eBusiness Weekly
Mamvura’s Market Minute
This past week saw three more sets of earnings and an update from Cafca on their performance. Interestingly at the Powerspeed AGM last Thursday, there were grumbles about how SI 122 of 2017 has all but put Frog Cables out of business while Cafca has been unable to adequately supply the market.
So Cafca take on another two dozen employees or so, tell us they have saved $15 million in forex, while all the importers go out of business?
Why do we even need SI64 and SI122?
The premiums paid for forex by importers are enough of handicap anyway, as discussed a few weeks back in reference to imported beer.
Cafca said EPS would come out at 4,5c this year, meaning its turnover will rise by at least 20 percent in the year, based on historical outcomes.
After reporting a loss in the year to July 9 last year and in the comparable interim period, Truworths reported a reasonable bottom line as the manufacturing operations also returned profit.
While sales in the stores were up 9.3 percent, comparable unit growth was on aggregate in double figures, pulled down by Topics, which has the lion’s share of group turnover. Trade receivables and bad debt are still remarkably good when compared with SA.
Finally, two of Innscor’s unbundled units reported their results yesterday.
Axia posted basic earnings of 1,19c and dividend of 0,4 cents, achieved on revenue growth of 32,6 percent, while Simbisa bottomline was 1,46 cents, a dividend of 0,45 cents on the back of a 29,7 percent rise in turnover.
One may be inclined to say “Snap”! The difference though is in the share price — the one being 17,5 cents and other 39 cents.
Once again, here is an obvious piece of mispricing in our market — either, as discussed in his very first column in this paper, Axia is massively undervalued, or Simbisa is overvalued.
We are starting to see another theme developing — revenues rising by 20 percent — 30 percent with volume growth lagging this significantly. This is closer to the forex premium and at a huge variance to inflation.
