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