Africa-Press – South-Africa. Shares in Barloworld climbed more than 6% on Wednesday, after the diversified industrial group hinted that it is likely to unbundle and separately list its car rental business, Avis Budget Southern Africa, also flagging double-digit increases in continuing revenue and operating profit so far in its 2022 year.
In early trade, its shares had risen 6.64% to R95.55, with the firm reporting a “robust performance” from its equipment businesses in the 11 months to end-August, amid strong demand from the mining industry. The firm also reported good growth for its Ingrain division, sugar producer Tongaat Hulett’s former starch business, which Barloworld acquired towards the end of 2020.
Barloworld said on Wednesday the work to unbundle its Avis business was “now far advanced”. It said it had been evaluating the exit of Avis either through or a sale or an unbundling and separate listing of the business, but that to date, none of the offers received were attractive enough.
As a result Barloworld said it continued to “progress preparatory work for an unbundling and separate listing of Avis in parallel”.
It remains “committed” to separating the Avis business this calendar year, adding that a further update regarding this would be made when it released results in November.
Casparus Treurnicht, head of research and portfolio manager at Gryphon Asset Management, said the main reason behind share bounce is the further detail on the unbundling of Avis. “That is an immediate value unlock story and without a doubt that is why the share is up so strongly this morning.”
Treurnicht said Barloworld’s share price had also been under pressure over the past few months, having moved from over R150, adding that the share had been poised for a bounce, if it released a trading update indicating things were going according to plan in its operations.
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