JSE-listed Labat’s strategy of ‘derisking’ itself from cannabis has taken a step forward with the acquisition of another IT company, Ahnamu.

In a SENS announcement on 4 March 2025, Labat announced that it paid R25 million in shares and cash for 51% of the software importer, which it said was a complementary purchase to Classic International Trading which it recently bought for its profit guarantees and strong cash flow forecasts.

Labat said an MoU had been signed with the beneficial owner of Ahnamu, Christopher Mark, a non-related party to Labat, and that the purchase would be funded by the issue of 200 million shares at an issue price of 10 cents a share, making up R20 million. The balance of R5 million would be paid in cash.

Labat describes Ahnamu as an “award-winning ICT importer and distributor of cutting edge external and internal computer hardware solutions across the SADC region”.  On the surface it looks like a good deal: Ahnamu’s profit before tax for the year ending 31 December 2024 ws R78,8 million and its net asset value was R64 million.

Labat indicated a change of strategy in January 2025, when long-standing CEO Brian van Rooyen stepped down and was replaced by Irfaan Mohammed. Mohammedtold shareholders that Labat would be reviewing its risks associated with the cannabis business and would make an announcement accordingly.

Labat’s main cannabis play is the Cannafrica retail brand, which has expanded significantly in the last year with over 70 outlets nationwide. It is being supplied from Labat’s SAHPRA-licensed Sweetwater Aquaponics facility in the Eastern Cape.

While Labat’s new board, which now includes Cannafrica CEO Herchel Maasdorp, is mulling over the future of its exposure to cannabis, the group is grabbing market share in the IT space since it bought Classic International Trading for R16,75 million last year.

Labat says the acquisition of Ahnamu represents a significant step for the group’s technology division, which has been actively seeking opportunities to diversify and strengthen its portfolio. Labat says the transaction offers several key advantages:

• A significant stronghold and long-standing client base in the IITC Market: Ahnamu's expertise provides Labat with a direct pathway into the lucrative IT hardware sector;

• Ahnamu's profitable track record enables rapid expansion, ensuring long term sustainable growth for Labat's technology business.

• Ahnamu's footprint in Africa allows Labat to expand into previously uncharted territories which provides Labat with valuable USD forex revenue;

• Labat and more so its recent software distributor Classic international will further have the opportunity to complete the value chain of both software and hardware complimentary customer base for absolute vertical integration.

Cannafrica sources say former Labat CEO van Rooyen is still consulting to the group’s cannabis business but that any increased investment in the healthcare division is on hold, including plans to increase Sweetwater’s production capacity, pending the outcome of the review.

Labat put out a trading update on SENS on 27 February 2025 advising shareholders that headline earnings per share for the six months ending 30 November 2024 would increase by 65,4% to 1,29 cents compared to the previous period of 0,78 cents/share.

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