Today's edition
Off The Hook
Good morning. Today is really about bets, and who ends up covering them. Telkom's three-year gamble on turning itself into a data business just paid out a dividend two-thirds bigger; South Africans are now wagering a fifth of the economy and counting the cost in helpline calls; and the Reserve Bank held rates steady while almost everyone bet the other way. Three very different rolls of the dice, one question: who read the odds right? Let's get into it.
MARKETS
RINGING IT UP
The old phone company is now a data business, and it's paying shareholders more
Telkom isn't really a phone company anymore. In its results for the year to March, group revenue barely moved, up just 1.4% to R44.5 billion, but underneath that flat line the business has quietly reinvented itself: data now brings in almost 60% of the money, up from 56% a year ago. The clearest sign of confidence is the payout. Telkom lifted its dividend by two-thirds, to 270 cents a share, only the second year since it brought dividends back after a four-year gap. It could afford to, with free cash flow up 10.4% to R3.1 billion and net debt down to just half a year's earnings.
By the numbers:
- Group revenue: up 1.4% to R44.5 billion, with data now nearly 60% of it.
- Dividend: up 65.7% to 270 cents a share, only its second since a four-year gap.
- Mobile: past 25 million subscribers; Openserve's first revenue growth in nine years.
The real test now is whether a leaner, data-led Telkom, still the country's third-biggest mobile network behind Vodacom and MTN, can keep growing once the easy turnaround wins are banked.
THE HOUSE ALWAYS WINS
South Africans now gamble a fifth of the economy, and the damage is mounting
South Africans are betting on a staggering scale. Reporting by GroundUp, with data by The Outlier, shows the country wagered roughly R1.5 trillion on gambling last year, about a fifth of the whole economy. Online betting alone made up R1.1 trillion of that, up from just R30 billion a decade ago, while casino spending has flatlined. The money is only half the story: calls to the national gambling helpline jumped from 65,000 to over a million in two years, and the share of problem gamblers has climbed from about 6% to over 31%. With regulation still thin, the harm looks set to keep climbing.
BAGEL BITE
Which brain structure fine tunes movement, balance and posture?
A. Cerebellum
B. Motor cortex
C. Basal ganglia
DOING THE ROUNDS
The Reserve Bank did the one thing almost nobody expected this week, and left interest rates exactly where they were. In a split four-to-two vote it held the repo rate at 7%, keeping the prime lending rate at 10.50%, even with inflation at 5% in June. Sixteen of 25 economists had bet on a hike. The rand fell more than 2% against the dollar, and Governor Lesetja Kganyago admitted the bank might yet be proven wrong. Full story →
The state fund that guards civil servants' pensions just lost most of its board in a single week. Six non-executive directors resigned from the Public Investment Corporation, which manages more than R3.6 trillion, leaving just five of the eleven. The trigger was a fight over top investment jobs and the fallout from a R411 million payment to a company called Acapulco. Then the chair, deputy finance minister David Masondo, stepped down too. Full story →
Mr Price's German bet is paying off, just as its shoppers at home run out of room. Group sales jumped 45.3% to R13.1 billion, powered largely by NKD, the discount chain it bought in Germany this year. Strip NKD out and African sales grew a steadier 3.2%, still ahead of the wider market. The catch is local: consumer confidence has slid to -19 as higher prices and living costs bite. Full story →
Pork just got a lot cheaper at the till, after a feared shortage flipped into a glut. Wholesale prices have dropped from about R40 a kilo to R30, Eskort says, as imports landed just when local farms came back online. It follows swine fever outbreaks that began in Tshwane late last year and cost the industry more than R10 million. Prices should settle near their usual R32. Full story →
WEATHER
BAGEL GAMES
Have you got what it takes to win today’s Wordle? Play here →
THE ANSWER
As for the Bagel Bite, the answer is: A. Cerebellum
The cerebellum is the part of the brain that fine tunes movement, balance and posture. It combines information from the eyes, inner ears, muscles and joints to help the body stay stable and coordinate movements accurately. It does not usually start movement itself, but it adjusts timing, strength and precision so actions such as walking, standing and reaching feel smooth and controlled.
That's your Monday sorted. Enjoyed it? Forward it on — a friend can subscribe in a click. Written by the Business Bagel crew.
