African Banking Corporation
Stockholders of the regional banking group-ABC have something to smile about this year. Currently trading at 504thebe, the company’s lowest share price for the past 12 months to date is 364thebe, while its highest mark to date stands at 505thebe. This basically means, those who bought shares at lowest prices, are poised to reap rewards, should the stock continue with its buoyancy. ABC recently posted a profit of P128, 5 million for the interim to June 2013, double what they achieved in the previous period (2012:P55, 2 million). The bank has announced plans to roll out retail expansion. Based on the company’s current share price, solid balance sheet and future profits expected from expansion, shareholders can expect even more.
Barclays Bank of Botswana
The bank, which is part owned by Barclays plc has not had a good year in both its stock performance and profit wise. Led by Reneitte Van De Merwe, the company’s share price has tumbled from a 12 month high of 700thebe to 552thebe as at Friday last week. Facing fierce competition from peers such as First National Bank (FNBB) and Standard Chartered Bank, Barclays has seen its profits declining in the past two years. For the half year results to June, profits before taxation tumbled 12, 6 percent to P251 million. Loans and advances, which collectively increased by 9 percent was not enough to inspire the company to profitability. While both profits and share price has plummeted, this has not stopped the listed bank to declare an interim dividend of 11,735 thebe. The company has announced plans to venture into new business opportunities; tighten credit control and invest in staff. Like any other commercial bank in Botswana, which depends on interest income, it remains to be seen what the bank plans to do in the wake of a fourth cut in lending rate.
Botswana Insurance Holdings Limited
Botswana biggest assets and management group has had mixed fortunes in the past year. With declining disposable income on most clients, leading to default on premiums, its subsidiary-Botswana Life is facing yet another tough year ahead. For the year to date, the group’s share price has reached 1065 thebe as its highest trade to date, but that was a marginal growth considering that its lowest was 1022 thebe. By the close of markets on Friday, the company share price was trading at 1055 thebe, 10thebe shy of its highest mark to date. The company, which is looking to expand in the region, posted a profit of P237 million for the six-months period to June, up 38 percent from the previous year. The company has been forced to cut its dividend by half from P115 million in 2012 (June) to just P56 million due to battered cash reserves. Under Gaffer Hassam, the group has announced a number of products such as unit trusts and short term insurance, which are expected to bolster the company’s profits going forward.
Tourism facilities operator- Chobe’s share price has performed satisfactorily, so has profitability. The company’s share price has increased to a year high of 301thebe, from a low of 251thebe. Chobe, which was listed just before the new Millennium, reported double digit growth in profit to P29 million for the six-months period to August 2013. Directors said the results were driven by a 10 percent increase in occupancy levels. During the year, the BSE listed company acquired Xanakana Camp using internal cash. The camp, located in Moremi game reserve will contribute to the company profitability in future, they have said. A decline in Europe business, latest business acquisition-Xanakana Camp- and fluctuating Pula against the US dollar is both good and bad news for the counter.
Choppies looks set to conclude its two years as a public company on a high. While executives of the firm smiled all the way to bank during the year, its share price has also not disappointed stockholders. For the year to date, the company share price has jumped to 320thebe, up 115thebe when matched with the lowest mark to date. Expansion in Botswana and South Africa drove full year profits to June 2013. Their entry in Zimbabwe is poised to further prop-up the company’ balance sheet. Profit for the fiscal year increased to P153 million, up from P129 million. In the face of declining disposable income, it will seem the company ‘perceived’ lower prices would attract consumers to their side. Its disputed Supa Save takeover during the year will also add to the company’s revenue base. Despite fierce competition from blood rival-Sefalana group- Choppies has still managed to stand tall in the fast moving consumer goods industry.
The only listed oil company also had a fairly good year. The company, which is controlled from South Africa, currently trades at 805thebe, more than double its lowest trading to date. In simple terms, those who bought its stock at 320thebe months ago, can easily cash more when they decide to sell before the Christmas season. Engen, which sells to both individuals and institutional clients, reported 89 percent increase profit attributable to equity holders of the parent company. At P70, 3 million, the profit was driven by increased demand coupled with uninterrupted supply from South Africa. Competition, which is expected to increase as government launch its oil company, fluctuating oil prices, expected fuel price increase in the new year could spoil the broth.
