Cracks in Italtile
It’s amazing how often I get asked this question:
“But where do you get all your information on these companies?”
The great thing about the markets is that there isn’t some mystical fountain that you need to drink from to gain this knowledge. It’s all there on SENS and in the company reports. The trick is knowing what to look for.
In my latest YouTube video, I go into detail on the latest results from Advtech and Italtile, as well as the fibre deal at Sabvest. I used this as an opportunity to pull in slides and excerpts from the results to show you exactly where the data comes from. This is why the best place to enjoy this piece is on YouTube. If you’re comfortable just getting the audio, then you’ll find it on Apple Podcasts and Spotify as well.
You’ll also find the summary of those stories in Ghost Bites below, along with a couple of Nibbles. Some of yesterday’s news will only be covered over the course of the week as I get time to engage with it properly, including MTN’s earnings update.
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Have a great day!
Ghost Bites: Making sense of SENS
Advtech’s numbers are a great example of margin mix, with Schools Rest of Africa leading the way with operating margin of 30.1%. Next up is Tertiary at 26.4%, followed by Schools South Africa at 20.9%. Resourcing could only manage 6.8%. One of these is not like the other…
But thanks to the higher margin businesses posting strong revenue growth (especially Tertiary with a 17% jump), the group’s margin went the right way. It’s a classic margin mix story.
Group revenue was up 8% and operating profit climbed 14%. HEPS was up 16% and the interim dividend per share increased by 18%. Return on Equity (ROE) sits at 20.6%, well up from 19.7% in the prior year.
These are strong results! But I must highlight that enrolments are anything but exciting in Schools South Africa, up just 1%. There just aren’t enough kiddos running around out there.
Italtile is a very difficult sideways story. With the Ceramic Industries operation (part of Manufacturing) running at just 70% capacity, profitability is under serious pressure. The Retail business isn’t doing much better, with system-wide store revenue up by just 0.4% as they struggled with a negative move in volumes.
With HEPS down by 9.4%, recently appointed CEO Brandon Wood has been passed a rather hot potato. He needs to resolve the issues in the Australian business as quickly as possible, with Italtile looking to dispose of that business to stem the bleeding.
The group will be hoping that provisional anti-dumping duties in South Africa (introduced in July 2026) will make a positive difference. But as they point out, the local market needs to work through excess stock levels first.
After releasing excellent results, Sabvest was back on SENS with news of an investment in Frogfoot Holdings and Vox Telecoms. Sabvest will be injecting R754 million in cash for a post-money interest of at least 8.97% in this companies. Fibre infrastructure is an incredibly expensive thing to build, with Frogfoot looking to extract value from its position as the 4th largest fibre network operator in South Africa.
Despite this market position (and the well-known brand of Vox being in the stable as well), these businesses reported a loss of R256 million in the period ended August 2025. That’s an outdated number, but it shows you why they need capital to grow.
Sabvest’s investment committee members must like what they see in the financial models. It’s a Category 2 transaction, so Sabvest shareholders won’t be asked what they think.
Get far more detail on these three updates in this video.
Selected Nibbles:
Fraser Wyllie has been appointed as CEO designate of Aveng. He takes the top job from 1 October 2026, having spent the past few years sorting out McConnell Dowell in New Zealand.
Tharisa has achieved an important milestone, with Karo Platinum signing a Special Mining Lease Agreement with the Government of Zimbabwe. This has been granted for an initial term of 25 years, providing the long-term certainty needed to justify capital investment.
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Global markets update with Shaun Murison
Alibaba's announcement of a $10.2 billion discounted share issue to fund its AI initiatives set the tech sector on the back foot yesterday, with the Nasdaq leading losses that also weighed on the S&P 500, while the Dow gained.
US futures are modestly positive in early trade this morning after longer-dated Treasury yields fell on a report that the Treasury Department may step up debt buybacks further.
South Korean shares fell after Samsung Electronics announced a $79 billion shareholder-return plan. It's a record sum but still short of what investors had expected. The index has since rebounded sharply off its intraday lows, and Asian markets are mostly firmer today.
The dollar index is marginally firmer but still trades near multi-month lows, while gold trades near the highs last seen in May, albeit modestly softer this morning.
Oil prices are steady near recent highs as investors weigh the impact of US sanctions on Iran.
The rand is flat on the day, and we expect a slightly negative open for the JSE All Share index.
On the economic calendar, US consumer sentiment data is likely to be today's most significant scheduled catalyst.
This update is provided by Shaun Murison, Senior Market Analyst at randswiss.com. Connect with him on LinkedIn here and follow him on X here.
Key Indicators:
USD/ZAR R16.02/$ | US 10yr 4.70% | Gold $4,645/oz | Platinum $1,861/oz | Brent Crude $91.44