I had quite a week of setbacks and indignities. My timing was terrible in Textainer and Grindrod Shipping. I got caught on the wrong side of the market’s reassessment of ArcelorMittal and missed Friday’s “no-brainer” rally in Anglo American Platinum.
I eventually looked for solace in Distell. But there was worse to come. Last Tuesday I had to extricate my hefty Jack Russell/mastiff cross, Dexter, from a milk crate containing my Sinatra and Krautrock records. He took exception to a pigeon pecking at his dog pellets and chased the bird into the sacred confines of my subterranean man cave. Besides my mint copy of Sinatra at the Sands being given an unflattering and messy review by the panicked pigeon, a thrashing Dexter broke my last two bottles of Benguela Cove malbec.
Then on the weekend, on a particularly inky night, I pitched farce over kettle into a deep porcupine hole outside my brother-in-law’s gate (welcome to Kommetjie!). Though I managed to not break the bottle of wine in hand or smash my cellphone screen, I did shave a chunk of flesh off my heel. It also hurt that my wife was royally amused, and tried to get her cellphone camera working rather than help me out of my predicament. There was a bit of good news in finally (touch wood!) overcoming the worst of my tennis elbow. But then overexuberant swinging on Saturday ushered in what I suspect is a(nother) case of frozen shoulder. I just can’t win.
Afrimat’s management team are phenomenally good capital allocators and expert operators
No regrets?
Speaking of swinging, Astoria — an investment company I have grown rather fond of in its new form — is looking to ride out a new cycle. Last week Astoria disclosed it had sold out of its remaining stake in aggregates and specialised mining business Afrimat — selling 963,662 shares at an average price of R58.34 a share, to raise almost R54m. At the same time Astoria has bought 120,000 restricted shares of common stock in Leatt Corp, a designer and manufacturer of protective wear for mobility sports, for about R52m. That’s a gutsy move.
Afrimat has been a dependable business. Its management team, headed by the redoubtable Andries van Heerden, are phenomenally good capital allocators and expert operators. Afrimat — even though increasingly prone to the vagaries of commodity cycles — is one counter I’d be happy to hold for my children. That said, Leatt, which is headquartered in Cape Town but listed in the US, has certainly carved out a viable (and seemingly growing) niche in protective gear to motorbikers, cyclists, snowboarders and other extreme sport riders.
Astoria bought 120,000 shares from founder Christopher Leatt, or 2.06% of Leatt’s common stock. But Astoria has since snapped up more Leatt shares, and now speaks for 2.4% of the common stock. Interestingly, the Afrimat shares were sold on a trailing earnings multiple of 10, and the Leatt stock bought on roughly the same multiple. I can’t help wondering — and this may be due to having to regularly explain to my wife why I sold Naspers at R40 — if Astoria shareholders will be asking at the 2032 AGM: “Do you regret selling Afrimat?”
Still, Astoria is certainly shaping up as one of the more intriguing investment counters on the JSE, with a serious weighting to specialist retail (the Safari Outdoor chain and the large Family Pet Centre concept) as well as exposure to a shinier Trans Hex Group. Then there is the significant minority holding in alternative gaming group Goldrush, via JSE-listed RECM & Calibre. Boring does not come to mind.
On another tack, I see the Public Investment Corporation (PIC) last week disclosed that it sold its entire holding in Premier Fishing & Brands. This seems a belated notification. On May 18 and May 24 respectively, 3 Laws Capital (aligned to Iqbal Survé’s Sekunjalo) took its stake in Premier to 24.49% and then to 30.15%. The PIC, one of the anchor investors when Premier listed in 2017, would surely have been one of the sellers then? Any irritation around tardy disclosure will, of course, pale into insignificance if Premier’s minority shareholders are pitched a buyout offer.
Between African Equity Empowerment Investments (AEEI) and Sekunjalo there is only a sliver of a free float left in Premier, and with all the controversy around banking facilities it might be more convenient if the company was taken private. But at what price? Premier’s cash and outstanding loans (to AEEI) are worth a large chunk of the current market capitalisation, and there has been substantial investment in the squid and abalone farming segments over the past few years.
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