Investor confidence in Sechaba high

SHARE   |   Tuesday, 30 August 2016   |   By Staff Writer
Matthwes Matthwes

Despite the conditions that the company finds itself operating in, investor confidence in Sechaba Breweries Holdings Limited remains positive. This is according to the company’s latest annual report released this week in which the board chairman, Thabo Matthews is quoted saying the stock has performed well during the year. “However, the performance of the Domestic Companies Index (DCI) during the 12 months to 31 March 2016 surpassed that of Sechaba’s share price performance, as the stock registered a 0.7% loss in share price compared to a 5.25% gain in the DCI, and this ranked Sechaba as the 15th best performing counter on the main board during the period under review,” said Matthews in the report.

Matthews says the company proved less liquid during the period with 7, 052, 492 shares traded, generating a turnover of P205, 318, 873 compared to 12, 067, 856 shares worth P302, 306, 643 over the prior year. Despite the tough operating environment, Matthews noted that  investors rated the Sechaba stock upwards implied by a Price to Earnings Ratio (PER) and Price to Book Value (PBV) 19.86 and 7.74 from 18.93 and 10.25 on 31 March 2015, respectively. Current ratings put Sechaba at a 28.54% premium to the domestic market on a PER basis, a sign believed to reflect investor confidence in the stock. Sechaba, which recently released its financial results, registered an increase in profits of 8.5 percent which is believed to be remarkable given the trading conditions in which it finds itself operating under, including the alcohol levy and Traditional Beer Regulations which have forced the company to shut some of its depots across the country, turning them into distribution points.

In the same report, Sechaba Managing Director, Johan de Kok says he remains optimistic about the future performance of KBL in the wake of improved reliability of water and electricity supply. “We are confident that we have the right talent to implement the company strategy successfully. Sechaba Brewery Holdings Limited will continue to create shareholder value, and continue to play a significant role in diversifying the local economy and supporting sustainable industries,” he said.