Our opinion on the current state of SEP

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 six months to 30th September 2023 the company reported revenue up 19,7% and headline earnings per share (HEPS) of 7,54c compared with 11,26c in the previous period. The company said, "While the year-on-year value of residential buildings passed declined during 2023, activity on civil construction projects and non-residential buildings increased. The rising cost of essential goods and services, coupled with higher interest rates, continued to erode the disposable income of consumers, maintaining pressure on the retail market". 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.