| Fri 5 Sep 2008, 10:00 | | AGI - A G Industries Limited - Trading Update |
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AGI
AGI
AGI - A G Industries Limited - Trading Update
A G INDUSTRIES LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1980/004051/06
Share Code: AGI
ISIN: ZAE000039467
("The Company" or "the Group")
TRADING UPDATE
Shareholders are advised that the headline loss per share for the year ended 30
June 2008 ("the reporting period") will be between 14 cents and 17 cents per
share compared to headline earnings per share of 10,9 cents per share in the
previous corresponding period, and that the basic loss per share for the
reporting period will be between 15 cents and 18 cents per share compared to
basic earnings per share of 33,5 cents for the previous corresponding period.
Trading
As mentioned in previous announcements, the Group`s results continued to be
materially impacted by operating problems at the Roodekop production facility.
These problems started having a material impact on revenues and operating
margins from January 2007 onwards. As expected during the year under review, it
resulted in an operating loss of approximately R37 million. The extrusion
manufacturing facility delivered operating profits from March until June 2008,
however, as previously indicated, full recovery is expected to take up to 18
months.
The domestic market was also severely impacted by power outages in January and
February 2008, traditionally the Group`s slower months. This exacerbated the
impact on the business through loss of sales volumes due to lower production, as
well as negative sentiment in the economy in general. The losses sustained in
the Group in those two months amounted to approximately R28 million,
substantially more than the historic trend.
The Group grew revenue by 6% with improved gross margins. The International
Division also delivered record operating results.
During the period under review, the Group implemented a three year turnaround
plan. Management expect profitability to return to acceptable levels within the
next 18 months.
During this time, there will be a strong focus on addressing the core problem
areas of productivity, overhead and wastage control, as well as on improving
cash flow generation and effective working capital control.
Importantly, gearing reduced from 81% at 30 June 2007 to 67% at 30 June 2008.
Non-Trading
In light of the trading results, management took the decision that it would be
prudent to defer raising a deferred taxation asset for the current year in the
amount of
R15 million until the trading entities involved return to profitability,
expected within 18 months as stated above. The once-off costs incurred during
the current year amounted to approximately R12 million. A substantial portion of
this amount related to retrenchment, impairment and abnormal maintenance costs
at the Roodekop facility.
The information in this trading statement has not been reviewed or reported on
by the company`s auditors.
Full details of the Company`s operations and its prospects for the 2009
financial year will be provided with the announcement of the results, which will
be published on SENS on or about 16 September 2008.
4 September 2008
Johannesburg
Sponsor: Sasfin Corporate Finance, a division of Sasfin Bank Limited
Date: 05/09/2008 10:00:02 Produced by the JSE SENS Department.
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