{"id":348,"date":"2022-02-14T01:01:00","date_gmt":"2022-02-14T01:01:00","guid":{"rendered":"https:\/\/bluegemresearch.co.za\/?p=348"},"modified":"2022-02-13T07:32:48","modified_gmt":"2022-02-13T07:32:48","slug":"arb-holdings-h122-results-tough-chaotic-trading-period","status":"publish","type":"post","link":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/?p=348","title":{"rendered":"ARB Holdings &#8211; H1:22 Results &#8211; Tough, Chaotic Trading Period"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Share Code: ARH \u2013 Market Cap: R1.8bn \u2013 PE: 9.3x \u2013 DY: 4.3%<\/strong><\/p>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-d26c49ec-fcd7-4b46-a977-b8ede4acd575\" href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2022\/02\/ARB-Holdings_H1_22_Results-Note.pdf\">ARB Holdings &#8211; H1:22 &#8211; Results Note<\/a><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2022\/02\/ARB-Holdings_H1_22_Results-Note.pdf\" class=\"wp-block-file__button\" download aria-describedby=\"wp-block-file--media-d26c49ec-fcd7-4b46-a977-b8ede4acd575\">Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>H1:22 \u2013 July Riots, Omicron 4<sup>th<\/sup> Wave &amp; Fading DIY Spend<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>ARB Holdings\u2019 H1:22 results reflected a tough, chaotic trading period where riots in July and the Omicron 4<sup>th<\/sup> Wave all hit the Group\u2019s operations while supply chains remained unpredictable and inflation pressures began to materialize.<\/li><li>The Group\u2019s revenue rose 7.5% y\/y, though this was driven by the Electrical Division\u2019s good performance. The Lighting Division saw a contraction over this period as the July riots disrupted many of its customers, discretionary retail spending faded off the high DIY-led base, and supply chains put pressure on in-house logistics.<\/li><li>Headline Earnings Per Share (HEPS) slipped somewhat to 39.1cps (H1:21 \u2013 41.1cps), though backed by good cash generation and the Group\u2019s normal bulletproof balance sheet.<\/li><li>Per Group policy, management has not declared an interim dividend (only a final dividend is normally declared).<\/li><li>Finally, during the period, the Group acquired the 25%-minority in CraigCor and secured a replacement supplier of switchgear, TosunLux, that should contribute positively to the Group going forward.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Our Thoughts: Offer to Minorities Key Short-term Event<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>More pertinent to the Group\u2019s short-term future, Masimong Electrical made an 800cps cash offer to ARB minorities with a proposed delisting of the Group.<\/li><li>Refer to our previous note for more detail as to this offer \u2013 <a href=\"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/?p=341\">Offer to Minorities &amp; Proposed Delisting<\/a>.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Forecast, Valuation &amp; Implied Return: Based on Offer to Minorities<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>We see the 12m TP as 800cps (previously: 766cps) and have derived it from the existing cash offer to minorities of 800cps.<\/li><li>This implies that there remains c.5% return at the current share price versus this offer.<\/li><li>Using the 12m TP and assuming the deal takes approximately four months for funds to flow, we see fair value as 775cps (previously: 654cps) based on the time value of money and the South African 10-year bond yield.<\/li><\/ul>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-0057455f-d449-46b8-a551-0cb1fec4ac24\" href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2022\/02\/ARB-Holdings_H1_22_Results-Note.pdf\">ARB Holdings &#8211; H1:22 &#8211; Results Note<\/a><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2022\/02\/ARB-Holdings_H1_22_Results-Note.pdf\" class=\"wp-block-file__button\" download aria-describedby=\"wp-block-file--media-0057455f-d449-46b8-a551-0cb1fec4ac24\">Download<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: ARH \u2013 Market Cap: R1.8bn \u2013 PE: 9.3x \u2013 DY: 4.3% H1:22 \u2013 July Riots, Omicron 4th Wave &amp; Fading DIY Spend ARB Holdings\u2019 H1:22 results reflected a tough, chaotic trading period where riots in July and the Omicron 4th Wave all hit the Group\u2019s operations while supply chains remained unpredictable and inflation [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[50],"tags":[52,51,53,75,13,60,20,30],"class_list":["post-348","post","type-post","status-publish","format-standard","hentry","category-arb-holdings-arh","tag-arb","tag-arb-holdings","tag-arh","tag-electrical","tag-equity-research","tag-research","tag-small-cap","tag-small-caps"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/348","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=348"}],"version-history":[{"count":1,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/348\/revisions"}],"predecessor-version":[{"id":350,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/348\/revisions\/350"}],"wp:attachment":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=348"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=348"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=348"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}