Still worth hitching a ride on this share

Admittedly the easy yards on Value Group have already been made by punters who snapped up shares in early September last year when sentiment stalled after an awful interim trading update.

The share price has revved back to 470c after steering south to 412c — the lowest level in almost three years.

The question is whether it’s still worth getting a ticket to ride, or whether investors might have missed the bus.

There’s little doubt — even with the markedly lower fuel costs that will come into play for the last three months of the current financial year — that earnings for the year to end-March will be markedly down on the 68c/share earned in the previous year.

Interim earnings came in around 5c/share with Value’s operating margins crunched from 7,4% to just 1,6% as fuel and labour costs escalated in a muted trading environment where revenue was up only 4% to R985m. Increased maintenance and subcontractor costs added further drag to the bottom line.

Even though Value traditionally has a stronger second half, IM would regard it as a commendable effort if full-year earnings can push past 20c/share.

While the short-term prognosis is not compelling, it’s worth remembering that since