Novus share price jumps 11% despite court ruling
The supreme court of appeal has ruled that Novus’s textbook contract with the department of basic education is invalid
JSE-listed Novus’s share price rose as much as 11.43% to 19.5c on Thursday, despite the company confirming, after the market closed on Wednesday, that it is considering appealing an unfavourable court judgment.
The supreme court of appeals (SCA) has set aside a R3bn contract for the printing and distribution of school workbooks to the Lebone Novus UTi Consortium, saying it is constitutionally invalid.
“The parties will study the implications of the judgment in detail before deciding on any action in this regard,” Novus said in a statement.
The judgment preserves the consortium’s right to continue to print and distribute the school workbooks until March 2020 — the original contract. Any extension of the contract, however, has been ruled out.
Rival group Caxton had fought the contract, maintaining a consortium led by it had been treated unfairly.
Moneyweb reported that the court ruled that the bid evaluation committee treated it unfairly and that the two bids were not treated equally when assessed on functionality.
Novus’s share price, which is somewhat volatile, had jumped as much as 11.43% by 11.20am on Thursday, its largest one day gain in a week
Caxton’s share price was unchanged at R9.74.
Novus reported earlier in November that its revenue had remained stable, but its operating profit had declined, in the six months to end-September, largely as the result of a loss of a contract with Media24.
The group said in its annual report the textbook contract was 17% of the group’s print revenue, which itself makes up 23% of group revenue.