Goodwill Savannah GA Fri, 26 Nov 2021 14:33:52 +0000 en-US hourly 1 Goodwill Savannah GA 32 32 Not that inflation of the 70s by Jeffrey Frankel Fri, 26 Nov 2021 13:35:00 +0000

Unlike the stagflation of the 1970s, the US recovery from the pandemic-induced recession has been strong, whether judging by GDP or labor market indicators. Today’s economic conditions are therefore reminiscent of the late 1960s, another period of rapid growth and moderately rising inflation.

CAMBRIDGE – Are the United States and other advanced economies experiencing stagflation, the unfortunate combination of high inflation and low output and employment growth that characterized the mid-1970s? At least in the case of America, the answer is no. What the United States is currently facing is moderate inflation, without the stagnant part. It’s reminiscent of the 1960s, not the decade that followed.

To be sure, headline consumer price inflation in the United States hit an unexpected level of 6.2% in October, the highest rate since 1991. Few people still predict a rapid return to 2% inflation , the long-term goal of the US Federal Reserve. Inflation has also reached ten-year highs in the United Kingdom (4.2%) and the European Union (4.4%), although it remains low in Japan.

Unlike the stagflation of the 1970s, however, the U.S. recovery from the pandemic-induced recession of 2020 has been strong, judging by GDP and labor market indicators. Growing demand for goods is facing supply constraints, including bottlenecks in ports and shortages of chips, leading to price inflation. Meanwhile, growing demand for labor is meeting a labor supply constrained by the lingering effects of the pandemic. This has resulted in wage inflation.

The U.S. unemployment rate fell from 14.8% in April 2020 to 4.6% in October 2021, which would have been considered close to full employment for most of the past half century. In contrast, unemployment reached 9% in May 1975, during a period of stagflation. Other current indicators point to an even tighter labor market today: the ratio of job vacancies to the unemployed is the highest on record, as is the quit rate. Wage growth is also on the rise, particularly at the lower end of the wage distribution.

Only participation in the labor market remains significantly depressed. Part of the decline reflects retirements, but much of it is attributable to COVID-19.

Evidence suggests that the problem with the US economy is not insufficient demand, which monetary and fiscal expansion could remedy, but rather inadequate supply, which they cannot. In particular, nominal GDP and direct measures of domestic demand, such as real personal spending or retail sales, have resumed their pre-pandemic long-term trends. When demand exceeds supply, the result is a trade deficit and inflation. We are currently seeing both.

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These are, in a sense, good problems to have. It is clearly better for demand and supply to recover, even if demand rebounds faster, than neither does. The US economy is way ahead of what most thought it would be a year ago. It is also ahead of other countries, such as the UK affected by Brexit, as GDP is now above its pre-pandemic level.

Monetary policy can do nothing to ease capacity constraints. But those constraints could go away on their own over the next year or so, as ports unclog, supply chains reform, the most demanding workers successfully match the jobs they want and the jobs they want. that supply responds to the high prices of those particular sectors facing acute excess demand.

Rather than looking like the 1970s, therefore, the current period is perhaps more like the late 1960s, another period of rapid growth and tight labor markets. Consumer inflation reached 5.5% in 1969.

Some fear that today’s moderate inflation will eventually be built into expectations, trigger a wage-price spiral, and resemble the high and persistent inflation of the 1970s. It is not impossible, and we do not. should not be complacent about inflation. But policymakers are unlikely to repeat the mistakes made at the time.

These mistakes started with increasing government spending to finance the Vietnam War without the tax revenue to pay for it. They continued in 1971, when Fed Chairman Arthur Burns and President Richard Nixon responded to rising inflation with a combination of quick monetary stimulus and doomed wage and price controls. failure. An overheating economy blew the lid off the boiling pot a few years later and inflation topped 12%.

Admittedly, the Fed has been overly optimistic in its inflation forecast this year, expecting price increases to be weaker and more transient. Larry Summers and Olivier Blanchard got it right in February, when they correctly predicted that rapid growth would lead to inflation.

But even though the Fed’s inflation forecast was far from target, its stocks arguably fell short of target. Granted, the Fed didn’t expect to start cutting back on its monthly asset purchases – known as quantitative easing – as early as November 2021. But it has responded appropriately to incoming inflation data, as well. than on the strength of the economy, adjusting the timing of its plans.

Additionally, markets barely reacted to the taper’s announcement of November 3, indicating that (now re-appointed) Fed Chairman Jerome Powell had successfully communicated the central bank rethink – unlike in 1994 and 2013, when the investors had not anticipated the onset of tightening cycles. If the Fed starts raising short-term interest rates in mid-2022, that won’t surprise the markets either.

