BASIL READ HOLDINGS LIMITED - Special dividend declaration and trading update

Special dividend declaration and trading update

Basil Read Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1984/007758/06)
Share Code: BSR ISIN: ZAE 000029781
(“Basil Read” or Group”)

SPECIAL DIVIDEND DECLARATION AND TRADING UPDATE

Special Dividend Declaration

As disclosed in the circular to shareholders dated Friday, 8
February 2013 regarding the disposal of the entire issued
ordinary share capital of TWP Holdings Proprietary Limited
(“TWP”) held by Basil Read for a cash consideration of R900
million (the “Circular”), which was approved by shareholders
at the general meeting of the Company held on Friday, 8 March
2013 (the “Disposal”), shareholders are advised that the group
received the sale consideration of R877.7 million, after
adjusting for the net debt and working capital agreed amounts,
on 12 March 2013.

The cash injection will allow Basil Read to settle debt and
strengthens the balance sheet for future organic growth.

Shareholders are further advised that the board of directors
of Basil Read is pleased to announce that a special dividend
to shareholders equating to R230 million (inclusive of
dividend withholding tax) has been approved and notice is
hereby given that the board of directors of Basil Read have
declared a special gross dividend of 175 cents per share
(148.75 cents per share net of 15% dividend withholding tax).

The special dividend has been declared from income reserves
(the purchase consideration of the Disposal) and no secondary
tax on companies’ credits has been used. A dividend
withholding tax of 15% will therefore be applicable to all
shareholders who are not exempt. The special dividend net of
dividend withholding tax thus amounts to 148.75 cents per
share.

The issued share capital of Basil Read at the declaration date
is 131 694 281 ordinary shares. The tax reference number of
Basil Read is 9950051715.

In order to comply with the        requirements   of   Strate   the
relevant details are as follows:

Event                                   Date
Declaration date of special dividend      Friday, 15 March 2013
Finalisation date of special dividend     Thursday, 6 June 2013
Last day to trade cum-special            Thursday, 13 June 2013
dividend
Ordinary shares commence trading ex-       Friday, 14 June 2013
special dividend
Record date (date shareholders             Friday, 21 June 2013
recorded in books)
Payment date                               Monday, 24 June 2013
No share certificates may be dematerialised or rematerialised
between Friday, 14 June 2013 and Friday, 21 June 2013, both
dates inclusive.

Trading update

Shareholders are referred to the trading update released on
SENS on 15 August 2012 which stated that the Group expected
its earnings for the 12 months ending 31 December 2012 to be
between 10% and 20% lower compared to the previously reported
corresponding period and headline earnings for the 12 months
ending 31 December 2012 to be between 25% and 35% lower
compared to the previously reported corresponding period.

The Group’s performance for the financial year ended 31
December 2012 has been further adversely impacted by the
following items:

–   A non-recurring non-cash IFRS2 charge relating to the
    recently concluded Broad Based Black Economic Empowerment
    transaction with SIOC CDT Investment Holdings Proprietary
    Limited for an amount of R60.5 million
–   A non-cash write down of development land relating to the
    Group’s investment in Rolling Hills Estate in Mpumalanga for
    an amount of R27 million
–   A charge in the current year of R65 million raised in
    relation to the Competition Commission’s investigation into
    the construction industry, which investigation is expected
    to be finalised in the second quarter of 2013

In addition to the above, the difficult trading conditions
particularly in the construction sector have led to the Group
incurring substantial losses on certain contracts:

–   Nata   to  Pandamatenga   road  –   undertaken   by  Sladden
    International in Botswana, a 100%-owned subsidiary, this
    contract is expected to be completed by June 2013. A further
    provision of R125 million was incurred in the 2012 financial
    year due to disagreements with the client’s representative
    relating to measurement and other claim entitlements. Basil
    Read is actively trying to resolve these disagreements which
    could lead to recoveries in the 2013 financial year.
–   N12 Tom Jones – contract is behind schedule and a loss of
    R85 million has been recorded due to various problems
    including shortages of steel and bitumen supply and the
    strike action in the transport sector. The cumulative effect
    of these problems has resulted in a nine month delay on the
    contract, which is now scheduled for completion in April
    2013.
–   Generally, the roads and civils sectors have been affected
    by difficult working conditions, including labour unrest,
    planned production targets not being achieved and unseasonal
    rain.

Due to the abovementioned contracts’ remaining period to
completion being relatively short, the contract losses have
been estimated with a greater degree of certainty and no
further losses are expected to be recorded.
Due to the adverse conditions detailed above, Basil Read is
now in a position to provide further guidance with regard to
the financial results and shareholders are therefore advised
that the Group expects its earnings for the year ending 31
December 2012 to be between 215% and 225% lower compared to
the previously reported corresponding period and headline
earnings for the year ending 31 December 2012 to be between
185% and 195% lower compared to the previously reported
corresponding period.

Despite having a signed settlement agreement and the receipt
of a part payment relating to the outstanding amounts owing by
the Free State Provincial Government (“FSPG”), the Group is
still due payments totalling R80 million. FSPG have confirmed
that the outstanding monies will be paid in the province’s
next financial year and the Group’s expectation is that this
will be in May 2013.

The contract to construct an airport on the island of St
Helena is performing to expectations and the project team
continues to deliver on major milestones. To date, the
logistical and procurement risks have been successfully
mitigated.

The   Group  will  continue   its  strategy   of  engineering,
procurement and construction (“EPC”) and renewable energy
through its continued investments in Basil Read Matomo
Proprietary Limited and Basil Read Energy Proprietary Limited.
The engineering division’s current order book stands at R1
billion.

The Group’s order book remains steady at a level of R10.1
billion, adjusted for the sale of TWP.

The financial information on which this trading statement is
based has not been reviewed or reported on by Basil Read’s
auditors.

The Group’s annual results for the year ending 31 December
2012 will be published on or about 27 March 2013.



Johannesburg
15 March 2013


JSE Sponsor
Macquarie First South Capital (Pty) Limited

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