Our opinion on the current state of SPG

Super Group (SPG) is a large international logistics group offering transportation to the industrial sector. The company has a policy of not paying dividends, preferring to undertake share buy-backs and investing in organic and acquisitive growth. Its policy of diversifying outside South Africa has paid off with as much as 51% of operating profit now coming from non-South African sources. This reduces the company's exposure to the strength of the rand and to the relatively depressed economic conditions which exist in SA at the moment. The company may have lost as much as R100m during the civil unrest. This is usually a profitable company which generates strong free cash flows. In its results for the year to 30th June 2023 the company reported revenue up by 30,6% and headline earnings per share (HEPS) up 23,3%. The company's net asset value (NAV) increased by 20,5% to 4627c per share. The company said, "In comparison with 2019, revenue has increased by 63% and EBITDA by 126%. Profit before tax and earnings per share increased by 32% and 31% respectively, with net asset value per share having increased by 52%". On 19th July 2023 the company announced that it had acquired 78,82% of CBW Group in the UK for GBP0,30,3m (R700m). Supergroup has benefitted directly from the move towards "risk-on" in international investment sentiment. At the current price of 3460c and on a P:E of 7,37 it still looks reasonably valued. It has recently made a "double bottom" at around 2500c per share and looks poised to continue its upward trend.