Our opinion on the current state of OMN

Omnia (OMN) is a diversified chemicals company supplying products to the agricultural, chemicals and mining industries in South Africa and 48 other countries. The Agricultural division is the leader in fertilizers in Southern Africa. It supplies granular, liquid and speciality fertilizers in Southern Africa, Eastern Africa, Australia, New Zealand, and Brazil. The mining division is the leading supplier of explosives in South Africa, Mali, Swaziland, Sierra Leone, Malawi, Senegal, Zambia, Zimbabwe, Botswana, Mozambique, and the DRC. The chemicals division is a manufacturer and distributor of speciality, functional and effect chemicals and polymers operating throughout the African continent. The company gets most of its sales from agriculture for fertilizers and the mining industry for explosives. In its efforts to diversify away from the South African economy, OMN acquired Oro Agri in America for $100m and Umongo Petroleum for R780m. They also commenced the construction of a R630m nitro phosphate plant at Sasolburg. This company's performance reflects the general performance of the South African economy. It has been very well managed and grows consistently by acquisition and organically, but it is in very tough markets where it has become difficult to make good profits. It is a relatively risky investment and dependent on commodity prices and agriculture - but both of which have done well. In its results for the year to 31st March 2023 the company reported revenue up 24% and headline earnings per share (HEPS) up 10%. The company said, "Agriculture Revenue increased 31% to R14 694 million - Operating profit increased 2% to R1 248 million. Mining Revenue increased 28% to R8 533 million - Operating profit increased 54% to R790 million". In a voluntary trading statement for the six months to 30th September 2023 the company estimated that HEPS for continuing operations would fall by between 2% and 12%. Technically, we suggested waiting until the share broke up through its 200-day moving average which happened on 11th September 2020 at 2775c. It has since moved up to 5700c.