Wednesday 24 June: Resource rout and dual JSE earnings shocks

Wednesday's session delivered a textbook resource-sector rout, with the All Share closing 1.62% lower as the Resource 20 shed 5.25% and Precious Metals & Mining fell 5.66%. The divergence was stark: the Industrial 25 added 1.36% while the FTSE/JSE Beverages index gained 2.88%, reflecting the defensive skew that often accompanies commodity weakness. On the JSE board, two earnings shocks stood out: Salungano Group surged around 21% after guiding headline EPS ~51c — roughly 20 times the prior year's 2.54c — while Crookes Brothers crumbled toward its 52-week low after warning of a headline loss of 167.2c per share. Schroder European REIT's board formally proposed a 2–3 year managed wind-down, cementing what had been a slow-motion structural failure for the sub-£100m listed vehicle.

Key takeaways

• The Resource 20 shed 5.25% and Precious Metals & Mining fell 5.66% as commodity weakness hit Wednesday's JSE, with defensive sectors providing offset.
• SLG rallied ~21% after guiding FY26 HEPS to ~51c, roughly 19 times the prior year, though no operating driver was disclosed and the figures are unaudited.
• CKS revised its trading statement to a headline loss of 167.2c per share, citing Mozambique deferred tax changes and labelling its macadamia segment commercially unsustainable.
• PHP confirmed advanced JV talks for its private hospital portfolio, sending the share up 25.8% on the day.
• OPA confirmed all operators resumed Nigeria ACS services from 24 June, though regulations remain suspended pending legal proceedings.

SLG ~20x earnings beat, but no driver disclosed

Salungano Group issued a trading statement on Wednesday guiding FY26 EPS of 50.64–51.14c and HEPS of 50.59–51.11c, representing an extraordinary step-change from the 2.54c EPS and 2.62c HEPS reported in FY25. The guidance range is unusually tight at roughly 1%, suggesting management has firm visibility on the outcome, but the filing is silent on any operating driver, segment breakdown or acquisition that might explain a near-20x jump. The figures are management-prepared and have not been reviewed by auditors. The results follow the recent lifting of a trading suspension on the shares, and audited full-year results are scheduled for release on or about 30 June 2026.

A 20-times earnings increase is the kind of headline that demands attention, but the complete absence of a disclosed driver means investors cannot yet distinguish between genuine operational recovery and a normalisation off an extremely depressed prior-year base. The prior-year EPS of 2.54c sits close to breakeven, so the magnitude of the beat — while technically extraordinary — could partly reflect the floor effect of a business that was structurally impaired in FY25 rather than a step-change in recurring earnings power. The 30 June audited results are the next checkpoint where the market will need to see operating cash flow backing the headline before the beat can be treated as confirmed.

CKS Headline loss and macadamia 'unsustainable' label deepen concerns

Crookes Brothers significantly worsened its trading statement just days before final results are due, swinging to a headline loss of 167.2c per share from prior-year earnings of 425.1c. The revision was triggered by Mozambique deferred tax changes layered atop an already deteriorating operational picture: sugar price pressure, delayed land sales, and a R258.8m macadamia impairment the company itself labels commercially unsustainable. The basic loss per share stands at 1,869.4c after the full impairment charge, which management has explicitly excluded from headline earnings. A prior trading statement issued on 12 June was already materially wrong, and this update is a further downward revision from that already-disappointing baseline.

For SA retail investors the key concern is not only the loss magnitude but the absence of an exit plan for the macadamia business, no debt disclosure, and no segment-level revenue or profit breakdown that would allow absorbability of the loss to be assessed. The 26 June final results must address whether the Mozambique deferred tax hit was a one-off accounting charge or a symptom of deeper balance-sheet stress, whether the macadamia unsustainability label will translate into a credible disposal or wind-down plan, and whether the sugar and land-sale pressures are cyclical headwinds or structural deterioration. Investors in CKS should treat the current trading statement figures as subject to further revision ahead of the release.

SCD Board formally proposes 2–3 year managed wind-down

Schroder European REIT's board has formally proposed a managed wind-down over two to three years, conceding that neither a corporate sale, a thematic pivot, nor continued trading will close the persistent NAV discount that has plagued this sub-£100m listed vehicle. The half-year results released alongside the proposal show NAV fell 1.9% to €151.3m (115.1 cents per share) from €154.2m, driven by unrealised revaluation losses, and EPRA earnings slipped 7.7% year-on-year to €3.6m. A second interim dividend of 1.48 euro cents per share was declared, payable 14 August 2026 to shareholders on the register 17 July 2026. The wind-down is intended to return capital to shareholders over 2–3 years while maintaining dividends to preserve investment trust status, and a shareholder circular will be published to convene the meeting at which the wind-down requires approval.