President Joe Biden can do relatively little to stem the highly unpopular rise in inflation. It has already stepped in to help unblock ports and other logistics in the supply chain. Increased vaccination against COVID-19 would increase labor supply, for example by keeping children in school, although it is difficult to see what more Biden could do here.

A good way to moderate inflation would be to allow more imports. Former President Donald Trump’s tariffs on many products – including aluminum and steel, and nearly all U.S. imports from China – have pushed up prices for consumers. Biden should be able to persuade China and other countries to lower some trade barriers against the United States in exchange for the removal of American tariffs. In any case, trade liberalization could bring some prices down quickly.

Some argue that the new government spending envisioned in Biden’s social spending bill would help increase inflation, either because they disapprove of big government or because a dollar of spending increases demand more than it does. a dollar of tax revenue reduces it. Others believe that the net effect on inflation will be beneficial (especially in the longer term), as many of the planned programs, such as quality universal preschool education, will increase the labor supply. artwork.

Regardless of these arguments, the effect of the new legislation on inflation is expected to be minor. Biden’s infrastructure package and proposed social spending should be judged on their own merits. Rising inflation in the United States reflects the economy’s rapid recovery from the COVID-19 recession, which means we should stick our heads out from the 1970s.



(formerly Domanolor Proprietary Limited)
(Incorporated in the Republic of South Africa)
Registration number 2020/852422/06
JSE share code: ANI ISIN: ZAE000303947
(“Afine” or “the Company” or “the Group”)


This abridged pre-listing statement is not an invitation to the public to subscribe for shares in the
Company, but is issued in compliance with the JSE Listings Requirements for the purpose of
providing information to investors regarding the business and affairs of Afine and is issued in
respect of a listing as a REIT by way of introduction, of all the issued shares of the Company on
AltX with effect from commencement of trade on Thursday, 9 December 2021. The shares are
being listed at a listing price of R3.67 per share, with the initial market capitalisation of the
Company being approximately R235 million and property assets valued by the Independent
Property Valuer at R307 million, exceeding R300 million in accordance with the JSE Listings
Requirements for a REIT.

This announcement contains the salient information in respect of Afine, which is more fully
described in the full pre-listing statement dated Thursday, 25 November 2021 (“Pre-listing
Statement”), which can be found on the website of the Company at For a full appreciation and understanding of Afine
and the Listing, the Pre-listing Statement should be read in its entirety.

Terms defined in the Pre-listing Statement bear the same meaning in this abridged pre-listing

1. Introduction

The JSE has granted Afine approval for a primary listing of all of the Company’s shares,
being, 64 000 000 ordinary shares of no par value in the “Other Speciality REITs” sector on
AltX, in terms of the FTSE classification, under the abbreviated name: “Afine”, JSE share
code: “ANI” and ISIN: ZAE000303947, with effect from the commencement of trade on
Thursday, 9 December 2021. Afine has 10% of the issued Shares held by public shareholders
at the point of listing on the JSE and an additional 5% of existing shares will be made
available by the controlling shareholder, KSP Offshore Limited, to facilitate tradability in the
shares of Afine. Confirmation of achievement of spread of public shareholders has been
submitted to the JSE.

Immediately prior to the Listing, the authorised shares of the Company comprised
1 000 000 000 shares of no par value and the issued shares of the Company comprised
64 000 000 shares of no par value. The Company has no treasury shares.
2. History and nature of business

2.1 Afine was incorporated as a private shelf company on 12 November 2020 under the name
“Domanolor Proprietary Limited”, which was acquired by the Founder and which name
was changed to “Afine Investments Proprietary Limited” on 10 March 2021. The Company
was converted to a public company on 11 May 2021.

2.2 The Company’s financial year-end is the end of February, with its second reporting period
being at 28 February 2022. The Company was incorporated as the holding company for
the purpose of listing on AltX. As at the Last Practicable Date, the Group’s property
portfolio had a gross asset value of approximately R307 300 000.

2.3 The Company is listing as a REIT on AltX, and holds a portfolio of income generating
immovable properties focused primarily in the petroleum sector, strategically located in
four of South Africa’s nine provinces.

2.4 The nature of the revenue of the Company is as follows:

Contracted with oil majors:
– Land rental – received from an oil major for the site;
– Development rental – received from an oil major for the developed property;
– Volumetric rental also referred to as rebates – calculated on fuel sales, being
additional income received above a base fixed rental streams (note that the petrol
pump price is based on the RAS, which price includes the profit on fuel sales,
Volumetric rental can be a fixed portion or a percentage of RAS; and
– Refurbishment Rental – being applied when the project needs to be upgraded, and

Contracted with other parties:
– Other rental – comprising income from alternative profit opportunities, which is
immaterial, such as ATM rentals, food offerings, E-Toll Offices and car washes.

