Mvela or Messina? Which of the two best performers from the past two years will stay at the top of the pile in the coming year?
In Messina's latest financials to December 2003, PricewaterhouseCoopers' (PwC) audit opinion of the company contains an "emphasis of matter". Without actually qualifying its audit report, PwC draws attention to the fact that Messina is and will remain dependent on holding company Southern Era Resources and the bankers during the expected period of production build-up at Voorspoed mine.
This means that to remain a going concern, Messina must lean on its parent company and its bankers. The company is not insolvent but it doesn't give investors a warm feeling either.
Its five-year IRR almost halved, from 106% to 59%. It's still a healthy return but the trend is against it.
Mvela, on the other hand, is a firm favourite with investors. Tokyo Sexwale's companies can do nothing wrong, it seems. The latest coup by its holding company, Mvela Holdings, was to gain a stake in Absa. Everyone wins - Mvela gets an interest in one of the big banks and Absa gets its all-important black empowerment partner.
But in looking to the future of Mvela's ranking, remember that its listing was a result of a reverse listing of its assets into already-listed East Dagga. The share price exploded: from the start of its rise in late 1999 to the current level, the share has increased 20-fold. In the past two years, however, the share has traded in a relatively narrow band between about R20 and R28. Without taking anything away from the company, it will have to display even greater entrepreneurial flair in future if it is to retain its position.
