JSE Close: Financials and property lead gains as gold miners shine, insurance slips on weather claims

The JSE climbed modestly on Monday with the All Share adding 0.32% and the Top 40 rising 0.28%, as financials outperformed and real estate extended gains. The FTSE/JSE SA Financials index surged 0.85% and the SA Listed Property Index gained 1.09%, while energy stocks bucked the trend with a 0.89% decline. We Buy Cars led advancing names with a 6.75% jump after raising its dividend, and Harmony Gold added 3.55% as a 39% surge in received gold prices drove the miner to a net cash position. On the downside, ASP Isotopes fell 5.57% after failing to file its quarterly report with the SEC, and Santam slipped 1.84% as weather-related claims weighed on insurer profitability.

WBC We Buy Cars reports revenue growth and a 10% dividend increase despite earnings pressure

We Buy Cars reported a 7.8% increase in interim revenue to R14.15 billion for the six months ended 31 March 2026, underpinned by 3.2% growth in units bought and 2.3% growth in units sold. Management raised the interim dividend by 10% to 33 cents per share, signalling confidence in the long-term expansion strategy despite near-term margin pressure.

Core headline earnings per share contracted by 1.7% to 119.7 cents as management adjusted used vehicle pricing downwards to compete with aggressive new vehicle pricing from Asian brands. The company faces heightened competition from a 15.7% growth in the new vehicle market, which has intensified price competition across the used-car sector.

The stock surged 6.75% to 3740c despite the earnings decline, suggesting investors are rewarding the dividend increase and expansion strategy over near-term margin concerns. The company also rolled out its Inspectify initiative, which is expected to feed richer data into pricing models to improve margins over time, while the R376.8 million acquisition of a 49% stake in GoBid expands digital auction capabilities for non-runner vehicles.

HAR Surging gold prices drive Harmony Gold to a net cash position

Harmony Gold's operational update for the nine months ended 31 March 2026 highlights a 39% surge in received gold prices to R2,020,821/kg, which more than absorbed a 13% rise in cash operating costs. The company transitioned from a R5.55 billion net debt position to a R1.33 billion net cash position during the period, marking a significant improvement in balance sheet strength.

Underground recovered grades exceeded guidance at 5.85g/t for the nine-month period, demonstrating solid geological control across operations. The Eva Copper project also secured its Environmental Authority Major Amendment approval, removing a key regulatory hurdle for the growth pipeline.

The stock gained 3.55% to 27450c on the day. Gold producers like Harmony benefit directly when the commodity price rises, and the strong price received is flowing through to the balance sheet. However, investors should note that the 592,000-ounce hedge book partially caps upside participation if gold prices continue to rally in the near term.

AGL Anglo American agrees sale of steelmaking coal business for up to US$3.875 billion

Anglo American has agreed to divest its Australian steelmaking coal portfolio to Dhilmar for up to US$3.875 billion, with management explicitly committing to use the proceeds to reduce net debt. The deal marks the completion of the group's exit from the steelmaking coal sector and includes a price-linked earnout of up to US$1.575 billion that provides potential upside exposure to coal price performance over the next five years.

The transaction provides a significant cash injection earmarked for debt reduction, simplifying Anglo American's portfolio and strengthening the balance sheet. However, completion is not expected until the first quarter of 2027, and the company remains embroiled in a separate arbitration dispute with Peabody over a previous failed sale attempt of the same portfolio.

The positive disposal news was partially offset by a Chilean tribunal ruling that has set aside a key 2021 environmental permit for the Collahuasi copper mine's infrastructure project. Management anticipates no immediate impact on daily copper production due to alternative water sources, but the ruling introduces regulatory execution risk for a nearly complete desalination plant at a core copper asset.

SNT Santam maintains underwriting margins but faces R430 million in weather claims

Santam's Q1 operational update shows conventional insurance achieved 9% gross written premium growth, supported by double-digit growth in direct segments like Miway and Santam Direct. The group maintained an underwriting margin above the 5% to 10% target mid-point despite severe weather events, though investment returns on insurance funds were suppressed to 2% of net earned premium due to negative fixed interest-rate market performance.

The quarter was impacted by R430 million in net weather-related and large losses, and management has warned of further unquantified but significant claims arising from severe weather in the Western Cape during May. The new Syndicate is projected to generate an approximate R300 million operational loss in 2026 as it scales.

