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For those who don’t mind farming for value on the over-the-counter (OTC) market it might be worth picking up stock in Bellville-based fruit exporting group Capespan. Of course, there’s a backdoor entry to Capespan – via JSE-listed agribusiness investor Zeder Investments [JSE:ZED] – but the stake is heavily diluted by Zeder’s much larger holdings in Pioneer Food and Distell.
Finweek believes Capespan is presenting a compelling value scenario (and you can be damn sure Zeder is probably scooping up any large parcels of shares it can lay its hands on).
Let’s look at some “value” specifics: Capespan has a net asset value of almost 300c/share against a share price that “spiked” at 160c last week (but has seemed more inclined to trade around the 140c level). Tangible NAV (stripping out the intangible assets and goodwill) stands at a reassuring 250c/share. Its balance sheet remains sound, with ample room to accommodate acquisitions – which appear likely on the logistics side of Capespan’s business.
Operationally, things are also starting to look more promising. Capespan managed a turnover of R2,7bn and pre-tax profits of more than R111m in the year to year-end 2010. Earnings came in at 24c/share, yielding a dividend of 8,5c. The performance – covering a trading period that wouldn’t by any stretch of the imagination be considered a bountiful 12 months – must be seen in the light of a sluggish interim performance (that actually saw Capespan running in the red).
Looking ahead, trading is still likely to be hampered by a strong rand. But the recent restructuring in Capespan’s fruit division should see bottom line benefit from a lower cost base in 2011 and, hopefully, there will be some tangible rewards from recent strategic investments in China.
Oh… did we mention Capespan has a new CEO in Johan Dique? Fruit industry insiders expect great things from Dique, who played a key role in turning around the fortunes of former agricultural co-op Senwes.
Finweek believes Capespan is presenting a compelling value scenario (and you can be damn sure Zeder is probably scooping up any large parcels of shares it can lay its hands on).
Let’s look at some “value” specifics: Capespan has a net asset value of almost 300c/share against a share price that “spiked” at 160c last week (but has seemed more inclined to trade around the 140c level). Tangible NAV (stripping out the intangible assets and goodwill) stands at a reassuring 250c/share. Its balance sheet remains sound, with ample room to accommodate acquisitions – which appear likely on the logistics side of Capespan’s business.
Operationally, things are also starting to look more promising. Capespan managed a turnover of R2,7bn and pre-tax profits of more than R111m in the year to year-end 2010. Earnings came in at 24c/share, yielding a dividend of 8,5c. The performance – covering a trading period that wouldn’t by any stretch of the imagination be considered a bountiful 12 months – must be seen in the light of a sluggish interim performance (that actually saw Capespan running in the red).
Looking ahead, trading is still likely to be hampered by a strong rand. But the recent restructuring in Capespan’s fruit division should see bottom line benefit from a lower cost base in 2011 and, hopefully, there will be some tangible rewards from recent strategic investments in China.
Oh… did we mention Capespan has a new CEO in Johan Dique? Fruit industry insiders expect great things from Dique, who played a key role in turning around the fortunes of former agricultural co-op Senwes.
