The transport sector of the JSE houses one of the best-performing companies - shipping and logistics group Grindrod. When taking into consideration companies' internal rate of return (IRR) over five years, earnings per share (EPS) growth over five years and return on equity (ROE) last year - Grindrod is ranked the best performer for all sectors in 2004. At the same time, profits rose 129% and headline EPS jumped 146%. The group's turnover was 52% better at R3bn.
However, in net profit, Grindrod lags behind diversified groups such as Barloworld and Imperial Holdings.
Last year Top Companies noted how conglomerates such as Barloworld and Bidvest had sneaked into the transport sector to take over growing companies - Avis and McCarthy respectively.
The sector is so diversified today - groups have interests in road freight, shipping, logistics, automobile, finance and fleet services.
Imperial benefits from diversification. Its turnover rose 9% during 2004, operating profit 10%, headline EPS 20% and EPS 12%. Its share price rocketed by 55% from R65 to R101 in early May this year.
It also improved its empowerment status by roping in two ANC heavyweights, Popo Molefe and Valli Moosa, through Lereko Mobility. When this scheme is finally realised, Lereko will hold 7,25% of Imperial Holdings and won't have any debts.
Grindrod's performance is a result of the buoyant international shipping market. CEO Ivan Clark says internal repositioning (bringing on board managers who are more entrepreneurial to run business units) and acquisitions (of ships at the right price and land-based businesses) have contributed to its present success.
Grindrod is growing its land-based operations as a buffer for the cyclical shipping market.
Grindrod recently acquired 50% of furniture transporter Boltt Removals; 76% of African Portland Industrial Holdings, a Namibia-listed company with terminal facilities in Walvis Bay and Maputo; and bulk logistics operations in Johannesburg, Cape Town and Durban. It also concluded a black economic empowerment (BEE) deal, through its operating subsidiary Southern Tankers, with Holgoun Maritime Consortium, which is led by Sivi Gounden. Holgoun has a 25,1% share in the business.
Institutional shareholders finally gave up on commuter bus company Putco, agreeing to sell their holding in a move that paved the way for the company's delisting from the JSE.
Putco management says the move will facilitate the empowerment process.
What Putco is not saying loudly is that as a nonlisted and empowered company, it is likely to double revenue from government contracts and other sources that demand evidence of black participation before awarding contracts.
Super Group's group revenue rose 18% to R7,1bn and trading income was R583m. Trading margins were kept steady at 8,2%.
The group acquired DIY hardware company Mica Plus, which will contribute to 2005 earnings.
One of the most underrated companies in this sector is Tiger Wheels. The manufacturer of aluminium wheels grew revenue by nearly 8% to R3,1bn in the year ending June 2004.
