High times in the Karooooo
The wheels turn slowly to my brother-in-law’s farm in one of the more desolate bits of the Cederberg. The last 30km over the Easter weekend, a trek on rutted dirt tracks, took almost as long as the journey from Cape Town to Citrusdal.
My daughter and her friends drowned out the bakkie’s engine whine and undercarriage bumps with some really obnoxious gangsta rap — a fitting soundtrack, as my wife observed, to the sparse, scrubby landscape. Equally jarring was the news that there are plans to reopen an old manganese mine at the next farm, with a handful of young entrepreneurs purportedly wanting to quarry for iron ore.
The cynic in me thinks this may be a top-of-cycle investment, and I wonder how investors would respond to a wideeyed junior mining venture of this nature. Perhaps such a start-up would be tested on the new Cape Town Stock Exchange?
But there are also practical issues to ponder, aside from destroying the Zen-calm aspect of the valley. I just can’t imagine that trucking out iron ore will be the easiest job, with the delicate roads that get badly damaged in heavy downpours.
During my daily dawdles I stumbled more than a few times on loose stones and shifting gravel — which will become more hazardous during the harsh winter rains.
Speaking of transport (and things close to the Karoo), I was heartened to see that Nasdaq-listed vehicle tracking and fleet management business Karooooo (the owner of Cartrack) is still revving reassuringly, with subscriber numbers (for the year) up 17% to 1.526million. More encouraging is that the net new subscribers’ number almost hit 220,000 — up 23% over financial 2021. This is bare-bones stuff and I keenly await the webinar on April 28, after the release of the results, to be able to dig a little deeper.
I would like to see some meaningful gains in promising markets in southeast Asia, where Cartrack’s advance was delayed by Covid complications.
I am also anxious to see how the new Carzuka venture (an online vehicle sales initiative) is going. With Cartrack’s technology able to provide buyers (and sellers) with key “usage” data, Carzuka could well command a significant niche in the used car sales market. Recent transactions involving WeBuyCars have shown how valuable a busy used car platform can be to investors.
Cartrack’s share price has been a bit iffy of late, losing about 16% since the start of the year. The rating is pretty demanding still, but this is a growth business in which CEO and founder Zak Calisto is heavily invested. I like entities in which the interests of management and shareholders are well aligned, and I will consequently be monitoring Karooooo for any further price decelerations.
No sleepless nights
I might also start taking a renewed interest in Labat, which — in its latest iteration — is rolling out a commercial cannabis business. In recent weeks I seem to have cured a long-standing insomnia issue by chewing a third of a cannabis gummy just before retiring to bed. I remain lucid enough to watch my favourite series and concentrate on a few chapters of a novel (a reread of the intricate Nostromo) before drifting off into the deepest sleep. While I wake up fully refreshed and raring to go, I did need to investigate a loud car alarm at 2am recently, and found myself so wobbly in the knees that when I tried peeking over the fence I slipped into the giant aloe that stands sentry in the veggie patch. Still, a few nasty pricks is a small price to pay for not staring at the ceiling at 3am night after bloody night.
Labat, I see, has issued another sizeable tranche of shares — between 23c and 29c a share — to raise more working capital for its cannabis health-care operations. I’m not sure if one should be encouraged or worried by this funding drip feed.
While on goofy topics, I had to chuckle over the advisory from recently listed property business Afine that some excitable punters had traded seven shares at R650 when the average share price has been ranging between 600c and
699c. Finger trouble surely?
But the JSE has declared this a valid trade, leaving the jointly responsible parties feeling respectively perplexed and euphoric.
I am also anxious to see how the new Carzuka venture — an online vehicle sales initiative — is going