Some of the South African corporate earnings releases to take note of this week include:
Vodacom (Full Year Results): Consensus is looking for a marginal drop in headline earnings per share (HEPS) after the company recorded a 5.5% decline in HEPS in 1H15. The business has been negatively impacted on by a regulatory cut in mobile termination rates in South Africa.
Pioneer Foods (Interim Results): In a recent trading statement, management guided for adjusted HEPS to increase by between 35% and 41%. Adjusted operating profit from continuing operations will be between 32% and 38% higher y/y. Management attributed the strong operational performance to high volume growth, appropriate pricing strategies, and a continued focus on cost cutting initiatives.
Tiger Brands (Interim Results): Tiger Brands guided for HEPS to decrease by 2% y/y to 853 cents which was tracking significantly behind full year consensus (+8% y/y). The result was adversely impacted on by foreign exchange losses in Dangote Flour Mills arising from the devaluation of the Nigerian Naira and a weak performance by its Kenyan subsidiary, Haco Tiger Brands.
Spar (Interim Results): Management guided for HEPS to increase by between 20% and 25% y/y. The mid-point of this range was tracking ahead of full year expectations at the time of the announcement. The high growth rate comes as a result of the inclusion of the BWG Group for the full period.
Famous Brands (Full Year Results): Consensus is looking for a 16% increase in HEPS, coming off of a 17% increase in half year HEPS. Trading conditions have been strained in its biggest market, South Africa, for some time now. Coupled with an established base, this has seen the HEPS growth rate slow slightly over the last few reporting periods.
Richemont (Full Year Results): The luxury goods group released a profit warning in April, informing the market that net profit will fall by ~36% as a result of non-cash, mark-to-market losses on financial instruments which included monetary items and derivatives. Sales (including Net-a-Porter, now classified as held-for-sale) increased by 5% y/y on a reported basis and operating profit (including a gain on investment property sold) was expected to increase by 10% y/y.
Mr Price (Full Year Results): In a recent trading statement, management guided for HEPS to increase by between 18% and 22%. In its third quarter trading update, management highlighted its concern over the subdued trading environment for homewares and the impact of the Eskom power crisis on trading. We would therefore be particularly interested in how these factors have impacted on sales growth.
Netcare (Interim Results): Consensus is looking for a 28% increase in half year earnings and a 22% increase in full year earnings. The group has not yet released a trading statement – which may indicate that a disappointment may be on the cards.
Mediclinic (Full Year Results): In a recent trading statement, management guided for basic HEPS to be between 15% and 20% higher. This was ahead of expectations at the time of release. The result would have been positively impacted on by a sharp appreciation of Swiss Franc.
Coronation (Interim Results): Management recently guided for diluted HEPS for the period to fall by between 5% and 15% y/y as a result of lower performance fees generated. This was to be expected as its fund performances are public knowledge, nevertheless, the update was negatively received by the market. We will be particularly focused on the impact of this result on the dividend.
Other releases to take note of include Astral (1H15), PPC (1H15), Reunert (1H15), Stefanutti (FY15), Tsogo Sun (FY15), Barloworld (1H15), and Investec (FY15).
Redefine International and Phumelela (amongst others) are trading ex-dividend on Monday. Friday marks the last day to trade in AECI, Capital & Counties, and Redefine (amongst others) to receive their most recently declared dividends.
In other corporate actions this week, Northam will distribute Zambezi Preference Shares to shareholders who elected to take up the prefs; Adcock Ingram investors who elected to accept Bidvest’s R52 per share will also be paid out. Friday marks the election deadline for BHP Billiton’s unbundling of South32. The response deadline to participate in the Choppies listing is Wednesday at 10:00 am.
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