| Fri 31 Oct 2008, 10:30 | | CND - Conduit - Trading Update |
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CND
CND
CND - Conduit - Trading Update
CONDUIT CAPITAL LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/017351/06)
Share code: CND ISIN: ZAE000073128
("Conduit" or "the company" or "the group")
TRADING UPDATE
In terms of the Listings Requirements of JSE Limited, companies are required to
publish a trading statement as soon as they become reasonably certain that the
financial results for the period to be reported on will differ by more than
twenty percent from that of the previous corresponding period. Accordingly, a
review of the financial results for the year ended 31 August 2008 by management
has indicated that operating profit, profit before tax, attributable earnings,
headline earnings, earnings per share ("EPS"), headline earnings per share
("HEPS"), net asset value per share ("NAV") and tangible net asset value per
share ("TNAV") are expected to be as follows:
Table 1
Unaudite Unaudite
d d
12 12
months months Change
to to
31 Aug 31 Aug
`08 `07 1
Operating profit (R`000) 2 19 727 12 587 7 140
Net profit before tax (R`000) 26 477 45 089 (18
2 612)
Attributable earnings (R`000) 14 266 20 881 (6
615)
Headline earnings (R`000) 14 828 20 365 (5
537)
EPS (cents) 6.14 11.22 (5.08)
HEPS (cents) 6.39 10.94 (4.55)
NAV (cents) 85.86 85.81 0.05
TNAV (cents) 67.23 50.40 16.83
Number of shares in issue, net 250 277 221 777 -
of treasury shares (`000)
Weighted number of shares 232 166 186 104 -
(`000)
Note: The financial information on which the above trading statement is
based has not been reviewed or reported on by the company`s auditors.
1. Given that the period to be reported on is a 12-month period and that the
most recent audited financial statements are for the 18 months ended 31
August 2007, the financial information for the 12 months to 31 August 2007
is reflected as unaudited.
2. The difference between operating profit and net profit before tax is
largely attributable to investment returns.
HEPS for the six months to 31 August 2008 was 5.08 cents, which compares to 1.20
cents for the six month period ended 29 February 2008 (see Table 2). Whilst this
represents a marked improvement in profitability, the impact of significantly
lower investment returns in the six months to February 2008 (see trading
statement of 29 April 2008) resulted in an overall reduction in earnings for the
12-month period ended 31 August 2008 as compared to the 12 months ended 31
August 2007.
GENERAL COMMENTARY
The corrective action taken in the insurance book in the six months to February
2008 provided the foundation for improved underwriting profitability in the
second six months of the year. This coupled with reduced exposure to equity
markets and the expected improved profitability in the group`s credit recovery
operations (Conduit Direct) resulted in a significant improvement in group
profitability in the second half of the financial year as is evident from the
comparison set out below:
Table 2
Unaudite Unaudite
d d
six six
months months Change
to to
31 Aug 29 Feb
`08 `08
Operating profit (R`000) 1 11 722 8 005 3 717
Net profit before tax (R`000) 17 848 8 629 9 219
1
Attributable earnings (R`000) 11 556 2 710 8 846
Headline earnings (R`000) 12 111 2 717 9 394
EPS (cents) 4.85 1.20 3.65
HEPS (cents) 5.08 1.20 3.88
NAV (cents) 85.86 89.85 (3.99)
TNAV (cents) 67.23 54.72 12.51
Number of shares in issue, net 250 277 226 277 -
of treasury shares (`000)
Weighted number of shares 238 407 225 856 -
(`000)
Note: The financial information on which the above trading statement is
based has not been reviewed or reported on by the company`s auditors.
1. The difference between operating profit and net profit before tax is
largely attributable to investment returns.
In the six months to 31 August 2008 the group further reduced its exposure to
equity markets thereby minimising the impact of recent market turmoil. The
statutory funding ratio of Constantia Insurance Company Limited ("CICL"), the
insurance division`s main asset, improved from 24,7% in August 2007 to 38% as at
31 August 2008 (Statutory requirement: 15%). CICL`s credit rating remains
unchanged at A-.
As at 31 August 2008 group cash and near cash resources available for investment
increased to approximately R130 million (29 February 2008: R110 million); which
resources are in addition to existing working capital utilised within the group.
Whilst the improved results for the six month period ended 31 August are
pleasing, general market conditions remain challenging and will likely follow
into the new financial year. The group will therefore continue to focus on
existing operations and will maintain a conservative investment strategy.
Conduit`s final results, with further commentary on all operating units, are
expected to be published on SENS in November 2008.
Johannesburg
31 October 2008
Sponsor: Merchantec (Proprietary) Limited
Date: 31/10/2008 10:30:01 Produced by the JSE SENS Department.
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