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CDZ - Cadiz Holdings Limited - Trading statement CADIZ HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1997/007258/06) JSE share code: CDZ ISIN: ZAE000017661 ("Cadiz Holdings" or "the group") CADIZ HOLDINGS - TRADING STATEMENT Cadiz Holdings shareholders are advised that basic and diluted earnings and headline earnings per share for the six months ending 30 September 2011 ("the period") are anticipated to be substantially lower than the comparable period last year and the group expects to break-even for the period. The decline in earnings is attributable mostly to disappointing operational performances from both the asset management and securities segments. The results for asset management have been impacted by difficult market conditions leading to a substantial reduction in performance fees, lower average assets under management relative to last year (currently R42 billion) and a high infrastructure cost base for the current assets under management. The strategic repositioning of the asset management business is in progress with the integration of the institutional and retail businesses of Cadiz Asset Management and Cadiz Wealth. In addition, the integration of the systems platforms, business development areas and investment processes will improve profitability by reducing costs, creating economies of scale and operating efficiencies. The investment offering has been refined to ensure the business applies a unified investment management platform and process. All these changes are expected to contribute to a reduced cost base, improved investment performance and growth in assets under management. Cadiz Asset Management will operate as an independent subsidiary with its own board and remuneration structure. The performance of the securities segment continues to be impacted by low trading volumes and increased competition. The Cadiz transaction with BNP Paribas ("BNPP") has also placed pressure on management resources during the period. The BNPP transaction is currently going through regulatory approval processes and the general meeting for shareholders to approve the transaction is scheduled for late October 2011. On completion of the transaction Cadiz and BNPP will combine their respective strengths to market and sell South African equity products to institutional investors in South Africa and abroad. The new securities business will be branded to reflect the names of both Cadiz and BNPP. The benefits of the transaction are only expected to start being realised during the next financial year. Once the expected proceeds from the BNPP transaction have been received in November 2011 and the capital requirements of the individual businesses have been determined, the directors are committed to communicating with shareholders on the group`s strategy for utilising or distributing any surplus capital. The group will be adopting a more decentralised business model after the BNPP transaction is concluded. The new structure will give the individual business units greater autonomy and accountability. The group`s head office cost structure will be streamlined and management will in future focus on the group`s capital and investments, monitoring the performance of the business units and providing shared services where this makes economic sense for the decentralised business units. Following the completion and approval of the BNPP transaction, the group will focus primarily on wholesale and retail asset management. The directors and management will therefore continue to take the necessary action to ensure the asset management business is sustainably profitable and competitive. Shareholders should note that specific earnings guidance will be provided as soon as there is reasonable certainty as to the 20% range by which earnings for the period have declined. The group`s results for the six months ending 30 September 2011 will be announced on SENS on Monday 7 November 2011. The financial information on which this trading statement is based has not been reviewed or reported on by the group`s independent auditors. Cape Town 14 September 2011 Sponsor Investec Bank Limited Date: 14/09/2011 13:00:01 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.
