5 September 2022
AVI (AVI) - Results for the Year Ended 30 June 2022
Consensus Recommendation BUY
Highlights |
Actual |
Change |
Revenue |
R13.8 billion |
4.3% |
Operating profit |
R2.5 billion |
5.4% |
HEPS |
530.6 cents |
6.1% |
DPS |
292 cents |
6.2% |
Valuation |
Price to Earnings |
Dividend Yield |
AVI |
13.8x |
6.3% |
FTSE/JSE Food Producers |
13.1x |
5.6% |
AVI reported robust headline earnings which have returned to pre-pandemic levels. The Group’s Entyce Beverages division (teas and coffees) revenue and operating profit increased by 5.4% and 0.9% respectively to R3.9 billion and R880 million, as revenue growth was partly offset by margin pressure from higher commodity input costs. Snackworks (biscuits and snacks) revenue and operating profit increased by 10.2% and 8.2% respectively to R4.7 billion and R881 million as price increases and volume growth were offset by cost pressure from rising raw material prices and raw material write-off costs associated with the 2021 July social unrest. I&J performed weaker with revenue and operating profit contractions of 5.1% and 10.4% respectively to R2.5 billion and R306 million, due to weaker fishing performance with a stronger Rand and higher fuel prices partly offset by abalone recovery. Fashion brands (Personal Care and Footwear & Apparel) revenue and operating profit increased by 2.6% and 23.7% respectively to R2.7 billion and R496 million, as price increases were partially offset by lower volumes in personal care and higher realised selling prices were partly offset by lower volumes and write-off costs relating to the July unrest in footwear & apparel.
RCL Foods (RCL) - Group Financial Results and Cash Dividend Declaration for the Year Ended June 2022
Consensus Recommendation STRONG SELL
Highlights |
Actual |
Change |
Revenue |
R34.9 billion |
10.2% |
EBITDA |
R2.6 billion |
7.7% |
HEPS |
118.6 cents |
9.9% |
DPS |
30 cents |
|
Valuation |
Price to Earnings |
Dividend Yield |
RCL |
9.7x |
3.9% |
FTSE/JSE Food Producers |
13.1x |
5.6% |
RCL reported a robust set of final year results for the period ended 30 June 2022 which reflected a strong recovery in its chicken business that it wants to offload, Rainbow Chicken, which has returned to profitability. Revenue for the group's five main revenue lines increased by 10.2%. Revenue for its Groceries division increased by 8.8% to R6.0 billion and EBITDA decreased by 1.4% to R550 million as the revenue growth was offset by margin pressure in Pies and Beverages. Baking revenue increased by 6.2% to R6.2 billion, while EBITDA contracted by 6.3% to R488 million, as margin pressure came in, in H22022, driven by high wheat and fuel costs. Sugar revenue increased by 7.2%, while EBITDA decreased by 9.3% but is the second highest profit for the division of R817 million. Rainbow revenue and underlying EBITDA increased by 10.1% and 214% respectively to R11.4 billion and R349 million, driven by better pricing and agricultural results despite higher commodity costs. The Group’s logistics business, Vector Logistics, which it intends to offload to streamline the overall business, reported revenue and EBITDA growth of 17.1% and 18.3% respectively to R3.7 billion and R335 million.
Bidvest (BVT) - Audited Financial Results and Cash Dividend Declaration for the financial year ended 30 June 2022
Consensus Recommendation BUY
Highlights |
Actual |
Change |
Revenue |
R99.9 billion |
13% |
Trading Profit |
R9.7 billion |
23% |
HEPS |
1601.5 cents |
24% |
DPS |
744 cents |
24% |
Valuation |
Price to Earnings |
Dividend Yield |
Bidvest |
15.4x |
3.3% |
FTSE/JSE General Industrials |
9.0x |
3.7% |
Bidvest reported a strong and impressive set of annual results. The Group’s Services International revenue and trading profit increased by 27% and 15% respectively to R27.4billion and R3.1 billion as the businesses benefited from scale and the full-year contributions from UK and Ireland acquisitions. Branded products revenue and trading profit increased by 7% and 28% respectively to R19.1 billion and R1.9 billion driven by record pharma sales and profits. Freight revenue and trading profit expanded by 20% and 37% respectively to R7.4 billion and R1.8 billion driven by record bulk commodity volumes. Commercial Products revenue and trading profit increased by 7% and 27% respectively to R15 billion and R1.2 billion. Services South Africa's revenue and trading profit increased by 14% and 37% respectively to R8.2 billion and R900 million a strong recovery in travel and tourism. Automotive revenue and trading profit increased by 12% and 26% respectively to R23.7 billion and R800 million as price and volume increases for new vehicles. Lastly, Financial Services revenue and trading profit contracted by 8% and 74% respectively to R2.4 billion and R86 million. A final dividend of 364 cents was declared, which is the biggest dividend declared in seven years.
