Last close As at 05/08/2026
ZAR38.00
▲ −0.13 (−0.34%)
Market capitalisation
ZAR2,020m
Research: Industrials
Primarily a steel-based beneficiation company, Argent Industrial is supported by export promotion and offshore investments in both new and existing businesses. By shifting its focus from South Africa (SA) to the US and the UK, it has created a strong, diversified base for long-term, sustainable growth, both domestically and globally. During the six-month review period (April to September 2024), Argent added another UK operation, as well as an investment in Xpanda Canada. Amid challenging global conditions, interim headline earnings per share improved to 231c versus 223c for the comparable period in the previous financial year. ZAR346m in net cash is equal to ZAR6.35/share, 23% of the company’s market value.
Written by
Hennie Vermeulen
Argent Industrial |
Following an established recipe
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Basic materials, iron and steel |
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29 November 2024 |
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Primarily a steel-based beneficiation company, Argent Industrial is supported by export promotion and offshore investments in both new and existing businesses. By shifting its focus from South Africa (SA) to the US and the UK, it has created a strong, diversified base for long-term, sustainable growth, both domestically and globally. During the six-month review period (April to September 2024), Argent added another UK operation, as well as an investment in Xpanda Canada. Amid challenging global conditions, interim headline earnings per share improved to 231c versus 223c for the comparable period in the previous financial year. ZAR346m in net cash is equal to ZAR6.35/share, 23% of the company’s market value.
Offshore margins remain strong
Turnover for the review period was down 3% with both steel trading (-4%) and manufacturing (-3%) showing similar weakness. By geographical segment, SA-based turnover slipped by 3%, while offshore dropped by 9%, partly because of the stronger ZAR and planned operational changes at its fuel storage solutions in the UK. Steel trading margins continued their downward trend to 2% from 5% stemming from softer metal prices and ever-present stiff competition. The total SA margin improved to 7% from 6%, driven by renewed strong demand for manufactured products. However, this is still below the FY24 margin of 10%. Offshore margins improved to 25% from 24%, thanks to strong overall demand and market share gains. PBT reached ZAR176m (+3%), with SA contributing ZAR56m (+30%) and offshore ZAR120m (-7%). Offshore assets contributed 68% to total PBT (vs a 38% contribution to turnover), down from 75% in the comparable period but up from 63% in FY24. This is a clear indication of the elevated margins being earned on offshore assets. Excluding a portion of Standmode, the UK acquisition that was not part of the comparable period or FY24 figures, the contribution is 67%.
Diversification and cash distribution sustained
Standmode (and Xpanda Canada) will continue to bolster offshore contributions as numbers will be incorporated in FY25. Margins should further be aided by maintained market share in the UK and new clients in Australia, especially in the US-based Joule speed control retarder systems. Although the board is allowed to continue with its share buyback strategy, no shares were repurchased during the review period. Argent declared an interim dividend of 60c, 9% better than the previous interim payment of 55c, maintaining cover of around four times.
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Historical financials
Source: Company financial reports |
EDISON QUICKVIEWS ARE NORMALLY ONE-OFF PUBLICATIONS WITH NO COMMITMENT TO WRITING ANY FOLLOW UP. QUICKVIEW NOTES USE CONSENSUS EARNINGS ESTIMATES.
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Research: Investment Companies
Following a strategic review earlier this year, the manager of the Bankers Investment Trust (BNKR), Alex Crooke, has concentrated the portfolio, reducing the number of holdings from around 170 to 100 by focusing on the best ideas available across global markets. The manager and the board believe this asset reallocation will differentiate BNKR from its peers, by making it one of the most concentrated investment companies in the AIC’s Global sector. Crooke stresses that this change does not represent a new strategy but is instead a refocusing of the trust’s existing approach. His attention to valuations also remains unchanged. Crooke believes the portfolio now forms ‘a whole that is greater than the sum of its parts’. He is optimistic that, combined with the board’s more flexible attitude to the use of revenue reserves to support dividends if required, the asset reallocation means the portfolio is well-placed to boost capital returns, while ensuring the trust keeps delivering progressive dividend growth.