AET - Alert Steel Holdings Limited - Alert Steel`s turnaround strategy starts

AET - Alert Steel Holdings Limited - Alert Steel`s turnaround strategy starts   
showing results                                                                 
ALERT STEEL HOLDINGS LIMITED                                                    
(Incorporated in the Republic of South Africa)                                  
(Registration number 2003/005144/06)                                            
JSE code: AET     ISIN: ZAE000092847                                            
("Alert Steel", "group" or "Alert")                                             
ALERT STEEL`S TURNAROUND STRATEGY STARTS SHOWING RESULTS                        
Pretoria, 17 October 2011 - AltX listed steel retailer Alert Steel said that    
its strategy of returning to its core business of retailing steel and steel     
related products had resulted in a significant improvement in its performance   
for the first three months of trading in the new financial year.                
Reporting on its year end results today, chief executive Johan du Toit said     
that the group had posted earnings before interest, taxation, depreciation      
and amortisation (EBITDA) of R6.2 million (Q1 2010: loss of R15 million) and    
a loss before tax of R1.5 million (Q1 2010: loss of R25.3 million) in the       
first quarter of the 2012 financial year.  Revenue for the three months was     
R190.3 million (Q1 2010:  R240.1 million).                                      
Du Toit said the process of discontinuing certain non-core product lines and    
the introduction of new ones aligned to the group`s strategy had resulted in    
the erosion of the group`s current customer base which impacted on the sales    
function at mostly the city branches.  Subsequent to the year end, most of      
the branches had made up the lost revenue from additional sales to existing     
customers as well as the acquisition of new ones.  Branches located in rural    
areas where less affected by this development as most of these were already     
solely supplying steel and steel-related products.                              
Revenue for the 2011 financial year reduced by 6% year on year to R769.9        
million with a consequent after tax loss of R119.8 million.  Gross profit       
decreased by 23.9% to R135 million after making an additional provision for     
R7 million for anticipated losses on disposing of the remaining inventory of    
the discontinued lines.  Headline loss per share increased from 25.5 cents to   
41.0 cents.                                                                     
Operating expenses decreased by 7% year on year to R203.7 million.  These       
expenses included exceptional items related to the restructure including        
legal and circular costs of R3 million, branch closure and retrenchment costs   
of R1.7 million, the settlement of onerous lease agreements of R5.3 million     
and rebranding and revamping costs of R2.1 million.                             
During the financial year, Alert Steel disposed of certain operations of        
Alert Steel North West and subsequently repurchased all the shares in Alert     
Steel North West on 1 October 2011, which is now wholly-owned.  In addition,    
Alert Steel disposed of the operations of Alert Plumping and the RSC            
Polokwane division, sold its shares in Alert Reinforcing and acquired all the   
shares in Alert Steel Polokwane.                                                
Du Toit said the raising of R50 million through a rights offer, concluded on    
10 October 2011, as well as the restructuring of the group`s overdraft          
facility with Nedbank into long-term loans had given the group the necessary    
working capital to continue as a going concern.                                 
"With the restructure behind us and our renewed focus on steel and steel-       
related products, we have regained the lost revenue from discontinued lines     
in the first three months of the new financial year by growing sales in new     
product lines.  We believe this trend is sustainable and, coupled with a        
number of other strategic initiatives aimed at improving customer service       
levels and increasing Alert`s positioning in the market, we are confident of    
meeting and perhaps even exceeding our budgeted targets for the 2012            
financial year," he said.                                                       
For further information call Johan du Toit on 082 416 8888                      
Issued by du Plessis Associates on behalf of Alert Steel Holdings Limited.      
dPA contact Helen McKane Tel : +27 11 728 4701, Fax: +27 11 728 2547, Mobile:   
082 330 2034 or e-mail: alertsteel@dpapr.com                                    
website: www.alertsteel.co.za                                                   
Designated Adviser                                                              
QuestCo Sponsors (Pty) Limited                                                  
Date: 17/10/2011 08:01:07 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.