There are a lot of news briefs out late last week and today...

Firstly, small cap manufacturer of wood-base panels and chipboard, William Tell (WTL) released a pretty gloomy trading update late last week indicating that its previous small profit has swung into a small loss. William Tell expects "...to report a basic loss per share ... for the six months ended 31 December 2011 to be between 1.57cps and 1.83cps compared to basic earnings per share of 1.3cps for the previous corresponding period."

William Tell shares trading at 54cps or down 39% in the last year, below its last reported NAV per share of 146cps.

William Tell competes against Masonite (MAS) and Steinhoff's PG Bison subsidiary in the wood-based panel industry and, unfortunately, is vastly smaller than both of these competing businesses.

On a different note, Steinhoff is spinning off its PG Bision subsidiary into Kap International Holdings (KAP) as part of what I believe is Steinhoff basically separating its South African assets from those in it holds in Europe.  KAP explains the rational for getting PG Bison (and Steinhoff's Unitrans) as "...represent[ing] an opportunity for KAP to acquire leading industrial assets in southern Africa to complement KAP's existing portfolio of industrial assets and to establish KAP as one of the largest listed industrial portfolios in southern Africa.  As a focused industrial group, KAP will be better positioned to capitalise on numerous growth opportunities inherent on the southern African continent.  In addition, the enlarged diversified industrial business is expected to be better placed to access capital, both in the debt and equity markets at competitive rates and pricing."

Manufacturing wood-based panels and chipboard is just like any other manufacturing business: it is extremely volume dependent, as it has very high fixed overheads.

Thus, when the market shrinks (like the local construction market has), then the marginal players see their volumes dropping the most and this has the worst effect on their profits. That is why, as William Tell is the smaller of MAS and PG Bison, the trading update of William Tell's is so disappointing, but not entirely unexpected.

Once again, on a different note, with KAP getting PG Bison injected into its substantially 'smaller-than-Steinhoff's' portfolio, one will soon be able to invest much more effectively directly into one of the local market leading wood-based panel manufacturers.

Mini industrial conglomerate, Jasco (JSC), released its H1:12 results today showing an impressive 55% growth in revenue resulting in HEPS jumping 96% to 6.9cps (H1:11 - 3.5cps).

These results show both the recovery of M-TEC and the incorporation of Spescom into the Group. The former is a cable manufacturer (much like Altron's Aberdare Cables and South Ocean) that the Group acquired a 34% stake in while the latter was a 100% acquisition and delisting of a network-focused ICT group.

Much like William Tell, M-TEC is a manufacturer and highly sensitive to volumes, and Jasco reports that "...the overall improved performance of M-TEC was mainly due to strong volumes in the Aluminium plant."

I'm not going to go too deeply into Jasco's results, as they are quite a mixed bag (have a look at that overdraft and just wait till the final dilution from Spescom's acquisition comes through!). Rather, I'm going to suspend my opinion until things at the Group settle down. There are a lot of spinning parts therein and, despite all of management's talk about "synergies" and "cross-selling", I am not overly convinced that the disjointed spinning parts will ever be anything more than just disjointed spinning parts.

And, in my opinion, that increases Jasco's forecast risk.

Still, it must be said, some of Jasco's spinning parts are actually quite nice little businesses and, if they all fire their cylinders at the same time, the share could do pretty well.

Finally, two more quick brief news items:

The Don Group (DON) has renewed its cautionary again. The 'ex-lossing-making-hotel-group' has been trying to evolve its business model towards that of being a tenanted residential property rental business, so this cautionary is probably more than likely a disposal of some non-core hospitality- or tourist-related investment.

Then, African Eagle Resources Plc (AEA) has just announced the finalization of its share issue to the IFC of c.11% of its share capital in the form of newly issued shares at GBP0.068 (or c.R0.82). The Group explains that the "...funds will primarily be used to finance the evaluation of the Company's Dutwa Nickel Project."

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