6 September 2022
Shoprite (SHP)
Consensus Recommendation BUY
Highlights |
Actual |
Change |
Sales |
R184 billion |
9.6% |
Gross Profit |
R45.1 billion |
-7% |
Diluted HEPS |
1048.1 cents |
10% |
DPS |
367 cents |
|
Valuation |
Price to Earnings |
Dividend Yield |
Shoprite |
21.8x |
2.6% |
FTSE/JSE Personal Care, Drug & grocery stores |
22x |
2.5% |
Shoprite is growing market share and has done so for the past 40 consecutive months. Shoprite now operates in 10 countries after exiting Madagascar and Uganda. Supermarkets RSA reported revenue and trading profit growth of 10.1% and 7% respectively. Like-for-like sales increased by 8.5%, with internal selling price inflation of 3.9% (close to 5% during H22022). The Shoprite and USave brands reported revenue growth of 7.2% to R77.9 billion, the Checkers and Checkers Hyper brands reported revenue growth of 9.1% to R58.7 billion while the LiquorShop brands reported revenue growth of R10.8 billion. Supermarkets Non-RSA delivered revenue and trading profit growth of 10.4% and 43% respectively, while Furniture revenue and trading profit contracted by 1.4% and 45% due to a high base effect and the closure of stores due to the July 2021 social unrest. The Groups other operating segments which include MediRite Pharmacies and Computicket delivered revenue growth of 8.5% to R12.9 billion and trading profit increased by 24.7%. The gross margin was maintained at 24.5% and the trading profit margin contracted slightly to 6.0% (FY2021: 6.1%). The Group opened 181 stores expanding its footprint to 2 989 stores. The total dividend for the year of 600 cents per share represents 10% growth.
7 September 2022
Discovery (DSY) - Audited results for the year ended 30 June 2022
Consensus Recommendation STRONG BUY
Highlights |
Actual |
Change |
New Business |
R23.1 billion |
5% |
Normalised operating profit |
R9.4 billion |
45% |
Normalised HEPS |
885 cents |
71% |
DPS |
nil |
- |
Valuation |
Price to Earnings |
Dividend Yield |
Discovery |
14.1x |
- |
FTSE/JSE Life Insurance |
10.0x |
4.4% |
Discovery reported its highest normalised headline earnings driven by strong performance in its SA Health, Life and Invest businesses. Discovery Bank reported a R990 million operating loss, which is 10% lower than FY2021, though their banking business is gaining significant traction. Retail deposits and advances increased by 30% and 14% respectively to R10.6 billion and R4.2 billion. Discovery Health’s gross inflows and normalised operating profit increased by 7% and 5% respectively to R97.2 billion and R3.6 billion, while Discovery Life’s gross inflows and normalised earnings improved impressively by 10% and 200% respectively to R15.1 billion and R4 billion. Discovery Invest’s gross inflows and normalised operating profit increased by 2% and 11% to R24.6 billion and R1.2 billion. Total AuA (assets under administration) and AUM (assets under management) increased by 4% and 7% respectively to R122 billion and R81 billion. Discovery Insure gross inflows increased by 14% to R4.7 billion but however made an operating loss of R162 million, a significant contraction of 165% from the prior year's profit, largely driven by the KZN floods in April and motor vehicle parts inflation. In the UK, VitalityHealth and VitalityLife gross inflows increased by 3% and 4% respectively to R11.7 billion and R6.9 billion, while normalised operating profit increased by 43% and 7% respectively. The Group decided to maintain its no-dividend policy despite a strong performance.
8 September 2022
Sanlam (SLM) - Group Interim Results for the six months ended 30 June 2022
Consensus Recommendation STRONG BUY
Highlights |
Actual |
Change |
Net result from financial services |
R4.6 billion |
1% |
Net client cash flows |
R37.1 billion |
-2% |
Diluted HEPS |
177 cents |
-7% |
Valuation |
Price to Earnings |
Dividend Yield |
Sanlam |
13.2x |
6.0% |
FTSE/JSE Life Insurance |
10.0x |
4.4% |
The Group’s general insurance operations suffered due to adverse weather, flooding in KwaZulu-Natal and rising claims costs driven by accelerating inflationary pressures. The net result from Life Insurance increased by 23% to R2.7 billion, while the net result from General Insurance decreased by 57%. The net result from Investment Management and Credit Structuring increased by 25% and 22% respectively. The Life Insurance division's net client cash flows increased by a strong 65%. Net operational earnings decreased by 7% to R4.4 billion. The Group’s life insurance new business volume decreased by 1% to R33.2 billion, while the net value of the new life insurance business decreased by 17% to R1.1 billion. The net value of new business margin expanded slightly to 2.89% from 2.82%. Net client cash inflows contracted by 2% to R37.1 billion. The Group’s emerging market business delivered a 12% drop in net result from financial services due to the decline in Moroccan equity markets.
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