Fits all my criteria this company, good divs, good growth, excellent margins, good ROCE, low debt and export revenues growing in supressed rand exchange environments. Struggles a bit with cash flow, but low leverage offsets that, I think.
If chemical companies "get it right" they can make a lot of money. They offer low labour head-counts, scalability, modularity, (often) low energy requirements, Rand hedging potential, exportable product - so they can grow beyond SA Inc. BUT here is my question - why were you not buying this at R1? The cash profits were the same as they are now.
OK, just completed my labourious DCF calculation on Rolfes - adjusting it for the recent Agrichem acquisition. On paper, this looks like a sweet deal. The Feb interims has this new company generating R5.2m in post tax profits - so if we extrapolate, lets double it for a full year's earnings. Thats R10.4m in cash generated. They are paying R47.75m - and generating around R23m in free cash flow at present. At a modest 9% forecasted growth, I put Rolfes at around R3 per share offering fair value using a DCF model (factoring in the 4% div yield) - but the kicker here is that 4% div yield will leave them with around R30m in cash in 3 to 4 years, at the rate they are going.