{"id":496,"date":"2024-04-02T01:01:00","date_gmt":"2024-04-02T01:01:00","guid":{"rendered":"https:\/\/bluegemresearch.co.za\/?p=496"},"modified":"2024-03-31T13:18:17","modified_gmt":"2024-03-31T13:18:17","slug":"sabvest-capital-fy-23-results-navigating-a-challenging-period","status":"publish","type":"post","link":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/?p=496","title":{"rendered":"Sabvest Capital \u2013 FY 23 Results \u2013 NAVigating a Challenging Period"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>Share Code: SBP \u2013 Market Cap: R2.7bn \u2013 Dividend Yield: 1.3%<\/em><\/p>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-650c9d2a-5da7-4928-b2e7-922d240f723e\" href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2024\/03\/Sabvest-Capital_Results-Note_FY_23.pdf\"><strong>Sabvest Capital &#8211; Results Note &#8211; FY 23<\/strong><\/a><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2024\/03\/Sabvest-Capital_Results-Note_FY_23.pdf\" class=\"wp-block-file__button wp-element-button\" download aria-describedby=\"wp-block-file--media-650c9d2a-5da7-4928-b2e7-922d240f723e\">Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>FY 23 Results: Rare period of pressure<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sabvest saw its Net Asset Value (NAV) per share slip fractionally lower to 10936cps (FY 22: 11017cps) as headwinds of higher inflation, higher interest rates and higher raw materials costs coincided with logistics challenges across the businesses held in its portfolio.<\/li>\n\n\n\n<li>Most of the Group\u2019s businesses performed good-to-well, though ITL Group &amp; Halewood continued to trade through difficult respective structural and cyclical headwinds.<\/li>\n\n\n\n<li>Management expects to resume satisfactory growth in NAV per share in FY 24, &amp; we tend to agree.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Thoughts: Today\u2019s Underperformers = Tomorrow\u2019s Upside<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Over the last couple of years, ITL\u2019s contribution to NAV has fallen from 20% to 10%, but the business (&amp;, indeed, the entire global apparel sector) has restructured &amp; could end up gaining from this period of disruption. Equity here is currently valued at zero but we suspect that this will not remain so &amp; provides future upside optionality.<\/li>\n\n\n\n<li>Likewise, Halewood\u2019s current difficult trading period belies the value of the underlying that\u2014in our opinion\u2014management is valuing conservatively. As headwinds turn to tailwinds here, earnings should follow mix, &amp; we see upside in this investment\u2019s contribution to NAV too.<\/li>\n\n\n\n<li>Finally, SA Bias is performing excellently &amp; Apex, DNI, Valemount &amp; Masimong all have healthy prospects.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Valuation, 12m TP &amp; Implied Return: Wide discount to NAV<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The share is currently trading at a c.37% discount to NAV.<\/li>\n\n\n\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 9817cps (previously: 10060cps), which still includes a HoldCo c.10% <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 11675cps (previously: 11920cps) with an implied return of +69%.<\/li>\n\n\n\n<li>See inside our report comparisons to some of the other JSE-listed HoldCo stocks.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Sabvest Capital: Breakdown of Group Net Asset Value (NAV)<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2024\/03\/2024-March-31-1.png\" target=\"_blank\" rel=\"noreferrer noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"909\" height=\"446\" src=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2024\/03\/2024-March-31-1.png\" alt=\"\" class=\"wp-image-498\" srcset=\"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2024\/03\/2024-March-31-1.png 909w, https:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2024\/03\/2024-March-31-1-300x147.png 300w, https:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2024\/03\/2024-March-31-1-768x377.png 768w, https:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2024\/03\/2024-March-31-1-624x306.png 624w\" sizes=\"auto, (max-width: 909px) 100vw, 909px\" \/><\/a><\/figure>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-650c9d2a-5da7-4928-b2e7-922d240f723e\" href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2024\/03\/Sabvest-Capital_Results-Note_FY_23.pdf\"><strong>Sabvest Capital &#8211; Results Note &#8211; FY 23<\/strong><\/a><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2024\/03\/Sabvest-Capital_Results-Note_FY_23.pdf\" class=\"wp-block-file__button wp-element-button\" download aria-describedby=\"wp-block-file--media-650c9d2a-5da7-4928-b2e7-922d240f723e\">Download<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: SBP \u2013 Market Cap: R2.7bn \u2013 Dividend Yield: 1.3% FY 23 Results: Rare period of pressure Thoughts: Today\u2019s Underperformers = Tomorrow\u2019s Upside Valuation, 12m TP &amp; Implied Return: Wide discount to NAV Sabvest Capital: Breakdown of Group Net Asset Value (NAV)<\/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":[119,13,15,60,118],"class_list":["post-496","post","type-post","status-publish","format-standard","hentry","category-sabvest_capital","tag-chris-seabrooke","tag-equity-research","tag-jse","tag-research","tag-sabvest"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/496","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=496"}],"version-history":[{"count":5,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/496\/revisions"}],"predecessor-version":[{"id":503,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/496\/revisions\/503"}],"wp:attachment":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=496"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=496"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=496"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}