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HOWDEN AFRICA - PRESS ANNOUNCEMENT

Release Date: 08/06/1999 12:11
Code(s): HWN
Wrap Text

CHAIRMAN'S STATEMENT AT HOWDEN AFRICA ANNUAL GENERAL MEETING
ESSENTIALLY OUR COMPANY IS INVOLVED IN TWO PRODUCT GROUPS. FANS AND AIR AND GAS ACTIVITIES AND PUMPS. THE PUMP COMPANY PRIMARILY SERVICES THE DOMESTIC AGRICULTURAL MARKET BUT IS NOW LOOKING AT EXPANDING FURTHER INTO THE INDUSTRIAL SECTOR. FOLLOWING THE ACQUISITION OF THE PUMPMAKER BUSINESS IN THE FOURTH QUARTER OF LAST YEAR, PROFITABILITY HAS BEEN RESTORED AND IS EXPECTED TO IMPROVE FURTHER DURING THE REMAINDER OF THIS YEAR. HOWEVER THE PRINCIPAL PRODUCT OF OUR COMPANY IS FANS AND AIR AND GAS ACTIVITIES.
OVERALL ECONOMIC GROWTH IN SA DURING THE FIRST QUARTER OF THE YEAR WAS NEGATIVE 0.3 %. THE TWO PRINCIPAL MARKET SECTORS FOR OUR PRODUCTS ARE POWER GENERATION AND MINING. BOTH WERE SEVERELY DEPRESSED AND THIS HAS LEAD TO A NEGATIVE IMPACT ON OUR BUSINESS. THIS COUPLED WITH THE RUNDOWN OF LONG TERM ORDERS ON HAND HAS RESULTED IN THE GROUP RESULTS BEING FAR MORE SENSITIVE TO CYCLICAL CHANGE THAN HAS BEEN EXPERIENCED IN THE PAST. RESULTS FOR THE HALF YEAR TO JUNE 1999 ARE THEREFORE UNDER PRESSURE AND ARE EXPECTED TO BE SIGNIFICANTLY LOWER THAN THE CORRESPONDING PERIOD LAST YEAR.
AT THIS STAGE WE ARE HOPEFUL THAT NOW, POST THE ELECTION, THERE MAY BE SOME RECOVERY IN THE SECOND HALF OF THE YEAR. PROSPECTS HOWEVER CONTINUE TO BE UNCERTAIN AND WILL REMAIN DEPENDANT ON RECOVERY IN DOMESTIC ECONOMIC GROWTH. END

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