Our opinion on the current state of NOVUS(NVS)Novus (NVS) is South Africa's largest printing company with 11 printing plants. Until recently, it had the monopoly contract to do all of Media24's printing. With effect from 1st April 2018, that contract was reduced to roughly 58% of Media24's printing, and the price paid by Media24 for printing was also reduced.
The company appointed a new CEO, Neil Birch, who has decided in the short term to abandon the company's acquisitions and focus on consolidating the business and improving its operating performance. The board may also look to sell the company's tissue business. The company has a level 4 BEE status but will need to improve that to become more competitive.
On 12th August 2022, the company announced that it would acquire 75% of Pearson South Africa.
In its results for the six months to 30th September 2024, the company reported revenue up 3,3% and headline earnings per share (HEPS) of 59,36c compared with 28,77c in the previous period. The company said that the improved profits were due to "...an improvement in the profitability of the Print Segment and profits from derivative instruments held in Mustek Limited ("Mustek"), within the Packaging Segment."
Technically, the share price fell steadily since listing in March 2015 until March 2021. Then it began to move up, and it currently trades just above its NAV (728,27c). We suggested waiting for a convincing break up through a 65-day moving average before investigating further. That happened on 8th October 2020 at 88c, and the share has since moved up to 760c.
The share trades about R1,5m worth of shares a day, which makes it practical for private investors. The share was added to the Winning Shares List (WSL) on 5th June 2024 at 524c. It has subsequently moved up to 760c.
NVS trade ideas
Our opinion on the current state of NOVUS(NVS)Novus (NVS) is South Africa's largest printing company with 11 printing plants. Until recently, it had the monopoly contract to do all of Media24's printing. With effect from 1st April 2018, that contract was reduced to roughly 58% of Media24's printing and the price paid by Media24 for printing was also reduced. The company appointed a new CEO, Neil Birch, who has decided in the short term to abandon the company's acquisitions and focus on consolidating the business and improving its operating performance. The board may also look to sell the company's tissue business. The company has a level 4 BEE status but will need to improve that to become more competitive.
On 12th August 2022, the company announced that it would acquire 75% of Pearson South Africa. In its results for the year to 31st March 2024, the company reported revenue up 24% and headline earnings per share (HEPS) of 78.8c compared with a loss of 7.4c in the previous year. The company said, "The increase in operating profit to R393.5 million (2023: R6.9 million) and gross profit margin improvement of 9.9% to 28.7% (2023: 18.8%), is attributable to a R264 million operating profit generated by MML and improved profitability in both Print and Packaging. Overhead costs were well contained throughout the Group."
Technically, the share price fell steadily since listing in March 2015 until March 2021. Then it began to move up and it currently trades at 92% of its NAV. We suggested waiting for a convincing break up through a 65-day moving average before investigating further. That has happened on 8th October 2020 at 88c, and the share has since moved up to 550c. The share trades about R225,000 worth of shares a day, which makes it practical for private investors.
Our opinion on the current state of NOVUS(NVS)Novus (NVS) is South Africa's largest printing company with 11 printing plants. Until recently, it had the monopoly contract to do all of Media24's printing. However, from 1st April 2018, that contract was reduced to roughly 58% of Media24's printing, and the price paid by Media24 for printing was also reduced. The company appointed a new CEO, Neil Birch, who decided to abandon acquisitions in the short term to focus on consolidating the business and improving its operating performance. The board may also consider selling the company's tissue business. Novus has a level 4 BEE status but will need to improve that to become more competitive.
On 12th August 2022, the company announced that it would acquire 75% of Pearson South Africa. In its results for the six months to 30th September 2023, the company reported revenue up 36.8% and headline earnings per share (HEPS) of 28.77c compared with 2.89c in the previous period. The company said, "The financial results for the six months ended 30 September 2023 ("period") improved when compared to the prior period, largely through the inclusion of the results of Maskew Miller Learning Proprietary Limited ("MML") in the Education segment."
In a trading statement for the year to 31st March 2024, the company estimated that HEPS would improve by at least 1000% compared with the 7.35c loss in the previous year. Technically, the share price fell steadily since listing in March 2015 until March 2021. Then it began to move up and it currently trades at 54% of its NAV. We suggested waiting for a convincing break up through a 65-day moving average before investigating further. That happened on 8th October 2020 at 88c, and the share has since moved up to 535c. The share trades about R263,000 worth of shares a day, which makes it practical for private investors.
Novus appears to be on a recovery path with significant improvements in financial performance and a strategic focus on consolidating and enhancing its core operations. The acquisition of Maskew Miller Learning and the strong growth in the education segment are positive indicators. However, potential investors should keep an eye on the company's ability to maintain and further improve its market position and BEE status, as well as any strategic moves regarding its tissue business.
Our opinion on the current state of NVSNovus (NVS) is South Africa's largest printing company with 11 printing plants. Until recently, it had the monopoly contract to do all of Media24's printing. With effect from 1-4-18, that contract was reduced to roughly 58% of Media24's printing and the price paid by Media24 for printing was also reduced. The company appointed a new CEO, Neil Birch, who has decided in the short term to abandon the company's acquisitions and focus on consolidating the business and improving its operating performance. The board may also look to sell the company's tissue business. The company has a level 4 BEE status but will need to improve that to become more competitive. On 12th August 2022 the company announced that it would acquire 75% of Pearson South Africa. In its results for the six months to 30th September 2023 the company reported revenue up 36,8% and headline earnings per share (HEPS) of 28,77c compared with 2,89c in the previous period. The company said, "The financial results for the six months ended 30 September 2023 ("period") improved when compared to the prior period, largely through the inclusion of the results of Maskew Miller Learning Proprietary Limited ("MML") in the Education segment". Technically, the share price fell steadily since listing in March 2015 until March 2021. Then it began to move up and it currently trades at 54% of its NAV. We suggested waiting for a convincing break up through a 65-day moving average before investigating further. That has happened on 8-10-20 at 88c and the share has since moved up to 421c. The share trades about R263 000 worth of shares a day which makes it practical for private investors.
Our opinion on the current state of NVSNovus (NVS) is South Africa's largest printing company with 11 printing plants. Until recently, it had the monopoly contract to do all of Media24's printing. With effect from 1-4-18, that contract was reduced to roughly 58% of Media24's printing and the price paid by Media24 for printing was also reduced. The company appointed a new CEO, Neil Birch, who has decided in the short term to abandon the company's acquisitions and focus on consolidating the business and improving its operating performance. The board may also look to sell the company's tissue business. The company has a level 4 BEE status but will need to improve that to become more competitive. On 12th August 2022 the company announced that it would acquire 75% of Pearson South Africa. In its results for the six months to 30th September 2022 the company reported revenue down 3% and headline earnings per share (HEPS) of 2,89c compared with 28,49c in the previous period. The company said, "Operating profit decreased to R23,3 million (2021: operating profit of R90,3 million) and gross profit margin decreased to 16,9% (2021: 24,0%) due to paper price increases and energy surcharges levied by European paper suppliers, and higher logistical costs experienced throughout the period". In a trading statement for the six months to 3th September 2023 the company estimated that HEPS would be 28,77c compared with 2,89c in the previous period. Technically, the share price fell steadily since listing in March 2015 until March 2021. Then it began to move up and currently trades at 54% of its NAV. We suggested waiting for a convincing break up through a 65-day moving average before investigating further. That has happened on 8-10-20 at 88c and the share has since moved up to 410c. The share trades about R230 000 worth of shares a day which makes it practical for private investors.