| Mon 16 Mar 2009, 17:19 | | FPF - Finbond Property Finance - Revised Trading Update for the Year Ended 28 |
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FPF
FPF
FPF - Finbond Property Finance - Revised Trading Update for the Year Ended 28
February 2009
Finbond Property Finance Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2001/015761/06)
Share code: FPF & ISIN: ZAE000097259
("Finbond" or "the Company")
REVISED TRADING UPDATE FOR THE YEAR ENDED 28 FEBRUARY 2009 (FOLLOWING THE
IMPAIRMENT OF GOODWILL AND INTANGIBLES IN THE MORTGAGE ORIGINATION DIVISION)
Finbond shareholders are referred to the Trading Update published by the
Company on 23 January 2009 wherein they were advised that Finbond expected its
fully diluted earnings and headline earnings per share for the year ending 28
February 2009, to be between 7,2 cents and 11,9 cents per share, as compared
to the earnings and headline earnings, on a fully diluted basis, of 23,8
cents, reported for the year ended 29 February 2008.
In terms of the Listings Requirements of the JSE Limited, an issuer must
publish a further trading statement if it becomes reasonably certain that a
previously published number, percentage or range in a prior trading statement
has changed.
Finbond is currently preparing its results for the year ended 28 February 2009
and the Company`s auditors are currently auditing these results. Finbond`s
directors believe that in terms of IAS36 - Impairment of Assets, Finbond will
need to impair a portion of its goodwill and intangible assets (specifically
brand names) relating to the mortgage origination division of the Company
following a process wherein Finbond assessed the carrying value of its
goodwill and intangible assets with the assistance of external valuation
consultants. The quantum of the impairment is approximately R73,2 million. As
a result, Finbond expects to report, on a fully diluted basis, a loss of
between 12,8 and 17,6 cents per share.
The expected range in respect of fully diluted headline earnings per share
remains unchanged from the previous Trading Update at between 7,2 cents and
11,9 cents per share. Headline earnings are not affected by impairments to
goodwill and intangible assets (in terms of SAICA Circular 08/07).
The impairments to goodwill and intangible assets are as a result of the
decreased rate at which banks are approving mortgage applications submitted by
Finbond`s mortgage origination division. This has had an effect on the
valuation of the mortgage origination side of the business determined for the
purpose of assessing the carrying value of goodwill and intangible assets.
Monthly mortgage origination volumes measured by formal grants (by the four
major banks) have declined from R1,8 billion in May 2007 to R346 million as of
December 2008.
The financial information on which this Trading Update has been based has not
been reviewed or reported on by the Company`s external auditors.
Pretoria
16 March 2009
DESIGNATED ADVISER:
GRINDROD BANK LIMITED
Date: 16/03/2009 17:19:02 Produced by the JSE SENS Department.
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