Botswana’s leading bank, First National Bank Botswana has become a much more stable bank under the able leadership of Lorato Boakgomo-Ntakhwana. At 400thebe, its share price has jumped 125thebe for the year to date. Compared to its peers, the listed lender has managed to remain profitable in the midst of rate cuts and competition. For the year to June, the company made a profit attributable to parent company of P700 million. Profit, said Boakgomo-Ntakhwana was influenced by advances-which boosted interest income. Rate cuts will force the bank to come up with ways of increasing non-interest income.
Based on profitability and Earnings per Share, this was not a good year for the security solutions company. From a high of 585thebe to date, the company share price currently trades at nearly half of that (at 302thebe). The fall in the company share price and profitability can be traced to the day the company decided to buy Facilities Management Group (FMG) and PS Cleaning in 2012. The company profits before tax for the half year to June tumbled 34, 8 percent to just P6 million. In an interview after his appointment some months ago, MD Michael Kampani said they were working hard to ensure they return to profitability. Ahead of the festive season, the company has already sent out letters signalling possible retrenchment. Kampani and his team must understand sacking staff is not necessarily the best way of dealing with operational costs or increase in profit.
Funeral Services Group has managed to hold its ground despite economic challenges facing its death business. The company has been profitable, so was its rising share price. Jumping from a low level of 130thebe for the twelve months to date, to close at 240thebe as of Friday last week, shareholders can have something to smile about this season. The company profit before tax for the half year to June moved up 9 percent to P14 million. FSG is also planning to chance at the regional market. New branches in Botswana and Zambia-where it has a subsidiary-have also been planned. The backup from Botswana Life for their life insurance covers have offered a perfect match over the years.
Furnmart, which retails domestic furniture and electrical appliances, has become one of the fastest growing home grown companies. Its share price has improved, but profit declined marginally during the year. It has jumped from a low of 161thebe for the year to date to reach 201thebe- a cheer for shareholders. Yearend results slowed down to P103 million, from P104 million in July last year. A distribution centre, which was established in the year, will further ensure source of supply is made easier for goods to be transported to Botswana, Namibia, South Africa and Zambia. The company said it is planning new business units, which it has not revealed as of press time.
Letlole La Rona
The company, which recently withdrew its long running cautionary note, effectively suspending talks with unmanned third party is yet to come with a greenfield projects since its inherited part of Botswana Development Corporation (BDC) property assets. Nonetheless, the company share price was not performed badly. The company highest share prices thus far have been 182 thebe, compared to its lowest of 149 thebe. It currently trades at 181thebe. The company has announced plans of entering the regional property market, joining peer Turnstar. With property market in Botswana slowing, but surely moving towards a bubble burst, delays in regional expansion may cost the company dearly. Unless it comes with its own Greenfield projects it is difficult to judge it.
The unsecured lending Goliath has yet another brilliant year-profit wise. The company, which is yet to re-apply for a commercial banking license with the central bank, has seen its stock hitting a year high of 260thebe, compared to 190thebe -the lowest this year. Currently trading at 230thebe, the difference with its lowest is marginal, but its plans to further expand its network may unlock more value for shareholders in the coming years. Chris Low, the new Managing Director has hardly settled in. Based on the fact that more commercial banks, against which it competes, are settling, the company’s profitability is under threat, if lending rate is considered.
Prime Time is on the road to recovery, thanks to competitive rentals from their flagship property project at CBD, Prime Plaza. However, the project, has not been able to help the company improve its profitability as it managed to post a profit of P43 million for the year ended August 2013, as compared to P59 million made the year before. The company has injected millions of Pula into the expansion of Prime Plaza, which is expected to finish next year. Analysts are saying the property development at CBD is not economic, which effectively means some companies, which may includes Prime Time could suffer as rentals do not match investments. Its share price has moved from a low of 182thebe, to a high of 225thebe. For this, the company deserves a ‘Wait and See’ classification.
