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VERIMARK HOLDINGS LIMITED - Trading Statement

Release Date: 03/04/2017 11:45
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" or “the Group”)

TRADING STATEMENT


Despite a tough retail environment due to a weaker consumer demand, higher
interest rates and negligible economic growth in South Africa, the Group
expects improved profits for the financial year ended 28 February 2017(“the
2017 financial year”).

As a result of the ongoing depreciation of the Rand against the US Dollar
(“USD”) in the prior financial year, it became necessary for Verimark to
increase selling prices in mid-February 2016. Although these price
increases were greater than the increases in the prior years, they still do
not reflect the total depreciation of the Rand against our import
currencies over the last five and a half years.

As in the past, the price increases impacted negatively on sales and
resulted in lower than expected sales growth. The subsequent strengthening
of the Rand to the USD and other currencies in the 2017 financial year
resulted in improved buying power of our imports. The combination of the
sales price increases and the strengthening of the Rand resulted in an
increase in gross profits.

A major focus on reduction and containment of costs helped to produce
favourable results. This was achieved through a renewed cost benefit
analysis and elimination of wasteful expenditure. The on-going improvement
resulted in cost increase being contained to below inflationary levels.

Shareholders are advised that the board of directors of the Company is
reasonably certain that, when compared to the audited results for the year
ended 28 February 2016(“comparative period”):

   -   the Company will record a profit before taxation of between R33,7
       million and R41,2 million, an increase of between 157% and 214% on
       the R13,1 million for the comparative period;
   -   headline earnings per share is expected to be in the range of 22,1
       and 27,0 cents per share being an increase of between 176% and 238%
       compared to the 8,0 cents for the comparative period; and
   -   earnings per share is expected to be in the range of 22,0 and 27,0
       cents per share, an increase of between 183% and 246% compared to the
       7,8 cents for the comparative period.

The financial information on which this trading statement is based has not
been reviewed and reported on by the Company’s external auditors.

The Company`s financial results for the 2017 financial year are expected to
be published on or about 23 May 2017.

3 April 2017
Sponsor
Grindrod Bank Limited

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