HPLR

Financial Mail - Investors Monthly - - Opening Bell -

Share price: : 660c JSE code: HPR

HOLD THIS MIGHT BE AN UN­FA­MIL­IAR name to most in­vestors — the acro­nym stand­ing for Hosken Pas­sen­ger Lo­gis­tics & Rail — as the com­pany was the sub­ject of a low-key un­bundling (as a div­i­dend in specie) from in­vest­ment com­pany HCI through its sub­sidiary Niveus In­vest­ments.

The in­ferred value of HPLR prior to be­ing listed on the JSE was 778c/share. Not long after list­ing, HPLR was steered right down to 441c — per­haps un­der­stand­ably, since the pro­longed bus strike would have im­pli­ca­tions for main sub­sidiary Golden Ar­row Bus Ser­vices (Gabs). But then a up­beat trad­ing state­ment revved up the share price con­sid­er­ably.

Suc­ces­sive HCI an­nual re­ports will show that Gabs is a peren­ni­ally prof­itable con­tender thanks to at­trac­tive sub­si­dies and on­go­ing in­vest­ment in fleet ef­fi­cien­cies.

IM puts a hold on HPLR, as at this junc­ture it’s im­pos­si­ble to de­ter­mine how “lo­gis­tics and rail” will drive the busi­ness. Pre­sum­ably HPLR will look to make val­ueadding ac­qui­si­tions. But un­til deal-mak­ing en­deav­ours are ev­i­dent and the profit prow­ess of Gabs can be re­assessed, the HPLR shares might idle along.

Longer-term in­vestors might con­sider clam­ber­ing aboard, re­mem­ber­ing that the most re­cent HCI un­bundling, Mon­tauk, also en­dured a slow start be­fore rock­et­ing.

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