Festivus for the rest of us
My plans to replace Christmas with what I regard as the more appropriate Festivus ceremony (as elaborated and celebrated by the cantankerous Frank Costanza on Seinfeld) failed miserably.
Still, I got to air my grievances later when scanning the gratuitous spending spree(s). Who would have thought AirPods could cost that much? My “big” present — the voluminous hardcover biography of US author Philip Roth — proved a real burden; my dormant tennis elbow flared up as I struggled to hold the tome off my chest in my determined bedtime reading sessions.
At least Christmas Day celebrations were livened up by a raging bushfire that briefly threatened Kommetjie. The kids and I hiked up Slangkop to witness the spectacle and to try to get waterbombed by the helicopters. We had to beat a hasty (and slightly embarrassing) retreat when we misjudged the fire line.
The markets over December — and I’m specifically referring to the JSE — were hardly ablaze with incendiary events. Health-care group Ascendis showed some action, which is covered elsewhere in this magazine. Otherwise there was not much to spark investor interest, which was disappointing, considering that the festive season lull is the time for companies to try to sneak through developments unnoticed.
I suppose I live in eternal hope of another Perskor moment. Older readers will recall that about 30 years ago during the December holidays the legendary Manny Simchowitz raided the Afrikaans media group — a most shocking development back in the day. Simchowitz had more than a few big-hitting executives leaping out of their hammocks.
The few festive season events worth noting included industrial supplies group Invicta making a surprise offshore acquisition by buying control of KMP Holdings, which supplies aftermarket heavy-duty diesel engine parts for industrial and agricultural machinery.
Invicta has struggled for decent returns from its Singapore-based Kian Ann operation
I was interested to note that Invicta says the deal forms part of a strategic focus to diversify into new geographical areas in the industries and markets in regions where the group has expertise. Reassuringly, Invicta subsidiary Equipment Spare Parts Africa is a major customer of KMP, so there is some familiarity with the business model. KMP is a relatively small acquisition at a cost of just under R270m, but Invicta, under its previous management, had signalled quite serious global ambitions that included a possible offshore listing.
With Steven Joffe — the man who turned Gold Reef Casinos into a real contender, against all odds — in charge of Invicta, I suspect there will be an air of conservatism to global advances. There might be more small offshore forays to build a solid (and profitable) global platform before anything of substantial scale is pursued. Definitely a situation worth watching.
Small-cap worries
Also worth keeping an eye on is Conduit Capital, which has attracted a new investor, Mmuso Capital, via a redeemable convertible preference share issue worth R500m. It’s a significant issue, as Conduit has a market capitalisation of just over R600m.
Conduit’s existing shareholders will be hoping the group’s share price is much higher when the option to convert the preference shares into equity rolls around, because at a “lesser” price of 63c the new investor (which also has pre-emptive rights to any issue of new ordinary shares) will snag about 53% of the company.
Conduit has a decent enough insurance/assurance hub, where the funds raised by the preference issue will be deployed. Less reassuring is the noninsurance investments, which have included some small-cap shares that have performed dismally over the past few years. That’s not a spill that can be quickly mopped up.
With Steven Joffe in charge of Invicta, there might be more small offshore forays to build a solid global platform