Failure to move by enX Group is exasperating shareholders

Business

Failure to move by enX Group is exasperating shareholders

This is not an easy time to be selling ‘mobility’ assets, with the gears of the local economy grinding ominously

Marc Hasenfuss


Industrial services and supplies conglomerate enX Group has been under cautionary for almost six months, which perhaps is frustrating for shareholders who were hopeful that a value unlock was imminent.
The details of the cautionary – first issued in mid-October – were that a strategic review by enX prompted a proposal to divest of Eqstra Fleet Management and Logistics (EFML). Officially, enX believed that “EFML may be better suited under a different structure so as to optimise EFML’s value proposition”.
Clearly, this is not an easy time to be selling “mobility” assets, with the gears of the local economy grinding ominously.
But enX’s EFML assets have proved profitable and operationally robust over the years, and it’s difficult to imagine that there would not be some serious interest from other industrial entities or even private-equity players for either the whole or parts of this hub. Price, one presumes, would be the big sticking point.
Although enX’s share price perked up (shifting to about R13 a share) after the release of the first cautionary, the initial excitement around a potential value unlock has subsided. The share has ranged mostly between R11.70 and R12.10 lately.
Investors who pay attention to detail might, however, find it intriguing – perhaps even significant – that the wording in the latest further cautionary notice has changed to include a reference to the enX board reviewing “other strategic opportunities” to maximise stakeholder value.That is an amendment open to the widest possible interpretation – especially with the enX share trading not too far from the last stated tangible net asset value.

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