Our opinion on the current state of CAT

Caxton (CAT) is a South African printer and publisher. This company is at the heart of the displacement of hard copy by digital and it is adjusting by reducing costs and trying to move across to digital platforms. But there has been a steady erosion of advertising revenue and even before COVID-19, the purchase of magazines has been in decline. In its results for the year to 30th June 2023 the company reported revenue up 16,6% and headline earnings per share (HEPS) up 20,2%. The company said, "Revenue grew by R995.2 million (16.6%) from R5 979.3 million to R6 974.6 million on the back of price increases to recover the large raw material input cost increases and volume increases in the packaging business, while volumes in the newspaper and commercial printing plants remained largely unchanged. The second half of the year's growth softened as loadshedding and inflationary pressures impacted consumer demand". The share broke up out of an island formation in 2021 and continues in an upward trend which is supported by its latest results.