Here’s what caught our attention on Monday:
1. Group Five saves internal jobs
Group Five is doing the opposite of a lot of struggling South African companies. It’s saving jobs. Moneyweb is reporting that as the embattled construction company delists from the JSE, between 3 000 and 3 500 jobs will be saved through the restructuring and sale of businesses and contracts to new owners.
Voting for the business rescue of Group Five Ltd and Group Five Construction will take place on September 11. If the business rescue plans are not adopted by creditors, the business rescue proceedings will immediately be converted into liquidation proceedings, according to Moneyweb.
2. Old Mutual results
The life insurer that continues to fight a boardroom battle with its former CEO, Peter Moyo has published interim results for the six months ended June 30, 2019. Old Mutual is reporting a 10% increase in adjusted headline earnings per share to 109.1 cents as well as a 10% increase in adjusted headline earnings of R5.2 billion. Interim CEO, Iain Williamson says the 10% increase in adjusted headline earnings reflects the ‘resilience’ of Old Mutual’s diversified business. He says the company remains focused on streamlining its operations for efficient services. The company is declaring a dividend of 45 cents per share, unchanged from 2018.
3. RCL foods reports losses
Consumer goods company, RCL Foods is reporting a 60.8% decrease in headline earnings per share to 37.9 cents, while reporting losses per share of 12.7 cents, down 111.9%. Revenue for the year ended June 2019 rose by 5.5% to R25.9 billion. The company attributes this to volume gains in most business units alongside commodity-driven price increases in animal feed. Profitability was, however, shot down by adverse performances in the sugar and chicken business units, the company says. Adding that the implementation of the sugar tax resulted in an adverse sales mix and lower sugar result, while the chicken unit was negatively impacted by low selling prices as a result of an oversupplied retail poultry market. A total cash dividend of 25 cents per share is being declared for the period.
4. Bidvest reports a 9.8% increase in Heps
Trading, services and distribution company, Bidvest is reporting a 9.8% increase in headline earnings per share to 1 352.1 cents for the year ended June 30, 2019. Headline earnings increased to R4.6 billion and trading profit increased by 3.5% to R6.7 billion. The company says it delivered strong earnings growth in associate companies, while both gross and trading margins improved for the period.
Bidvest adds that strong profitability gains were also achieved at Adcock Ingram, while Comair recognised the successful claim award against SAA, increasing Bidvest’s share of profits in the associate companies.
A final dividend of 318 cents per share is being declared for the period, up 5.6%.
5. Rand update and the week ahead
South Africa is bracing for second quarter GDP data, due on Tuesday. In the first quarter, the country’s economy recorded negative growth, with GDP contracting 3.2%, the biggest decline in nearly a decade.
South Africa’s total new vehicle sales data and Absa PMI is due on Monday.
The rand gained on Friday after South Africa recorded an unexpected trade deficit for July. On Monday, the currency was at R15.14 to the dollar at 9:25.