What the announcement deliberately does not contain is equally important: no current NAV, no gearing level, no wind-down cost estimate, and no per-asset realisation timeline. A €14.9m French tax exposure — representing approximately 9.8% of current NAV — sits unprovided pending appeal, creating a binary drawdown risk that could materially reduce terminal proceeds for shareholders. SA investors holding SCD on the JSE are now in a capital-return-in-progress situation where the direction is clear but the economics remain unquantified. The shareholder circular will be the critical document where the board must disclose the NAV, the debt quantum, and the French tax liability before investors can model whether the wind-down delivers value above the prevailing share price.

PHP Advanced JV talks for private hospital portfolio confirmed

Primary Health Properties confirmed on Wednesday that press speculation about strategic discussions is grounded in substance: the company is in advanced discussions with an investor to contribute its private hospital portfolio into a new joint venture. The language marks a step up from the prior "exploring a range of strategic options" framing, and the confirmation landed against a share that had been selling off modestly into the print — negative 20-day performance and approaching 52-week lows. The advance represents a genuine development rather than vague exploratory talk, giving investors in a beaten-down name a concrete upside scenario to track. No deal terms, structure or value have been disclosed, and the statement explicitly notes there can be no certainty that a transaction will be agreed or as to its terms.

The share rose 25.8% on the day to R25, and the confirmation that credible investors are engaged — not merely being explored in theory — is a meaningful signal that the strategic review of the private hospital assets is progressing from possibility toward probability. However, deal certainty and economics remain the missing pieces, and any transaction still requires regulatory and potentially shareholder approvals. For JSE investors who hold PHP, the confirmation of advanced-stage discussions provides a live catalyst to monitor, but the investment case will remain incomplete until a signed deal provides the value and structure detail the current filing withholds.

OPA Nigeria ACS services resume after multi-month suspension

Optasia announced on Wednesday that from 24 June 2026 all operators have resumed airtime credit services in Nigeria, ending the temporary suspension that triggered prior disclosures on 15 April and 1 June. The share had sold off roughly 14% in the 20 days before the announcement and sat near its 52-week low, so confirmation that the service has reopened cuts against a market that had been positioned for a prolonged shutdown. The resumption restores operating revenue for a beaten-down share and provides relief for SA retail investors who held through the suspension period. The company's consistent disclosure cadence across three announcements in as many months reflects active and transparent issue management.

The catch is structural rather than transient: the underlying regulations in Nigeria remain suspended pending ongoing legal proceedings, meaning the revenue restart operates under provisional legal status. An adverse court ruling could re-close the service, leaving the market unable to price the legal outcome as a binary or probabilistic event. The filing provides no segment revenue, financial impact estimate, or timeline for resolution of the legal proceedings. Investors who held through the suspension now have the operational base restored, but the next material event for OPA is the outcome of the Nigerian legal proceedings, which will determine whether the ACS resumption is sustained or reversed.

NED FY26 guidance on track; PPB credit loss ratio flagged

Nedbank confirmed via its H1 2026 pre-close update that FY2026 guidance remains on track through five months of 2026, with upper-single-digit PPOP growth, upper-single-digit NIR growth and well-managed expenses. The NCBA acquisition in Kenya is tracking to plan, with key regulatory approvals from the Prudential Authority, COMESA and the EAC Competition Authority secured, and completion targeted for end Q3 or early Q4 2026. The update keeps the FY2026 narrative intact for investors who have been tracking Nedbank's performance against guidance, and the confirmation lands against a share that has already moved up — up 8.1% over 30 days and 4.4% over five days heading into the print.

The material flag in the update sits in Personal & Business Banking, where the credit loss ratio has breached above the top end of its through-the-cycle target range, signalling deepening consumer affordability stress. Group CLR sits in the upper half of the 60–100 bps through-the-cycle range, consistent with full-year guidance for CLR slightly above midpoint, but the PPB breach is a more pointed deterioration signal that the pre-close deliberately leaves unresolved. The pre-close provides only qualitative directional commentary; all figures are management-prepared and unreviewed. Nedbank's 4 August interim results are the event where the market will receive the actual HEPS quantum, the audited segment-level breakdown, and whether the PPB credit deterioration is stabilising or worsening.

What we are watching

Thursday 25 June brings Crookes Brothers final results for the year ended 31 March 2026 — the disclosure that must address the macadamia exit plan, group debt position and whether the Mozambique deferred tax hit signals deeper balance-sheet stress. The SCD shareholder circular on the Schroder European REIT wind-down is also expected shortly, providing the NAV, debt quantum and French tax liability detail that Wednesday's proposal withheld. Nedbank's 4 August interim results remain the next major checkpoint for the credit loss ratio signal raised in Wednesday's pre-close.