SABVEST Capital’s (Sabcap) share price leapt by more than 5 percent on the JSE yesterday morning after the investment group said it expected its half-year earnings for the six months to the end of June to surge by more than 100 percent, boosted by investee companies that are trading at or ahead of pre-Covid-19 levels.
Sabvest has interests in nine unlisted investments, which include Apex Partners, Classic Food Brands and Masimong Group Holdings, and direct and indirect interests in six listed investments, which include Transaction Capital, Metrofile Holdings and Corero Network Security plc.
The group also has an offshore bond portfolio.
The group said in a trading statement that it expected its headline earnings per share (Heps) and earnings per share (Eps) to be at least 600 cents a share, which is greater than a 100 percent increase compared to the six months to the end of June last year.
Last year, the group reported a headline loss of 387.4c and a loss a share of 387.5c.
Heps and Eps were likely to be greater than that reported for the six months to the end of June 2019 of 125.7c, which was before the impact of Covid-19.
“Shareholders are advised that all of Sabcap’s investee companies are trading at or ahead of pre-Covid-19 levels and ahead of 2020 levels and in many cases achieving satisfactory growth on those levels.
“As a consequence, Sabcap anticipates improved results for the six months to end June 2021, notwithstanding the effect of the stronger rand in 2021 on the valuations of Sabcap’s foreign assets,” the group said.
The share price climbed to a dayhigh of R49.99 a share after the release of the positive trading update, up from Wednesday’s closing price of R47.56. The share closed at R49.49.
Sabcap also expected to declare a dividend per share of at least 20c a share, which is a 100 percent increase compared to 10c a share declared earlier, but was 44 percent less compared to the 36c declared for the six months to the end of June 2019, when it was still known as Sabvest Limited.
Its net asset value (NAV) would be at least 8 000c a share, which is a 7.5 percent increase compared to the NAV of 7 444c reported at the end of December 2020 and a 20.8 percent increase compared to the NAV of 6 624c reported in June last year.
The group said its net debt/assets would be below 5 percent.
“Sabcap has made some changes in its portfolio which have resulted in an even more conservatively geared balance sheet and increased funding potential for new investments, buybacks and dividends,” the group said.
The group expected to issue a further trading statement with specific ranges on or about the end of August, and it expects to release its half-year results in mid-September.
BUSINESS REPORT