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VERIMARK HOLDINGS LIMITED - Trading Statement

Release Date: 02/10/2013 11:35
Code(s): VMK     PDF:  
Wrap Text
Trading Statement

Verimark Holdings Limited
Incorporated in the Republic of South Africa
Registration number: 1998/006957/06
JSE share code: VMK
ISIN number: ZAE000068011
("Verimark" or "the company")

TRADING STATEMENT

In terms of paragraph 3.4(b) of the Listings Requirements of the JSE
Limited, an issuer is required to publish a trading statement as soon
as they are satisfied that there is a reasonable degree of certainty
that the financial results for the next reporting period will differ by
at least 20% from those of the previous corresponding period.

While Verimark’s business and operational efficiency improvement
initiatives, together with the completed relocation into the company’s new
warehouse and office complex are beginning to take effect, shareholders are
advised that it is anticipated that the Group will record a loss before
taxation of between R1 million and R1.5 million for the six months ended 31
August 2013. This compares to the loss before taxation of R4.4 million
reported on in the previous corresponding period.

Headline earnings per share and earnings per share for the six months ended
31 August 2013 are expected to be in the range of (1.0) and (1.4) cents per
share compared to the headline earnings per share and earnings per share of
(5.2)cents per share and (5.1) cents per share respectively, as reported on
in the previous corresponding period.

Verimark’s operating profit is expected to be in the range of R3 million to
R3.6 million compared to an operating loss of R5.1 million in the previous
corresponding period. Improvements in the Verimark’s operating profit were
largely as a result of the operational efficiency and business improvement
initiatives presented at the year-end announcement made in May 2013.

The volatility and devaluation of the Rand / Dollar exchange rate has
resulted in higher foreign exchange losses. This together with the
increased funding required in the first part of the year, resulted in
higher overall finance expenses. This has negated a large portion of the
above-mentioned operating profit improvement, resulting therefore, in a
smaller improvement in the loss before taxation.

FUNDING

In spite of the anticipated loss for the six months ended 31 August 2013,
the operating profit improvements and the considerable inroads into the
reduction of excess inventory levels that were experienced at the end of
February 2013 have resulted in positive cash generation. The company
remains favourably geared and adequately funded to continue on Verimark’s
growth path.

PROSPECTS

Management has taken certain actions to mitigate the impact of the Rand
devaluation and continue to strive towards improvement in the operating
margins. The focus on the operating efficiency and business performance
initiatives remain priority and are expected to continue to bear fruit in
the future.

The Board is confident that the medium- and long-term prospects of Verimark
remain positive.
The information on which this trading update has been based has not been
reviewed or reported on by the company’s auditors.

The Company`s financial results for the six months ended 31 August 2013
will be released on SENS on 10 October 2013.

2 October 2013

Sponsor
Grindrod Bank Limited

Date: 02/10/2013 11:35:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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