There’s more than a hint of Leicester City about the position in which Capitec finds itself of late. Fortunately it doesn’t have to deal with a transfer window in which the likes of Arsène Wenger come and dangle a hundred grand a week and all the glamour models you can handle in front of its top performers. But it, too, has had the Cinderella story, and the big question is whether it can continue to churn out the results now that it’s plonked its corporate posterior firmly at the big boys’ table.
Its latest numbers show that it has lost none of its appetite for everybody else’s lunch, with a cheeky 648,000 new customers coming to join the party (that is, the bank) in the past six months.
Capitec attributes this to its increased branch network in key malls — it has opened a further 31 new branches in the period — as well as the core attraction of consumers lapping up its combo of simplicity and value for money, offering clients the most affordable bank account in SA. Clearly, under the current economic circumstances, it is vital not to go all African Bank and dish out loans to anybody who wanders into a branch, and Capitec goes into considerable detail on the conservatism of its approach to credit.
It has limited credit extension to lower-income groups, as well as to particular industries and business units that give it what the more technical bankers refer to as the heebie-jeebies.
Mobile banking is growing fast, and signs are that economic pressure will continue to drive value-conscious consumers through its ever-open doors.
Vital numbers on October 3 2016
|Share price (R)||649.30|
|Market cap (Rbn)||75.08|
|Earnings yield (%)||4.67|
|Dividend yield (%)||1.74|
It wasn’t that long ago that the mining industry was throwing cash around like a bunch of sailors on their first night in port, and their service providers were lapping up the largesse with alacrity. Sadly those days are long gone, and the lads with the picks and shovels have got their wallets sewn up tighter than the proverbial gnat’s chuff. This is extremely poor news for the likes of ELB, which may well have some of the shiniest engineering solutions in the market but it’s struggling to shift them.
Its catalogue of complaints reads like the gloomiest of Russian novels, bemoaning everything from subdued commodity prices, a global economic slowdown, low growth in SA, the rand falling out of bed and a collapse in investor confidence to explain why its earnings have tanked from an attributable profit of R92m in 2015 to a loss of R148m. Large infrastructure projects and capital spending in the public and private sectors have been delayed or cancelled, and the lawyers have been adding a bit of spice to the mixture.
This all adds up to a toxic situation requiring a nimble-footed response, and in the past couple of years ELB has attempted to move away from its reliance on the minerals and metals-related sectors. It is looking to move into providing biomass, gas and energy from waste power plants, and to develop some expertise in the industrial sector, particularly in fast-moving consumer goods. The group is budgeting for a return to profitability this year as it continues to reposition itself for a more robust and sustainable future.
Vital numbers on October 3 2016
|Share price (R)||17.00|
|Market cap (Rm)||609.02|
|Earnings yield (%)||—|
|Dividend yield (%)||5.71|