| Tue 2 Sep 2008, 13:42 | | RMH - RMB Holdings - Further Voluntary Trading Update In Respect Of Financial |
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RMH
RMH
RMH - RMB Holdings - Further Voluntary Trading Update In Respect Of Financial
Year Ended 30 June 2008
RMB HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1987/005115/06)
ISIN: ZAE000024501
Share Code: RMH
(`RMBH` or `the Company`)
FURTHER VOLUNTARY TRADING UPDATE IN RESPECT OF FINANCIAL YEAR ENDED 30 JUNE 2008
Shareholders are referred to the voluntary trading update issued by the Company
on 30 May 2008 and that issued earlier today by the Company`s associate
FirstRand Limited ("FirstRand").
In its initial trading update RMBH highlighted that the deteriorating macro
conditions, both domestically and globally, would result in a more challenging
operating environment for FirstRand`s banking businesses. FirstRand has now
issued a further voluntary trading update to its shareholders in which it
highlights additional current year write-downs which were not anticipated at the
time of the 30 May 2008 trading update:
WesBank has decided to write down all the operating assets associated with the
exit from its lending businesses in Australia. It expects the net outcome from
the planned sale of its non-lending assets in Australia to largely off-set these
losses, but the full extent will only be reflected in the financial year to June
2009. This, combined with a further increase in its bad debt levels has
resulted in a further reduction in WesBank`s earnings for 2008.
Given worsening market conditions, Rand Merchant Bank ("RMB") decided to
accelerate the process of de-risking and scaling back its international equity
portfolio. This resulted in a further write-down of the carrying values of
certain assets.
Competition Tribunal approval for certain of RMB`s private equity disposals,
that were expected prior to 30 June 2008, were only finalised in July 2008. As
a result the anticipated earnings from these disposals are not included in RMB`s
June 2008 results.
The above issues have further negatively impacted the FirstRand Group`s earnings
for the financial year to 30 June 2008. Consequently FirstRand advised its
shareholders that its June 2008 Earnings, Headline Earnings, as well pro forma
Normalized Earnings (following the unbundling of Discovery) are expected to be
lower than the previous year, but by not more than 10%.
As its investment in FirstRand produces the bulk of RMBH`s earnings, it is
anticipated that the impact outlined in FirstRand`s updated trading statement
will, to a large extent, flow through into RMBH`s results for the year ended 30
June 2008.
RMBH therefore advises shareholders that it now expects that for the year to 30
June 2008, Earnings, Headline Earnings and Normalized Earnings are expected to
be lower than the previous year, to a similar extent to that indicated by
FirstRand. As the Company funded part of the acquisition of its interest in
Discovery through a fresh issue of RMBH shares, the decline expressed on a per
share basis could be greater, but not to a material extent. In the year to 30
June 2007 RMBH reported Earnings of R4 109 million (349.7 cps), Headline
Earnings R 3 900 million (332.0 cps) and Normalized Earnings of R 3 984 million
(335.4 cps).
The financial information on which this voluntary trading update is based has
not been reviewed and reported on by the Company`s external auditors.
Details of RMBH`s results for the financial year ending on 30 June 2008 are
expected to be released on SENS and published in the press on or about 17
September 2008.
Sandton
2 September 2008
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 02/09/2008 13:42:01 Produced by the JSE SENS Department.
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