases.

Read: Ramaphosa appoints head of anti-corruption unit, The new era has begun, and the stakes are high

5. Rand update

South Africa has a busy week ahead, with both the inflation rate and the Sarb’s interest rate decision due. In political events, investors are still keeping a close eye on President Cyril Ramaphosa’s moves as announces the new members of his cabinet in a week. Last week, the rand was mostly affected by the ongoing, tit-for-tat US-China trade war. According to Rand Swiss, the rand emerged as the third largest loser among emerging market currencies, losing the stability it managed to maintain over the week. On Monday, the rand was at R14.40 to the dollar at 8:47. 

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