Transport and logistics shares on the JSE have struggled over the past 12 to 18 months as liquidity in the small and mid-cap sectors has dried up and the local economy has stuttered. However with many of these businesses generating offshore revenue and offering attractive yields, we review the key listed players.
|Share||Market Capitalisation||Return on Assets||P/E Multiple||Dividend Yield (historic)|
It should be noted that Imperial benefited from it’s cash generative holding in vehicle import / export group Motus which was spun-off in November 2018 and 11.5% is unlikely to be the forward yield.
Share price performance
|Share||Year to date||1 year||3 years||5 years|
Value Group rarely receives any media coverage but it is interesting to note that the group has delivered the best Return on Assets and the only group to deliver a positive shareholder return over 1, 3 and 5 years.
One of the attractive features of these businesses is their earnings mix which means that while the South African economy may be in the doldrums, they are benefiting from operations in Africa, Europe, the US and Asia.
Below is a breakdown of the businesses earnings / profit mix:
|Share||South Africa||Africa||Rest of World|
|Santova||43% (Total including rest of Africa)||N/a||57%|
|Onelogix||100% (Total including rest of Africa)||N/a||N/a|
|Value Group||Not reported||Not reported||Not reported|
Insiders have conducted the following transactions since the start of 2019:
- Imperial CFO George De Beer purchased R4.8m of shares on the open market March 2019 at prices of between R63.70 and R64.50/share (Imperial presently trades around R45/share)
- Patrick Pols (director and shareholder of Onelogix subsidiary) sold R438 550 worth of shares at R3.50/share (Onelogix presently trades at R3.27/share)
- Super Group Company secretary Nigel Redford sold R749 902 worth of Super Group shares in March 2019 at an average price of R33/share
- Super Group CEO Peter Mountford purchased R328 417 of shares at an average of R32.84/share
- Value Group non-executive director Dr Matthews Phosa sold R258 000 worth of shares between March and June 2019
- Value Group non-executive director Carl Stein sold R2.1m of shares at a price of R5.80/share in July 2019 (shares presently trading at R6.15/share)
NAV discounts and the de-listing risk
Presently, many of these businesses trade at significant discounts to their Net Asset Value (NAVs)
- Imperial – R45.25 (NAV R57)
- Super Group – R30 (NAV R28.90)
- Santova – R2.05 (NAV R3.11)
- Value Group – 15 (NAV – R6.24)
- Onelogix – R3.27 (NAV – R3.82)
The risk – particularly for the likes of Santova and Onelogix – is that the lack of liquidity will eventually result in discounts to NAV which are too deep to justify staying listed. Santova’s most recent acquisition was done on a forward PE of 8 times earnings for an unlisted business. This is in stark contrast to the 3.3 times earnings multiple that the market is affording Santova at the moment.