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Trading statement
CONDUIT CAPITAL LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/017351/06)
Share code: CND ISIN: ZAE000073128
(“Conduit” 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 twenty percent from that of the previous corresponding
period. Accordingly, a review by management of the financial results for the year ended
31 August 2014 has indicated that headline earnings, earnings per share (“EPS”), headline
earnings per share (“HEPS”), net asset value per share (“NAV”) and tangible net asset value per
share (“TNAV”) are expected to be as follows:
Unaudited Audited
year ended year ended Percentage
31 Aug 2014 31 Aug 2013 Change increase
Headline earnings (R’000) 40 159 39 980 179 0.4%
EPS (cents) 45.4 15.5 29.9 192.9%
HEPS (cents) 15.7 15.6 0.1 0.6%
NAV (cents) 167.9 122.5 45.4 37.1%
TNAV (cents) 120.6 104.2 16.4 15.7%
Number of shares in issue, net of
treasury shares ('000) 256 377 256 377
Weighted average number of
shares ('000) 256 377 255 982
As previously reported, with effect from 1 September 2013 our interest in credit recovery and
debt management specialist, Anthony Richards and Associates Proprietary Limited (“ARA”), would
be accounted for as an associate - doing away with the Direct segment entirely. The change in
accounting treatment required that we fair value our 40% interest in the company and bring to
book R75.55 million (29.5 cents per share) in earnings and net asset value. Whilst we view the
resultant contribution to 2014 EPS as cosmetic (and rightly excluded from HEPS), we are satisfied
that the identical one-off adjustment to NAV reveals a more realistic valuation of the asset.
Where headline earnings for the first half of the year trailed the comparative period by 14.3%
(largely as a result of an anomaly in the 2013 tax line), by year-end the shortfall was eliminated
and - above all the accounting and tax clutter - headline earnings of R40.16 million narrowly
eclipsed last year’s R39.98 million.
In 2013, as a subsidiary, the ARA results were consolidated. In 2014, as an associate, the
earnings were equity accounted and skewed by the fair value adjustment. To make comparison
with the corresponding 12-month period more meaningful, were we to disregard the ARA
revaluation and include our share of ARA’s profits on a like-for-like equity accounted basis in
2013 and 2014, the resultant profit before tax of R47.30 million for 2014 would compare
favourably with the R45.08 million posted in 2013.
Net asset value, including the ARA fair value adjustment, advanced to R430.45 million or 167.9
cents per share. TNAV increased 16.4 cents to 120.6 cents (R309.27 million). A profit on the
disposal of a joint venture asset (excluded from headline earnings) accounts for the difference
between HEPS and the increase in TNAV. The group remains completely debt free.
The financial information on which this trading statement is based has not been reviewed or
reported on by the group’s auditors. Conduit’s audited results for the year ended 31 August 2014
are expected to be released on or about 27 November 2014.
Johannesburg
17 November 2014
Sponsor
Merchantec Capital
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