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March 2017 sees the launch of another big IPO in the fisheries industry. Sea Harvest Group Limited is due to list on the 23rd of this month. Sea Harvest will join Oceana and Premier Food Fishing (listed last month) as the companies offering the most direct exposure to the fisheries industry.

 

[align=justify]Investing in AVI or Brimstone Investment Corporation offers exposure to I&J and Sea Harvest respectively, but you would be buying into diversified portfolios and would gain exposure to several companies within the food and beverage sector as well as the healthcare and insurance sectors.

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Brief overview of Sea Harvest:

[align=justify]The Sea Harvest Group was established in 1964 and is a market-leading, vertically integrated fishing business with operations in South Africa and Australia. The group operates in Saldanha Bay and Mossel Bay, and the company acquired a controlling stake in Mareterram in Australia.

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[align=justify]The principal business of the Group is fishing of MSC-certified Cape hake and Shark Bay tiger and king prawns, processing of the catch into frozen and chilled seafood, and the marketing of these products, locally and internationally. Sea Harvest is the leading frozen fish brand in South Africa in both retail (with a 36.7% market share) and food service, with strong consumer loyalty and brand equity.

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[align=justify]The Group is one of the largest fishing rights holders in the South African Cape hake industry, with 28% of the hake TAC (total allowable catch) equating to 41,676 tons, and 56% of the prawn licences in Shark Bay, Western Australia.

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What’s the reason for the IPO?

Management have given several reasons for the listing:

  1. Support management’s strategy of continuing to invest in the business, improve margins and grow organically
  2. Support the group’s vision of becoming a diversified global fishing company through value-creating acquisitions
  3. Clean up the balance sheet by repaying bank debt, preference shares, shareholder loans and creating a ’war-chest’ for growth
  4. Provide ongoing access to capital markets and the ability to use scrip as currency to support Sea Harvest’s growth strategy, both in South Africa and Australia
  5. Allows a mechanism for management and staff retention

Is it a profitable business?

[align=justify]It is worth noting that the fishing industry has very high barriers of entry due to the large capital costs, BEE requirements and government regulations. Sea Harvest has invested in 29 vessels (a mix of frozen and fresh) as well as three factories (which have an insurance value in excess of R1bn). It is very difficult for smaller players to compete with the bigger established companies, and therefore one could argue that profits are somewhat protected.

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[align=justify]Furthermore, BEE is a critical part of the rights allocation process in South Africa, and Sea Harvest is one of the most empowered fishing companies. In a recent conversation, CIO Muhammad Brey was quite upbeat at the prospect of at least securing a similar quota during the 2020 allocation process given the company’s BEE credentials.

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[align=justify]Furthermore, there has been an increased demand for seafood as we see a growing wellness trend and switch to healthy proteins with lower fat. This bodes well for the industry.

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[align=justify]As a company, Sea Harvest has seen a steady growth rate in profitability. EBITDA increased 14%,15% and 19% respectively for 2014,2015 and 2016. Return on equity over the same period was 18%, 27% and 33%. The most profitable divisions are the export market (hence a rand hedge) and also local retail and food service. The diversified local and international customer base (no customer accounts for more than 10%) reduces the concentration risk as it is not overly dependent on one client.

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[align=justify]Buying Sea Harvest shares will give you ownership of a company with a strong track record, established brand, solid assets and experienced management team. I believe the share would suit an investor who is relatively risk averse and looking for a company that will generate reliable earnings. Risks include the negative impact of a strong ZAR on exports, and the quota allocation.

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Cheyne Anderson

Portfolio Manager and Securities Trader

 

Cheyne has spent the last 10 years working in London, holding numerous positions within Equity and Equity Derivatives at various Investment Banks. His main focus has been on South African and Emerging Markets and also gained good exposure to global equity markets and products. He completed both his BCom degree in Economics and his BCom. Honours in Financial Analysis and Portfolio Management at the University of Cape Town. After completing each of the rigorous exams, Cheyne became a CFA Charterholder in 2014.


