Our opinion on the current state of ENXGROUP(ENX)The enX Group (ENX) is a diversified industrial company catering to the petrochemical, fleet management, logistics, and industrial sectors. It includes divisions such as Austro, which distributes wood-working equipment, and New Way Power, which provides diesel generators. Its fleet division focuses on fleet management, logistics, and vehicle tracking, while ENX Petrochemicals markets lubricants, polymers, rubber, and chemicals in Southern Africa.
The company has actively streamlined its operations, selling off several non-core assets, including Eqstra in 2019 and EIE Group in April 2022, which allowed for debt reduction and special dividends for shareholders. The company also completed the sale of Eqstra Investments in June 2024, resulting in another special dividend of R5.00 per share.
In its results for the six months ending 29th February 2024, enX reported revenue up by 5% and headline earnings per share (HEPS) up 110%. Growth was driven by increased volumes in polyethylene, specialty chemicals, and generator sales, especially to data centers, though lower base oil pricing impacted average selling prices.
In a trading statement for the year ending 31st August 2024, enX estimated HEPS growth between 77% and 87%, but a decline of 6% to 16% for continuing operations. The share trades an average of R188,000 daily, making it viable for private investors, with potential upside from any economic recovery in South Africa.