All of the above rental is fully contracted, with approximately 99% being contracted with
Engen and Sasol. The Company does not have any vacancies at the Last Practicable

2.5 Afine was founded by Peter Todd, with strategic input from Mike Watters, both of whom
are notable investors and operators in the REIT space, with the purpose of creating a
holding company for a REIT focussing on the acquisition of properties that operate in the
petroleum sector in South Africa.

After a property acquisition, Afine will conclude a lease agreement with an oil major, such
as Sasol and Engen. Afine is not involved in the operations of the underlying petrol filling
station thus making the administration of Afine very simple.

The Company’s first investments involved the acquisition of an interest in five PFS properties
from the PFS Vendors in February 2021, namely Sasol Piet Retief, Sasol Somerset West, Sasol
Grassnyers, Sasol Protea Park and Sasol Parkdene. A further PFS property was acquired in
two phases with 50% of Lizalor Investments being acquired in February 2021 and the
remaining 50% of that company (which holds the leasehold rights in Engen Platinum One
Stop), and 100% of Coral Lagoon Investments, in May 2021, which holds Engen Riverside
The four PFS vendors are Investment Facility Company Three Three Six, Katherine Street
Properties, Lyndham Trust and Petroland and further details are set out in Annexure 15 of
the Pre-listing Statement. Petroland will continue to assist Afine with the administration of
the various properties, whilst the other PFS Vendors will not have any further operational

On 4 November 2021, Afine entered into the Petroland Administration Agreement in terms
of which Petroland will provide administration services to the Company, also providing the
Company with the CEO and CFO, who will manage Afine on a part-time basis. The part
time role was preapproved by the JSE ahead of the listing of Afine due to the limited time
required to manage the business.

Afine also has a right of first refusal on all new petrol filling station development projects
identified by Petroland, thereby ensuring that Afine will have priority. Currently no new
acquisitions have been identified but the experience, expertise, industry knowledge and
network of Petroland is expected to bring pipeline opportunities to Afine.

To the extent there are any conflicts of interest, the Directors who may have an interest in
the transaction will be recused from the decision-making process in accordance with the

All the properties acquired by Afine are established petrol filling stations with various
licences and rights in place. The responsibility for licencing rests with both the operator of
the filling station as well as the property owner.

Set out in Annexure 17 of the Pre-listing Statement is the specific information on each of
the properties included in the Group’s property portfolio.

There have been no disposals by the Company since its incorporation until the Last
Practicable Date.

3. Prospects

The recent trend in REIT investment demand from investors has been for specialised REITs
over generalised portfolios. This has gathered momentum with specialisations in logistics
(Equities Property Fund Limited), self-storage (Stor-Age Property REIT Limited), and multi-let
industrials (Stenprop Limited, Sirius Real Estate Limited). Until recently, ownership of petrol
service stations in South Africa was not concentrated in a REIT structure.

Afine’s objective is to consolidate ownership through a REIT structure, with an acquisition
strategy to grow the business substantially over the next five to 10 years from a solid base
and with deep industry knowledge, experience and networks.

According to the South African Petroleum Industry Association (SAPIA) there are
approximately 4 600 service stations in South Africa of which 75% are under the effective
control of Oil Companies. Therefore, Afine is well positioned to target more than a
thousand service stations to add to its current network. The principle that Afine will apply
is to identify service stations with similar locations and turnover figures as its existing network.
The Afine Chairman, CEO and CFO have built extensive contacts in and knowledge of the
South African service station over the past 30 years that will be utilised in growing Afine’s
In relation to the future trend of electric vehicles, it is anticipated that PFS will continue to
provide a vital service to motorists via the convenience store, electrical recharging and
car maintenance facilities, etc. According to a global ranking by the Munich Mobility
Show, globally there are approximately 10 million Electric Vehicles (“EV’s”) on the roads,
of which only 1509 EV’s are on South African roads. The EV future creates a massive
opportunity for recharge stations at all strategically positioned service station facilities.
According to a PwC Report (Unlocking South Africa’s Hydrogen Potential dated October
2020) South Africa also has an unprecedented opportunity to capitalise on the rapidly
developing global hydrogen economy. Therefore, additional to EV’s, South Africa has
world-class renewable potential that can be leveraged to supply clean energy to the
world and transform the domestic economy, creating additional opportunities to supply
energy to motorists. This is a future potential opportunity that the Directors will monitor
closely. The Directors are confident that the future will be largely unaffected by the
electrical car and/or any other clean energy trend, as the Directors firmly believe that the
Board, together with all the role-players in the industry (namely the Oil Companies), will
constantly ensure that the Company positions itself to reap maximum benefit from any
future trends in the supply of energy to motorist.

