{"id":301,"date":"2021-08-25T14:42:34","date_gmt":"2021-08-25T14:42:34","guid":{"rendered":"https:\/\/bluegemresearch.co.za\/?p=301"},"modified":"2021-08-25T14:42:37","modified_gmt":"2021-08-25T14:42:37","slug":"sabvest-capital-h121-delivering-growth-offering-value","status":"publish","type":"post","link":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/?p=301","title":{"rendered":"Sabvest Capital &#8211; H1:21 &#8211; Delivering Growth &#038; Offering Value"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>Share Code: SBP \u2013 Market Cap: R2.1bn \u2013 Dividend Yield: 0.45%<\/em><\/p>\n\n\n\n<div class=\"wp-block-file\"><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2021\/08\/Sabvest-Capital_Results-Note_H1_21.pdf\">Sabvest Capital &#8211; Results Note &#8211; H1:21<\/a><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2021\/08\/Sabvest-Capital_Results-Note_H1_21.pdf\" class=\"wp-block-file__button\" download>Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>H1:21 Results: Businesses trading at-or-better than 2019 levels<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Sabvest Capital\u2019s Net Asset Value (NAV) per share grew by +24% y\/y to 8240cps (H1:20 \u2013 6624cps) to the end of 30 June 2021. We have updated this post-period and see NAV currently at closer to 8500cps (our estimate).<\/li><li>The Group doubled its interim dividend to 20cps (H1:21 \u2013 10cps) as its balance sheet saw degearing and management has steadily continued buying back shares in the open market (which we consider value accretive at these levels).<\/li><li>Perhaps most importantly, management emphasises that at the date of publishing the results all the Group\u2019s businesses are trading at-or-better than 2019 (and 2020) levels.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Thoughts: Upside to forward valuation, corporate actions<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Multiples used to value the Group\u2019s unlisted investments were flat or slightly lower than prior periods. This gives us comfort that NAV growth is earnings-based (i.e. good quality).<\/li><li>In Classic Foods (and, even Revix) case(s), it looks likely that valuations may be written upwards in the near-term. Added to this, the current trading of the underlying businesses implies higher forward valuations too, even if multiples remain flat.<\/li><li>Finally, management\u2019s share buy-back &amp; hints at a potential acquisition may drive further upside from here.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Valuation, 12m TP &amp; Implied Return: Lots of value available<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Updating the Group\u2019s NAV for the latest market prices and taking out our fairly-valued \u201cHoldCo discount\u201d of 20% (previously: 19%), we arrive at defendable (post-discount) fair value for Sabvest Capital shares of 6826cps (previously: 6402cps) or +31% <em>higher<\/em> than the current share price. As noted, we see upside risk to this expression of fair value.<\/li><li>Rolling our fair value forward at our Cost of Equity, we see the Group\u2019s 12m TP as 8000cps (previously: 7542cps) with an implied return of +54%.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Refer to our <a href=\"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/?p=273\">Initiation of Coverage<\/a> for more background.<\/p>\n\n\n\n<div class=\"wp-block-file\"><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2021\/08\/Sabvest-Capital_Results-Note_H1_21.pdf\">Sabvest Capital &#8211; Results Note &#8211; H1:21<\/a><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2021\/08\/Sabvest-Capital_Results-Note_H1_21.pdf\" class=\"wp-block-file__button\" download>Download<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: SBP \u2013 Market Cap: R2.1bn \u2013 Dividend Yield: 0.45% H1:21 Results: Businesses trading at-or-better than 2019 levels Sabvest Capital\u2019s Net Asset Value (NAV) per share grew by +24% y\/y to 8240cps (H1:20 \u2013 6624cps) to the end of 30 June 2021. We have updated this post-period and see NAV currently at closer to [&hellip;]<\/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":[120,19,118,77],"class_list":["post-301","post","type-post","status-publish","format-standard","hentry","category-sabvest_capital","tag-holdco","tag-research-report","tag-sabvest","tag-value"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/301","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=301"}],"version-history":[{"count":1,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/301\/revisions"}],"predecessor-version":[{"id":303,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/301\/revisions\/303"}],"wp:attachment":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=301"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=301"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=301"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}