Labat (LAB) is a 57% black-owned investment holding company that listed on the JSE in 1999. The company buys and improves subsidiaries and then sells them for a profit. At the moment, Labat has two operations: South African Micro-Electronic Systems (SAMES) and Labat Logistics. On 14th April 2020, the company announced that it had acquired 70% of Biodata, an East London-based company focused on cannabis healing. The acquisition is to be paid for in shares. The market for cannabis in South Africa in 2020 was expected to be worth around R27 billion.
On 5th May 2020, the company issued a profit forecast for the years 2021 and 2022, in which it said it was raising R112 million by issuing shares and that it would generate a profit of R60 million in 2021 and R162.3 million in 2022, resulting in headline earnings per share (HEPS) of 10.9c and 29.9c, respectively. On 8th May 2020, the company announced that it had decided to put Force Fuel into business rescue due to a drop in volumes as a result of COVID-19.
In its results for the six months to 30th November 2022, the company reported revenue up 19.4% and a headline loss of 1c per share compared with 4.3c in the previous period. The company said, "During the period under review, Labat Africa has been concentrating on growing its Healthcare business by implementing its highly focused strategy and has successfully completed the seed-to-customer value chain with the acquisition of Sweetwaters Aquaponics."
The company's shares were suspended on the JSE in October 2023 and will remain suspended until the company appoints new auditors and produces audited financial statements for FY23 and interims for the six months to 30th November 2023. Even when trading, this is a volatile, loss-making penny stock, so investors should leave it alone.
Overall, while Labat has shown some growth in revenue and has made strategic acquisitions, its financial instability, loss-making status, and recent suspension make it a highly risky investment. Potential investors should approach with caution and consider more stable opportunities.
On 5th May 2020, the company issued a profit forecast for the years 2021 and 2022, in which it said it was raising R112 million by issuing shares and that it would generate a profit of R60 million in 2021 and R162.3 million in 2022, resulting in headline earnings per share (HEPS) of 10.9c and 29.9c, respectively. On 8th May 2020, the company announced that it had decided to put Force Fuel into business rescue due to a drop in volumes as a result of COVID-19.
In its results for the six months to 30th November 2022, the company reported revenue up 19.4% and a headline loss of 1c per share compared with 4.3c in the previous period. The company said, "During the period under review, Labat Africa has been concentrating on growing its Healthcare business by implementing its highly focused strategy and has successfully completed the seed-to-customer value chain with the acquisition of Sweetwaters Aquaponics."
The company's shares were suspended on the JSE in October 2023 and will remain suspended until the company appoints new auditors and produces audited financial statements for FY23 and interims for the six months to 30th November 2023. Even when trading, this is a volatile, loss-making penny stock, so investors should leave it alone.
Overall, while Labat has shown some growth in revenue and has made strategic acquisitions, its financial instability, loss-making status, and recent suspension make it a highly risky investment. Potential investors should approach with caution and consider more stable opportunities.
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