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TRANS HEX GROUP LIMITED - Trading Statement

Release Date: 28/06/2019 07:05
Code(s): TSX     PDF:  
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Trading Statement

TRANS HEX GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1963/007579/06
Share code: TSX
ISIN: ZAE000018552
(“Trans Hex” or the “Group” or the “Company”)

TRADING STATEMENT

Trans Hex is currently finalising its provisional results for the 12 months ended 31 March 2019
(“Results”), which are expected to be released on SENS on or about 28 June 2019.

Results in this trading statement are compared with results for the 12 months ended 31 March 2018
(“Previous Corresponding Year”).

Restatement of the financial results for the Previous Corresponding Year

     • Business Combination
The financial results of West Coast Resources (Pty) Limited (“WCR”) have been fully consolidated within
the Group as of 1 February 2018. Accordingly, a provisional valuation of identifiable assets acquired and
liabilities assumed was made as at 31 March 2018, upon the conclusion of the 2018 financial year. The
provisional fair values were adjusted upon the finalisation of the valuations on 7 December 2018.
Comparative information presented in the Previous Corresponding Year has been revised accordingly.

Furthermore, it should be noted that the consolidation of WCR from 1 February 2018, impacted the
comparability of the results for the year ended 31 March 2019, with the results for the Previous
Corresponding Year. Prior to 1 February 2018, the investment in WCR was accounted for as an
investment in an associate under the equity method.

   • Prior Year errors
The Group’s financial statements were amended retrospectively with regards to the year ending 31 March
2018.

The Group reassessed the useful life of several items still in use within property, plant and equipment, in
line with current assessments.

   The correction of the error results in adjustments as follow:

   Statement of financial position                                         2018

   Increase in carrying value of property, plant and equipment             7 862
   Increase in retained income                                             6 379
   Increase in non-controlling interest                                    1 483

The Group measures its investment in Somiluana at amortised cost. In the prior year the Group did not
estimate the future cash flows of the loan. This has now been re-measured.
   Statement of financial position                                         2018

   Increase in investment in associates                                   38 759

   Statement of comprehensive income

   Increase in fair value gains                                           38 759

Completion of sale of the Lower Orange River (“LOR”) operations with effect from 1 April 2018

At the general meeting of Trans Hex shareholders (“Shareholders”) held on 3 September 2018,
Shareholders approved the sale of the LOR operations for a cash consideration of R72 million (exclusive
of value added tax), which sale became effective on 1 April 2018. In the circumstances, the results of the
LOR operations for the 12 months ended 31 March 2019 are excluded from the Results and only the
proceeds from the sale are reflected, which impacts the comparability of the Results with the results for
the Previous Corresponding Year (i.e. the results of the LOR operations were presented as discontinued
operations in the Previous Corresponding Year).

The Group expects to report:

-   earnings per share of 125,1 cents compared to a restated loss per share of 198,9 cents (previously
    reported loss per share of 175,6 cents) in the Previous Corresponding Year, representing an
    improvement of 163%;
-   headline earnings per share of 45,3 cents compared to a restated headline loss per share of 165,0
    cents (previously reported headline loss per share of 216,5 cents) in the Previous Corresponding
    Year, representing an improvement of 127%; and
-   adjusted headline loss per share amounted to 51,3 cents (2018: loss of 68,3 cents). The re-
    measurement of the rehabilitation provisions amounting to R111,2 million was reversed to arrive at
    the adjusted headline loss per share. For the Previous Corresponding Year headline loss for the
    year was adjusted to include retrenchment costs at the LOR operations of R111,4 million,
    representing an improvement of 25%.

COMMENTS

The following salient points will be fully reported upon when the Group releases its Results:

-   Group net profit from continuing operations amounted to R64,7 million (2018 (restated): loss of
    R16,0 million (previously reported profit of R26,2 million)).
-   Group net profit from discontinued operations amounted to R79,3 million (2018: net loss of
    R213,0 million).
-   Group net profit for the year amounted to R144,1 million (2018 (restated): net loss of R229,0 million
    (previously reported net loss of R186,8 million)).
-   The Group’s net cash position at the end of the year was R65,5 million (2018: R79,4 million).
-   Net asset value per share amounted to 268 cents (2018 (restated): 152 cents (previously reported
    218 cents)).


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

Cape Town
27 June 2019

Sponsor
One Capital

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