Tag Archives: astoria

Astoria Investments Ltd – Results Note – Crystalizing NAV with Optionality

Share Code: ARA – Market Cap: R537m – Discount to NAV: c.39%

Astoria Investments – Q3:24 – Results NoteDownload

Q3:24 Results: Headwinds of a Stronger Rand

  • Astoria reports quarterly but management only update unlisted valuations in the Q2 and Q4 reports. Thus, the key change over the Q3:24 period was a stronger Rand (c.9% stronger on a 12m-rolling basis and c.6% stronger versus the start of the current reporting period versus the USD).
  • With this context, Astoria’s NAV per share increased by +2.1% in USD and decreased by 3.7% in ZAR for the Q3:24 period (as compared to NAV at the start of financial year).

Astoria’s NAV components:

Commentary: ISA Carstens (Potential) Exit Proving Solidity of NAV

  • Astoria has received a non-binding offer for its stake in ISA Carstens &, along with fellow shareholders, final terms are being negotiated. While the offer is non-binding, its pricing is broadly in line with Astoria’s fair value for ISA Carstens. This gives us a great data point for the realism of management’s fair values for their unlisted investments (the 3rd-party offer aligns with Astoria’s valuation). Finally, this potentially turns c.8% of the Group’s NAV into cash which would provide management with ammo for future investment options (i.e. embeds some exciting optionality for future capital allocations).
  • Outdoor Investment Holding continues to trade well, Leatt Corp’s latest quarterly hints at a trough being reached, RECM Calibre has changed its name to Goldrush Holdings (code: GRSP), low diamond prices continue (Land is doing relatively well while Marine has its ship in dry dock for well-timed maintenance), & VCG continues corporatising and scaling.

Valuation, 12m TP & Implied Return: Discount a Little Tighter

  • Astoria’s share is trading at c.39% discount to the current NAV (Previously: 45%) once we update its NAV with current prices.
  • If we take out our calculated “HoldCo discount” of c.13.6% (Previously: 14.4%) from this NAV, we arrive at a fair value for Astoria’s shares of c.1216cps (Previously: 1204cps) or c.41% higher than the current share price.
  • Rolling this fair value forward at our Cost of Equity, we arrive at a 12m TP of c.1433cps (Previously: 1417cps) that implies a potential return of c.66% from the current share price.
Astoria Investments – Q3:24 – Results NoteDownload

Astoria Investments – Results Note – Navigating the Rough Well

Share Code: ARA – Market Cap: R484m – Discount to NAV: 45%

Astoria Investments – Q2:24 – Results NoteDownload

H1:24/Q2:24 Results: Fully-invested with OIH Paying Dividends

  • With a stronger Rand and lower RACP (soon-to-be renamed ‘Goldrush Holdings’) and Leatt Corp share prices, Astoria’s USD-NAV and Rand-NAV softened -2.9% and -3.5% respectively.
  • During the six months, Astoria invested more into Leatt Corp (LINK), and received a legacy agterskot payout. We currently consider the Group fully invested, but dividend flows from Outdoor Investment Holdings (OIH) should provide incremental capital for deployment & compounding.
  • Finally—as per policy—management have refreshed the Group’s unlisted company valuations, which we specifically discuss in the context of their performance and their peers.

Commentary: Leatt, Goldrush & Diamond Headwinds Cannot Last

  • OIH saw broad growth (excluding Family Pet Centre), Trans Hex (Land & Marine) somewhat bucked diamond trends with good pricing, ISA Carstens showed its quality, and the Vehicle Care Group (VCG) steadily (and responsibly) began scaling.
  • Unfortunately, Leatt Corp (trading its way through excessively stocked wholesale markets) and Goldrush (loadshedding hurting EBITDA margins) saw their share prices under pressure during the period, which created some headwinds to NAV.
  • Loadshedding (appears) gone for the moment and the wholesale market for Leatt should righten itself over time, thus implying upsides in both businesses from these levels.