The potential impact of Covid-19 on property values will only become more measurable
and quantifiable with certain accuracy in forthcoming years as the world progresses
through the recovery of this pandemic. However, as at the Last Practicable Date, the
impact of Covid-19 has been immaterial in relation to the rental on the properties owned
by Afine due to the long-term nature of the leases and the tenants being two large oil
majors, namely Sasol and Engen. The rental income is not impacted by lockdown or
service delivery issues.

With a solid and reliable income stream diversified across various provinces in South Africa
and Afine listing as a specialised REIT, the prospects for Afine are considered to be strong
and the Board believes that its strategy to acquire additional petrol filling stations will
present an attractive investment opportunity for both investors and property owners
looking to diversify their returns.

4. Directors

The Board currently comprises five Directors, three of which are non-executives (of whom
two are independent). There are no other office holders. The full names, ages, business
addresses, qualifications, positions and experience of the Directors, all of whom are South
African nationals, save for MJ Watters (who holds both South African and British citizenship)
and PA Todd (who holds British citizenship) are outlined below:

Full name and age Michael John (Mike) Watters (62)
Business address 3 Regents Walk, Ascot, Berkshire, United Kingdom
Qualifications BSc Eng (Civil), GDE, MBA
Position Independent non-executive Director (Chairman)
Full name and age Darryl Kohler (64)
Business address Wellington House, Rise Road, Ascot, Berkshire, United Kingdom
Qualifications BSc Eng (Civil), GDE
Position Lead independent non-executive Director
Full name and age Johannes Theodorus (Anton) Loubser (60)
Business address Unit 4602, Greenways, Strand
Qualifications B.Comm (Financial Management)
Position Chief Executive Officer
Full name and age Johan Theo (JT) Loubser (32)
Business address Unit 4602, Greenways, Strand
Qualifications B.Comm (Financial Management and Financial Accounting)
Position Chief Financial Officer
Full name and age Peter McAllister Todd (62)
Business address S1 AO Residences, Royal Road, Grand Baie, Mauritius
Qualifications BCom LLB, HDip Tax
Position Non-executive Director

The JSE has agreed to the part-time appointment of Anton Loubser and JT Loubser as the
CEO and CFO, respectively, of Afine due to the current limited operational requirements
of the Company, i.e. the Company’s current portfolio of seven properties does not warrant
the cost associated with the appointment of two full-time executives at present. However,
the Board and the Audit and Risk Committee will assess the appointment of a full-time CEO
and CFO, respectively, on an annual basis, and report on such assessment in the
Company’s annual report.

As at the Last Practicable Date, the Board and the Audit and Risk Committee have
assessed and have satisfied themselves as to the appointment of Anton Loubser and JT
Loubser as CEO and CFO, respectively, on a part-time basis until such time as the
operational capacity of the Company increases to such extent that would require these
positions to be filled on a full-time basis.

5. Property and asset management and administration of properties

The asset management and property management functions of the Company have been
internalised. The Board, which comprises a team of well-qualified and highly experienced
individuals, manage the properties as well as acquisitions and disposals and such services
are not outsourced, therefore no additional fees will be levied against Afine other than for
administration services.

6. Property forecast information

Set out below are the forecast statement of profit or loss and other comprehensive income
(“Property Forecast Information”) for the years ending 28 February 2022 and 28 February

The Property Forecast Information, including the assumptions on which they are based and
the financial information from which they are prepared, are the responsibility of the
directors of Afine.

The Property Forecast Information has been prepared in compliance with IFRS and in
accordance with Afine’s accounting policies.

28 February 28 February
Figures in Rand 2022 2023
Rental Income 37 609 010 34 556 440
Revenue straight-line adjustment 3 859 272 1 159 344
41 468 282 35 715 784
Other operating expenses 4 711 281 2 444 481
Other operating gains (bargain purchase) 55 559 228 –
Operating profit 92 316 229 33 271 303
Finance costs (4 879 500) (6 252 098)
Finance income 209 250 –
Fair value adjustments 129 466 954 –
Profit for the year 217 112 933 26 918 772
Dividend distribution (26 000 000) (25 000 000)
Transfer to retained income for the year 191 112 933 1 918 772

A reconciliation of the profit for the year to expected attributable earnings is set out below:

