REM­GRO

Finweek English Edition - - INVESTMENT -

HOLD

HOLD FNB Se­cu­ri­ties says that the cur­rent 11% dis­count to net as­set value (NAV) sug­gests that the in­vest­ment hold­ing group is trad­ing at ‘ fair value’. Rem­gro re­ported that net in­trin­sic as­set value in­creased 34.2% to R204.83. Rem­gro presently trades around R195/share. Di­luted nor­malised head­line earn­ings per share in­creased 11.6% to 1088.4 cents beat­ing an­a­lyst ex­pec­ta­tions. (that isn’t un­der­writ­ten) be­ing suc­cess­ful, in which case the group is in real trou­ble. But, if the MTEC/pref­er­ence share chal­lenge is ad­e­quately (and swiftly) re­solved, the group’s bal­ance sheet sud­denly looks more sta­ble, its re­main­ing op­er­a­tions are then rea­son­ably prof­itable and a rights is­sue is then quite com­fort­able. So, all in all, Jasco’s turn­around ap­pears to be at a crit­i­cal knife-edge junc­tion. Thus, it is less a con­sid­er­a­tion about val­u­a­tion and more one about risk that makes me think that I will sit this one out un­til we have more clar­ity.”

BUY

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