Our opinion on the current state of TXT

3 lis 2023

Textainer (TXT) is one of the world's largest lessors of containers with 3,5m twenty-foot-equivalent units (TEU) in its fleet. It is listed on the New York Stock exchange and on the JSE. The company supplies dry freight, specialised and refrigerated containers to 250 customers all over the world and sells more than 140 000 units each year. The company has 14 offices and 500 depots. In its results for the year to 31st December 2021 the company reported headline earnings per share (HEPS) of US$5,31 up from US$1,53 in the previous year. The company bought 741163 of its own shares during the year. The company bought FWB:2BN worth of containers during the year. Obviously, Textainer benefited from the extreme shortage of containers worldwide and the sharp rise in the price of renting containers. The company said, "For the full year 2021, lease rental income increased 25% to $751 million, driven by organic fleet growth in a strong demand environment. Adjusted EBITDA increased by 47% to $698 million, reflecting our ongoing profitability focus, as well as a favorable lease and resale environment". In an update on the 3 months to 31st March 2023 the company reported total lease revenue of $194,9m compared with $198,7m in the previous period. Attributable income was 122c per share compared with 147c in the previous period. The company said, "Adjusted EBITDA was $167 million, and adjusted net income was $54 million, or $1.22 per diluted share, resulting in an annualized ROE of 13%". In a report on the 3 months to 30th September 2023 the company said, "Net income of $44.7 million for the third quarter, or $1.07 per diluted common share. Headline earnings of $44.3 million for the third quarter, or $1.06 per diluted common share. Repurchased 996,403 common shares at an average price of $40.12 per share". The share is liquid with more than R20m worth of shares changing hands daily and it is in a rising trend since August 2020. It is clearly a rand hedge share which is impacted by the level of world trade. COVID-19 has had an effect, but its business was mostly considered by governments to be essential. We believe that this company will continue to do well as the world economy recovers. On 23rd October 2023 the company announced that it would be acquired by Stonepeak for $7,4bn and that shareholders would get $50 per share. This caused the share price to jump 40%.