Company news in brief

23 March 2020 | Business

Investec profit to drop by up to 23%

South Africa's Investec warned on Friday that its full-year profits would drop by up to 23%, with coronavirus expected to deal a further blow to a company already struggling with tough market conditions.

Investec's shares, however, rose over 13% in a broadly rebounding Johannesburg bourse with some analysts saying the stock looked relatively cheap having plummeted in recent days as the coronavirus outbreak roiled markets.

The company also pushed on with its spin-off and London listing of asset management firm Ninety One today.

The group's adjusted earnings per share, which reflect profits made in the course of its ordinary operations, are set to be between 16% and 23% lower in the year to March 31.

Investec had already been hurt by factors including lacklustre growth in South Africa, which tipped into recession in the final quarter of 2019, and Britain's departure from the European Union, with its UK specialist banking arm in particular struggling. – Nampa/Reuters

SA's Tsogo Sun to close 36 hotels

South African hotel operator Tsogo Sun will close up to 36 hotels over the next few weeks after travel bans imposed by various countries to contain the coronavirus caused a "total collapse of demand", it said on Friday.

Tsogo said in a statement it was looking to reduce costs and capital expenditure further and this will be done by closing a number of hotels in the key areas where the firm has multiple properties and will consolidate the available demand into the remaining operating hotels in those areas.

The owner of the Southern Sun and Beverly Hills hotels said the hotel closures will affect 7 700 rooms, or 40% of the group's hotel portfolio, over the next few weeks. All booking channels will remain active for the close monitoring of demand patterns.

"During this period, all capital expenditure has been postponed and only essential maintenance will endure," Tsogo Sun said.

The firm, which also owns casinos, said it had been approached by both the public and private healthcare sectors to turn its closed hotels into quarantine facilities and "we are endeavouring to assist in this regard". – Nampa/Reuters

Steinhoff's revenue hit by store closures

South African retailer Steinhoff said on Friday turnover had fallen, particularly in general merchandise, as a result of the partial or full closure of stores in a number of European markets due to restrictions on movement.

Steinhoff's general retail stores in France, Spain, Poland and the Czech Republic are affected, Steinhoff's statement said, adding that the decline will last as long as the restrictions.

The performance of its fast-moving consumer goods business has been more resilient, it added.

Steinhoff's European stores fall under the Pepco Group, which owns retail brands PEPCO, Poundland and Dealz.

"The extent and duration of the current restrictions on trade remain uncertain and it is too early to determine the exact impact of the pandemic on the performance of the group for the 2020 financial year," Steinhoff, which also operates in Australia, said. – Nampa/Reuters

MTN drops data prices

MTN said it had agreed to cut the cost of its data bundles on Friday after South Africa's competition watchdog warned in December that the telecoms operator and rival Vodacom faced prosecution if they did not do so.

A two-year inquiry into data services which concluded late last year found prices charged by the top two operators in South Africa, which control about 70% of its wireless broadband market were higher than in other African markets they operate in.

MTN said it would reduce the cost of monthly data bundles of 1 gigabyte (GB) and below by between 25% and 50% from April 15, after a finding that South Africa's mobile data prices were the highest on the continent.

The price of its 1 GB monthly data bundle will fall by 33% to R99 from R149, MTN said in a statement, after the Competition Commission said the preliminary evidence suggested there was scope for price reductions of 30% to 50%.

MTN will also provide each of its 29 million customers in South Africa with 20 Megabyte (MB) of free data daily through its instant messaging platform, Ayoba and offer 500 MB of free data access to up to 500 public benefit services websites such as health and job sites every month. – Nampa/Reuters

Eskom orders investigation into COO

A senior lawyer is to investigate allegations of "corruption and victimisation" levelled against the operations chief at Eskom, the struggling South African power utility's board said.

The company had received correspondence from anti-graft organisation Corruption Watch and the South African Federation of Trade Unions detailing fresh allegations against Jan Oberholzer, Eskom's chief operating officer, the board said in a statement.

Oberholzer has been investigated over separate accusations that were found to have no substance, the statement said, adding that the board had previously been unaware of the new allegations.

"In the correspondence, both organisations articulate allegations of corruption and victimisation against the chief operating officer," it continued.

"In the best interests of Eskom and both the complainants and the COO, the board has engaged the services of independent senior counsel to investigate the allegations." – Nampa/Reuters

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