THE GHOST TRAIN
THE FINANCE GHOST: Smaller pie, bigger slice
In tricky times of little or no growth, look beyond the blue chips and find companies storming their way through the mid-cap tables
07 March 2024 - 05:00
This is a tricky time for equity investors in South Africa. Growth is hard to come by in general and almost nonexistent at macro level, so companies with market-leading positions are in most cases watching their margins erode. Costs are eating away at the income statement and top-line growth is asthmatic.
To make it worse, that frightening line called “net finance costs” below earnings before interest, tax, depreciation and amortisation (ebitda) is proving to be the death blow for growth, with bankers getting the juiciest part of the fruit and shareholders left with that soft bit nobody wants to eat...
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