Don’t rush in
Grindrod published results with HEPS falling into a loss of 61.2c versus a 74.4c profit last time. Net asset value has fallen from 2 450c to 2 007c as it impaired tangible assets by some R2bn, and impaired goodwill by almost half a billion rand. With a market cap of R11bn, the company has underlying cash of just over R9bn and debt of just under R2.5bn. It has exited the rail manufacturing businesses, a good move as it manages logistics – manufacturing was never its core business. The share price is up almost 50% since the lows of last May and while the company is well capitalised and under no threat of going bust, I would not rush to buy. Rather wait for the turnaround back to profit to start because tough times can (and do) often last longer than anybody expects.
While the company is well capitalised and under