Our opinion on the current state of SEPHAKU(SEP)
Sephaku (SEP) operates within South Africa's construction materials sector, focusing on ready-mixed cement products and other cement supplies for the industry. The company owns 100% of Metier Mixed Concrete and holds a 36% stake in Sepcem, with Dangote owning the remaining 64%. Sephaku's performance is closely tied to the state of the construction industry, which has faced challenges in recent years.
In its financial results for the year ending 31st March 2024, Sephaku reported an 18.6% increase in revenue and a rise in headline earnings per share (HEPS) to 25.71 cents from 9.66 cents in the previous year. The company highlighted that Métier had repaid its term loan, replacing it with an unutilized overdraft facility by the end of FY 2024. To support its fleet and loader renewal program, instalment sales liabilities increased to R65 million, compared to R47 million in the prior year. Finance charges saw a reduction from R13.3 million to R11.6 million, driven by a decrease in total debt.
In its trading statement for the six months ending 30th September 2024, Sephaku projected a HEPS increase of between 72% and 87%, noting improved performance from Sephaku Cement and steady results from Métier Mixed Concrete. While the share has experienced a decline and sideways movement since October 2021, it is showing signs of stabilization, finding support around 85 cents. Given its current trading volume averaging R220,000 per day, it remains a feasible option for private investors, especially as it trends upward following the latest results.
In its financial results for the year ending 31st March 2024, Sephaku reported an 18.6% increase in revenue and a rise in headline earnings per share (HEPS) to 25.71 cents from 9.66 cents in the previous year. The company highlighted that Métier had repaid its term loan, replacing it with an unutilized overdraft facility by the end of FY 2024. To support its fleet and loader renewal program, instalment sales liabilities increased to R65 million, compared to R47 million in the prior year. Finance charges saw a reduction from R13.3 million to R11.6 million, driven by a decrease in total debt.
In its trading statement for the six months ending 30th September 2024, Sephaku projected a HEPS increase of between 72% and 87%, noting improved performance from Sephaku Cement and steady results from Métier Mixed Concrete. While the share has experienced a decline and sideways movement since October 2021, it is showing signs of stabilization, finding support around 85 cents. Given its current trading volume averaging R220,000 per day, it remains a feasible option for private investors, especially as it trends upward following the latest results.
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