Results show potential
I SAID RECENTLY that I liked RBA as a turnaround story, specifically because it gave investors access to the high-growth lowincome property market. At the time I recommended waiting for the f inancial results, which have now been released.
The key takeaway from the results was that operating profit was down to R8m from R14.2m in the previous year and there was a headline loss of 0.88c/share. For the year, the group ended with negative cash f low but remember that it repayed R4.3m in directors’ loans. If this item hadn’t gone through, cash f low would have been positive. As a buyer at 11c, I f ind that the TNAV of 13.23c to be encouraging as it matches NAV of 13.59c very closely – you have a transparent valuation. However, much of this is underpinned by a property portfolio and keep in mind the old rule of finance – “The value of an asset is its cash-flow” – so the trick for RBA will be turning in real cash in 2013/2014. I’m still a buyer but you would have to be patient.