I met Chris Logan more than a quarter century back when he presided over South Africa’s hottest unit trust management company in an era when these pooled investment funds were mushrooming. Under his watchful eye, the funds managed by Logan’s star team at BOE Asset Managers (Jenny Ferrini, Anet Ahern, Tracey Chiappini, etc) topped most performance tables in SA’s pre-Allan Gray era. After Nedbank acquired BOE, Logan moved on and after a short spell with HSBC, started his Cape Town-based Opportune Investments. Having his own business enabled the beach boy from KZN’s Amanzimtoti to indulge his water-based hobbies – and get more involved in activist investing long before it became popular by attacking value traps like the Liberty and Pick ‘n Pay pyramid structures. He has been a long-time and very public critic of accounting practices at Tongaat, and after proving his point there, has switched his attention to its former subsidiary Hulamin. He explained why on Rational Radio. – Alec Hogg
Chris Logan has been one of the strongest critics of Tongaat, but is now more occupied with its Pietermaritzburg-based former subsidiary Hulamin, which was unbundled in 2007. He sent Biznews a report on the business which is embedded as a PDF and republished below.
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On this week’s Rational Radio, Logan said he has been following Hulamin (ZA:HLM) since it was separately listed. Apart from one good rally from 2013, the shares have been in a downtrend ever since. The price has fallen 94% from its peak, even more than Tongaat. (see graph below – click it to access the latest data).
What irks Logan is that instead of having to report bad news like the recent profit warnings, global conditions are extremely favourable right now for companies like Hulamin, which should be doing very well. But in his opinion, poor management, misaligned incentives and the wrong strategic choices have bedevilled what should be a good business.
Logan believes there is enormous value in Hulamin, but it will require ejecting the “old Tongaat culture” to unlock. One of the major advantages the company has over its former parent is no debt burden.
His once lonely position, Logan adds, is now starting to be shared by other shareholders. He is engaging with some of them to agitate for changes that Hulamin urgently needs – but which are also required at many other South African corporates which, Logan reckons, need a major make-over.
