SEARDEL

Share price: 146c JSE code: SER

Financial Mail - Investors Monthly - - Opening Bell -

HOLD SEARDEL HAS NOT HAD A GOOD fi­nan­cial year. Losses were all over the place, leav­ing the share on a neg­a­tive earn­ings mul­ti­ple of 33,3 times.

But oth­er­wise the trend is in the right di­rec­tion. Just over a year ago Seardel held a R5bn rights is­sue. Pro­ceeds were used to set­tle debt. For in­vestors, a healthy bal­ance sheet is an en­cour­ag­ing sign.

It’s a small cap share (mar­ket cap­i­tal­i­sa­tion R932m) with a lot of po­ten­tial, de­spite the dis­ap­point­ing in­terim re­sults.

There are some valu­able as­sets. Seardel runs e.tv, owned by Hosken Con­sol­i­dated In­vest­ments (HCI) and industrial gi­ant Rem­gro. It also runs eNews, the only lo­cal news chan­nel worth watch­ing.

The me­dia in­dus­try is a tough busi­ness to be in at present. Ad­spend is tight and Seardel is up against some big com­peti­tors, not least Naspers’s DStv and the SABC. But some­times it helps to be smaller. Seardel has the flex­i­bil­ity that big go­ril­las lack.

Last Oc­to­ber for­mer CE Mar­cel Golding (of HCI) re­signed. But Seardel is now in the hands of the ca­pa­ble HCI brains-trust.

The share price has sunk by 24% over the past year. That’s what makes Seardel a hold. In­vestors don’t want to sell the share now and fu­ture move­ments in the share price will prob­a­bly be up.

The div­i­dend yield is a gen­er­ous 8,2%, though it must be noted that Seardel has not paid a div­i­dend since 2007.

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