Steinhoff buys Pepkor for R63bn; Results from Naspers, Omnia, Transaction


Tuesday 25 November

  • Naspers (mkt cap: R620bn) interims to end September: Revenues +30%; core earnings +24% to R6.1bn. Economic-interest revenues outside of SA now 72% of total; internet revenues +44% to 58% of total. Development spend +42% to R4.4bn leading to net free cash outflow of R428m. PayTV trading profit +11% to R5bn. Consolidated net gearing 29%. Group expects increased development spend in second half, leading to lower core earnings growth for that period. Print media trading profit dropped 96% from R214m to R8m. Research reports from analysts describe the results as “encouraging” with important revenue areas in line with expectations. Only disappointment was DTT growth of 55 000, well below anticipations due to regulatory challenges.
  • Steinhoff International (mkt cap: R142bn) is to acquire an effective 92% of Pepkor for R62.8bn from entrepreneur Christo Wiese, JSE-listed Brait and Pepkor’s management. This is the biggest corporate transaction in SA history. Pepkor employs 32 000 in its 12 brands, has revenues of R38.2bn from operations in 16 countries, around two thirds from Africa, 23% Australia and 9% Eastern Europe. Steinhoff will issue 609m shares at a price of R57 each (a slight premium to the current market price) for Wiese’s 52%; and a further 200m shares (also at R57) plus R15bn in cash for Brait’s 37%. If consummated, the deal will take Steinhoff’s market cap to around R200bn. To listen to the special podcasted interview with Steinhoff CEO Markus Jooste click here.
  • Omnia Holdings (mkt cap: R14.5bn) interims to end September: HEPS -8% to 546c; divi +3% to 190cps on revenue decline of 1.1%. Gearing improves to 29.7% (35.7%) and operating profit margin steady at 8.3%. Mining division under pressure due to collapse of commodity prices, but strong performance expected from agricultural side. Chemicals division gathering momentum after recovering from strikes. Retiring FD Noel Fitz-Gibbon has been replaced by Wayne Koonin.
  • Transaction Capital (mkt cap: R4.4bn) prelims for year to end September: Continuing HEPS +18%; Final divi of 10cps making 16c for year after March’s capital distribution of 210cps. (from sale of Paycorp and Bayport) Continuing gross loans and advances +14% to R6.7bn with credit loss ratio stable at 5.2%. Cash of R1.2bn available for acquisitive and organic growth. Now restructured, company expects sustainable growth in medium to long term.