Company news in brief

Big profits for cash-flush Mr Price

Strong retail sales growth and the acquisitions of Power Fashion and Yuppiechef have boosted Mr Price’s profits for the 52 weeks to end-April.

The value retailer's headline earnings per share grew 20.1% to 1 282.1 cents, and its operating profit exceeded R4 billion for the first time. The group declared a final dividend of 807.7 cents per share.

Despite the third and fourth waves of Covid-19, load shedding, last year’s July unrest temporarily closing 111 stores, and supply chain issues, the group’s total revenue increased 23.0% to R28.1 billion. Online sales grew 48.2% compared to the previous period.

Cash sales made up 86.1% of group retail sales and grew 26.4%, largely aided by the inclusion of Power Fashion and Yuppiechef - which are both cash-based. The group is free of financing debt and has a cash balance of R4.6 billion.

Mr Price group’s store footprint grew to 1 721 with the acquisition of seven Yuppiechef stores, while 36 new Power Fashion stores were opened after being acquired. All together, 130 new stores were opened in the period. – Fin24

Remgro takeover bid undervalues Mediclinic

Remgro and Mediterranean Shipping Company (MSC) have proposed a cash offer to buy out Mediclinic shareholders.

The offer was made on May 26th, but was rejected by the Mediclinic board.

They are offering shareholders 463 pence (R89) per share. Mediclinic’s share price closed at R79.78 on Wednesday evening, but jumped more than 4% yesterday morning following news of the bid.

The share price has been climbing since May 24th, gaining 20% over the past two weeks.

In a statement yesterday morning, Mediclinic said the offer "significantly undervalued Mediclinic and its future prospects". It confirmed that the board “unanimously” rejected the bid.

Mediclinic said that in terms of UK regulations, the consortium has until 7 July to either announce a firm intention to make an offer for Mediclinic, or confirm that it does not intend to make an offer. – Fin24

Vukile reports strong trading

Vukile Property Fund, which owns shopping centres in South Africa and Spain, is seeing "strong trading" in both countries, with retail sales and footfall back at pre-pandemic levels.

"We are seeing good demand and competition from retailers to expand in our portfolios," the company said in its annual results.

The group owns properties worth almost R31 billion. Roughly half of the portfolio is held via its Madrid-listed subsidiary, Castellan, with the rest in South Africa. Locally, it owns centres like Mdantsane City and Gugulethu Square.

Its gross property revenue for the year to end-March increased to R3.5 billion, from R3.1 billion in the previous year.

The company posted a total dividend of 105.8 cents per share, from 101 cents in the previous year. It expects dividend growth of between 5% to 7% for the current financial year. – Fin24

Moody’s raises alarm on Transnet

The credit ratings agency Moody's has placed most of Transnet’s credit ratings on review for a downgrade.

Transnet has a $1 billion international bond that matures next month, but currently does not have sufficient funds to repay bondholders. Transnet only had around R1.3 billion of cash on its balance sheet, and will need to pay bondholders R23.5 billion as more bonds mature until March 2023.

The company planned to redeem the bond that matures next month with a new US$1 billion international bond issuance in coming weeks.

"However, Moody's believes a sufficiently large international bond issuance prior to the July maturity is becoming increasingly challenging given current market conditions," the agency said in a statement.

Nevertheless, it believes a risk of default in July remains low as Transnet is in advanced stages of securing binding commitments for credit facilities with a diverse group of lenders, which Moody's believes will be available before the 26 July maturity. Moody's also believes that the government will offer "strong" support, if required. – Fin24

Twitter to share data

Twitter will yield to Elon Musk's demand for internal data central to a standoff over his troubled US$44 billion bid to buy the social media platform, the Washington Post reported on Wednesday.

The news comes just days after the Tesla chief threatened to back out of his deal to purchase Twitter, accusing it of failing to provide data on fake accounts.

The Post cited an unnamed source familiar with the negotiations as saying Twitter's board decided to let Musk access its full "firehose" of internal data associated with the hundreds of millions of tweets posted daily at the service.

“This would end the major standoff between Musk and the board on this hot button issue which has paused the deal," Wedbush analyst Dan Ives said in a tweet.

Twitter chief executive Parag Agrawal has said that fewer than five percent of accounts active on any given day at Twitter are bots, but that analysis cannot be replicated externally due to the need to keep user data private. – Fin24/AFP