28 February 28 February
Figures in Rand 2022 2023
Profit for the year 217 112 933 26 918 772
Revenue straight-line adjustment 3 859 272 1 159 344
Bargain purchase 55 559 228 –
Fair value adjustments 129 466 954 –
Attributable income 28 227 479 25 759 428
Percentage distribution 92.11% 97.05%
Expected dividend distribution 26 000 000 25 000 000


Number of shares outstanding 64,000,000 64,000,000
Basic earnings per share (cents per share) 339.24 42.06
Less fair value adjustments (cents per share) 202.29 –
Less Bargain purchase (cents per share) 86.81 –
Headline earnings per share (cents per share) 50.14 42.06
Diluted earnings per share (cents per share) 339.24 42.06
Less fair value adjustments (cents per share) 202.29 –
Less Bargain purchase (cents per share) 86.81 –
Diluted headline earnings per share (cents 50.14 42.06
per share)

The figures set out above are extracted from detailed forecasts for the years ending 28
February 2022 and 28 February 2023 and have been reported on by the Independent
Reporting Accountant, PKF Octagon Incorporated. The Independent Reporting
Accountants’ report on the Property Forecast Information is included in the Pre-listing

An interim dividend distribution of R16 million has already been declared and was paid on
15 November 2021.
7. Interim financial information for the 6 month period ended 31 August 2021

An extract of the reviewed interim financial information of Afine for the 6 month period
ended 31 August 2021 is set out below.


Reviewed Audited

31 August 28 February
Figures in R Notes 2021 2021

Non-current assets
Investment property 3 307,300,000 10,946,000
Equity accounted investments – 13,237,836
Total non-current assets 307,300,000 24,183,836

Current assets
Trade and other receivables 158,185 6,065,436
Listed investments 5 11,234,025 –
Cash and cash equivalents 3,884,462 228,412
Total current assets 15,276,672 6,293,848
Total assets 322,576,672 30,477,684

Equity and liabilities
Issued capital 5,302,000 6,002,000
Retained income / (accumulated loss) 174,473,206 (1,195,848)
Total equity 179,775,206 4,806,152

Non-current liabilities
Deferred tax liabilities 59,336,282 2,358,101
Bank loans 31,472,729 –
Total non-current liabilities 90,809,011 2,358,101

Current liabilities
Trade and other payables 878,529 100,524
Current tax liabilities 268,547 14,736
Other financial liabilities – 382,616
Bank loans 9,373,394 –
Loans from related parties 41,471,985 22,815,555
Total current liabilities 51,992,455 23,313,431
Total liabilities 142,801,466 25,671,532
Total equity and liabilities 322,576,672 30,477,684

Reviewed Audited

6 months ended 1 month ended
31 August 28 February
Figures in R Notes 2021 2021

Revenue 6 21,834,984 –
Other expenses (2,014,625) –
Profit from operating activities 19,820,359 –
Gain on bargain purchase in a
business combination 55,627,004 2,756,004
Fair Value adjustment 131,854,000 –
Finance income 121,997 –
Finance costs (2,183,940) –
Share of loss from equity accounted
investments – (3,951,852)
Profit / (loss) before tax 205,239,420 (1,195,848)

Income tax expense (29,570,366) –
Profit / (loss) for the period 175,669,054 (1,195,848)

Earnings per share from continuing
and discontinuing operations
attributable to owners of the parent
during the period
Basic earnings per share
Basic earnings / (loss) per share 7 274.4829 (1,868.5100)

Diluted earnings per share
Diluted earnings / (loss) per share 7 274.4829 (1,868.5100)

Headline earnings per share
Headline earnings per share 7 27.7475 –

The figures set out above have been reported on by the Independent Auditor, PKF Pretoria
Incorporated. The Independent Auditors’ report on the interim financial information of
Afine for the 6 month period ended 31 August 2021 is included in the Pre-listing statement.
8. Salient dates and times

Abridged Pre-listing Statement published on SENS on Thursday, 25 November

Listing of Afine Shares under the abbreviated name
“Afine”, share code “ANI” and ISIN ZAE000303947, on AltX
at commencement of trade on Thursday, 9 December

1. The above dates are subject to change. Any such change will be announced on
2. All references to dates and times are to local dates and times in South Africa.

9. Availability of the Pre-listing Statement

Copies of the Pre-listing Statement may be obtained from the Company’s website at from Thursday, 25 November 2021 or on
request from the Designated Advisor or Company Secretary of Afine.

25 November 2021

Reporting Independent
Corporate Advisor Designated Advisor Accountant Property Valuer

Date: 25-11-2021 03:40:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (‘JSE’).
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.

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