Share price: 146c JSE code: SER
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.