New African Properties (NAP) currently trades at 220thebe, 6thebe above its lowest mark in the 12 months to date. Apart from Mafenyatlala mall, which was opened a few years ago, the company has not been very aggressive in its expansion. However, like other listed property companies, NAP has also announced plans of venturing into regional markets. For the year to July, the company managed to post exciting profits of P186, 9 million, as compared to P144 million the year before.
The company rarely trades at the local bourse, but then it’s only the company executives that can better explain this scenario. For the 12 months to date, the company shares have only managed to move just 3thebe up to reach its highest mark of 23thebe. At some point, the company’s shares were suspended from trading after it failed to publish scheduled results. Olympia an investment holding company, owns Kalahari Floor Tiles in the densely populated Mogoditshane.
The company is currently trading at 175thebe after a share split into five sometimes in October. Before that its share price was trading well over 700thebe. The lowest the company has ever reached in the year to date has been 142thebe. Masa Centre, a mix use property at CBD, as always led profit for the audited year to August 2013. Profit increased marginally to P12 million compared to P11 million the year before. During the year, the company announced a number of acquisitions such as Chobe Marina Lodge and Tholo Limited.
Managing Director Johan De Kok must have frowned on the news that President Ian Khama will hike the alcohol levy by 5 percent, which effectively means increase of the cost of alcohol. However, its stock has moved from a low of 1575thebe to a high of 1827thebe, signalling demand for its stock. The company owns Kgalagadi Breweries Limited (KBL). In the last 12 months, the company has undertaken a number of initiatives to cut operation costs and maximise profits. The amalgamation of KBL and Botswana Breweries Limited (BBL) is one such initiative. A bottle producing plant launched some few months back is expected to contain operation costs. The resignation of Chairman Edward Komanyane was the low point in their year.
Sefalana group has made strides this year to compete head on with giants like Choppies. In an effort to increase retail footprint, the company has increased its Shoppers stores countrywide and it has promised more will be rolled out into the New Year. The group, which is headed by Chandra Chauhan, is currently trading at 648thebe, just 2thebe from its highest mark for the year to date. Its lowest share trading this year has been 325thebe. The company has announced plans to move into the competitive regional market, but negotiations with a third party are still pending. Shareholders are still waiting.
Standard Chartered Bank has managed to report increased profits despite tough competition from peers in the top four brackets. Its share currently sells at 1170thebe, its highest to date, when matched with 1000thebe which is its lowest this far. For the half-year to June 2013, advances and loans pushed the bank’ profits to a double-digit growth. Earnings per share were up 9% and dividends per share 220 percent above the same period in 2012. CEO Moses Lekaukau said they are also keenly awaiting opportunities that will come about from the relocation of diamonds sales from London to Gaborone.
The dual-listed tourism company released its best-ever interim results since it first became public three years ago. For the half-year results to August 2o13, the company profit skyrocketed 72 percent to P48 million. The profits were driven by increased demand for beds from its traditional clients in Europe. However, declining Pula against the US dollar threatens their balance sheet. With an excess of 25 000 guests per annum, the region-focused company is arguably the largest in Botswana. Currently its share sells at 250thebe, down 60thebe, which is its highest for the year to date.
Turnstar, a property outfit suffered a major setback when its Chief Executive Jakes Motlhabane resigned halfway through his contract. Share price has moved from a low of 148thebe, to 170thebe at present its highest mark to date has been 181thebe. The company is currently reaping rewards from its more than half a billion Pula investment in Mlimani Mall in Tanzania. It has announced plans to expand Game City mall. Based on its successful move to expand and create shareholder value, the future looks bright for shareholders.
Consider buying: Based on current company performance, announced projects, it may be perfect to buy for future gains.
Don’t Buy or Sell: It will be best to just adopt a wait and see approach. You lose whether you buy or sell current stock
Consider selling or buying: It is a win-win situation, either your buy or sell the decision is all fine for now.
Don’t buy: The stock is almost useless in its current state.
NB: The above market information was sourced from BSE before official trading on Monday. Share price might have changed by now. Furthermore, all recommendations about which stock to buy, keep or sell are not necessarily the best advices. Professional services from bodies such as stockbrokers can be sought before buying or selling.