Bytes and MTN Defy Broad JSE Selloff as Mahube Deal Collapses

The JSE endured a broadly negative session on Tuesday, with the All Share closing 1.42% lower as risk-off sentiment weighed on resources and technology shares. The Top 40 fell 1.52%, the Resource 20 dropped 2.44%, and the FTSE/JSE Technology index was the session's weakest performer, closing 4.64% in the red. Defensive names outperformed, with British American Tobacco leading the All Share higher by 6.23% and Sasol gaining 2.55% on firmer energy prices. Bytes Technology Group was the session's standout mover, surging 6.46% after the company paired weaker full-year earnings with an aggressive £25 million share buyback programme. At the other end, AngloGold Ashanti fell 5.49% on weaker gold prices, while Naspers and Prosus extended their slides toward 52-week lows.

BYI Earnings contract but buyback cushions the fall

Bytes Technology Group reported a 5.6% decline in full-year operating profit and a 6.1% drop in headline earnings per share to 21.4p, despite Gross Invoiced Income growing 11.5%. Management pointed to H2 gross profit recovery as evidence that Microsoft incentive headwinds are beginning to ease, though the company guided for flat operating profit in FY27 as it absorbs £4.5 million in cost normalisation. To address the stalled bottom line, the board launched a £25 million share repurchase programme structured in two equal tranches through the first half of FY27, alongside a 1.4% increase in the final dividend to 7.0p. The stock rose 6.46% to 74.7p on the session, suggesting investors viewed the H2 recovery and aggressive capital return as sufficient compensation for the weaker earnings outlook. A separate governance update announced the splitting of the CFO and COO roles, with Andrew Holden transitioning to a dedicated COO position once a successor is appointed.

MTN Regional strength drives 20% service revenue growth

MTN Group delivered a 20.0% increase in group service revenue for the first quarter of 2026, with constant-currency growth reaching 21.1%, as data revenue surged 36.1% and fintech revenue rose 22.4% across Nigeria and Ghana. The group expanded its EBITDA margin by 3.0 percentage points to 47.6%, reflecting effective expense management that allowed profitability to outpace topline growth. The balance sheet remains exceptionally strong, with a net debt-to-EBITDA ratio of just 0.2x against a 1.0x target, supported by R42.6 billion in HoldCo liquidity. However, MTN South Africa reported a 12.5% decline in EBITDA and margin contraction to 32.6%, highlighting persistent domestic challenges that continue to weigh on the overall investment case. Management reaffirmed medium-term guidance targeting at least high-teens service revenue growth for the group and high-20% to low-30% for the Fintech division, while separately publishing pro forma financial effects for the pending acquisition of the remaining IHS shares.

MHB Shareholders reject R6.00 scheme, deal collapses

Mahube Infrastructure shareholders delivered a decisive rejection of Sustent Holdings' proposed scheme of arrangement, with 65.66% of eligible votes cast against the R6.00 per share cash offer at a general meeting. Shareholder participation was exceptionally high at 95.31% of eligible minority shares, indicating strong engagement among investors willing to defend their valuation of the underlying infrastructure assets. The collapse of the transaction removes the guaranteed R6.00 pricing floor, returning the company to a standalone entity where the stock now trades at a steep 0.57x price-to-book multiple. Sustent Holdings and its concert parties retain a 34.9% stake, or 19.2 million shares, which may act as a significant overhang and complicate future strategic actions given the large minority position. The stock declined 3.33% following the announcement, directly reflecting the elimination of the scheme consideration from the investment thesis.

OCT Double-digit earnings growth and upgraded dividend outlook

Octodec Investments reported a 15.4% increase in headline earnings per share to 88.22 cents and an 11.1% rise in distributable earnings per share for the six months ended 28 February 2026, driven by solid bottom-line execution across its property portfolio. The board declared an interim cash dividend of 64.50 cents per share, up 4.0% year-on-year, and upwardly revised full-year distributable income per share growth guidance to between 3% and 5%, up from the previous 0% to 4% forecast. The loan-to-value ratio improved modestly to 37.3% from 37.9%, indicating ongoing balance sheet discipline. However, core vacancies increased across the portfolio, largely attributable to the departure of two significant tenants at the Capitol Towers North and Talkar properties, a structural risk factor that warrants close monitoring given the income-focused nature of the investment thesis. The stock trades at a price-to-book multiple of 0.67x.

MSP Advanced negotiations to divest up to seven mall assets

MAS PLC issued a cautionary announcement confirming it is in advanced negotiations to potentially dispose of an enclosed mall and up to six open-air malls to independent parties, with due diligence investigations either completed or at final stages. The potential disposals are subject to achieving acceptable commercial terms, and the company may ultimately choose not to proceed with either transaction. The stock trades at a deep discount to book value at a price-to-book ratio of 0.60x, suggesting that successful asset sales could unlock significant embedded value for shareholders by narrowing the gap between market price and underlying net asset value. Portfolio rationalisation through targeted divestments would mark the first concrete step toward capital unlocking at a company where the discount has persisted as a structural feature of the investment thesis.

CNP CANAL+ confirms secondary inward listing on JSE Main Board

CANAL+ has published its pre-listing announcement for a fast-track secondary inward listing on the JSE Main Board, presenting local investors with direct access to a ZAR 51 billion global media group following its acquisition of MultiChoice. The combined group now serves 42 million subscribers across geographically diversified markets, though the debt-funded acquisition has significantly geared the balance sheet, with net debt ballooning to €1.97 billion from €355 million. The MultiChoice integration presents near-term cash drag, contributing a negative €60 million to cash flow from operations and a negative €168 million to free cash flow in just over three months of consolidation. Management targets over €400 million in adjusted EBIT and over €300 million in free cash flow run-rate synergies from 2030, heavily back-weighted targets that imply a prolonged multi-year period of integration execution risk. The company proposed a dividend of 2.2 euro cents per share payable in June 2026, providing an initial income element for JSE-listed holders. Investors considering exposure should weigh the long-term synergy potential against the elevated debt profile and the back-loaded nature of the targeted returns.

What we are watching

Wednesday's JSE agenda features an MTN Group shareholder webcast scheduled for 10:00, where management may provide additional colour on the Q1 trading update and the pending IHS acquisition. Bytes Technology Group also has an investor presentation due, offering further context on the FY26 results and the £25 million buyback programme. No NERSA energy pricing decisions or primary equity capital events are scheduled for Wednesday according to the SENS register, though MAS PLC and CANAL+ could issue further cautionary updates as their respective transactions progress toward binding terms.