Red faces over glitch — or shares not selling?

In a strange twist on Monday, technology group Jasco retracted its results for the year ended June, saying it had “erroneously referred to the results being audited’’.

The mistake was because some disclosures in the “notes” section of the company’s financial statements had not been completed and finalised with its auditors. Jasco said the updated, final version of the company’s results was unlikely to reflect any changes to profits, but the board decided to retract it anyway. The company said on Thursday its net earnings in the year to June rose 8.9% to a meagre R8.8m, as revenues grew 10.2% to R1.2bn.

The company asked the JSE to suspend its shares on Monday, until its results were republished. Fortunately, the small-cap’s stock is highly illiquid. Despite Jasco releasing results last week, no shares changed hands on Thursday and Friday, meaning that “no-one acted to their detriment on the June 2018 results as announced”, the group said.

In other words, besides being slightly embarrassing for the management team, the hiccup is no train smash.

The group’s shares have trended sideways so far in 2018, edging down from 60c at the start of the year to 55c presently. Last week, new Jasco CEO Mark van Vuuren said the company was keen to use President Cyril Ramaphosa’s Youth Employment Service (Yes) initiative, which was gazetted in late August. The scheme is aimed at giving businesses an incentive to employ young people through tax breaks and improved BEE ratings.

It looks like the market is coming to terms with the fact that plastics packaging group Bowler Metcalf will not be paying a bumper special dividend from the proceeds of the sale of its major stake in beverages business SoftBev.

Anyone who has followed the perennially profitable Bowler for the past 30 years would know the directors were always going to err on the side of caution. Under the prevailing economic conditions and competitive packaging environment, it is difficult to argue against mobilising the bulk of the retaining SoftBev cash to shore up core operations.

Bowler’s recent investment presentation suggests 30% of the SoftBev proceeds will be paid out in a special dividend, with 20% set for existing capital commitments and 50% earmarked for strategic growth initiatives. The base consideration for Bowler’s share of SoftBev is R349m, with an estimated R40m to R55m to be added in form of a deferred consideration. There is also an outstanding loan of close to R65m that Bowler is collecting from SoftBev.

In essence, Bowler — assuming no economic catastrophes in the months ahead — could pay a nice round special dividend of 100c/share.

While strategic growth initiatives may be mainly a further bolstering of the plastic packaging core, the presentation also shows an interesting aside in a willingness to diversify through start-ups and acquisitions.

Then there is a reference to property development, which might pique interest into what is tucked away under “Investment Properties” — which are presumably very conservatively valued at R5.6m on the latest balance sheet.