{"id":555,"date":"2024-08-26T01:01:00","date_gmt":"2024-08-26T01:01:00","guid":{"rendered":"https:\/\/bluegemresearch.co.za\/?p=555"},"modified":"2024-12-13T13:10:34","modified_gmt":"2024-12-13T13:10:34","slug":"sabvest-capital-h124-results-returning-to-growth","status":"publish","type":"post","link":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=555","title":{"rendered":"Sabvest Capital \u2013 H1:24 Results \u2013 Returning to Growth"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>Share Code: SBP \u2013 Market Cap: R2.9bn \u2013 Dividend Yield: 1.2%<\/em><\/p>\n\n\n\n<div data-wp-interactive=\"core\/file\" class=\"wp-block-file\"><object data-wp-bind--hidden=\"!state.hasPdfPreview\" hidden class=\"wp-block-file__embed\" data=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/Sabvest-Capital_Results-Note_H1_24.pdf\" type=\"application\/pdf\" style=\"width:100%;height:600px\" aria-label=\"Embed of &lt;strong&gt;Sabvest Capital - Results Note - H1:24&lt;\/strong&gt;.\"><\/object><a id=\"wp-block-file--media-45ea5fda-2d97-4ab8-9677-c7821091a209\" href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/Sabvest-Capital_Results-Note_H1_24.pdf\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Sabvest Capital &#8211; Results Note &#8211; H1:24<\/strong><\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/Sabvest-Capital_Results-Note_H1_24.pdf\" class=\"wp-block-file__button wp-element-button\" download aria-describedby=\"wp-block-file--media-45ea5fda-2d97-4ab8-9677-c7821091a209\">Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>H1:24 Results: NAV Returns to Growth<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sabvest\u2019s Net Asset Value (NAV) grew +3% y\/y to 11786cps (H1:23 \u2013 11465cps), management hiked the Group\u2019s dividend to 35cps (H1:23 \u2013 30cps), and bought back a further R51.7m shares during the period (average price of c.6893cps versus the NAV of 11786cps and the current share price of 7450cps).<\/li>\n\n\n\n<li>Many of the Group\u2019s underlying businesses recovered\/grew nicely: Apex, Flexo and ITL all performed well while Corero\u2019s share price more than doubled, and Transaction Capital unbundled We Buy Cars Holdings (JSE code: WBC).<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/2024-08-26-SBP-SOTP.png\" target=\"_blank\" rel=\"noreferrer noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"917\" height=\"322\" src=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/2024-08-26-SBP-SOTP.png\" alt=\"\" class=\"wp-image-557\" srcset=\"https:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/2024-08-26-SBP-SOTP.png 917w, https:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/2024-08-26-SBP-SOTP-300x105.png 300w, https:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/2024-08-26-SBP-SOTP-768x270.png 768w, https:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/2024-08-26-SBP-SOTP-624x219.png 624w\" sizes=\"auto, (max-width: 917px) 100vw, 917px\" \/><\/a><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>On a balance, the Group\u2019s portfolio outlook is good, its valuations are proving conservative (see \u2018<em>Thoughts\u2019<\/em> below) and management is steadily degearing as cash is realized and\/or flows centrally.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Thoughts: Exits Underscore Conservative Valuations<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sabvest has (1) agreed to exit Metrofile in two tranches at an above-market price (301cps), (2) received an initial R80.6m from its exit of Sunspray (at above-book at the time), &amp; (3) concluded an exit from Rolfes that should be at a premium to its previous value in the Group\u2019s NAV.<\/li>\n\n\n\n<li>This is c.6% of assets being realized at <em>above<\/em>-book prices (proceeds should go into degearing) and it goes to evidence Sabvest\u2019s conservative unlisted valuations.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Valuation, 12m TP &amp; Implied Return: Discounted<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The share is trading at a c.37% discount to NAV, which is well off from the JSE-listed peer group average discount <em>particularly<\/em> when compared based on Sabvest&#8217;s superior track record (i.e. the Line-of-Best-Fit below).<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/2024-08-26-HoldCo-PBs.png\" target=\"_blank\" rel=\"noreferrer noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"591\" height=\"384\" src=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/2024-08-26-HoldCo-PBs.png\" alt=\"\" class=\"wp-image-558\" srcset=\"https:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/2024-08-26-HoldCo-PBs.png 591w, https:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/2024-08-26-HoldCo-PBs-300x195.png 300w\" sizes=\"auto, (max-width: 591px) 100vw, 591px\" \/><\/a><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Using our updated NAV (with the latest market prices) we arrive at a defendable (<em>post<\/em>-discount) fair value for Sabvest\u2019s shares of 10754cps (previously: 9817cps), which still includes a HoldCo c.10% <em>discount<\/em> against this NAV (unchanged from prior period).<\/li>\n\n\n\n<li>Rolling our post-discount fair value forward, we see the Group\u2019s 12m TP as 12616cps (previously: 11675cps) with an implied return of +69%.<\/li>\n<\/ul>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-45ea5fda-2d97-4ab8-9677-c7821091a209\" href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/Sabvest-Capital_Results-Note_H1_24.pdf\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Sabvest Capital &#8211; Results Note &#8211; H1:24<\/strong><\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2024\/08\/Sabvest-Capital_Results-Note_H1_24.pdf\" class=\"wp-block-file__button wp-element-button\" download aria-describedby=\"wp-block-file--media-45ea5fda-2d97-4ab8-9677-c7821091a209\">Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: SBP \u2013 Market Cap: R2.9bn \u2013 Dividend Yield: 1.2% H1:24 Results: NAV Returns to Growth Thoughts: Exits Underscore Conservative Valuations Valuation, 12m TP &amp; Implied Return: Discounted<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[117],"tags":[52,51,13,15,60,118,140,20,30,16],"class_list":["post-555","post","type-post","status-publish","format-standard","hentry","category-sabvest_capital","tag-arb","tag-arb-holdings","tag-equity-research","tag-jse","tag-research","tag-sabvest","tag-sabvest-capital","tag-small-cap","tag-small-caps","tag-south-africa"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/555","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=555"}],"version-history":[{"count":3,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/555\/revisions"}],"predecessor-version":[{"id":607,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/555\/revisions\/607"}],"wp:attachment":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=555"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=555"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=555"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}