Our opinion on the current state of FTH

Frontier Transport (FTH) is a bus company whose major asset is Golden Arrow bus services, but which also owns Sibanye Bus Services, Table bay Rapid Transit, N2 Express, Eljosa Travel and Tour, Shuttle Up and Alpine Truck and Bus. The company says, "The current portfolio is rooted in the commuter bus and luxury coach segments. Through its principal subsidiary Golden Arrow Bus Services, with over 160 years of proven operational expertise". In its results for the year to 31st March 2023 the company reported revenue up by 15,1% and headline earnings per share (HEPS) up 5,9%. The company's net asset value (NAV) increased by 8,4% to R1,546bn. The company said, "...the effect of the rising fuel price and above inflationary original equipment manufacturers’ price increases has seen operating expenses increase 18.9%. The net effect has resulted in EBITDA of R458.2 million (2.3% higher than the comparative prior period of R447.8 million). Debt levels have decreased by R45 million since 31 March 2022 while the prime rate increased over the period, and the Group has seen savings of R3.4 million in its finance costs". In a trading statement for the six months to 30th September 2023 the company estimated that HEPS would increase by between 60% and 71%. Technically, the share trades about R170 000 worth of shares on average every day and has been in a gradual upward trend. Obviously, a company like this was heavily impacted by COVID-19 and travel restrictions, but it does appear to have recovered.