Our opinion on the current state of LABAT(LAB)Labat (LAB) is a 57% black-owned investment holding company which listed on the JSE in 1999. The company buys and improves subsidiaries and then sells them for a profit. At the moment, Labat has two operations - South African Micro-Electronic Systems (SAMES) and Labat Logistics.
On 14th April 2020, the company announced that it had acquired 70% of Biodata, an East London-based company focused on cannabis healing. The acquisition is to be paid for in shares. The market for cannabis in South Africa in 2020 was expected to be worth around R27bn. On 5th May 2020, the company issued a profit forecast for the years to 2021 and 2022, stating it was raising R112m by the issue of shares and that it would generate a profit of R60m in 2021 and R162,3m in 2022, resulting in headline earnings per share (HEPS) of 10,9c and 29,9c respectively.
On 8th May 2020, the company announced that it had decided to put Force Fuel into business rescue because of a drop in volumes as a result of COVID-19.
In its results for the year to 31st May 2023, the company reported revenue up 114,96% and a headline loss per share of 7,14c compared with a loss of 7c in the previous period. The company's net asset value (NAV) fell by 89,74% to 1,58c per share.
The company's shares were suspended on the JSE in October 2023 and will remain suspended until the company appoints new auditors and produces interims for the six months to 30th November 2023.
Even when trading, this is a volatile, loss-making penny stock, so investors should leave it alone.
