Our opinion on the current state of AH-VEST(AHL)

AH Vest, trading under the All-Joy brand, is a significant player in South Africa's condiment market, notably as the country's second-largest producer of tomato sauce. The company is actively expanding its product offerings into ready meals, soups, and canned vegetables, diversifying beyond its traditional sauce lines to capture a broader share of the food market.

For the six-month period ending 31st December 2023, AH Vest reported a modest revenue increase of 1.9%, alongside a substantial rise in headline earnings per share (HEPS) by 37%. This growth in earnings is particularly notable, suggesting improved operational efficiency or cost management. The company's net asset value (NAV) stood at 48.24c per share, indicating a stable financial position.

A significant development for AH Vest during this period was the installation of generators at its production facility. This investment was aimed at enhancing service levels, which increased from 80.8% in the previous year to 82.7%. Despite this improvement, the company noted that its service levels still lag behind the industry average. The need for increased working capital was highlighted as a pressing concern, impacting the business's overall performance as it seeks to maintain and expand its operational capabilities.

However, one of the main challenges facing AH Vest is its market liquidity. The share is virtually untraded on the Johannesburg Stock Exchange (JSE), presenting a significant barrier for private investors interested in the company. This lack of trading activity can make it difficult for investors to enter or exit positions, potentially leading to higher risks associated with price volatility when trades do occur.

Given the company's strategic expansion and the recent improvements in operational infrastructure, AH Vest appears to be positioning itself for future growth. However, the trading issues present a notable caveat for potential investors, emphasizing the need for careful consideration of market liquidity when evaluating investment opportunities in smaller or less actively traded companies.