PSV (PSV) has consistently disappointed and, although not saying much, the latest trading statement from this niche industrial machinery group is at least a little positive.
The Group announced that it expects HEPS of between 1.55cps and 1.89cps as compared to the previous HEPS of 0.61cps. The Group still expects to report a loss per share of between 8.9cps and 9.1cps, but this is largely due to the disposal of the Petrologic business to Tokheim International at a R21,9 million loss.
The Group did a long series of bad acquisition during the boom years that it has slowly been unwinding and selling off. After the latest disposal of Petrologic, I do wonder what is left in this group?
It seems like the core business lines of supplying pumps, spares and valves remains the dominant part of the Group (hence the name, PSV) and teh cryogenics business line.
Perhaps one to watch in the future? Tough to say, but I would focus on the Group's balance sheet (intangibles, solvency and liquidity), its gross margin (as overheads can always be managed, but you need to be demanding a good gross margin on your product for this to matter) and the underlying sustainability of the Group... Perhaps it might just be better to wait for the full FY 13 results to come out, the mining strikes (because PSV supplies into the mines) and all these challenges to play out to make sure that this "turnaround" is actually sustainable.
Talking about turnarounds, Esorfranki (ESR) released a trading update for H1:13 indicating that it expects "...basic earnings per share of between 11,0 and 13,2 cents and headline earnings per share of between 7,0 and 8,4 cents for that period. When compared to the corresponding accounting period, these numbers represents an increase in earnings per share of between 329% and 375% (2011: 4,8 cents loss per share) and headline earnings per share of 280% and 315% (2011: 3,9 cents headline loss per share)."
The Group also indicates that its order book is R2.4bn and notes that R645m more contracts and tenders are imminently pending awarding. The last part always makes me chuckle when the construction companies disclose it as "imminent pending awards" is a really vague terms and often just means tenders that they have submitted and "hope" they still win...
Finally, Vunani (VUN) has also been trying to turn itself around since the Credit Crisis. In the latest move, Vunani has basically announced that it will be selling its stake (c.15%) in separately-listed Vunani Property Investments Fund (VPIF) in order to service it off-listing debt that it shifted following its forced rights issue from sinking debt-backed investments...
That is a long and confusing sentence, but, basically, Vunani seems to being forced to do the same thing that the earlier mentioned PSV has done: a fire sale of assets to shore itself up.
I don't believe that Vunani is out of the woods yet, but progress is still progress.