Category Archives: Team Commentary

Team Commentary

Namibia Breweries FY14 Trading Statement

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Trading Statement

Namibia Breweriesreleased a trading statement today in which management has guided EPS to increase between 175% and 185%, coming of a low base after the N$188m impairment to its investmentin DHN Drinks (Pty) Ltd last year that resulted in a decrease in earnings per share in FY13.

HEPS is expected to be down between 8% and 11%, with softer operating results contributing to the decrease in HEPS. In our view a fierce operating environment in SA has most likely resulted in increased losses from the JV.

The company expects Basic EPS of 97c to 101c (midpoint of approximately 99c), while HEPS is expected to be between 158c and 164c (midpoint of 161), missing our forecast of 208cps.

Target price and recommendation

Results are expected to be released on SENS on 10 September 2014 and in the press on 11 September 2014; as such we left our forecasts and target price unchanged and retain our HOLD recommendation for the meantime.

IJG Mortgage Calculator

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Following two interest rate hikes by the Bank of Namibia since June 2014, we have had many questions as to the impact of the increased interest rates on individuals mortgage repayments. As such, we have compiled the below (simple) calculator to assist clients with the calculations.

Just change the grey cells values as per your loan, and the calculator will do the rest. Note that the mortgage lending rate is currently filled in, but if you have a mortgage+ or mortgage- rate, you will have to change this.

Go to the Mortgage Calculator


Bidvest Namibia FY14 Results Trading Statement

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Trading Statement

Bidvest Namibia released a trading statement today in which management has guided EPS and HEPS to be down by between 9% and 11%. The company expects Basic EPS of 115.3 to 117.9c (midpoint of approximately 116.6), while HEPS is expected to be between 115.2 and 117.8 (midpoint of 116.5). This in our view is a fairly big miss considering that we forecasted HEPS growth of 9.3% as opposed to the decline.

 The midpoint HEPS of 116.6cps implies 2nd half HEPS of 60.6cps, which at first sight seems good considering the 9.3% increase on the previous half. However compared to the 75.3cps of the 2nd half of FY13, it is actually 19.5% lower. There exists a strong seasonal factor in the company’s earnings with fishing revenue traditionally accelerating in the 2nd half. We suspect the miss in earnings are likely top line driven, with either weaker prices or slower catches attributing to the negative surprise.

Should the company wish to maintain the previous years total dividend of 69cps, the payout rate will need to increase to 59.2%. Previous talks with management showed a reluctance to move significantly above the 50% payout level, thus there exists a high probability that we might see a dividend cut.

Target price and recommendation

Results are expected to be released on SENS on 28 August 2014 and in the press on 29August 2014; as such left our forecasts and target price unchanged and retain our BUY recommendation for the meantime.