{"id":471,"date":"2023-08-28T01:01:00","date_gmt":"2023-08-28T01:01:00","guid":{"rendered":"https:\/\/bluegemresearch.co.za\/?p=471"},"modified":"2023-08-26T08:48:35","modified_gmt":"2023-08-26T08:48:35","slug":"sabvest-capital-h123-results-growth-despite-tougher-period","status":"publish","type":"post","link":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/?p=471","title":{"rendered":"Sabvest Capital \u2013 H1:23 Results \u2013 Growth Despite Tougher Period"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>Share Code: SBP \u2013 Market Cap: R2.8bn \u2013 Dividend Yield: 1.3%<\/em><\/p>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-06583ae4-0ce4-4874-a239-015689bc4831\" href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/08\/Sabvest-Capital_Results-Note_H1_23.pdf\"><strong>Sabvest Capital &#8211; Results Note &#8211; H1:23<\/strong><\/a><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/08\/Sabvest-Capital_Results-Note_H1_23.pdf\" class=\"wp-block-file__button wp-element-button\" download aria-describedby=\"wp-block-file--media-06583ae4-0ce4-4874-a239-015689bc4831\">Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>H1:23 Results: Fully Invested<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sabvest grew its Net Asset Value (NAV) by +10.4% y\/y to 11465cps (H1:23 10388cps) and maintained its interim dividend at 30cps (H1:22 \u2013 30cps).<\/li>\n\n\n\n<li>The Group is fully invested and, indeed, has several investment disposals in progress. With net debt at c.10% of gross assets, we expect realizations to be applied (somewhat) to degearing.<\/li>\n\n\n\n<li>Management expects moderate growth in NAV per share for the full FY 23E period.<\/li>\n\n\n\n<li>Note (below) how unlisted valuation multiples have remained flat over the period.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/08\/2023-August-28-SBP-NAV.png\" target=\"_blank\" rel=\"noreferrer noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"624\" src=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/08\/2023-August-28-SBP-NAV-1024x624.png\" alt=\"\" class=\"wp-image-473\" srcset=\"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/08\/2023-August-28-SBP-NAV-1024x624.png 1024w, https:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/08\/2023-August-28-SBP-NAV-300x183.png 300w, https:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/08\/2023-August-28-SBP-NAV-768x468.png 768w, https:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/08\/2023-August-28-SBP-NAV-624x380.png 624w, https:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/08\/2023-August-28-SBP-NAV.png 1045w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n\n\n\n<p class=\"has-small-font-size wp-block-paragraph\"><em>Sources: Sabvest, Iress, Profile Media, various company reports, &amp; Blue Gem Research workings &amp; assumptions<\/em><em>; *Valuation performed by Masimong management predominantly based on Discounted Free Cash Flow methodology. **Average between subsidiaries\u2019 multiples (4.5x and 6.0x).<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Thoughts: More Nuanced Performances from Investees<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>While H1:23 was generally a tougher trading period for underlying businesses, particularly <strong>Apex<\/strong>, <strong>ARB<\/strong> and <strong>SA Bias<\/strong> all performed <em>strongly<\/em> and saw good growth in their earnings and, thus, resulting valuations.<\/li>\n\n\n\n<li>Somewhat offsetting this, <strong>Halewood<\/strong> saw a cyclical adverse product mix and <strong>ITL<\/strong> continued to be buffeted by macro headwinds in the global apparel supply chain causing both to underperform. Both these businesses are good quality, and, in time, we expect these headwinds to abate, normal growth to continue and their respective contributions to Sabvest\u2019s NAV to rise accordingly.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Valuation, 12m TP &amp; Implied Return: 40% discount to NAV<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Updating the Group\u2019s NAV for the latest market prices we arrive at a defendable (post-discount) fair value for Sabvest\u2019s shares of 10060cps (previously: 9227cps), which still includes a HoldCo c.13% <em>discount<\/em> against this NAV.<\/li>\n\n\n\n<li>Rolling our post-discount fair value forward, we see the Group\u2019s 12m TP as 11920cps (previously: 10906cps) with an implied return of +73%, excluding dividends.<\/li>\n\n\n\n<li>Beyond the above numbers and implied returns, the fact is that the Group\u2019s share price (6900cps) is currently at a large c.40% discount to what we estimate its current NAV is (11534cps). Given the Group\u2019s track record, quality of NAV and prospects, we find this large discount strange.<\/li>\n<\/ul>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-06583ae4-0ce4-4874-a239-015689bc4831\" href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/08\/Sabvest-Capital_Results-Note_H1_23.pdf\"><strong>Sabvest Capital &#8211; Results Note &#8211; H1:23<\/strong><\/a><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2023\/08\/Sabvest-Capital_Results-Note_H1_23.pdf\" class=\"wp-block-file__button wp-element-button\" download aria-describedby=\"wp-block-file--media-06583ae4-0ce4-4874-a239-015689bc4831\">Download<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: SBP \u2013 Market Cap: R2.8bn \u2013 Dividend Yield: 1.3% H1:23 Results: Fully Invested Sources: Sabvest, Iress, Profile Media, various company reports, &amp; Blue Gem Research workings &amp; assumptions; *Valuation performed by Masimong management predominantly based on Discounted Free Cash Flow methodology. **Average between subsidiaries\u2019 multiples (4.5x and 6.0x). Thoughts: More Nuanced Performances from [&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":[119,13,15,60,140,20],"class_list":["post-471","post","type-post","status-publish","format-standard","hentry","category-sabvest_capital","tag-chris-seabrooke","tag-equity-research","tag-jse","tag-research","tag-sabvest-capital","tag-small-cap"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/471","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=471"}],"version-history":[{"count":1,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/471\/revisions"}],"predecessor-version":[{"id":474,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/471\/revisions\/474"}],"wp:attachment":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}