TFG needs decisive action

It certainly won’t come as a surprise to regular readers that I’ve brought you a detailed look at the recent retail updates today. It’s a sector that I find truly fascinating.

As I continue to balance the convenience of the mailer vs. the ability to provide more detail on the website, I’ve opted to write a Best of Ghost Bites piece that looks at the recent news from Shoprite, The Foschini Group and Truworths in detail.

The rest of the Bites are available in the usual spot below.

Enjoy!

Standard Bank and Java Capital have partnered to build an integrated real estate advisory and co-investment platform.

Here’s what the press release will tell you: “This approach combines Standard Bank’s strong balance sheet, extensive African footprint and proven execution capabilities with Java Capital’s specialist advisory and real estate capital markets expertise.”

But what do the brains behind the businesses have to say?

Brian Marshall and Andrew Brooking joined me on this podcast to explain exactly how this joint venture will work, why it has been put in place, and what it means for clients.

Ready to dig into recent Unlock the Stock recordings? There are a couple for you to choose from. You can watch the session with Calgro M3 at this link and the Pan African Resources example here.

PS: 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!

Sappi (JSE: SAP) released results for the fourth quarter ended September 2026, capping off a truly revolting year for the company.

The full-year numbers reflect a 3% dip in revenue and a spectacular collapse of 95% in EBITDA (measured in US dollars). There are no net profits here, with the previous year’s loss of $177 million ballooning to $747 million in this period.

The balance sheet metrics aren’t much better either. Net debt increased by 7%, while the net asset value per share fell by 27%.

After the share price closed 13.7% lower on Friday at R11.25, the drop over 12 months now stands at 50%. The 52-week range tells an even more striking story, with the 52-week low of R8.64 being less than a third of the 52-week high of R26.30!

But did the final quarter of the year at least deliver a message of hope to suffering shareholders?

Well, if you were hoping for a swing into the green to end the year, you’ll be sorely disappointed by the final quarter loss of $116 million. But if you had considered management’s guidance and remembered how tough things are for Sappi, you would find that the latest EBITDA numbers were in line with guidance and represent a sequential improvement (i.e. vs. the third quarter).

As an indication of how volatile Sappi’s income statement can be, the year-on-year move in the latest quarter was a 5% decrease in revenue and an 11% drop in EBITDA, yet the net loss was significantly smaller than $194 million in the comparable period.

There are a lot of factors that impact the performance of the company, ranging from the stronger rand (vs. the US dollar) through to the impact of higher fuel, logistics and chemical costs thanks to the geopolitical environment.

At product level, weak demand for certain products and an outright structural decline in graphic papers (volumes down 11%) aren’t helping.

There are some positives at least, with certain segments reporting higher volumes and supportive pricing. The problems have clearly outweighed the highlights though, contributing to pressure in both operating profits and the nasty negative fair value movements in the forestry assets.

As you might imagine, there have been awkward discussions with the banks. Sappi is big enough that the banks want the group to survive, but that doesn’t mean that the journey won’t be painful and potentially expensive for equity holders.

Sappi has managed to get the suspension of covenant testing extended to June 2027 (it was due to expire in March). In other words, the lenders are giving Sappi breathing room in the hope that the business can come right before more forceful action becomes necessary.

This is perhaps a good time to remind you that equity investors stand in the queue behind debt providers, so Sappi really needs to see an improvement in its results.

Alas, the outlook statement isn’t particularly encouraging, with significant planned maintenance in the first quarter of FY27 and an expected negative forestry fair value price adjustment. Adjusted EBITDA for the first quarter of FY27 is expected to be below the fourth quarter of FY26 i.e. the company anticipates a sequential decline.

Tailwinds like pricing momentum in certain products and better overall demand are helpful, but it seems like a sustained decline in fuel prices would help even more. The company mentioned this pressure point several times in the update.

And in case you’re wondering, the European Commission is currently assessing the remedies put forward by Sappi and UPM for the graphic paper joint venture. If things don’t get better in graphic paper, the industry may eventually run out of competitors altogether!

Purple Group (JSE: PPH), the listed company behind EasyEquities, released a trading statement for the year ended August 2026. HEPS grew by between 22.3% and 32.3%, with the midpoint showing an acceleration from the growth in the six months to February of 21.0%.

Despite this, Purple’s share price is down 21% in the past 12 months. Share price movements are driven by many things, one of which is the market’s expectation of growth vs. the percentage actually achieved by the company. Nevertheless, I have held my position in Purple throughout this volatility.

Another MTN (JSE: MTN) subsidiary added its name to the list of recent financial updates from the continent. Thus far, it’s been a very encouraging period for the telecoms giant in the rest of Africa.

MTN Rwanda’s third quarter performance included a 16.8% increase in service revenue and a 26.9% jump in EBITDA. The company’s EBITDA margin was 360 basis points higher at 45.5%.

On a nine-month basis, service revenue was up 20.0% and EBITDA increased by 29.1%.

This means that although the latest quarter was a slower period of growth, EBITDA margin of 45.5% was higher than the nine-month period at 43.1%.

It’s always important to look at free cash flow in these businesses. With a substantial decrease in capex excluding leases, adjusted free cash flow was up 57.6% over nine months. It jumped by 99.6% for Q3 i.e. nearly doubled year-on-year in the latest quarter!

The company reaffirmed its medium-term guidance of mid-teens service revenue growth and EBITDA margins in the 40% - 42% range. The company also guides a capex intensity range of 7% to 10%.

Based on the latest numbers, the company is outperforming on these guided metrics. This sounds great, but it’s also management’s way of telling you that things could moderate from here.

Finally, a couple of selected director dealings:

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.

US markets ended a volatile week on a mixed note on Friday, with the Nasdaq rallying 1.09% and the S&P 500 adding 0.31%, while the Dow Jones slipped 0.46%. October nonfarm payrolls showed that US employers added 165,000 jobs, nearly triple what economists had expected, while the unemployment rate eased to 4.1%. Market pricing for a Fed rate hike climbed to almost 75% following the report.

Nvidia's board announced an independent investigation on Sunday after reports that CEO Jensen Huang was targeted by a Chinese espionage operation. The company has said it has no reason to believe that national security or company secrets were compromised.

Asian markets have largely looked past the headline, with benchmarks in Taiwan, Japan and South Korea posting strong gains this morning as semiconductor stocks rebound. The Hang Seng and Shanghai Composite are also firmer, although only marginally so.

Oil prices remain under pressure. Brent fell 17% last week, its steepest weekly decline since the start of the Covid pandemic, and is softer again this morning. President Trump said it was highly unlikely he would order fresh strikes on Iran as long as talks continue to progress, even as both countries reported vessels being hit around the Strait of Hormuz.

Gold is firmer this morning as the dollar softens in the wake of the US elections.

The rand is firmer against a softer greenback, and the JSE All Share Index is expected to open higher this morning, taking its lead from the strong rally in Asia, with firmer gold prices likely to support the precious metals miners.

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 R16.49/$ | US 10yr 4.83% | Gold $4,872/oz | Platinum $1,555/oz | Brent Crude $97.43