Bell Equipment’s AGM earlier this month might have made a fascinating study in navigating the vagaries of big machine business cycles. Before CEO Ashley Bell stepped down from the top position last week, he gave a comprehensive rundown of the numerous initiatives now under way to secure much needed additional volumes and footholds in new markets for the company.
Yet the first question aired at last week’s AGM was a rather blunt: “Is Bell, or IA Bell [which holds over 70% of the group] considering delisting the group again?”
The question undoubtedly remains pertinent, particularly as Bell, which is putting serious capital into new capacity and new equipment lines, is investing at arguably the lowest point of the business cycle. Some investors, perhaps optimistically, even suggested that Bell’s decision to step down might somehow facilitate efforts to buy out minority shareholders again.
Coupled to investors’ delisting fixation are the ongoing whispers from some quarters on the market that Japanese industrial conglomerate Hitachi has also been sniffing around the company with a view to a takeover deal. Though the ongoing deindustrialisation of South Africa would probably mitigate against such corporate action, some specialised local industrial businesses have been targeted by global players. Look no further than Barloworld.
The company was, of course, the subject of a controversial R10 a share buyout offer from IA Bell in October 2012, and after that a far more generous R53 a share takeout offer from the same party in mid-2024, this time at huge premium to the then average share price of R31. Both offers fizzled out after considerable shareholder resistance — though there might, with hindsight, be some regret that the latter offer was not taken up. Bell shares now trade at about R38, with the group battling a fair number of headwinds in its various markets.
Responding to the question about delisting at the AGM, group chair Gary Bell said the board is not aware of any discussion in this regard. “Certainly any future corporate action will be announced in accordance with the regulations and requirements.” He was not able to speak for IA Bell at that juncture.
For those who need reminding, Bell’s most recent attempt at delisting was premised on a contention that for the group to grow in an increasingly competitive industry it should be restructured to enhance its agility and flexibility in long-term decision-making. Bell was not suited to a listed environment because certain strategic decisions were unlikely to yield positive short-term financial results.
And this is exactly where Bell shareholders find themselves now — forced to look to the longer-term horizon. In his business review, Ashley Bell said the group had been navigating the turbulence and largely declining demand cycle for more than two years now. “Shifting global dynamics and uncertainty are not good for business and have a negative bearing on investor sentiment for both construction and mining sectors.”
He explained that while some commodities were faring better than others, the traditional sectors where Bell’s products operated — from articulated dump trucks (ADTs) and excavators to haulage tractors and crushers — were feeling pressure. He added that government infrastructure spending is at risk of being redirected to bolster military capacity in certain geographies.
Chinese competition in the heavy equipment market has not yet proved disruptive
Ashley Bell noted that the important North American ADT market had contracted about 20% during 2025, due largely to the matter of US trade tariffs, which has been a major theme for Bell since April 2025. “Outside the US, we have seen the side effects of heightened geopolitical tensions affecting demand in some regions and a higher level of competition due to products being redirected from the US market.”
What’s more, the company’s aftermarket had been slower than expected, largely on the back of reduced activity and equipment utilisation in major markets. “When machines work less, fewer parts are consumed.”
The group has been prudent, though. Ashley Bell said inventory management remains a priority, with overheads still tightly managed and an emphasis on cash preservation. “While progress during 2025 was slower than planned due to the supply chain challenges and weak sales in the second half, we reduced our inventory investment and maintained our cash position at comfortable levels considering the tumultuous market conditions.”
The company’s cash amount, at last count, was R160m, compared with net debt of R542m in the previous financial year. This is symptomatic of subdued market conditions, which ease cash flow at Bell. The annual report notes that when the group ramps up for stronger market conditions, this requires a cash investment in inventory. When market conditions are weak, cash that was tied up in inventory is released and flows into the business.
Opportune Investments CEO Chris Logan was keen to know whether the company — with a balance sheet in pristine condition — would mobilise part of its cash holding to buy back shares that are trading at a sizeable discount to NAV at the bottom of a business cycle. Logan also said a smaller issued share float would “make corporate action easier”.
Ashley Bell said share buybacks had not been a priority but could be considered “depending on the outlook over the next year and the understanding of the best use of cash”. Gary Bell said management had done an incredible job of getting working capital under control, considering the company’s distance from its main markets and suppliers. But he warned that when Bell ramped up production the cash would come in handy. “The board needs to decide whether there is an immediate need to plan for a ramp-up.”
Significantly, Bell has been investing materially in new product development and extending market reach. Ashley Bell said the launch of the Bell grader product line last year— “our most considerable product development programme over the past few years” — was proving a noteworthy success. “The motor grader is being rolled out into the market in a controlled manner, starting in South Africa, where we are pleased with the market response.”
Bell also entered into a supply agreement with CNH Industrial America in March this year to supply Case Construction Equipment-branded motor graders for exclusive distribution in North America. The first deliveries are expected shortly. Then there is also Bell’s first moves into the forestry industry, with a fully mechanised timber processing head, which has been tagged as “an exciting growth opportunity”.
Ashley Bell says the group is making steady progress in the long-term project to grow articulated dump truck (ADT) manufacturing capability in Europe — particularly with the testing of new componentry supplied by the northern hemisphere. “Though testing has had its challenges, this is the purpose of the exercise ... and we continue to work closely with our suppliers to make design improvements to be sure we deliver ongoing superior quality and durability in these products”.
Thankfully, Chinese competition in the heavy equipment market has not yet proved disruptive. There are a couple of Chinese ADT manufacturers, but these are not producing significant volumes in Bell’s markets.
Overall, there is a fair bit simmering at Bell — and new products like the motor grader could conceivably have Bell eventually shifting similar volumes to the group’s well-known ADT brand. Ashley Bell, however, cautioned that building up volumes in new products would take time.
Shareholders don’t have much choice but to exercise patience, perhaps comforted that the company’s trundling along at the bottom of the cycle for a prolonged period might force the delistings hand again.
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