Share Code: SBP – Market Cap: R5.7bn – Share Price discount to NAV: 10%
H1:26 Results: Compounding
- Sabvest’s Net Asset Value (“NAV”) per share rose +5.2% over six months to 16940cps (FY 25: 16105cps) and +22.0% y/y (H1:25: 13882cps), which is c.+4.7% ahead of our own last published estimate of 16180cps.
- Only Amicus and Halewood disappointed, while the rest of the Group’s investments performed well.
- Net interest-bearing debt fell to R122m (FY 25: R156.6m) offering balance sheet capacity for the post-period investments & current capital commitments.
- Management held the interim dividend held at 40cps (H1:25: 40cps).
Thoughts: Two Major Deals Add to the Shape of NAV
- Post-period, ITL agreed to buy the massively synergistic, Swedish Rudholm Group and Sabvest (led by DNI) subscribed for R754m in Frogfoot, Vox and Hypa to gain a foothold in an exciting, fast-growing fibre enterprise.
- A strong Rand masked genuine operating progress at ITL and Flowmax, and Apex (28% of the portfolio) and SA Bias (22%) are around half of Group NAV, a concentration management itself flags.
Valuation & Implied Return: Priced Close to Fair Value
- We estimate current NAV at 16832cps (previously: 16180cps), against which the share trades at a c.10% discount (previously: 12%), though we have not considered any potential accretion or growth from the two large post-period investments noted above.
- Deducting a HoldCo discount of c.12% of NAV (previously: 10%) based on central costs, gives a fair value of 14839cps (previously: 14613cps).
- Rolling that forward at our Cost of Equity gives a 12m TP of 17344cps (previously: 17119cps) and an implied price return of c.+15% (previously: +20%), or c.+16% including the c.0.9% dividend yield. The persistent discount in the share price has closed, but from here the return should be led by our expected NAV growth.
