Motus Operandi

As you’ve noticed in the past couple of weeks, I’m done with creating summaries that AI models are capable of doing. Instead, I’m going back to my roots and addressing what I’ve always seen as the biggest problem in the market: the gap between institutional research and traditional finance media.

Making that gap smaller requires deep dives. It also means that I need to show you how to work through the source material (like earnings presentations) to understand what the slides are really telling us.

The first such example is Motus (JSE: MTH), only available on YouTube due to the need to constantly refer to the slides. Set aside 13 minutes and get ready to understand far more about this complex mobility company and its underlying exposures. Please consider subscribing to the channel while you’re there.

Before we move on, I’m going to remind you that two companies placed important announcements on the platform yesterday:

Read on for a detailed look at Hyprop (JSE: HYP), with notes on Southern Sun (JSE: SSU) and a few Nibbles as well. I will do Growthpoint (JSE: GRT) separately, perhaps even as a YouTube video? Feel free to let me know where you would prefer to have a deep dive vs. an in-mailer piece. That’s the benefit of the new strategy!

You still have a few hours left to sign up for Unlock the Stock featuring Redefine Properties (JSE: RDF). Having recently hosted a Capital Markets Day, the management team is excited to share the details of the longer-term strategy. Attendance is free, but you must register here.

Looking for something you’ve read recently? This link has all the previous editions of Ghost Mail (and Ghost Mail Weekender). Share it with your friends and bring them into the community!

Hyprop has released results for the year ended June 2026. The distributable income per share is in line with the upper end of guidance, up by a juicy 11.7%. The total dividend increased by 14.4%, so the payout ratio is higher than in the prior year. As a shareholder in Hyprop, these numbers make me rather happy.

To add to the returns, the net asset value per share has increased by 6.7%. The share price is up 27% over 12 months, so market sentiment has significantly improved towards Hyprop.

The total return over 12 months is almost 35%. Chalk that up as the zillionth reason why I prefer owning REITs to having buy-to-let investments. Or “buy toi-let” as my earliest Ghost Mails used to joke.

There’s a decrease in the loan-to-value (LTV) ratio from 33.6% to 28.5%, although much of this improvement is because of additional equity raised during the year to support the acquisition of Galleria Burgas that closed in July 2026. Hyprop still has plenty of firepower on the balance sheet to think about doing further transactions.

A critical thing to remember about Hyprop is that they have significant exposure offshore. The South African portfolio may be 78% of gross lettable area, but it’s only 58% of distributable income. This means that Eastern Europe contributes 42% of distributable income despite being only 22% of the gross lettable area.

This is quite a snazzy chart, giving us a geographical picture as part of a waterfall chart:

In South Africa, the portfolio includes a number of properties that you’ll know: Canal Walk, Rosebank Precinct, Clearwater Mall and more. Tenants enjoyed turnover growth of 4.9% and a trading density increase of 5.5%. Reversions in the portfolio improved to 8.7%. The vacancy rate sits at 3.1%.

In Eastern Europe, tenants’ turnover was up 4.2% and trading density increased by 3.9%. Reversions were positive 2.7%. The vacancy rate is just 0.2%.

Guidance for FY27 is growth in distributable income per share of between 7% and 9%.

The next chart is an important view of how diversified the funding sources of a large property fund can be. Note the large number of banks involved, with Hyprop trying to make sure that they get the best deal. Smaller corporates can’t do this as effectively, which is why the largest players tend to enjoy structural benefits in funding costs that the mid-size names struggle to compete with:

The following chart is also worth looking at carefully. Note how the department stores have suddenly seen wonderful growth in trading density. I strongly suspect that this is because these stores have been downsizing. Health and beauty comes through strongly here, as do the motor showrooms with the new formats where the Chinese brands are taking space in malls. Spare a thought for the categories that I suspect are most disrupted by online channels in South Africa, being technology and books:

Southern Sun’s prepared comments for the AGM and the RMB Morgan Stanley Investor Conference are worth a read. They are accompanied by a preliminary trading statement that flags growth in HEPS for the six months to 30 September 2026 of at least 20%.

Remember, this is a tourism business rather than a gaming and gambling business. Sun International is the name that you can easily confuse it with. I wrote on that company the other day in Ghost Mail.

For the first five months of the financial year ending March 2027, Southern Sun has enjoyed revenue growth in South Africa of 10%. That feels like an exceptional outcome in the context of global disruption and fuel price hikes.

The offshore business benefitted from the relaunch of the Paradise Sun that was closed for refurbishment in the comparable period. Together with better volumes in Mozambique and Tanzania, offshore revenue has jumped by 54%.

Occupancy rates are up from 57.8% to 60.2%. Average room rates have increased by 9.5%. Add it all together and you get group revenue growth of 12%, which also immediately tells you that the South African business is substantially larger than the offshore operations.

Conferencing and events have continued to be a major driver of earnings growth. That’s just as well, as there are always inflationary pressures of utility costs and the need for system upgrades in IT. Still, it’s clearly been a very strong period, with the group repurchasing R174 million worth of shares at an average price of R9.98 per share.

Do your own research and speak to your financial advisor. Nothing you read or listen to in Ghost Mail should be interpreted as financial advice. This is not a complete review of SENS and does not replace the need for you to refer to company announcements and reports yourself. Every effort is made to avoid errors in Ghost Bites and related podcasts, but I am only human.

The European Central Bank takes centre stage today and is expected to raise rates, with the Federal Reserve and the Bank of Japan policy meetings due next week. The monetary policy statement and Christine Lagarde's press conference thereafter will be closely monitored for clues as to the timing and pace of monetary policy action going forward, in the wake of escalating wars and their impact on energy prices.

Oil prices are marginally lower this morning after trading through the $100 a barrel mark yesterday, while bond yields remain elevated.

Iranian backed Yemeni Houthi attacks on Saudi energy facilities are among the latest in a series of Middle Eastern escalations weighing on global risk sentiment.

US benchmarks closed lower yesterday in broad based equity market weakness, although futures are flat to modestly higher this morning. Asian equity markets are mostly lower.

Gold is tracking close to yesterday's highs, while copper trades around all time highs on tariff threats.

The rand is tracking sideways and we expect a flat open for the JSE All Share Index.

In addition to today's ECB meeting, US PPI inflation data is also on the economic calendar.

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 R16.04/$ | US 10yr 4.84% | Gold $4,418/oz | Platinum $1,900/oz | Brent Crude $100.42