Industry News: Super Group Ltd, Brimstone, Telkom Mobile

Super Group Results

Supply chain giant, Super Group Ltd posted their year-end results recently. The company saw a small drop of 8.7% in revenue, from almost R38 billion in 2019 to almost R35 billion in 2020. Operating profit suffered a 41% drop from about R2.8 billion to R1.6 billion. Earnings per share fell significantly by 125.3% from 360.8 cents to a loss of 91.4 cents (-91.4 cents). Net asset value stood at R13 billion, a 3.3% increase from the previous year, and the company is yet to declare a dividend for this year. Super Group cited an already deteriorated economic environment (pre-Covid days), in addition to the lockdown regulations as a major force in the drop in performance. The adverse impact of Covid-19 stands estimated as:

  1. Revenue: R5.2 billion

  2. Profit before tax: R932 million

  3. Headline earnings per share: R613 million

They might see recovery from the fresh wave of lockdown easing, especially now with international borders opened up.

Brimstone Lets Go of Life Healthcare

On Friday, 18 September, Brimstone announced its proposed disposal of their 3.37% (49 497 807 shares) holding of the Life Healthcare Group (yes, the guys followed by the notorious ‘Esidimeni’ saga). Brimstone is looking to use the funds to settle a loan valued at R1.348 billion. At the close of markets on Friday, Brimstone could have made away with R852 352 236.54 (or just say R852 million) – that’s about 63% of the loan they wish to settle, and I have not accounted for any premiums/discounts, fees or taxes. It makes sense why they would look to sell at a premium, as they have so proposed. From the beginning of the year, Life Healthcare Group (and life in general if we’re being honest) hasn’t been doing great at all. They have dropped about 30% of their share price in the time period. So, that means Brimstone will need the premium to compensate for such misfortunes.

Covid-19 Pulling A Number on Telkom

SA State-Owned Entities are material for any news piece if we are speaking facts. However, Telkom is always zoned out of the noise. They do quite well, one must come to admit. But Covid-19 has been quite mean on them thus far. In a recent market update, they announced that their Consumer segment did well in spite of disruptions to their distribution channels. The mobile business led the charge with a strong surge in Mobile Data as a result of Work-From-Home and online schooling.

They did so well, they jumped to become the 3rd biggest mobile telecoms company is SA – Remember, Telkom Mobile is only 10 years old. This was complemented by significant investments in infrastructure including the fibre backbone that has helped carry large traffic, and increased resilience to support the data demand that came with Covid-19.

BCX and Small Medium Business (SMB), who service the Enterprise customers, suffered as companies adopted Work-From-Home policies which diverted usage from fixed lines to mobile. They also faced a problem of reduced IT spend and postponed capital projects due to Covid-19 related uncertainty. The Group is also focusing efforts on cost management to protect EBITDA and margins. They stated that the outcome of the restructuring program was as expected. Perhaps an urgent hurdle to handle will be the R870 million tax liability that they have said to fund through monthly cash flows, payable until end of March 2021.

While that’s it for our Monday News of the day, this information, like the content on our blog, is potential power to direct your financial action closer to financial freedom. Follow us on Facebook and Instagram for more.

Author: Nkanyiso Nyawose

0 views0 comments