The stock slipped 1.84% to 37596c on the day. The underlying business is growing well, but elevated weather claims and strategic expansion costs will constrain near-term profitability. The economic capital cover ratio remains robustly within the 145% to 165% target range following the March dividend payment, and strategic expansion continues with US$55 million in committed Syndicate lines and a new reinsurance license in India's GIFT City.

ARL Astral Foods confirms strong operational recovery with 467% surge in interim HEPS

Astral Foods released unaudited interim results for the six months ended 31 March 2026, reporting a 467% increase in headline earnings per share to 2 318 cents and declaring an interim dividend of 1 160 cents per share. Revenue increased by 11% to R11.94 billion, and profit before interest and tax surged by 348% to R1.21 billion, reflecting significant operational leverage and margin expansion.

The exceptional earnings recovery confirms the operational turnaround guided in prior trading statements. The substantial 1 160 cents dividend return signals strong cash generation from the business. These are unaudited short-form interim figures rather than full audited financial statements.

The stock drifted lower despite these results, potentially because the market largely priced in the recovery following prior updates. However, the strong bottom-line performance and cash generation establish a solid fundamental baseline for the business going forward.

SPP SPAR exits the UK market to eliminate earnings drag, yielding a breakeven net cash outcome

SPAR has entered into agreements to dispose of its UK business assets, including 71 company-owned stores to A.F. Blakemore & Son and 63 stores to third parties, for estimated gross proceeds of approximately GBP13 million. Despite the substantial EUR78.5 million impairment previously recorded, the transaction will generate no material liquidity with the net cash outcome expected to be broadly breakeven.

The transaction facilitates a clean exit from the UK, terminating a persistent earnings drag and allowing management to redirect focus toward core operations. Following the impairment, the group expects no further cash outflows associated with these disposals.

The formal exit removes a major operational overhang from a stock trading near its 52-week low. However, investors should note that the completion timeline extends to September 2026, leaving execution risk in place, and no net cash will be generated from the disposal despite the fundamental quality improvement.

ISO ASP Isotopes unable to timely file Form 10-Q with the SEC

ASP Isotopes has formally notified shareholders of its inability to timely file its quarterly Form 10-Q with the SEC. The filing introduces short-term administrative uncertainty regarding quarterly financial results but does not provide the underlying reasons for the delay or an updated submission timeline.

The stock fell 5.57% to 9100c on the day, reflecting market sensitivity to administrative rather than fundamental issues. The company has maintained regulatory communication by formally advising stockholders of the SEC filing delay, and continues to uphold its disclosure obligations across both of its active listing venues.

This is a compliance delay that introduces regulatory uncertainty, though it carries no immediate signal for the underlying equity thesis. The stock has declined sharply on the day, but the filing does not alter the fundamental picture for the business.

PIK Pick n Pay launches ZAR4.7 billion bookbuild for 11.5% of Boxer to fund core turnaround

Pick n Pay has launched an accelerated bookbuild to divest an 11.5% stake in its high-growth subsidiary Boxer Retail Limited, aiming to raise up to ZAR4.7 billion to support the struggling core Pick n Pay Stores segment's path to cashflow break-even. The group will retain a 54% controlling interest in Boxer after the placement.

Boxer Retail climbed 2.45% to 8864c on the day as the market responded positively to the capital raise plan. The proceeds provide crucial liquidity to fund the turnaround plan and ensure medium-term financial flexibility for the core business.

SA retail investors should recognise that this capital raise removes immediate liquidity risks for Pick n Pay, but the necessity of selling a high-growth asset to stabilise the core business highlights ongoing operational challenges. The transaction introduces execution risk as there is no certainty the placement will proceed, and a 365-day lock-up arrangement restricts the group's ability to monetise further portions of its Boxer stake over the next year.

What we are watching

Investors should monitor further regulatory developments on the Chilean Collahuasi environmental permit affecting Anglo American's copper operations, as well as any updates on the Pick n Pay Boxer placement bookbuild process. Absa Group's Annual General Meeting is scheduled for 2 June 2026, and Nu-World has a Special General Meeting in mid-June to consider general authorities for share issuances and repurchases.