BELL Share price: R8,50 JSE code: BEL
IT’S HEAVY YELLOW METAL
blues for Bell Equipment, one of the largest makers and distributors of construction vehicles in Africa. The main problem is mining, the major local market for Bell’s vehicles. CE Gary Bell says many mines have cut back on purchases and are waiting before committing to capital expenditure. The result has been a fall-off in demand for Bell’s equipment.
But the Richards Bay-based company has been through similar crises before, and it has come through. “The company is known for innovation and resilience,” says Bell.
A partial solution would be to expand outside domestic mining, but here too Bell sees problems. “African governments generally need to consider becoming a little more investor friendly or we won’t be able to attract the large, reputable, global players who are looking for security of tenure,” Bell notes. And without the global funds there won’t be much demand for Bell’s vehicles.
Though the company sees tough trading ahead, there is a little glimmer of hope. “Our dependence on mining has been offset by our northern hemisphere business, which is predominantly construction related in Europe and North America and continues to grow,” adds Bell.
Shredded interim results to end-June showed the worrying trend of cash down and debt up. Bell has not paid a dividend since March 2013.
However, investors should be cautious of selling the share now. The share price is trading near its low for the year and net asset value is more than three times higher than the price.