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Rolfes becoming a serious player

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Not applicable
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.
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Super Contributor
This was on Hotstoxx a few nights ago - so some comment should be available on ABN Digital website now.
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Super Contributor
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.
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Not applicable
can't seem to find where I put my time machine
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Super Contributor
Had you bought them when they were half this price, you wouldn't need a time machine. My point is that we are all too busy chasing trades and tend not to buy what is staring us in the face.
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Not applicable
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.
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