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I wouldn't touch Sea Harvest or any fishing related company with a ten foot pole

 

Just look at PFF for example, price started sliding a week or so after listing.

 

And as per my prediction, they are slowly but surely moving into illiquid territory.

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I wouldn't touch Sea Harvest or any fishing related company with a ten foot pole

 

Just look at PFF for example, price started sliding a week or so after listing.

 

And as per my prediction, they are slowly but surely moving into illiquid territory.

 

Must admit that i won't go for them right of the bat. Will let them mature for a week or so to get settled.

 

I've read somewhere that they pretty much have fixed quotas for fishing, and pretty much fill them every time, so they are quite constant. They are also a household name (could be my own preference playing here perhaps) and they have the whole BBBEE thing down.

 

Suppose we will have to wait and see how they approach the listing.

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Must admit that i won't go for them right of the bat. Will let them mature for a week or so to get settled.

 

I've read somewhere that they pretty much have fixed quotas for fishing, and pretty much fill them every time, so they are quite constant. They are also a household name (could be my own preference playing here perhaps) and they have the whole BBBEE thing down.

 

Suppose we will have to wait and see how they approach the listing.

 

That's just it, they are very constant with average growth around 12% yearly, far to boring for me.

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It would seem that there is a big interest in the Sea Harvest listing, Brimstone Investment Corporation - which owns Sea Harvest - announced late on Friday that a strong demand for Sea Harvest shares resulted in the entity increasing the size of the share offer.

 

Even Brimstone's own share price has gone up 31.25% since beginning of the year:

1003996880_BrimSeaHarvest.JPG.a3c1f3a651f9de99fb8fc6d395643cb6.JPG

 

Source: http://www.fin24.com/Companies/Agribusiness/brimstone-shares-soar-on-strong-demand-for-sea-harvest-20170320

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Private Placement of shares in Foresight Solar Fund Ltd.

 

Overview

Foresight Solar Fund Ltd. Is a Jersey registered, closed-end investment company that invests in a portfolio of predominantly UK operated solar plants. The company had its IPO on the main board of the London Exchange in 2013, in which way it managed to raise £150 million.

 

The company’s solar farms generate 470 MW of clean energy, which does not sound like much compared to big coal and gas powered stations. The company operates 18 ground based solar power plants with a gross asset value of £650 million that it earns a 1% management fee on. The investment managers do not have performance fees or acquisition fees.

 

This will be the first fund, on the JSE, that solely invests in solar or renewable energy. I do believe renewable and green energy is the future of energy and one day the world will be without fossil fuels, this transition will come sooner rather than later. We see the evidence with the major strides that companies like Tesla are doing in this particular industry and countries like Sweden that aims to be completely dependent on renewable energy by the year 2040.

 

IPO details

The investment team, that manages the fund, started in 2007 and launched their first fund in 2008. The company is looking to raise £50 million (R784 million) in the local market with a minimum of 250 million shares. RMB will be the sole bookrunner of the deal.

 

Investment Policy

The company will mainly invest in "ground based, operational solar assets, predominantly in the UK". The part of the investment that does not fit "Operational and UK based" will not exceed 25% of the investment. The company also highlighted the fact that although it’s not part of their investment policy, they will keep dividend growth constant at a rate of inflation. The company’s current investment policy does not allow for financial gearing, but will seek to get investor approval and include gearing as part of their mandate.

 

"Foresight Solar Fund will see to achieve these returns through active management of its solar power plants in accordance with Foresight Solar Fund’s investment policy and will look to grow its investment portfolio through additional asset acquisitions throughout its life."


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So Sea Harvest listed. How long does it take to show in google finance?

 

PS. There is a lot of buzz on twitter about this listing.

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So Sea Harvest listed. How long does it take to show in google finance?

 

PS. There is a lot of buzz on twitter about this listing.

 

Just look at PFF, as predicted their volumes have dropped significantly since listing, including their share price.

 

I have the same feeling about Sea Harvest.

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Telkom SA SOC Ltd. plans to break out its telecommunications towers and real estate assets into a separate unit that may then be listed on a stock market, according to two people familiar with the matter.

