Southern Sun Ltd

Southern Sun Ltd maintains a conservative capital structure with a debt-to-equity ratio of 0.22, indicating limited leverage relative to shareholder equity. The balance sheet shows total assets of 14.34 billion ZAR against total liabilities of 4.62 billion ZAR, resulting in total equity of 9.72 billion ZAR. Long-term debt stands at 2.18 billion ZAR, while cash and equivalents are 635 million ZAR, leading to a net cash position that is negative after subtracting total debt. Liquidity is assessed as medium risk, supported by a current ratio of 0.69, which suggests short-term liabilities exceed current assets. Operating cash flow is 1.34 billion ZAR, and free cash flow is 1.10 billion ZAR, demonstrating strong cash generation capabilities despite the tight current ratio.

Profitability metrics indicate efficient capital utilization, with a return on equity (ROE) of 12.73% and a return on assets (ROA) of 8.63%. The company generated 7.19 billion ZAR in revenue, with an operating income of 1.82 billion ZAR and net income of 1.24 billion ZAR. These figures reflect a healthy operating margin and net margin, although specific cohort median comparisons are not available in the provided data to benchmark these returns against industry peers. The consistency between basic and diluted shares outstanding (1.315 billion) suggests minimal dilution impact on earnings per share calculations.

Segment and geographic revenue breakdowns are not provided in the available data, preventing a detailed analysis of revenue concentration or regional exposure. Without specific segment data, the analysis relies on aggregate financial performance, which shows robust top-line growth and bottom-line retention. The absence of segment details limits the ability to assess diversification risks or identify high-growth business units within the hospitality portfolio.

Historical revenue and net income trends are not included in the input data, so a multi-year growth trajectory cannot be constructed. The current financial snapshot provides a single-period view, highlighting strong absolute performance but lacking the temporal context to evaluate momentum or cyclicality. Future analysis would benefit from historical period data to contextualize the current 7.19 billion ZAR revenue figure against prior years.

Risk assessment identifies medium liquidity risk and low dilution risk. The key flag notes that net cash is negative after subtracting total debt, which aligns with the balance sheet figures showing 2.18 billion ZAR in long-term debt versus 635 million ZAR in cash. The low dilution risk is consistent with the equal basic and diluted share counts, indicating no significant outstanding options or convertible securities that would increase the share count. The medium liquidity risk is primarily driven by the current ratio of 0.69, which requires monitoring to ensure short-term obligations are met.

Recent observations include analyst estimates with a mean price target of 13.50 ZAR and a mean recommendation of 2.00, indicating a buy rating. The analyst consensus is narrow, with the high, low, and median price targets all at 13.50 ZAR, and only one buy rating recorded. No specific filing, news, or transcript observations are provided in the input data to detail recent corporate events or management commentary.

Revenue ZAR 7.19B, +8,8% YoY; Operating income +16,7% YoY.

• ▍Revenue ZAR 7.19B, +8,8% YoY
• ▍Operating income +16,7% YoY
• ▍Net income +20,8% YoY
• ▍Free cash flow +18,8% YoY
• ▍Net margin 17.2%