FINANCIAL REVIEW
NET ASSET VALUE VS SHARE PRICE
R16,00
R14,00
R12,00 10,20
R10,00 9,00
R8,00 7,30
R6,00 5,25 5,50
4,00
R4,00 2,50
1,65 R2,00 0,80
11,50
10,75 11 , 00 11 , 00 11 , 00
10,40 10,50 10,40
R0,00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Market share price NAV
➊ First dividend after turnaround .
➋ Royal Bafokeng B-BBEE transaction .
➌ Record financial results .
➍ Senwesbel offer to Senwes shareholders .
➎ Grindrod transaction .
➏ Share repurchases 2005 ; 2013 ; 2015 ; 2020 .
➐ Good results after a good grain harvest .
➑ Worst drought since 1904 : 2016 . Good results driven by an exceptionally good grain harvest .
➓ Net profit of R303 million , whilst market price per share closed at the same level as the previous year .
While the NAV increased during the period 2016 to 2020 , the market price per share remained consistent . The main reasons for this are the low liquidity of Senwes shares and political uncertainty regarding the land reform issue . The market share price of Senwes was at R13 per share during the 2020 financial year , but declined to R11 with thin liquidity after the announcement of the lockdown .
QUALITY OF EARNINGS : ACCOUNTING VS CASH EARNINGS
R ’ m |
Accounting profit before tax |
446 |
Adjusted for non-cash items : |
Profit on business combinations |
( 56 ) |
Depreciation and amortisation |
87 |
Provisions not in normal course of business |
26 |
Provisions abnormal in nature |
30 |
Cash profit |
533 |
The quality of earnings ratio ( actual cash profit vs accounting profit ) for the 2020 year is 120 %. This is an indicator that the actual cash profit is higher than the accounting profit after eliminating non-cash flow items such as depreciation , the gain on bargain purchase and the movement in abnormal provisions .
Positive cash flow of R994 million ( 2019 : R139 million ) was generated from operating activities after the payment of dividends to the value of R112 million ( 2019 : R99 million ), finance costs of R88 million ( 2019 : R80 million ), tax of R117 million ( 2019 : R64 million ) and the increase in working capital of R762 million ( 2019 : R193 million ) are taken into account . R268 million ( 2019 : R188 million ) was invested in capital projects aimed at operational efficiency and at increasing service delivery to the customer .
SENWES INTEGRATED REPORT 2020
79