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ARGENT INDUSTRIAL LIMITED - Trading Statement, Repurchase of Argent Shares, Automotive Sector Impairment and Group Property Update

Release Date: 23/04/2015 12:30
Code(s): ART     PDF:  
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Trading Statement, Repurchase of Argent Shares, Automotive Sector Impairment and Group Property Update

Argent Industrial Limited
(Registration number 1993/002054/06)
(Incorporated in the Republic of South Africa)
Share Code: ART
ISIN: ZAE000019188
(“Argent” or “the company” or “the group”)

TRADING STATEMENT, REPURCHASE OF ARGENT SHARES, AUTOMOTIVE SECTOR
IMPAIRMENT AND GROUP PROPERTY UPDATE

In terms of paragraph 3.4 (b) of the Listing Requirements of the
JSE Limited, companies are 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 more than 20% from those of the previous
corresponding period.

Headline earnings per share for the year ended 31 March 2015 are
expected to be between 15.3 and 18.3 cents per share compared to
14.6 cents per share in the previous corresponding period, being
between 5% and 25% higher. The basic earnings per share for the
year ended 31 March 2015 is expected to be between 4 and 7 cents
per share compared to the basic loss per share of 211.4 cents in
the previous corresponding period, being an increase of between
102% and 103%.

In addition, the pre-tax results should have increased by a
further R74 million had the company not been effected by the 4
week country wide industrial strike action in July 2014, as well
as the below mentioned automotive sector impairments.

Repurchase of Argent shares

Argent wishes to advise shareholders that it will be commencing
with repurchasing of the shares issued by the company once the
results for the year ended 31 March 2015 have been released on
SENS. This buy-back of shares was authorized by the shareholders
at the annual general meeting held on 28 October 2014.

In terms of the special resolution the company will commence
repurchasing its shares in tranches of 3% of the number of shares
in issue, pursuant to which an announcement providing details
thereof will be released.

The authority to repurchase is limited to a maximum of 20%, in
aggregate, of the company’s issued share capital at the time the
authority was granted.

Automotive Sector Impairment

The Board of Directors has taken the decision to conclude
operations at Giflo Engineering (Bophuthatswana) (Pty) Ltd
(“Giflo”).
The decision was made on the back of poor margins and a labour
dispute with NUMSA which has resulted in a labour strike which
started on the 12th of January 2015 and is still currently ongoing.

The strike has been incredibly violent with a number of our
working staff and staff of our suppliers and customers being
hospitalized. Our trucks, as well as those of our suppliers have
been damaged, working staff houses have been set alight and the
factory has been brought to a halt as a result of the strikers
stoning all vehicles in the vicinity of the Giflo factory and
cutting off the company’s water supply.

The company has reserved its rights against NUMSA and has obtained
a court interdict to allow it to operate unhindered, something
which is easier documented in theory than it is in reality.

Although the cash-flow effect of the above is positive, the once
off impairment of assets held at Giflo has negatively affected the
current reporting period results in the amount of approximately
R51 million pre-tax earnings and a R6.4 million reversal of
deferred tax asset.

Group Property Update

The Group has sold the following properties during the reporting
period:

- Gammid JHB in Johannesburg for R5 million to a related party;
- Atomic Office Equipment in Cape Town for R16 million;
- Gammid Cape in Cape Town for R31 million;
- Phoenix Steel Mpumalanga in Middelburg, which is currently
vacant, for R10.5 million on auction.

The following properties are currently for sale:

- Giflo Engineering (Bophuthatswana) in Ga-Rankuwa via auction on
28 May 2015 at a reserved price of R 10.5 million;
- Gammid George in George, which is currently vacant, for R6
million.

The above information has not yet been reviewed or reported on by
the company’s external auditors. It is anticipated that the
audited results for the year ended 31 March 2015 are to be
published on SENS on or about 25 June 2015.


Umhlanga
23 April 2015

Sponsor:   PSG Capital Proprietary Limited

Date: 23/04/2015 12:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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