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The Finance Ghost: Burgers sizzle, builders stumble and bankers balance the books

The Finance Ghost: Burgers sizzle, builders stumble and bankers balance the books
The Finance Ghost
By The Finance Ghost
9 Mar 2025
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In a week where builders crumbled under the weight of consumer pessimism, burgers sizzled with surprising growth, and bankers scrambled to mask their credit woes with double-digit earnings, the JSE reminded us that even amid the chaos, there’s always a twist worth savouring.

The JSE offers such a rich variety of sectors for investors. Although we often complain about the number of delistings, there are still plenty of interesting companies on the local market. In a busy earnings week, we saw everything from builders to bankers, with some tasty burgers along the way. Buckle up!

The builders: disappointing


Cashbuild’s share price is now down more than 23% year-to-date. Although that sounds shocking, it must be read in the context of the broader retail pressures on the JSE. Practically everything is in the red – even Shoprite is down 7%. Still, this is cold comfort for those who have lost nearly a quarter of the value in the stock over just a couple of months.

The bull case for Cashbuild is that South Africans ended 2024 on a high, feeling better about their country and the economy; and with more money in their pockets thanks to reduced pressure on interest rates. Load shedding had been banished to the past. Homeowners were making space in their budgets to invest in their homes. That was the theory, anyway.

In practice, 2025 has seen a significant deterioration in consumer sentiment. When there is political upheaval, people get worried and tend to sit on their hands rather than splashing out on major projects. Plus, load shedding is back. None of this is encouraging, with the market therefore feeling concerned about what sales might look like in 2025.

To add to these worries, the release of interim results for the six months to December 2024 showed us that although there was some revenue momentum in the business (and we knew this already from quarterly updates), margins were headed in the wrong direction. With gross profit margin dropping 40 basis points from 24.7% to 24.3%, the benefit of revenue growth was eaten up by lower margins. Thankfully, HEPS increased by 4% due to a drop in expenses. The market is well aware that a company cannot reduce expenses into perpetuity, so the bull case around the quality of top-line growth (ie at attractive margins) has been called into question.

The burgers: juicy (but read carefully)


Spur’s share price is only slightly in the red this year, which makes it one of the better-performing consumer stocks on the local market. The company is following a fairly simple strategy based on gaining market share in its home market. Investors like it when things are kept simple, particularly when the alternative is the confusing web of regional and brand exposure that is Famous Brands.

For the six months to December, Spur grew revenue by 13.8%. That may sound too good to be true, as even families and their love of Spur’s play areas surely couldn’t spend that much more at the restaurants. You would be on the money with that scepticism, as a 6% uplift was thanks to the timing of the Doppio Zero acquisition (it wasn’t fully included in the base period). Excluding Doppio, Spur’s group revenue grew by 7.6%. That sounds more reasonable.

Still, with the interim dividend per share up 11.6% and the share price up 11% over 12 months, Spur is continuing to deliver. The choppiness in the share price is something to behold though, stuck between R32 and R36 since July 2024 and creating plenty of fun for range traders.

The bankers: double-digit earnings growth


We had two major banking groups releasing results in the past week. First was Nedbank, with results for the year ended December 2024. With HEPS up 11% and the dividend per share up 10%, on paper it looks like a solid year in which the bank took advantage of growth in South Africa. The realities on the ground are quite different, though.

This isn’t a growth story; it’s a credit quality story. Revenue was up just 4% at Nedbank and expenses grew 8%, so the numbers would’ve been in trouble if not for an improvement in the credit loss ratio. It was thanks to reduced credit losses (both actual and expected) that earnings went in the right direction. We are unlikely to see a year-on-year move in credit like that again, so 2025 is going to need a much better performance in revenue and more focus on costs.

Over at FirstRand, the other banking group that released earnings in the week, we saw a pretty similar story. Admittedly for the six months to December 2024 and thus not perfectly comparable to Nedbank’s full-year numbers, FirstRand grew its normalised earnings and its dividend by 10%. Again, it was a strong credit performance that drove a meaningful uplift in the numbers. The underlying exposure is also far more complicated than what you’ll find at Nedbank, as FirstRand has significant exposure to the UK market. The credit performance in the UK was even better than in South Africa, so that was a boost to earnings.

FNB, the core banking business that we are all familiar with, only grew earnings by 6%. RMB was up 7% and Wesbank jumped by 12%. Aside from vehicle finance, there wasn’t much growth to get excited about last year.

So much for GNU-phoria, then. DM

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