Cutting edge: Afrimat has expanded its portfolio from its traditional aggregates, cement, sand and clinker businesses into a diversified minerals player
commodities alongside a normalisation of global fertiliser prices — should they occur concurrently — will add to the risk metrics of the current expansionary phase.” But Clark maintains that Afrimat has been a consummate deal-maker and has made every acquisition work, on time and on budget. “The group has shown that at full operational capacity it has an ability to return the initial acquisition cost in early profitability. This was certainly true of Demaneng and latterly Nkomati Coal. I envision that Glenover will emulate past successes,” he says. That’s clear in the performance of Afrimat’s share price. The company is that rare beast, a 10-bagger. The stock has risen from R4.30 a
We think that through our beneficiation process for rare earths we can have a project of very efficient scale Andries van Heerden
share in December 2011 to today’s R54 — a 1,158% gain. Cynics, of course, might question how Afrimat can keep uncovering “hidden gem” deals. Van Heerden says Afrimat’s participation in the Industrial Development Corp’s “Mine to Magnets” initiative opened opportunities in the rare earths space and led to the group developing its own ion exchange technology. This allows it to extract rare earth minerals from the phosphate stockpiles. Van Heerden also points out that behind the scenes there is considerable legwork. “Our success rate in seeking out viable opportunities is below 5%. For every 100 opportunities that come our way we eliminate 95% for operational risk, technical feasibility, financing challenges or market issues.” He says Afrimat also focuses strongly on projects that can make back the capital invested as soon as possible. Remarkably, Afrimat recently reported that at Coza Mining (better known as Jenkins) and (the notoriously difficult) Nkomati Anthracite, both the quality and the quantity of the respective resources are exceeding expectations, “with good cash flow as a result”. With this in mind, it’s difficult to doubt Van Heerden’s assessment that the total purchase price and all project spend at Glenover will be funded from the company’s “robust balance sheet and strong future cash flow generation”. x
NEW LISTINGS
Put a tiger in your real estate tank The first petrol station Reit to debut on the JSE has ambitious plans to grow assets to R1bn within 18 months Joan Muller mullerj@fm.co.za
ý Property listings have been few and far between in the past five years, and the odd new portfolio that did come to market tended to offer more of the same — a mix of retail, industrial and office buildings. However, in early December Gaia Fibonacci Fibre — a first-of-its-kind specialist infrastructure real estate investment trust (Reit) that invests in fibre-optic cable networks — was listed on the Cape Town Stock Exchange, originally known as 4AX. The listing, with an initial investment of R34m, was brought to the market by Gaia Fund Managers, Fibonacci Managers and Kruger International Asset & Wealth Management. More intriguing perhaps is last week’s listing of Afine Investments on the JSE, which brings an entirely new offering to the sector’s 50-odd property counters. Afine, albeit still a small counter with a market cap of less than R250m, is the first SA-focused Reit to offer local investors access to the rental income streams generated by petrol service stations. Afine is the brainchild of veteran property players Mike Watters and Peter Todd, both former South Africans who have teamed up with SA developer Petroland Group, which was founded by Anton Loubser in 1993. Loubser has since developed more than 60 petrol stations across SA and will run the new company. Watters is the former CEO of UK-based RDI Reit (formerly Redefine International), where he was at the helm for 16 years before the company was bought out by Starwood Capital Group earlier this year and delisted from the London Stock Exchange and JSE. Todd is chair of London-listed Grit Real Estate Income Group. Though the petrol service station sector is an established real estate investment class in the US, Europe and Australia, high entry barriers December 16 - December 22, 2021
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