Super Group isn’t super keen on an acquisition spree despite hefty net cash: analysts

It’s open to M&As or special dividends, however.

The retail firm seems primed on an acquisition spree with its net cash standing on $115m, about 13% of its market cap.

However, according to a report by CIMB, Super is choosing to hold its horses from acquisitions right now, as it has invested in new plants in recent years and capex needs are now minimal.

“When quizzed on intentions, management hinted that it is open to both M&A and the possibility of a special dividend. We think either scenario will be positive for the stock,” CIMB noted.

Meanwhile, Super remains focused on its three-pronged strategy of branding, innovation, and diversification, which have since been bearing fruit.

“Sales of new higher-margin products are picking up, gross margins are improving and new markets (Russia and Eastern Europe) are growing. Branded consumer already up on constant currency basis Super’s mainstay branded consumer (BC) segment (c.2/3 of group revenue) endured a challenging 2014-15 as it was caught in the middle of slowing ASEAN consumer spending and weak currencies,” the report added.

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