There are some listed companies that never seem to make impressive earnings growth, even when the industry in which they operate is doing well and the economy as a whole is on a good footing.
Some, on the other hand, never seem to have a bad period of growth. Fees could fall, the rand could strengthen or weaken and Pravin Gordhan could be arrested by the Hawks — they would remain resilient.
Technology firm EOH Holdings is a company that falls into the latter category.
Directors in the company sold more than R39m worth of shares last week.
Chief financial officer John King exercised options granted to him in 2010, 2012 and 2013 to increase his interest in the company by 30,000 shares.
The balance of the options exercised — 145,000 — were sold at an average price of R173.99 each, or R25m in total. The company said the sale was to settle tax obligations following the exercise.
Executive director Dion Ramoo sold 39 ,712 shares, at a weighted average price of R171.84, for R6.8m . Non executive director Danny Mackay offloaded 45,600 shares, at a weighted average price of R166.77, for R7.6m.
Since EOH’s establishment in 1998 by CEO Asher Bohbot, the company has consistently outperformed its rivals, some of which have fallen off the radar screen. Information technology firms that have delisted from the local bourse in the past two years include Business Connexion, Gijima, Morvest and CompuClearing.
EOH is now one of two companies listed in the technology index. In the year to date, the EOH share price has grown 24%. Datatec’s is down 5%.
But nothing can last forever. Years of plenty are often followed by years of famine.
In the banking sector, Standard Bank joint CEOs Sim Tshabalala and Ben Kruger exercised options worth R14.5m. Both Tshabalala and Kruger exercised 50,000 shares at a price of R145, bringing the value of each transaction to R7.25m.
According to the bank’s annual report, Kruger’s total pay in 2015 was R30.79m, including incentive awards amounting to R22m, giving the CEO an increase of 61% from a year earlier. Tshabalala’s total pay was R30.99m, including annual incentives of R22m, giving him an increase of 28% compared with the prior year.
While their combined compensation increased by about 43% in 2015 after full-year profit climbed by a third, their pay in 2016 could reverse as the worlds of politics and economics collide in SA.
In two weeks, finance minister Gordhan is expected to deliver his medium-term budget speech, which will have significant bearing on whether global ratings agencies will downgrade SA’s sovereign credit rating.
The banking sector and the broader market also have their eyes glued on the dramatic saga unfolding between Gordhan and the Hawks. On October 11 , shares of the big four banks tumbled by more than 5% in intraday trade on news of the Hawks issuing a summons to the minister.
Meanwhile, spirits were up at Distell as executives were granted incentive awards. Richard Rushton was awarded 45,867 share appreciation rights at a grant price of R165.02/share, or R7.6m in total.
Finance director Lucas Verwey accepted 55,314 shares with a value of R9m.
The rights were awarded with conditions: up to one-third of the share-appreciation rights may be exercised on or after the third anniversary of the date of grant; and all must be exercised by the seventh anniversary of the date of grant.