THE GOOD, THE BAD & THE UGLY|

Finweek English Edition - - Companies & markets - EDITED BY MARC HASENFUSS

DÉJÀ VU (IT’S ALL RE­LATED) WE’VE FRE­QUENTLY com­pared the vi­brant stock mar­ket sen­ti­ment con­cern­ing the AltX and new list­ings to those heady days of the late Nineties (when ev­ery man and his lap­top dashed on to the JSE). Oth­ers say it’s dif­fer­ent this time… and that re­mains to be seen.

But we couldn’t help feel­ing déjà vu when pe­rus­ing a no­tice from African Cel­lu­lar Tow­ers FOL­LOW SAB­VEST’S EX­AM­PLE. PLEASE! TRAD­ING UP­DATES are be­com­ing in­creas­ingly con­tentious; some are pub­lished min­utes be­fore the re­lease of ac­tual au­dited re­sults, oth­ers are mis­lead­ing and some are too com­pli­cated. In that re­gard you have to con­grat­u­late in­vest­ment trust Sab­vest, which man­aged to pub­lish a rather sen­si­ble trad­ing up­date to share­hold­ers last week.

In a no­tice that was plainly set out, Sab­vest ad­vised that head­line earn­ings would be up 138% to 176c/share and earn­ings by 150% to 178c/share. The group also dis­closed the div­i­dend would dou­ble to 12c/share.

Is­su­ing such a clear and con­cise trad­ing up­date re­flects well on Sab­vest’s man­age­ment sys­tems and on the way the com­pany is run gen­er­ally. We sin­cerely hope more listed com­pa­nies fol­low its ex­am­ple… high­light­ing the ac­qui­si­tion of JK Shel­ters for R40m.

The deal – payable in a com­bi­na­tion of scrip and cash – hinges on JKS achiev­ing a war­ranted profit of R8m for the year to endFe­bru­ary 2007. That would put the buy on a mod­est for­ward price:earn­ings mul­ti­ple of five times.

While JKS ap­par­ently com­ple­ments AC Tow­ers’ cel­lu­lar phone tower busi­ness, the ac­quired com­pany is also 66,6% con­trolled by an AC Tow­ers di­rec­tor.

Such re­lated party trans­ac­tions – in­volv­ing a di­rec­tor sell­ing a busi­ness he/she owned or partly owned – into the listed com­pany was rather com­mon among the tech­nol­ogy list­ings of the late Nineties. Of course, the dif­fer­ence this time is that at least the re­lated party is dis­closed up front and war­ranted prof­its are pen­cilled in for all to see. AT SIXES AND SEV­ENS LAST YEAR Amal­ga­mated Elec­tron­ics Cor­po­ra­tion (Amecor) – to sat­isfy de­mand for its tightly held shares – placed 6m shares with six in­sti­tu­tions at a price around the 220c/share mark.

At the time of writ­ing, Amecor – de­spite re­port­ing solid in­terim re­sults to endSeptem­ber – sits be­tween 160c and 170c/share.

The group tra­di­tion­ally en­joys a stronger sec­ond half – which begs the ques­tion: “Why the fiz­zled share price?”

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