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FINBOND GROUP LIMITED - Trading Update

Release Date: 18/10/2019 17:30
Code(s): FGL     PDF:  
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Trading Update

Finbond Group Limited

(Incorporated in the Republic of South Africa)

(Registration number: 2001/015761/06)

Share code: FGL

ISIN: ZAE000138095

(“Finbond” or “the Company” or “the Group”)

TRADING UPDATE

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

A review of the financial results for the six months ended 31 August 2019 by the directors of the company
has indicated that both basic and headline earnings per share are expected to decrease to between 5.5
cents and 4.4 cents per share compared to 10.9 cents per share for the six months ended 31 August 2018,
representing a percentage decrease of between 50.0% and 60.0%.

These poor results were due to the transition of SASSA customers to the new SA Post-Office card (which
occurred in the second six months of last year). The timing of the SASSA transition and the fact that we
were impacted in the second six months of last year and the subsequent recovery in the first six months
of the current year has a significant impact on the comparability of the current interim period ended 31
August 2019 versus the corresponding interim period ending 31 August 2018. The SASSA transition was
only beginning to be felt in August 2018 and South African operations had benefited from good SASSA
sales performance for the first six months of last year. To illustrate, the total number of SASSA loans sold
for the first six months of the current year decreased by 94.6% to 8,655 compared to 160,910 for the
corresponding period last year. Noting that for the second half of the current year the South African
operations outlook is significantly more positive than the second six months of last year (when the worst
of the SASSA impact was felt).

None of the above adverse developments in South Africa affected Finbond’s North American operations
that contributed in excess of 97% of Headline Earnings.

Despite above adverse developments in South Africa, during the period under review:

    •   Total Assets increased by 12.9% to R4.30 billion (Aug 2018: R3.81 billion).
    •   Cash and Cash Equivalents increased by 25.6% to R969.7 million (Aug 2018: R772.3 million).
    •   Interest income increased by 15.1% to R937.9 million (Aug 2018: R814.9 million).
    •   Revenue from continuing operations increased by 3.3% to R1.29 billion (Aug 2018: R1.25 billion).
    •   Revenue from North American operations as a percentage of Total Revenue increased by 10.0%
        to 66% (Aug 2018: 60%).
    •   The value of loans advanced increased by 9.1% to R2.87 billion (Aug 2018: R2.63 billion).
    •   Cash received from customers increased by 3.2% to R3.78 billion (Aug 2018: R3.67 billion).
The financial information on which this trading statement is based has not been reviewed or reported on
by Finbond’s auditors. Finbond’s unaudited results for the interim period ended 31 August 2019 are
expected to be released on SENS on or before 31 October 2019.

Pretoria

18 October 2019

SPONSOR:

GRINDROD BANK LIMITED

Date: 18/10/2019 05:30:00
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