Our opinion on the current state of NOVUS(NVS)

11月25日

Novus (NVS) is South Africa's largest printing company with 11 printing plants. Until recently, it had the monopoly contract to do all of Media24's printing. With effect from 1st April 2018, that contract was reduced to roughly 58% of Media24's printing, and the price paid by Media24 for printing was also reduced.

The company appointed a new CEO, Neil Birch, who has decided in the short term to abandon the company's acquisitions and focus on consolidating the business and improving its operating performance. The board may also look to sell the company's tissue business. The company has a level 4 BEE status but will need to improve that to become more competitive.

On 12th August 2022, the company announced that it would acquire 75% of Pearson South Africa.

In its results for the six months to 30th September 2024, the company reported revenue up 3,3% and headline earnings per share (HEPS) of 59,36c compared with 28,77c in the previous period. The company said that the improved profits were due to "...an improvement in the profitability of the Print Segment and profits from derivative instruments held in Mustek Limited ("Mustek"), within the Packaging Segment."

Technically, the share price fell steadily since listing in March 2015 until March 2021. Then it began to move up, and it currently trades just above its NAV (728,27c). We suggested waiting for a convincing break up through a 65-day moving average before investigating further. That happened on 8th October 2020 at 88c, and the share has since moved up to 760c.

The share trades about R1,5m worth of shares a day, which makes it practical for private investors. The share was added to the Winning Shares List (WSL) on 5th June 2024 at 524c. It has subsequently moved up to 760c.