Analysis: a rising multiple on a repeated formula

The two announcements share a structure, which makes the difference between them the informative part. In both cases Argent bought owner managed British manufacturers outright for cash, took the freehold property at a separately stated value, and paid for the trading business as a multiple of after tax profit. The multiple moved from 4.9 in August 2024 to 5.5 in July 2026. On the earnings Argent discloses, the Ramsden Group is also the larger business of the two, with GBP 1 517 341.00 of attributable after tax profit against GBP 1 202 913.00 for Standmode. Those two multiples and the two after tax profit figures are the only comparative data points either announcement provides, because neither gives revenue, margin, order book or the basis on which the property values were struck.

The context is a group whose British revenue is now larger than its South African revenue. For the year ended 31 March 2026 Argent reported total revenue of R 2 839 163 thousand, of which South Africa contributed R 1 272 495 thousand and the United Kingdom R 1 050 467 thousand, against R 828 951 thousand from the United Kingdom in the prior year. Group revenue rose 7.7% and profit for the year rose 9.7% to R 303 573 thousand. In the same annual report Argent said it made no new acquisitions in 2026 while conducting due diligence on a potential acquisition in the United Kingdom and assessing a further opportunity. The Ramsden purchase was announced in the first quarter of the following financial year.

Two things the announcement does not establish are worth naming. It does not say how the purchase was funded, and it does not quantify the effect on group earnings. What can be checked is the capital allocation choice sitting alongside it. Argent repurchased and cancelled 1 278 013 shares during the year to 31 March 2026 at an average price of R30.52, a total of R39 million, and said its shares were trading on an ex-cash price to earnings multiple of 3.7 times at 31 March 2026. On the figures disclosed, the acquisition multiple of 5.5 times sits above the 3.7 times ex-cash multiple the company stated for its own shares at 31 March 2026, and both the purchase and the repurchase were carried out.

What a careful reader would look at next is the interim report for the six months to 30 September 2026, the first set of accounts that will consolidate the Ramsden Group, and the geographical revenue note in the FY2027 annual report, which will show whether British revenue growth reflects the acquisition, the existing fuel storage and materials handling businesses, or both. Companies House filings for the four acquired entities will also show accounts made up to the new owner’s year end.

What the documents say

Argent Industrial Limited (JSE: ART) told shareholders on 17 July 2026 that its British subsidiary had bought a family owned steel drum, pallet and container reconditioning business in England for an aggregate cash consideration of GBP 10 836 650, stated in the announcement as R 238 189 567. The agreements were signed on 16 July 2026 and the announcement gives the same day as the completion date, so completion preceded the announcement.

The buyer was Argent Industrial UK Limited, a wholly owned subsidiary. Argent classified the purchase as a category 2 transaction under the JSE Listings Requirements, on the stated basis that its value exceeds 5% but is less than 30% of the company’s market capitalisation at the date of signature. That classification sets the disclosure the rules require. A category 2 deal needs no shareholder vote and no circular, and the financial information in the announcement has not been reviewed or reported on by Argent’s auditors, a limitation the company states in the text.

Three agreements and four operating companies

The consideration bought four separate corporate entities through three share purchase agreements with seven individual sellers, each described as the sole legal and beneficial owner of the shares being sold. Mr S. Ramsden, Mrs D. Richardson, Mrs A. Ramsden, Mr B. Ramsden and Mrs L. Ramsden sold the entire issued share capital of Ramsden and Whale Limited, which owns Ramsden Steel Drums Limited. Mr S. Ramsden and Mrs A. Ramsden sold Ramsden Pallets Limited. Mr G. Richardson and Mr K. Mole sold Drumcare Holdings Limited, which owns Drumcare Limited.

Argent describes the collected businesses, which it calls the Ramsden Group, as founded in 1954 and operating from premises the companies themselves own. The activities are the manufacture of new and reconditioned steel drums, the supply of wooden pallets, and the reconditioning of intermediate bulk containers under the companies’ own waste management licences. Those licences are a material part of the activity, because reconditioning containers that held regulated substances is a permitted activity rather than a purely industrial one.

The United Kingdom register carries the corresponding entries. Ramsden and Whale Limited is company number 06876974, incorporated on 14 April 2009 and previously named Ramsden and Whale Holdings Limited until 1 April 2010. Its registered nature of business is recorded under SIC code 38220, treatment and disposal of hazardous waste. Its registered office is now given as Argent Industrial Uk Ltd C/O Cannock Gates Ltd, Martindale, Hawks Green, Cannock, an address belonging to an Argent business, and its last accounts were made up to 31 March 2026, the same financial year end Argent uses.

How the price was built

Argent splits the consideration into two parts and gives the method for each. GBP 2 490 000, or R 54 730 200, is the stated value of the properties owned by Drumcare Holdings Limited and Ramsden and Whale Limited. The remaining GBP 8 346 650, or R 183 459 367, is the value of attributable profits after tax at a price to earnings ratio of 5.5.

The announcement then gives the underlying figures. Net assets attributable to the Ramsden Group are GBP 4 935 391.00, or R 108 479 894.18. Profits attributable after taxation are GBP 1 517 341.00, or R 33 351 155.18. There were no outstanding conditions precedent, and the warranties are described only as standard for a transaction of this nature. PSG Capital acted as sponsor.

The Standmode template

Argent has run this play before, and the earlier announcement is close enough to serve as a benchmark. On 19 August 2024 the same subsidiary bought the entire issued share capital of Standmode Limited and its subsidiary Mersey Container Services Limited from Mr P. Fitzgerald and Mrs J.E Fitzgerald, by way of a lock box transaction, for GBP 6 894 276.70, or R 159 326 734.54, completing on 16 August 2024. That price was also split into property, GBP 1 000 000.00 or R 23 110 000.00, and attributable after tax profits capitalised at a price to earnings ratio of 4.9, GBP 5 894 276.70 or R 136 216 734.54. Net assets were GBP 3 029 723.00 and after tax profits GBP 1 202 913.00. It too was a category 2 transaction with no outstanding conditions precedent.