Bell Equipment bounces back to profit

Share price now 47.5% higher than the recent failed buyout of minorities.
After a ‘long fight’ one shareholder is ‘finally excited to own Bell’. Image: Supplied

Shares in JSE-listed manufacturer of heavy equipment for construction, mining and agriculture, Bell Equipment closed at R14.75 on Monday – 47.5% higher than the recent failed R10 per share proposed buyout price of minority shareholders by the company’s founding family trust.

Read: Proposed buyout of Bell Equipment minority shareholders fails [Nov 2021]

Bell Equipment’s share price rose by 2.08% on Monday after the company reported a strong bounce back to profit in the year to December 31, 2021, and that it is now more upbeat about its prospects.

Bell on the up

The company said the corporate action to buy out minority shareholders and delist the company was a shareholder matter but admitted this was a distraction during 2021 and impacted on the group’s operating environment.

Read: Scheme to buy out Bell Equipment minorities at R10 a share an exercise in futility?

The R10 per share offer price raised the ire of minority shareholders, who claimed it undervalued the company, and resulted in complaints to the Financial Sector Conduct Authority (FSCA).

FSCA, JSE investigations

Bell Equipment referred in its latest financial results to a Moneyweb report in September 2021 about the FSCA registering two investigations against the company.

One of the investigations related to alleged insider trading and the other to whether the company published any false, misleading or deceptive statements about the company or its securities during July 2020.

Read: FSCA registers two investigations against Bell Equipment

Bell Equipment said on Monday it had provided specified information and documentation to the FSCA following a written request and was informed in February 2022 that the FSCA had decided to close both investigations and no legal action would be taken in this matter.

The company said the JSE also notified it that they had closed their earlier investigation of Bell Equipment in July 2021.

It said the JSE also confirmed having issued its closing letter to the complainants, advising that the JSE had not identified any breach of the Listings Requirements by Bell Equipment based on the issues raised by the complainants in their complaints to the JSE.


Bell Equipment on Monday reported a 20% increase in revenue to R8.01 billion from R6.69 billion in the previous year.

Profit after tax improved by 615% to R294.3 million from a previous loss of R57.2 million.

Headline earnings per share grew by more than 1 000% to 294 cents from the 31 cents per share loss in the previous year.

A gross final cash dividend of 50 cents per ordinary share for the year was declared.

Bell Equipment’s net asset value per share increased to R40.38 at end-December 2021 from R36.64 cents at end-December 2020 and R37.79 at end-June 2021.

Turnaround due to ‘commitment, resilience’

Bell Equipment CEO Leon Goosen attributed the turnaround in the financial performance of the company largely to the commitment and resilience of its global team.

Goosen said they collectively put their full weight behind the company’s strategy and focused on sales, efficiency improvement, working capital management and cost containment initiatives while the group showed belief in its initiatives and long term future by resisting any retrenchment drive.

“Customer support has traditionally been one of our mainstays so when production and sales volumes dropped in 2020, we acknowledged that we have an established customer base relying on Bell support and technical backup,” he said.

“This stood us in good stead when the market started rebounding in 2021.”

Goosen said the group’s turnaround to a profit was driven by improved market conditions, especially in the Northern Hemisphere, and a strong recovery in sales.

He said increased production volumes at both the South African and German factories resulted in higher recovery of costs, which positively impacted on the bottom line.

Effective management of working capital meant a lower level of borrowings and a significant reduction in interest costs on working capital funding and this, together with strong cost containment, contributed further to the improved financial performance, he said.

Buyout critic ‘finally excited’

Carson Mitchell, the managing member of Shipyard Capital Management LLC who was outspoken about the offer price, said on Monday that having failed to get minorities to sell for what turned out to be 3.4 times 2021 earnings, Bell Equipment is now carrying on as a public company and enjoying the global rebound in construction and mining.

“I hope Bell will recognise the inevitable competitive logic, which is that Bell should be sold to one of the large excavator manufacturers who lacks an articulated dump truck [ADT].

“In the meantime, Bell trades at five times earnings and just 36% of book value, and just reinstated a 3.5% dividend. They also appear to be re-initiating road shows, which should bring renewed attention to the company.

“It sounds odd to say after such a long fight with the company, but I am finally excited to own Bell,” he said.



Goosen said Bell Equipment emerged from the Covid-19 lockdowns looking forward to buoyant market conditions in 2022 with a strong order book.

He said the group experienced increased demand for its equipment in most markets, with investment in infrastructure and government stimulus packages benefitting developed markets, particularly in the Northern Hemisphere.

Goosen said improved commodity prices and demand also resulted in some improvement in certain African markets.

“We are far more confident about global infrastructure spend and the recovery of the economic sectors our diverse equipment supports, than in the past three or four years,” he said.

“We are hopeful of a [resolution] in Ukraine and that a spill over into the rest of Europe will be avoided.”



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