 

The new entity would be run by a new, property-focused management team charged with generating extra revenue for Africa’s biggest landline provider, said the people, who asked not to be identified because the plans are private. Pretoria-based Telkom has one of the largest real estate portfolios in South Africa and Chief Executive Officer Sipho Maseko wants it to contribute more to earnings, they said.

 

Source:https://www.bloomberg.com/news/articles/2017-03-27/telkom-of-s-africa-said-to-split-tower-assets-may-consider-ipo

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Brian Joffe, the founder of South Africa’s Bidvest, will list a 2 billion rand ($150 million) investment firm, Long4Life, on the Johannesburg Securities Exchange next week, the firm said in a pre-listing statement on Friday.

 

Joffe will provide 100 million rand of the capital himself and institutional investors will subscribe for the rest before listing the firm on April 7. The firm will not raise any more capital on its listing date.

 

Long4Life aims to be more nimble than traditional private equity funds and will build up a diversified portfolio of listed and unlisted assets.

 

The firm will initially focus on South Africa as it needs more scale to invest abroad, Joffe told Reuters.

 

“It’s an opportunistic, entrepreneurial play,” he said.

 

The firm will most likely not invest in industries such as deposit-taking banks, mining and resources companies, he added.

 

Joffe will be Long4Life’s chief executive and only employee to start with, and the firm will aim for returns of in excess of 15 percent per annum in the medium to long term.

 

“Long4Life will pursue investments predominantly with a lifestyle focus. These could include businesses in the beauty, outdoor, sport, retirement villages, and restaurants, among other sectors,” the firm said.

 

Long4Life will have the share code L4L on the JSE.

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New ABSA ETFs coming in the next couple of months. Not going to go into too much detail, but they'll compliment NFEMOM wrt factor investing. Will definitely be giving them a look :)


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4Sight Holdings

Purpose of the Private Placement

 

4Sight Holdings intends listing on the AltX in the Software and Computer Services sector of the JSE Lists. The listing of 4Sight Holdings on the AltX supports the Company’s aim of creating an international technology group that is run by exceptional individuals with entrepreneurial expertise, as supported by four key listing value drivers, being: 

 

Access to funding for: 

- Acquisitions; 

- Development and go-to-market of internal products; and 

- Incubator projects in various stages of development 

 

Visibility: Increased exposure to the markets, with analyst coverage raising the profile of the company; 

 

Credibility: Our customer base is dominated by corporates. They seek a secure and credible supplier and being listed on the JSE provides this credibility; and Talent attraction from a global network pool due, in part, to the visibility of the listing, but also from having greater opportunities to engage with the media.

 

The key drivers will all result in accelerated growth which, in turn, will drive shareholder value. 

 

The Company wishes to raise up to R300 000 000 through the AltX Listing, of which approximately R52 000 000 ($4 000 000) will be used to settle the cash amounts owed by Digitata Mauritius as disclosed in Annexure 10. 

 

The balance will be used for expansion, primarily by way of acquisitions both in South Africa and internationally with up to R60 000 000 for various incubator projects that are expected to yield worldwide revenue over time. A portion of the funds will be used to settle costs associated with the capital raising as the majority of the costs associated with listing have been settled at the Last Practicable Date. The capital will primarily be raised in South Africa. As at the date of this Prospectus, 4Sight Holdings is not listed on any Stock Exchange.

 

SALIENT DATES AND TIMES 2017

Date on which the Private Placement contemplated in this Prospectus will be open at 12h00 on Thursday, 21 September

Date of release of the abridged prospectus on SENS Thursday, 21 September

Expected last date for indications of interest for purposes of the book build Thursday, 12 October

Date on which shareholders will be advised of their allocations Tuesday,17 October

Date on which funds will be debited from shareholders’ accounts or payments made into the Company’s bank account Wednesday, 18 October

Date on which the results of the Private Placement will be released on SENS Thursday, 19 October

Listing of securities on the JSE at 9h00 on

 

More info here: https://www.easyequities.co.za/NewListings/Details?newListingId=99

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