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TASTE HOLDINGS LIMITED - Trading Statement

Release Date: 12/09/2014 10:30
Code(s): TAS     PDF:  
Wrap Text
Trading Statement

TASTE HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 2000/002239/06)
Share code: TAS ISIN: ZAE000081162
(“Taste” or “the Group”)


TRADING STATEMENT


In terms of the Listings Requirements of JSE Limited, companies are required to publish a trading statement
as soon as they become reasonably certain that the financial results for the period to be reported on will
differ by more than 20% from that of the previous corresponding period.

Taste is currently finalising its results for the six months ended 31 August 2014 (“the current period”). In light
of the rights offer that opens on Monday 15 September 2014, the directors issue this trading statement
substantially earlier than in prior years. Notwithstanding the early release of this statement, the directors of
Taste confirm that the earnings guidance published on SENS in the Rights Offer Declaration Data
announcement on 28 August 2014 (“Declaration Announcement”), has marginally improved.

The directors anticipate that the earnings per share and the headline earnings per share for the six months
ended 31 August 2014 are expected to be between 3.0 cents and 3.7 cents, compared to the earnings per
share of 5.8 cents and the headline earnings per share of 5.7 cents for the six months ended 31 August 2013
(“the prior period”).

As announced in the Declaration Announcement, the results for the current period already include a portion
of the initial expected once-off and up-front investment costs related to the Domino’s Pizza roll-out and
conversion. These once-off investment costs include costs relating to the store conversions, establishment of
a centralised dough production facility and initial training and marketing. As these costs relate to the
investment in Domino’s, core headline earnings exclude such costs and take into account the normalising of
the prior period’s pizza division profit from store openings that occurred in the prior period, as the decision
was taken this year not to open new Scooters Pizza or St. Elmo’s outlets in the current period due to the
anticipated Domino’s Pizza roll-out and conversion. Core headline earnings more accurately reflects the
comparable performance of the underlying business and Taste will disclose this performance measure for as
long as it is relevant to stakeholders and at least until the conversion of Scooters Pizza & St Elmo’s stores to
Domino’s is complete.

Accordingly, the guidance on core EBITDA for the current period, as published in the Declaration
Announcement has improved and core EBITDA is now expected to be R1.7 million to R2.2 million higher
than the prior period (R21.2 million).

The guidance on core headline earnings for the current period, as published in the Declaration
Announcement has improved and core headline earnings is now estimated to be between R0.8 million and
R1.3 million lower than the prior period (R9.9 million). In the current period amortisation, depreciation and
finance costs are materially higher than the prior period as a result of the capital expenditure incurred in the
second half of the 2014 financial year for the acquisition of NWJ stores and expansion of capacity and further
integration of the food services division. Additionally, changes were made to the human resource structure of
the food division in the second half of the 2014 financial year in order to capatalise on international brand
opportunities and acquisition potential in the local market. These additional costs are therefore not in the
prior period. Benefits from the NWJ capital expenditure are expected in the latter half of the current financial
year due to the seasonal nature of the Groups jewellery division. The benefits of the restructure of resources
in the food division have been realised to some degree through the conclusion of a master licence
agreement with Domino’s.

The financial information on which this trading statement is based has not been reviewed or reported on by
Taste’s auditors. Taste's financial results are expected to be released on SENS on or about 9 October 2014.


Johannesburg
12 September 2014

Sponsor
Merchantec Capital

Date: 12/09/2014 10:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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