| Mon 2 Jun 2008, 8:54 | | SNU - Sentula Mining Limited - Trading Update And Cautionary Announcement |
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SNU
SNU
SNU - Sentula Mining Limited - Trading Update And Cautionary Announcement
SENTULA MINING LIMITED
(previously Scharrig Mining Limited)
(Registration number 1992/001973/06)
(Incorporated in the Republic of South Africa)
Share code: SNU ISIN code:ZAE000107223
("Sentula" or "the group")
TRADING UPDATE AND CAUTIONARY ANNOUNCEMENT
1. Trading update
In compliance with paragraph 3.4(b) of the Listings Requirements of the JSE
Limited, a listed company is required to publish a trading update as soon as it
becomes aware that the financial results for the next period to be reported on
will differ by at least 20% from those of the previous reported period.
Shareholders are advised that for the year ended 31 March 2008, results are
expected to be as follows:
- basic earnings of between 98 cents and 117 cents per share;
- headline earnings of between 74 cents and 89 cents per share; and
- core earnings of between 100 and 120 cents per share.
The financial results for the year ended 31 March 2008 were negatively impacted
upon by, inter alia:
a significant dilutionary effect stemming from the weighted average number of
shares in issue, which increased by 33%, compared to the previous period. New
shares were issued, inter alia to fund a number of acquisitions concluded during
the 2008 financial year, as well as to develop the group`s coal assets, whereas
these transactions are only expected to make a material contribution to earnings
in the 2009 financial year. In this regard, unexpected delays were experienced
in obtaining regulatory approval for the acquisition of:
- Classic Challenge Trading (Pty) Limited ("CCT"); and
- an equity interest of 49.998% interest in the Koornfontein mine
("Koornfontein").
Shareholders should however note that the CCT and the Koornfontein acquisitions
have since become unconditional.
- abnormally high rainfall during December, January and March of this
financial year, which impacted adversely on the open cast operations,
specifically in terms of earth moved and coal extracted;
- delays experienced in the awarding of three material new contracts to
Sentula, whereas the working capital and capital investment was made in
anticipation of these contracts.
- Shareholders should note that these contracts were subsequently awarded and
the benefit thereof will realize in the current financial year; and
rising interest rates and internal inflation, the cost of which had to be borne
by the group during the lagtime before annual contract mining rate escalations
became effective.
Basic and headline earnings per share were furthermore adversely affected by the
amortization of intangibles which arose on an acquisition as well as the costs
relating to the implementation of a group share incentive scheme.
The financial information on which this trading update has been based has not
been reviewed or reported on by the group`s auditors.
2. Cautionary announcement
Shareholders are advised that the financial results for the year ended 31 March
2007 will be restated. Errors were identified with respect to the appropriate
application of IFRS 3 pertaining to one of the acquisitions made in the prior
year and resulted mainly from the following:
- erroneous conclusion as to the accounting effective date of the acquisition
resulting in the incorrect measurement of the fair value of the consideration
paid; and
- incorrect valuation of certain fixed assets on the date of acquisition.
Additionally, an impairment test in terms of IAS 36 was not performed on certain
assets acquired as part of one acquisition in the 2007 financial year. Had this
been done at year-end, it would have resulted in an impairment of a number of
drill rigs which were not suited to the group`s coal mining operation and had
materially deteriorated in market value.
Shareholders are advised that the above instances leading to a restatement of
Sentula`s 2007 results have had no impact on the company`s cash position.
Sentula`s board of directors has appointed a sub-committee, comprising the
deputy chairman, the head of the audit committee and an accounting firm to
review the circumstances that have led to this restatement and to report
thereon.
Full details of the restatement will be set out in the announcement containing
the results for the year ended 31 March 2008 which is expected to be announced
on or about 25 June 2008.
Accordingly, shareholders are advised to exercise caution until such
announcement is made.
Johannesburg
2 June 2008
Sponsor
Barnard Jacobs Mellet Corporate Finance
Investor Relations
College Hill (+27 11 447 3030)
Date: 02/06/2008 08:54:51 Produced by the JSE SENS Department.
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