Our opinion on the current state of SEP

2023年11月6日

Sephaku (SEP) is a construction materials business in South Africa which supplies ready-mixed cement products and cement to the construction industry. The group consists of 100% of Metier Mixed Concrete and 36% of associate company Sepcem where the remaining 64% is held by Dangote. Obviously, Sephaku is directly impacted by the difficulties in the construction industry. In its results for the year to 31st March 2023 the company reported revenue of R981m compared to R786m in the previous year. Headline earnings per share (HEPS) were 9,98c compared with 17,67c in the previous year. The company said, “The Group’s FY 2023 performance was mixed. Métier and SepCem both demonstrated resilience and agility in maintaining market share, and Métier delivered strong growth in revenue and profit. But deteriorating economic conditions and persistent challenges in the cement industry impacted SepCem’s financial performance". In a trading statement for the six months to 30th September 2023 the company estimated that HEPS would fall by between 27% and 35%. The share was in an upward trend from July 2020 until October 2021, but has been falling and moving sideways since. It has R133 000 shares changing hands on average each day making it practical for the private investor. Although volatile, it appears to have found some support at around 85c.