COMPANY COMMENT
Harsh realities do not support Novus’s uptick
Things continue to look grim at Novus after the company essentially threw away the Media24 contract
The Caxton share price gained almost 5% on Wednesday for no apparent reason. Given that Novus also ticked up 2.56% it might just be down to generally strong investor sentiment. Certainly on the basis of operational performance there does seem to be support for a strengthening in the Caxton share price, but not much for an uptick at Novus. From the beginning of April Caxton took over the printing of Media24’s newspapers in Gauteng. It also picked up the contract for printing Media24’s magazines in the Cape. The two contracts are extremely valuable and for years had been tightly controlled by Novus, which at one stage was a subsidiary of Media24. Securing the contract gives Caxton an almost dominant position in Gauteng. Although it recently lost the contract to print for the Independent Group in Gauteng, Caxton now prints for Media24 as well as Tiso Blackstar (which publishes Business Day) and its own publication, The Citizen. The share is on an undemanding price:earnings ratio of 8.5...
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