BFS - Blue Financial Services Limited - Trading Statement

BFS - Blue Financial Services Limited - Trading Statement                       
BLUE FINANCIAL SERVICES LIMITED                                                 
(Incorporated in the Republic of South Africa)                                  
(Registration Number:  1996/006595/06)                                          
JSE Code:  BFS                                                                  
ISIN:  ZAE000083655                                                             
("Blue" or "the Company" or "the Group")                                        
TRADING STATEMENT AND NOTIFICATION OF WARRANTY CLAIMS RECEIVED BY THE COMPANY   
IN TERMS OF THE MAYIBUYE SUBSCRIPTION AGREEMENT                                 
1.   Trading statement                                                          
    Further to the trading update released on SENS on 1 February 2011, the      
Board advises that it has now obtained a reasonable degree of certainty     
    that the loss incurred by the Company for the financial year ended 28       
    February 2011 will be reduced. Although all of the results have not yet     
    been finalised, the Board considers it important to communicate the         
extent of the reduction in the loss.                                        
    The company expects a decrease in the basic loss per share ("LPS") of       
    between 75% and 95% and a decrease in the headline loss per share           
    ("HLPS") of between 72% and 92% for the year ended 28 February 2011,        
compared to the LPS and HLPS reported in the prior comparative period.      
    This translates into a basic loss of between 8.9 and 42.9 cents per share   
    and a headline loss of between 10.4 and 37.4 cents per share attributable   
    to ordinary shareholders, compared to the LPS of 170.3 cents and HLPS of    
135.0 cents for the previous year.                                          
    As reported on SENS on 1 February 2011, the main reasons for the            
    reductions in the losses are:-                                              
    -    cost savings generated as a result of right-sizing the organization;   
-    credit impairments reduced through improvements in collection          
         processes;                                                             
    -    no further write-offs of financial and intangible assets post the      
         recapitalization of the Group by Mayibuye; and                         
-    improvements in operational efficiencies and business                  
         sophistication.                                                        
    The restructuring during the current financial year and the impact of the   
    Mayibuye turnaround strategy, have contributed to the expected              
improvement in financial results. The management actions aimed at           
    stabilizing the business have led to a decline in new loan advances to      
    customers during the year. This should change with the on-going market      
    repositioning of the business and enhanced credit-granting procedures.      
These actions provide a sound platform for growth and returning the group   
    to profitability in the future.                                             
2.   Notification of Warranty Claims received                                   
    In terms of Mayibuye`s rights contained in the Subscription Agreement       
concluded with the Company, shareholders are advised that a notification    
    of warranty claims has been received from Mayibuye.  Mayibuye is entitled   
    to have such warranty claims settled through the issue of such number of    
    Blue ordinary shares (based on the 30 day VWAP per Blue ordinary share)     
which in aggregate would be equal to the value of the warranty claim(s).    
    The Company has not yet confirmed these claims. However, in the event       
    that the warranty claims are settled they will not have any further         
    impact on the Company`s Income Statement.  The assessment of any warranty   
claims will be dealt with through an independent committee of the Board.    
This trading statement has not been reviewed or reported on by the Company`s    
external auditors.                                                              
Johannesburg                                                                    
26 April 2011                                                                   
Designated Adviser:  Grindrod Bank Limited                                      
Date: 26/04/2011 08:00:01 Supplied by www.sharenet.co.za                     
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.