Valuation, 12m TP & Implied Return: Widening of Discount

  • Astoria’s share is trading at c.45% discount to the current NAV (Previously: 40%) once we update its NAV with current prices.
  • If we take out our calculated “HoldCo discount” of c.14.4% (Previously: 14.2%) from this NAV, we arrive at a fair value for Astoria’s shares of c.1204cps (Previously: 1162cps) or c.54% higher than the current share price.
  • Rolling this fair value forward at our Cost of Equity, we arrive at a 12m TP of c.1417cps (Previously: 1386cps) which implies a potential return of c.82% from the current share price.
Astoria Investments – Q2:24 – Results NoteDownload

Astoria Investments – Results Note – Discount Appears too Wide

Share Code: ARA – Market Cap: R498m – Discount to NAV: 42%

Astoria Investments – FY 23 – Results NoteDownload

FY 23 Results: A Mixed Bag of Results

  • Astoria’s USD Net Asset Value (NAV) felt pressure and slipped marginally to $0.7947 per share (FY 22: $0.8266 per share), though the Rand NAV was slightly up at 1454cps (FY 22: 1406cps) as the Rand weakened over the period.
  • A decline in diamond prices was a headwind on diamond interests, loadshedding hurt Goldrush’s LPM performance & Leatt’s share price followed its sales down over an extra-ordinary trading period.
  • On the other hand, Outdoor Investment Holdings (OIH) traded (really) strongly (see relative sales performance below), ISA Carstens saw +10% enrolment growth & Vehicle Care Group (VCG) is proving its model nicely.

Commentary: Conservative NAV & Upside Optionality

  • Other than valuing A-Tec in OIH separately as a Norwegian asset and lifting ISA Carsten’s Academy multiple from 6.0x to 7.0x (but it remains well below other listed educational stock multiples), Astoria’s unlisted valuations remain largely consistent with history and, arguably, conservative.
  • A FY 24E normalisation in diamond prices & in Leatt Corp’s trading environment could point to upside in Astoria’s NAV (Leatt & diamond interests are a third of the Group’s NAV).

Valuation, 12m TP & Implied Return: Above Average Discount

  • Updating Astoria’s NAV to current prices, the share is trading at an above-sector-average c.42% discount to current NAV (Previously: 34%) despite its strong growth in NAV (+32.4% y/y CAGR in Rand-NAV since management took over on 1 December 2020)
  • If we take out our calculated “HoldCo discount” of c.13.9% (Previously: 15.0%) from this NAV, we arrive at a fair value for Astoria’s shares of c,1192cps (Previously: 1152cps) or c.49% higher than the current share price.
  • Rolling this fair value forward at our Cost of Equity, we arrive at a 12m TP of c.1420cps (Previously: 1365cps) which implies a potential return of c.77% from the current share price.
Astoria Investments – FY 23 – Results NoteDownload

Astoria Investments – Results Note – Durable Performance & Cautionary Issued

Share Code: ARA – Market Cap: R604m – Discount to NAV: 24%

Astoria Investments – Q2:23 Results NoteDownload

Q2:23 Results: Currency and Market Headwinds

  • Astoria reported Net Asset Value of $0.748ps (FY 22: $0.827ps) or R14.08ps (FY 22: R14.06ps) with growth in Outdoor Investment Holdings (OIH) offset by lower RACP (i.e. Goldrush) & Leatt Corp share prices. A weaker Rand offset this in the Rand-based NAV but detracted against the USD-based NAV.
  • Unlisted valuations remain conservative with multiples unchanged.

Commentary: Businesses Robust & Investments Degearing

  • Importantly—given its 48% of NAV—OIH is trading well, growing both footprint and store-level trading density.
  • Broadly, underlying businesses are performing &, even those facing headwinds, are trading resiliently and offer upside the moment the broader economy/ies improve.
  • Along with existing businesses growing their profits, other potential future fair value moves include both the Family Pet Centre (FPC) and Vehicle Care Group’s (VCG) refined business models showing success. Likewise, Trans Hex Marine’s historic cost should be fairly valued in future results.
  • During H1:23, Astoria paid back some of its investment-level debt (we expect this to continue). This adds to NAV & lowers financial risk while freeing capacity to regear for another acquisition (see the cautionary noted below).

Valuation, 12m TP & Implied Return: Under Cautionary…

  • Updating Astoria’s NAV to current prices, the share price is trading at a c.24% discount to current NAV (Previously: 34%).
  • If we take out our calculated “HoldCo discount” of c.14.5% (Previously: 14.0%) from this NAV, we arrive at a fair value for Astoria’s shares of c.1213cps (Previously: 1192cps) or c.11% higher than the current share price.
  • Rolling this fair value forward at our Cost of Equity, we arrive at a 12m TP of c.1440cps (Previously: 1422cps) that implies a potential return of c.33% from the current share price.

Note: The share is currently trading under a cautionary announcement due to a potential acquisition.

Astoria Investments – Q2:23 Results NoteDownload