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ALEXANDER FORBES GROUP HOLDINGS LIMITED - Trading statement for the six months ended 30 September 2018

Release Date: 23/11/2018 14:00
Code(s): AFH     PDF:  
Wrap Text
Trading statement for the six months ended 30 September 2018

ALEXANDER FORBES GROUP HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2006/025226/06)
JSE Share Code: AFH
ISIN: ZAE000191516
(“Alexander Forbes” or “the group” or “the company”)

TRADING STATEMENT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2018

Alexander Forbes is currently finalising its interim financial results for the six months ended 30 September 2018 which
will be released on the Stock Exchange News Service (“SENS”) and on the company’s website at
www.alexanderforbes.co.za on 11 December 2018.

Following a thorough review of the strategic roadmap and related projects within the IT modernisation programme
performed by management and the appointed subcommittee of the Board of Directors since June 2018, the group has
decided to amicably terminate the contract with the primary implementation partner. The primary implementation partner
will continue to provide general information technology services to Alexander Forbes for a period of 12 to 18 months.

As a result of the above decision, the group will impair the software development assets amounting to R287 million. The
impairment will be recorded in non-trading and capital items and will be adjusted for in the calculation of headline
earnings. In addition to the impairment, the group has incurred one-off operating expenses relating to the termination of
the contract amounting to R52 million. These operating expenses will impact the profit from operations before non-
trading items and will not be adjusted for the calculation of headline earnings.

The underlying business operating results reflected in the profit from operations before non-trading and capital items for
the six months are expected to decrease by between 1% and 5% (to between R433 million and R451 million) when
compared to the R455 million reported at 30 September 2017. Excluding the above one-off operating expense of R52
million, the operating profit of the group before non-trading and capital items would be between 7% and 10% higher than
the first half of last year.

Headline earnings per share which excludes the impairment of the software assets are expected to be between 16.0
and 17.2 cents per share for the six months ended 30 September 2018, a decrease of approximately 21% to 26% from
the 21.7 cents per share reported for the six months ended 30 September 2017 (“previous comparable period”).

The earnings per share are expected to decrease to a loss of between 3.5 and 4.5 cents per share for the six months
ended 30 September 2018, which is 116% to 121% lower than the 22.0 cents per share reported in the previous
comparable period.

These accounting adjustments will have no impact on reported cash balances and free cash flow in the current period.

This trading statement is issued in accordance with paragraph 3.4(b) of the JSE Limited Listings Requirements. The
financial information on which it is based has not been reviewed or reported on by the group's external auditors.


Carina Wessels
Group General Counsel and Company Secretary

23 November 2018
Sandton

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Date: 23/11/2018 02:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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