The SmallCaps.co.za Index (being the simple sum of the J232, J231, J230 and J202 indices) outperformed the ALSI yesterday by creeping up 0.2% against the ALSI's drop of 0.8%. The volumes remain low, though, as I think a lot of attention is being absorbed by the recent drop in commodities prices.

Famous Brands came out with a trading update yesterday stating that it expects EPS, HEPS, and DHEPS to be up 16% to 20%. The group owns a diverse portfolio of fastfood brands and franchises with its core moneyspinners being Steers, Wimpy, Debonairs and Mugg & Bean. The group has been quite acquisitive over the last eighteen months and it will be interesting to see how much of this growth is acquisitive versus organic. Another understated, but critical, component of Famous Brands is its central manufacturing and logistics function that supplies into the franchisee network. Added volumes from new acquisitions should surely boost the contribution from core segment.

FBR's results will be released on 23 May 2011.

Another key trading update that came out yesterday is Sanyati. The diversified heavy construction group expects its HEPS to drop by around 52% for the year ended 28 February 2011. This is not unexpected news, as the whole construction sector is currently in public-sector post-World Cup hangover state, but SAN's trading update does help to at least quantify how bad this is for the group. Turnover and gross margins will be bad, but more critical will be how the group is managing its overheads (hopefully downwards) and how much net cash the group has left (hopefully lots).

SAN results will be released on 16 May 2011.

Two other trading updates yesterday was Verimark expecting its HEPS and EPS to be between 30.0cps and 31.7cps and the low-margin logistics firm, Santova, expecting EPS and HEPS and EPS to be 1.25cps and 0.98cps. Both of these businesses are fairly marginal as far as I am concerned, but what is critical is that not one of these trading updates where indicating profits dropping.

If even marginal local businesses are starting to feel a recovery in their profits, then the recent JSE gains have been justified.

Look for Paracon reporting today. I like the little group, though the cloud hanging over the potential ban for labour broking has hurt their share price. That said, they have a stake in Nihilent Tech, an Indian-based ICT firm, that could prove extremely valuable when/if the business lists in 2012 in India.

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