An encouragingly good week for SA Inc

Good results from Barloworld and a trio of retailers, some share price sparkle for Tsogo Sun, Ayo’s 142% dive in profits and 86% increase in dividends, two cents’ on Tencent’s biggest shareholder(s), and some bank AGMs.
Keeping it in the family: the Survé group will be one of the biggest beneficiaries of Ayo’s generous dividend. Image: Waldo Swiegers, Bloomberg

Leaving aside the considerable and grim prospect of a third wave of the Covid-19 pandemic in SA and more restrictions, there was much that was encouraging on the corporate front last week.

Many large consumer-focused companies reported stellar performances for the latest six-month reporting period; in a few instances even the full year figures were looking strong.

Read/listen: Pleasing results from SA Inc

This is an encouraging demonstration of the resilience of the corporate sector and, as the Capitec remuneration chair might say, an indication of “tireless and ingenious efforts”. Of course the Capitec Remco would have us believe these tireless and ingenious efforts were being made by a relative handful of executives only. What a load of self-serving tosh that is.


Barloworld’s interim results were looking surprisingly dapper after concerns earlier this year that the group might be losing its way.

Investors were evidently encouraged as the share price surged over 20% in the days after the results announcement.

Even former stablemate and consummate laggard Nampak managed to bring a bit of cheer, with the share price ticking up 5% after better-than-expected interims.

Read: Barloworld to sell its logistics business by the end of the year (May 25)


In the retail sector, strong results from Lewis, Mr Price and Pepkor indicated the benefits of pent-up consumer demand.

Pepkor grew headline earnings by 50.6% on a revenue increase of just 8%.

The Lewis share price has more than doubled since the R12 low reached in August last year.

The current share price of R34.40 might encourage a slowdown in the recent pace of share repurchases. In early February the furniture retailer disclosed that it had spent R47 million repurchasing 5.2 million of its shares between late October and early February.

Last week, the day after the release of its annual results, Lewis informed shareholders it had purchased an additional 3.5 million shares between early February and May 27 for a total cost of R109 million.

Tsogo Sun

Hotel and leisure group Tsogo Sun isn’t having such a good time.

Last week it reported a R3.3 billion revenue slump for the year to end-March and an operating loss of R177 million. These grim figures were on the back of an occupancy rate of a mere 12% for the financial year.

Notwithstanding the dismal results, the share price surged 27% in the days after their release.

At R8.40 the share price is now off its 12-month low of R2, but it is still way off its net asset value.

Read: 1 000 jobs cut at Tsogo Sun Hotels amid Covid-19 financial fallout (May 28)

Ayo Technology

Of course the stand-out appalling results last week were the ones released by the software and computer services group in the Iqbal Survé stable, Ayo Technology.

In the six months to end-February 2021 revenue plummeted 36% to R859 million.

Much scarier however was the 142% dive in profits from R160 million to a loss of R66 million.

Despite these massive losses – equivalent to 25c a share – the board decided to increase its dividend by 86% to 65c a share.

That generosity, which will cost the company R223.6 million, will certainly help the Survé group with any cash issues it has, given that through African Equity Empowerment Investments (AEEI), it will be one of the largest beneficiaries.

The dividend announcement might prompt the Public Investment Corporation (PIC) to speed up its efforts to track down the R4 billion cash it pumped into Ayo in December 2017.

Another few dividend payments like that and there won’t be much more cash left to track down.

Naspers and Prosus

Familiarity is certainly not leading to content in the case of the latest rearrangement of assets/shares in the Naspers-Prosus game.

After considering the complexity involved, most analysts are remarkably underwhelmed.

And given the continued discount to Tencent it is increasingly difficult to believe the creation of Prosus and move to Amsterdam was of any value to anyone other than the top executives.

Read: Prosus offer to Naspers ‘idiotic’ – Saporta (May 26)

Bank AGMs

The AGM season got into full swing last week.

Standard Bank provided an excellent opportunity for shareholders to consider another perspective on the group’s plans around expansion into Africa.

Nedbank’s was rendered dull by the absence of shareholder involvement and the board’s puzzling insistence on spending an inordinate amount of time reading out screeds of information that is already available to shareholders.

(Over at MTN chair Ncebesi Jonas was having none of that time-wasting; he glided through the AGM in 37 minutes helped by the complete lack of involvement of shareholders, other than to cast their vote.)

Capitec’s AGM was also rather lifeless apart from the remarkable and unprecedented 51% vote against the remuneration implementation report, which essentially ignored the remuneration policy. If the remuneration committee was surprised by the vote, it should be replaced. Perhaps it should be replaced anyway.



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Seriously Ann Crotty… the JSE surge primarily on commodities is not the panacea miracle for the SA economy

You are in denial or ignorant if you think all is hunky doey in SA Inc

Every 79 cents of every tax rand goes to debt repayment and civil servant wages, let alone the plethora of other governance stupidity served to the nation

Trivial article when leaving the ills out

I don’t know what you’re on about – none of the companies she mentioned are in commodities.

And regardless of what government is doing, most of these companies have done well under the circumstances. Yes, that deserves to be celebrated.

I guess the glass is always half empty for some.

End of comments.



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