Delegates uneasy over Joburg Indaba snub

What is to be made of the Chamber of Mines boycotting a dinner addressed by Mineral Resources Minister Mosebenzi Zwane, in whom the industry body says it has lost confidence, pointedly adding that he is linked to dubious dealings?

The dinner hosted by the Joburg Indaba had Zwane as a guest speaker on the eve of the two-day event. But neither he nor his ministry was present at the mining conference itself to participate in any meaningful way or to hear how dismissive overseas investment funds are towards SA as a destination.

However, the talking point rather was the chamber’s decision not to attend the dinner and the notable absence of many CEOs who would normally have come to such an event.

It was noteworthy that the CEs of Anglo American’s South African businesses were all in attendance, but this could easily be explained by the company disentangling itself from coal mines supplying power utility Eskom and the need to keep Zwane as sweet as possible.

The common sentiment among delegates at the conference was that the chamber had made a mistake, lowering itself to petty games rather than being present in the same room as Zwane and, perhaps, delivering its view directly to him on a public platform where senior domestic industry figures were present instead of taking aim at the minister during poorly attended sessions at a mining conference in Australia.

Zwane had a good point to make during his speech. Don’t attack him in front of a public audience and fight him here at home. While the chamber’s CE, Roger Baxter, delivered the same cutting criticism of Zwane during an impromptu media conference the day after the dinner to explain its boycott of the event, the momentum and opportunity had been lost.

Usually, releasing your results at 5.35pm on a Friday afternoon is unlikely to endear you to the market. But shares in retailer Choppies closed Monday’s session flat, with nearly R1.7m worth of shares traded.

This would indicate there was little to be concerned about in the results. The group’s operating income, in fact, jumped 28% for the year to June.

Retail space at the Bostwanaheadquartered company is growing – 21% this year alone – and Choppies is bringing in the punters: footfall grew 29% as the supermarket chain has expanded into Tanzania and Mozambique, adding to its presence in Botswana, SA, Zimbabwe, Zambia and Kenya.

Choppies now trades out of 217 stores after adding five since the end of the financial year. And it is negotiating the acquisition of a further eight in KwaZulu-Natal, in which province the retailer grew same-store sales 18% in the period under review.

But the expansion has cost it too: over the year, administrative expenses jumped by as much as a third, while a doubling in its interest bill meant that net profit for the period was lower than the year previously.

Choppies is also by no means a cheap offering for investors wanting African retail exposure.

Its forward price:earnings ratio of 18.47 is only marginally lower than that of mighty Shoprite, which now trades on a forward ratio of 18.8.

Spar has a lower forward price:earnings ratio at 17.4, while Woolworths, thanks to its share price plunge in 2017, trades at just 13.3 times earnings.

Only Pick n Pay is significantly more expensive, at 19.9.