These companies are most at risk of financial distress, including PPC and Woolworths


Solar Metropolis’s proprietor, Solar Worldwide, is likely one of the firms most liable to monetary misery, based on a brand new report by Intellidex.

  • A brand new report by the analysis group Intellidex has assessed the monetary threat South African firms are going through, because the Covid-19 disaster heaps extra stress on companies.
  • Unsurprisingly, lodge teams and development firms are amongst these deemed most in danger.
  • However the record of the “most secure” firms consists of surprises, together with two main miners and a packaging firm. 
  • For extra articles, go to

The Covid-19 pandemic has cranked up the stress on many South African firms, significantly these already scuffling with debt and a harsh financial panorama earlier than the disaster.

For some, it has pushed them over the sting – with Edcon, Comair and others already submitting for chapter safety throughout lockdown.

READ | These SA companies might not have survived lockdown

A brand new report, compiled by the capital markets analysis group Intellidex, has analysed the monetary threat that South African listed small- and mid-cap firms are at present going through.

Every firm was analysed when it comes to an inventory of threat components, together with:

Enterprise threat, together with how a lot threat its trade is going through, in addition to how delicate the corporate’s working revenue is to falling income (firms with excessive fastened prices and decrease margins will endure extra, in addition to their debt burdens.

  • Liquidity threat: An organization’s particular person working capital.
  • Brief-term debt threat: An organization’s skill to repay its short-term interest-bearing debt.
  • Lengthy-term debt threat: The power to fulfill all of its money owed.
  • Administration threat: A subjective evaluation of administration’s pedigree within the view of Intellidex analysts, “thus its skill to navigate enterprise stress induced by Covid-19”.

Corporations had been scored from Zero to five – with a decrease rating indicating greater threat.

The evaluation yielded some stunning outcomes, with firms in a single trade displaying vastly completely different levels of monetary pressure.

For instance, amongst retailers, the report discovered that Woolworths (with a ranking of 1.79) was at higher threat of monetary misery than Massmart (1.96) – the embattled proprietor of Makro and Recreation, which was pressured to shut Dion Wired.

Woolworths misplaced billions on its Australian enterprise David Jones – and needed to tackle a serious debt burden in an effort to save lots of that enterprise.

Woolworths, which may a minimum of commerce throughout the lockdown, can be at a a lot greater threat of monetary misery than a few of its friends like Mr Value (3.57) and Truworths (3.07), which needed to shut their doorways for weeks. 

(Decrease scores point out a better threat). Supply: Intellidex

Shoprite (3.39) has a better rating than Choose n Pay (2.68), the report exhibits.

At excessive threat of monetary misery:

The report discovered that construction-related firms had been amongst these companies at highest threat of monetary misery, with Aveng scoring 0.89 (decrease numbers reveal higher threat),  Calgro M3 (0.54) and PPC (0.71).

Solar Worldwide (0.54) obtained one of many poorest threat scores – even worse than the horse racing firm Phumelela (1.61), which has filed for chapter safety.

The tech firms Adapt IT (0.98) and EOH (0.63) additionally obtained very unhealthy scores, and are deemed at excessive threat of misery.

Different firms which can be deemed excessive threat included Metropolis Lodge (1.88), Tongaat Hulett (1.43), AdvTech (1.52) and Life Healthcare (1.61).

The most secure companies

On the opposite facet of the spectrum, Intellidex deemed a few firms very low threat – thanks primarily to robust steadiness sheets.

Amongst them are the packaging group Bowler Metcalf (4.20) and Italtile (4.20), in addition to the mining firms Kumba (4.64) and African Rainbow Minerals (4.46) – which have greater scores than Vodacom (3.39) and MTN (2.32).

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Additionally from Enterprise Insider South Africa:

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