Argent Industrial remains very much the playbook for finding that delicate combination of meaningful value unlock, strategic steadiness and consistent operational growth.
There was a time, not even eight years ago, when Argent was trundling along unconvincingly at 355c-380c. This week it reported headline earnings of 538c a share for the year to end March. The cash-flush (and cash-generative) group also paid a final dividend of 74c a share to bring the full-year payout to 141c a share.
Since the end of the financial year in 2022, Argent has returned 520c a share in collective dividends. Despite the dividend flows and eight years of bottom-line growth, it remains on a modest trailing earnings multiple of seven. This neatly encapsulates sentiment for small-cap stocks on the JSE (I’m afraid to say).
Most Argent acolytes know that behind the scenes, investor Rhys Summerton (also a prime mover at iOCO and Aimia) provided the perfect foil for Argent’s no-holds-barred CEO, Treve Hendry, noting that the selected offshore niches that the group operates in continue to pay off encouragingly.
Revenue from the UK specialist engineering businesses now tops R1bn and total profit before tax from international operations has reached R300m. This is almost triple the profits eked out by the traditional South African businesses Jetmaster, Xpanda, Castor & Ladder and Megamix (to name a few).
I must presume a separate London listing for Argent’s buoyant offshore business hubs is still on the cards? In his commentary, Hendry notes Argent is in the throes of due diligence on a potential acquisition in the UK and is actively assessing another opportunity. “In the longer term, we have a full pipeline of opportunities to pursue that fit our strategic and financial ambitions for the group.”
Though no deals were clinched in financial 2026, Argent did spend R39m on a buyback of almost 1.3-million shares at an average price of R30.52 a share. Hendry indicates that Argent will continue the share repurchase programme. This is smart capital allocation, with the group’s shares still trading on a low single-digit ex-cash earnings multiple.
I must presume a separate London listing for Argent’s buoyant offshore business hubs is still on the cards?
Shareholders at consumer brands distributor Nu-World, which trades at a whopping 60% discount to its hard NAV of around R70 a share, must be looking enviously at Argent. There are some similarities. Aside from the deep discount to NAV, Nu-World has been consistently profitable and dividend-paying since its listing on the JSE in 1987.
While it’s usually comfortable enough to be paid to wait for a value-unlock trigger, Nu-World has gone backwards on several important metrics — most notably trading margins and return on equity. The share trades on a trailing and forward earnings multiple of six, plus a 5.5% dividend yield, an apt summation of the market’s view on near-term prospects. Nu-World hosted a special general meeting (SGM) last week, which was instructive in terms of assessing value-unlock possibilities.
I won’t hold my breath … unless businessman David Brouze, the biggest shareholder, is allowed to be the catalyst for positive change, as has been the case with Summerton at Argent.
I relied on a recording to follow proceedings as the guest tab for online access never came to life. I discerned, from the audio, a caginess that might worry shareholders pressing for an expedient value unlock and new growth initiatives.
Chair Michael Goldberg was not present. This might not be a big deal, but he was also not at the AGM in February. When a shareholder queried his absence, no explanation was forthcoming. There was also uneasiness around the meeting being chaired by an executive director, MD/CEO Jeffrey Goldberg, Michael’s younger brother.
Jeffrey is a significant shareholder. Just before the SGM, he had added to his share tally (5.23% at the end of August last year) with open market purchases of more than 80,000 shares. The impartiality of the meeting chair seems a valid query, especially as there was a nonexecutive director, Michael Judin, who might have stepped in.
Perhaps most startling of all was directors not being able, or willing, to disclose the shareholder(s) behind nominee company LTG Bank AG, which holds a chunky 25.84% stake in Nu-World. LTG is the second-biggest shareholder behind Brouze’s Inhlanhla Ventures (32.42%). The board was asked to establish the entity or individual behind LTG.
I reached out to Nu-World FD Graham Hindle on the LTG identity matter. The official answer: “I have been advised by our sponsors that only information in the securities register needs to be made public, which we did at the SGM. Full details of the holder were disclosed. The UBO [ultimate beneficial owner] is not disclosable.”
The meeting entertained two resolutions, one allowing the group to issue shares for cash and the other allowing the group to buy back shares. They passed with roughly 60% support, indicating how fractious things have become at Nu-World. The share buyback is hardly contentious. But there was an intriguing insight on issuing shares for cash. Nu-World directors reiterated a need for flexibility, saying there was no intention to issue shares at a deep discount to NAV.
What might be contemplated, however, is a share issue to execute a takeover/merger transaction with a similar-sized entity trading at a similar discount to NAV as Nu-World. The board indicated there were such opportunities in the listed and unlisted spaces. That, I dare say, remains to be seen.
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