Publications
Partners
Safety first for Paladin?
At the recent Paladin Capital [JSE:PLD] AGM executive director Piet Mouton – in a rather broad rumination about strategy – cited the security sector as a possible investment opportunity. Mouton intimated the private security sector – much like private education (where Paladin has a big stake in newly listed Curro Holdings) – is an industry that doesn’t scratch to find demand for its services.
Apparently private security guards now outnumber South Africa’s Police Force. However, as Mouton pointed out the barriers to entry aren’t exactly high.
Whether Paladin would consider starting its own security services (even if Paladin Security has a really reinforced ring to it) seems doubtful. That would require a rather hectic bit of corporate manoeuvring and mustering in an industry that, outside the larger players, is fragmented.
TheSPECtacle – obviously foregoing any finder’s fee – might be inclined to suggest Paladin lock a target on COMMAND HOLDINGS, which currently seems to be engaged in a skirmish with majority shareholder Cape Empowerment. Perhaps Paladin, coming in as a resourceful equity partner, could even broker a very profitable peace between Command and CAP – which we should remember also has its own fast-growing security operations.
Remgro holds back
Following the outcry when Anglo American – in the midst of the global financial crisis – held back its dividend, TheSPECtacle was rather surprised not to receive calls from Remgro [JSE:REM] shareholders last week. As a result of its change in year-end, no dividend was proposed by Remgro for the 12 months to end-March 2011. Shareholders (never a patient lot, even at the best of times) will have to wait for a final dividend for the 15 months ending 30 June 2011, which will only be declared in September and paid in November this year.
TheSPECtacle supposes – with Remgro’s cash balance sitting at R5,6bn (before the windfall from the Fundamo sale) most shareholders reckon it might be worth the wait.
The interest on that cash pile should get mouths watering. Oh no, wait…what interest? Most of Remgro’s cash is being held offshore in euro, British pounds and US dollars – a position shareholder activist Theo Botha may query (again) at its upcoming AGM.
Sporting declaration
Speaking of dividends, TheSPECtacle was quite enamoured with the payout policy of HOLDSPORT – the old Moresport business sneaking back on to the JSE in a slightly different guise. According to its voluminous pre-listing statement, Holdsport’s directors currently envisage the total annual dividend will be covered 1,8 times to two times by core headline earnings. That’s a rather generous payout policy, and if Holdsport performs like its pre-listing statement suggests then even TheSPECtacle (always looking for an attractive income stream) will yield to temptation.
For the record, core headline earnings came in at 415c/share in the year to end-February 2011. If we take the liberty of pencilling in a 4000c share price on listing, then the historic yield is a rather nifty 5%. That’s right up there with the Foschinis, Mr Prices and Truworths of the fashion world.
Wes there’s a will…
TheSPECtacle wonders how many predatory eyes are fastened on the brittle share price of coal miner and merchant Wescoal Holdings [JSE:WSL]? Maybe it wasn’t so easy for Wescoal to shift from being mainly a merchant to a full-scale miner – even though the market was pretty enamoured with the idea initially.
TheSPECtacle still reckons there’s a great deal to be done by merging empowerment giant HCI’s coal interests with Wescoal – possibly in a transaction that creates a more formidable coal operation.
But HCI’s coal operations have just turned profitable, which might curb enthusiasm to adopt a loss-making company. Then again, losses have never spooked the chaps at HCI…
At the recent Paladin Capital [JSE:PLD] AGM executive director Piet Mouton – in a rather broad rumination about strategy – cited the security sector as a possible investment opportunity. Mouton intimated the private security sector – much like private education (where Paladin has a big stake in newly listed Curro Holdings) – is an industry that doesn’t scratch to find demand for its services.
Apparently private security guards now outnumber South Africa’s Police Force. However, as Mouton pointed out the barriers to entry aren’t exactly high.
Whether Paladin would consider starting its own security services (even if Paladin Security has a really reinforced ring to it) seems doubtful. That would require a rather hectic bit of corporate manoeuvring and mustering in an industry that, outside the larger players, is fragmented.
TheSPECtacle – obviously foregoing any finder’s fee – might be inclined to suggest Paladin lock a target on COMMAND HOLDINGS, which currently seems to be engaged in a skirmish with majority shareholder Cape Empowerment. Perhaps Paladin, coming in as a resourceful equity partner, could even broker a very profitable peace between Command and CAP – which we should remember also has its own fast-growing security operations.
Remgro holds back
Following the outcry when Anglo American – in the midst of the global financial crisis – held back its dividend, TheSPECtacle was rather surprised not to receive calls from Remgro [JSE:REM] shareholders last week. As a result of its change in year-end, no dividend was proposed by Remgro for the 12 months to end-March 2011. Shareholders (never a patient lot, even at the best of times) will have to wait for a final dividend for the 15 months ending 30 June 2011, which will only be declared in September and paid in November this year.
TheSPECtacle supposes – with Remgro’s cash balance sitting at R5,6bn (before the windfall from the Fundamo sale) most shareholders reckon it might be worth the wait.
The interest on that cash pile should get mouths watering. Oh no, wait…what interest? Most of Remgro’s cash is being held offshore in euro, British pounds and US dollars – a position shareholder activist Theo Botha may query (again) at its upcoming AGM.
Sporting declaration
Speaking of dividends, TheSPECtacle was quite enamoured with the payout policy of HOLDSPORT – the old Moresport business sneaking back on to the JSE in a slightly different guise. According to its voluminous pre-listing statement, Holdsport’s directors currently envisage the total annual dividend will be covered 1,8 times to two times by core headline earnings. That’s a rather generous payout policy, and if Holdsport performs like its pre-listing statement suggests then even TheSPECtacle (always looking for an attractive income stream) will yield to temptation.
For the record, core headline earnings came in at 415c/share in the year to end-February 2011. If we take the liberty of pencilling in a 4000c share price on listing, then the historic yield is a rather nifty 5%. That’s right up there with the Foschinis, Mr Prices and Truworths of the fashion world.
Wes there’s a will…
TheSPECtacle wonders how many predatory eyes are fastened on the brittle share price of coal miner and merchant Wescoal Holdings [JSE:WSL]? Maybe it wasn’t so easy for Wescoal to shift from being mainly a merchant to a full-scale miner – even though the market was pretty enamoured with the idea initially.
TheSPECtacle still reckons there’s a great deal to be done by merging empowerment giant HCI’s coal interests with Wescoal – possibly in a transaction that creates a more formidable coal operation.
But HCI’s coal operations have just turned profitable, which might curb enthusiasm to adopt a loss-making company. Then again, losses have never spooked the chaps at HCI…
