Our opinion on the current state of ARGENT(ART)
Argent (ART) is a manufacturer and beneficiator of steel and aluminium products supplying a wide range of businesses in South Africa. It also has operations in the US and the UK. Many of Argent's products are well-known in South Africa, such as Xpanda and Jetmaster. It also supplies bulk steel products and beneficiates to suit specific needs. For example, it sells tube, sheet coil, and plate steel. It modifies these products with bending, slitting, and cutting to length.
The company is the largest distributor for Hulamin and offers a full range of aluminium products. It manufactures ladders, castors, and storage bins. It also produces paint and a range of steel cupboards, desks, filing cabinets, and other office furniture. Additionally, it manufactures and markets a variety of steel fencing and gates. Most of these businesses are directly impacted by the state of the South African economy, so the current conditions have forced the company to restructure substantially.
In its results for the six months to 30th September 2024, the company reported revenue down 3,3% and headline earnings per share (HEPS) up 3,7%. The company's net asset value (NAV) increased 13,4% to 3265,9c per share. The company said, "The optimism in South Africa surrounding the Government of National Unity has resulted in the recent strengthening of the Rand, which created an accounting write-down of 9.7 million in the group’s cash and cash equivalents, whereas the previous period had a write-up of 11.7 million. Overall, the group showed a resilient performance with revenue declining after a 15% strengthening of the Rand."
The average daily value traded in this share is about R874 000, which means that it is viable for private investors. This company is trading on a very low multiple of 6,39 - which we think makes it good value. The share has been rising since its low of 1416c on 8th May 2023. We regard this as a good investment at current levels. Obviously, it will benefit directly from any improvement in the economy.
On 19th August 2022, the company announced that it had acquired 100% of the UK company, Standmode, for R159,3m.
The company is the largest distributor for Hulamin and offers a full range of aluminium products. It manufactures ladders, castors, and storage bins. It also produces paint and a range of steel cupboards, desks, filing cabinets, and other office furniture. Additionally, it manufactures and markets a variety of steel fencing and gates. Most of these businesses are directly impacted by the state of the South African economy, so the current conditions have forced the company to restructure substantially.
In its results for the six months to 30th September 2024, the company reported revenue down 3,3% and headline earnings per share (HEPS) up 3,7%. The company's net asset value (NAV) increased 13,4% to 3265,9c per share. The company said, "The optimism in South Africa surrounding the Government of National Unity has resulted in the recent strengthening of the Rand, which created an accounting write-down of 9.7 million in the group’s cash and cash equivalents, whereas the previous period had a write-up of 11.7 million. Overall, the group showed a resilient performance with revenue declining after a 15% strengthening of the Rand."
The average daily value traded in this share is about R874 000, which means that it is viable for private investors. This company is trading on a very low multiple of 6,39 - which we think makes it good value. The share has been rising since its low of 1416c on 8th May 2023. We regard this as a good investment at current levels. Obviously, it will benefit directly from any improvement in the economy.
On 19th August 2022, the company announced that it had acquired 100% of the UK company, Standmode, for R159,3m.
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