I detest taking stock of another year gone, being the perennial underachiever across the many traditional gauges of success. I managed to lose more than I won on both the padel and tennis courts, and as soon as I repair one torn muscle another summarily gives way. Even though I don’t have the stomach for it, I now munch anti-inflammatory tablets as if they were Smarties.
My only solace was that my Strava “year in review” showed I managed to clock up 1,513km, which, according to the app, meant I outdid 92% of its users. It’s a hollow victory, though. On more than one occasion, as I traipsed past the outer limits of Kommetjie, the Strava app would veer into a twilight zone — and a 5km stroll would register as a 12km sprint. Very flattering.
Apple Music, my backdrop when I toil away, also gave me pause for thought. I spent almost 500 minutes listening to the “King of New York”, Lou Reed. I gave Open Invitation (a song where Lou espouses the benefits of tai chi) and New Sensations (where our man gets zenned on a motorcycle) more than 14 listens each during the year.
I am slacking a bit, because Apple tells me I spent about 850 hours wallowing in the genius of Frank Zappa in 2024. Clearly it was a year of yearning and self-deprecation. My most listened to songs this year were Lloyd Cole’s No Blue Skies, The Rolling Stones’s I’m Going Down, Richard Hell’s Time, Mark Lanegan’s One Hundred Days, The Cars doing Let the Good Times Roll and Toots Thielemans puffing extra pathos into the world-weary theme from Midnight Cowboy. No wonder my whisky stocks are depleted.
In a year in which, I assume, most readers enjoyed better fortunes on the JSE, I was largely forced out of my market positions by domestic demands that just seem to get bigger as my offspring get older. That said, I did have loads of fun with Brait — though I will confess that I have not had the guts to crunch the numbers to see whether I finally sold out with any dignity. Kore Potash, one of my long shots, finally paid off. Finbond Mutual Bank was a worthwhile flirt too. The legally hinged Randgold & Exploration might test my patience into 2025, not that there is an option for a graceful exit.
Frankly, there’s far more frivolous fun to be had in the crypto market, where I had great difficulty recently restraining myself from tilting at the Peanut the Squirrel meme coin. I am half-seriously wondering if there is any merit in developing a meme coin around Knuckles McDuck — the wonderful creation of late, great FM colleague Peter Wilhelm.
There are still a good number of undervalued industrial counters that might be advanced on by offshore predators in the year ahead
It was apt, I suppose, to end the year with a timely reminder that some of our ingrained scepticism is often misplaced. At least I called this deal half correct earlier in the year when I speculated the Zahid Group was going to buy out industrial giant Barloworld. Zahid, joined by Barloworld CEO Dominic Sewela, will fork out an effective R123.10 a share to buy out minority shareholders. That’s a decent premium on Barloworld’s recent share price and a serious 87% premium on the group’s average share price of R65.72 about 30 days before the issuing of a cautionary in mid-April. There’s not been much good news at Barloworld in the past 12 months, so I suspect minorities will mostly take the money and run.
It will be sad to see another stalwart of the JSE’s broader industrial segment delisting, remembering we lost the mighty Imperial Logistics (also to an offshore investor) only a few years ago. While there has been a marked uptick in sentiment for South Africa Inc counters since the formation of the government of national unity, there are still a good number of undervalued industrial counters that might be advanced on by offshore predators in the year ahead. Hulamin springs to mind. Metair, Santova and Master Drilling? Maybe …
Speaking of which, KAP — a sprawling play across numerous sectors from timber to polymers — is slowly regaining its mojo. Things are not that pretty, but it’s clear CEO Gary Chaplin is knuckling down and racking up those hard yards that come before a much-anticipated downward stretch, when the business will capitalise on its big capital expenditure programme over the past few years (which will hopefully coincide with stronger momentum in local economic growth).
The good news is that timber business PG Bison started and ramped up its new R2bn production line in Mkhondo. There is a catch, though. The stop-start nature of the ramp-up process meant the new line was only 60% utilised in the five months to end-November. It will take four years to reach full capacity through a combination of domestic and export sales. So, operating profit dipped as the depreciation and running costs of the new line were absorbed and exports were clinched at lower margins.
Perhaps more importantly, the logistics hub managed an improvement in operating profit and returns off lower revenue and a smaller fleet size. KAP says the division also completed an organisational redesign during November to further enhance returns. I’m not sure what the group intends doing with Unitrans. Considering the debt levels, I’m certain most shareholders would still prefer a sale.
On the topic of sales, I was surprised to see small investment counter Sabvest Capital diminishing its stake in unlisted industrial business Apex Partners, cashing in R145m by reducing its holding from 46.4% to 40.6%. I was even more surprised to note Sabvest’s debt levels had been culled from R600m to just R160m after collecting the Apex proceeds and “other inflows”. CEO Chris Seabrooke’s nicely poised for 2025, I would think.
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