Value Group Limited. JSE: VLE

Value Group Limited shares

Background of Value Group

  • The Value Group is a transport and logistics group based in South Africa, with a history stretching back to 1981. Through moves to buy other businesses and expand organically, Value Group is today one of South Africa’s largest transport and logistics companies, operating throughout the country and in sub-Saharan Africa. Services include merchandise transport, warehousing, distribution and logistics solutions, delivered through a vertically integrated model.

  • The group is split into the General Distribution (which contributes 80% of revenue) and Truck Rental and Other segments. Various divisions within these segments include Truck Rental, Fridge Fleet, Film Fleet, Linehaul, Warehousing, Dedicated Distribution, Logistics, Container Storage, Clearing & Forwarding, Autobody and Materials Handling.

  • Group revenue exceeded R1 billion for the first time in 2007, and revenue for 2016 stood at R2.06 billion. Value Group shares are for sale on the Johannesburg Stock Exchange (JSE) with a market cap of R540 million. Value Group share price has however been severely impacted by challenging economic and trading conditions.

Value Group Shares Growth Driver

  • The Value Group’s performance has been dampened due to the instability of South Africa’s industrial sector, which has resulted in reduced customer demand and increased operating costs. Net profit fell from R109 million in 2012 to R54 million in 2016, with headline earnings per share dropping from 66 cents to 37.2 cents. After several years of steadily increasing sales, live sales only grew by 1% for the year. The group did however manage to buy 100% of Key Distributor, which is anticipated to expand FMCG volumes.

  • Trade conditions have remained challenging even during peak times such as Christmas. Volumes in the logistics industry continue to decline, and Value Group has responded by cutting labour, maintenance and fuel costs. Capital expenditure has been steadily reduced, and will continue to be reduced in line with the forecast of a subdued operating environment.

  • An extensive restructuring process is currently underway in the General Distribution segment, involving rightsizing of various branch operations, reassessment of fleet and delivery frequencies, and reformulating customer costs and distribution methodologies. A restructuring process is also taking place in the Truck Rental and Other segment. While the truck rental business is profitable, divisions such as materials handling have not performed to expectations. With depreciation of the exchange rate, future sales are expected to be further impacted.

Value Group Group Investor Tip

  • The online JSE stocks chart shows that Value Group share price has fallendrastically over the past several years, from a high of R7.20 in 2014 to R2.90 by December 2016. The outlook still looks bleak for the company going forward, and investors won’t be enthusiastic to buy Value Group shares. Shareholders will however seek solace in the fact that the Value Group has a successful track record and an experienced management team, who will hopefully get the business through these challenging times and return it to growth. Investment analysts predict that Value Group shares will under perform the market, making the stocks a risky buy.

Value Group Major Shareholders

The BRSALO Trust, Opsiweb Investments, Foord Asset Management

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How to buy Value Group Group Shares

  • Value Group : How to buy Value Group Group Shares Online

    We have made it simple to buy JSE listed firm shares online. The easiest way to buy Value Group shares or stocks is to; start by submitting the ‘BUY THIS SHARE’ form. Next, one of our experienced and certified stock brokers will personally get in contact with you to discuss your custom stock request. Finally, a stock advisor will confirm the amount of shares you are looking to invest in Value Group and assist you with the setup and management of your stock portfolio account.

  • Here are the steps you must follow to Buy / Value Group Group shares with utmost confidence:

    1. Start by Filling in the BUY THIS SHARE form.
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