Our opinion on the current state of SFN

Sasfin (SFN) is a banking group that specialises in various types of finance for small businesses and high net-worth individuals. It was listed on the JSE in 1987. The company has been investing heavily into its digital platforms and into acquisitions. The share was in a strong downward trend and we advised investors to wait until there was a measurable turn in the price such as an upside break through its long-term trendline before investigating further. That upside break has not yet occurred mainly because of the impact of COVID-19 but there are signs that the share is beginning to recover. In its results for the six months to 31st December 2022 the company reported total income up 12,62% and group headline earnings per share (HEPS) down 20,74%. The company said, "The reduction in earnings in the current period is largely due to higher impairment charges. In the first half of the prior year the Group saw a low impairment charge following strong recoveries as the Covid-19 pandemic abated". On 16th October 2023 the company announced, "Sasfin has entered into binding heads of agreement to dispose of its capital equipment finance and commercial property finance businesses to African Bank Limited". This caused the share price to rise sharply. In a trading statement for the year to 30th June 2023 the company estimated that HEPS would decline by between 15,72% and 31,12%. This is definitely a share to watch now. Also on 16th October 2023 the company was given notice by the JSE that it had to produce its financial statements for the year to 30th June 2023 before the end of the month or face suspension. We suggested that you should wait until it broke above its long-term downward trendline before buying. That happened on 7th June 2021 at 2200c. The share is now trading for 2950c.