Finweek English Edition - - COVER STORY -

2Con­duit fo­cuses on short-term in­surance and credit re­cov­ery. It is a high-qual­ity, cash-gen­er­a­tive busi­ness as ev­i­denced by its strong bal­ance sheet and on­go­ing prof­itabil­ity. The com­pany has a mar­ket cap of R360m, R270m cash in the bank, with a re­turn on eq­uity of 17%. While it’s cur­rently re­tain­ing cash to rein­vest into the busi­ness, in the 2011 fi­nan­cial year it paid out a div­i­dend of 10c per share when the share was trad­ing at 65c. We be­lieve there is po­ten­tial for fur­ther div­i­dends in the near fu­ture.

Con­duit cur­rently trades on a price-to­book ra­tio of 1.3 times, and a P/E ra­tio of 11.1 times. Adding up the dif­fer­ent parts of the busi­ness, we value Con­duit at R491m ver­sus the cur­rent mar­ket value of R346m. More im­por­tantly, the op­portu-

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