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We find the spike in bad debts concerning and our reconstruction of TFG’s Debtors Book shows that debtor collections may have fallen by -9.3% y-y. We examine TFG’s collection cost recovery and service fees, which grew rapidly and believe that this revenue stream diminishes the quality of TFG’s earnings. We attempt to get an independent view of the number of TFG customers who may be under financial stress by estimating the number of customers who may be paying collection cost recovery fees. We calculate that a substantial proportion of TFG credit customers may be under some financial stress and believe there may be further downside risk to its bad debts. -
A snapshot of Spar's FY19 results. -
A snapshot of Telkom's 1H20 results.
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We unpack CLS' retail division’s gross profit margin and total income margin and find that its other income has been growing ahead of gross profit. We assess the key reasons for total income margin expansion over the last ten years and find that in the earlier years it was driven by improving supply chain efficiencies. We estimate how much more margin CLS retail can extract as its private label contribution nears its target and believe that most margin gains have already been achieved. -
A snapshot of Vodacom's 1H20 results.
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We attended the Annual General Meeting of Truworths (TRU) and summarise key points from the meeting.
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Indicators released in October remained net negative for consumers. SACCI Business Confidence recovered to 92.4 points in September following the August decline to 89.1 points. Manufacturing activity dropped further in September as the ABSA PMI shed -4.7 points to 41.6 points. Fuel prices softened for November as petrol and diesel fell by -13c/litre and -16c/litre to R15.44/litre and R14.14/litre. In September, both CPI and PPI inflation moderated to 4.1%, following respective -20bps and -40bps declines. The rand depreciated by -2.6% against the dollar on a y-y basis, closing the month of October at R15.11/USD. On a m/m basis the rand remained relatively flat. -
A snapshot of Disc-Chem's 1H20 results.
