There's no trading statement from Rolfes yet, what does this mean?

by , 26 September 2017
There's no trading statement from Rolfes yet, what does this mean?
Throughout 2016 and early 2017 Rolfes had a great run, up from R2.76 to a high of R5.

But the share has suddenly dropped in the past two weeks.

A number of investors and analysts attribute this to the fact that the company hasn't released a trading statement.

So what does a trading statement have to do with share price?
 
The JSE requires companies to release trading statements a week, to two weeks before they release results – If profits will differ by 20% (upwards or downwards).
 
So, following a great first half of the year, it was expected that Rolfes profits for the full year would be 20% or higher than the profits for last year.
 
That would’ve meant profit of at least 63.84cps and could’ve been as high as 75cps based on many forecasts.
 
But, Rolfes has its results release scheduled for this week – yet there has been no trading update.
 
And, because investors are now worried about profits, the share price is languishing.
 
Is now the time to sell?
 
So with Rolfes profits not growing as much as what was expected – what now?
 
Firstly, in the first half of the year Rolfes made a profit of 37.85cps. This is high enough to put the company on a PE of 9.38 – which is a 50% discount to the JSE All-Share Index.
 
But no matter what – Rolfes profit for the second half of the year won’t be zero.
 
In fact – based on the fact that there was no trading statement (for higher or lower profit) we can deduce that profit for the year end will be in the range of 43.1cps to 63.3cps.
 
At the bottom of the range, Rolfes will be on a PE of 8.1, at the top of the range Rolfes will be on a PE of 5.52.
 
Simply put – there results still have Rolfes as a BUY. Remember – it’s achieved this during a recession. So, as we emerge from this recession Rolfes is set for an infinitely stronger performance.
 
 
Very strong performance from Silverbridge sends the share upwards!
 
Silverbridge results for the year ended June 2017 was released on 18 September 2017.
 
The company grew revenue by 7.7% from R86 million to R 93 million.
 
At the same time it kept tabs on expenses, and managed to grow profits from 27.52cps last year to a massive 38.84cps this year. That’s 41% growth.
 
With these figures and the share price at 295c, it sits on a PE of 7.6. This still makes the share dirt cheap. It’s share price is up from around 215c at the beginning of the month – but I expect it to hit 350c soon. Hold
 
Capevin Holdings pays another dividend
 
Capevin Holdings will be restructured soon – and that’ll be our exit from the share with a decent profit.
 
In the meantime the company has announced it will pay a 13.60 dividend per share.
 
It will make payment of this dividend on 9 October 2017.
 
The company also announced its intrinsic value per share sits at R9.14. It’s current share price is 864c, so there’s some more upside potential before we exit. Hold
 
Here’s to unleashing real value
Francois Joubert

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