| Tue 21 Apr 2009, 11:49 | | CKS - Crookes - Dispiosal And Lease Of Komatipoort Estate Withdrawal Of |
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CKS
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CKS - Crookes - Dispiosal And Lease Of Komatipoort Estate, Withdrawal Of
Cautionary And Trading Update
CROOKES BROTHERS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 1913/000290/06)
SHARE CODE: CKS ISIN: ZAE000001434
("Crookes" OR "the Company")
-DISPOSAL AND LEASE OF THE KOMATIPOORT ESTATE
-WITHDRAWAL OF CAUTIONARY
-TRADING UPDATE
1. DISPOSAL OF THE KOMATIPOORT ESTATE
1.1. Introduction
Shareholders are advised that an agreement has been reached between Crookes
("the seller") and the National Department of the Land Affairs ("the
purchaser"), for the disposal of the Komatipoort Estate in terms of the
Restitution of Land Rights Act 22 of 1994 ("the properties"), for a cash
purchase consideration of R200 million ("the consideration") (collectively,
"the disposal").
1.2. Terms of the disposal
The effective date of the disposal will be the date of registration of
transfer of the properties.
The consideration of R200 million is payable by no later than the tenth
succeeding day after the registration of transfer of the properties.
The proceeds of the disposal will be utilised to fund expansion opportunities
in the pipeline and repay current debt.
The properties are being sold voetstoots and without any warranty.
1.3. Conditions precedent
The disposal is subject to conditions that are considered normal for
transactions of this nature, of which the following remain outstanding:
- approval of Crookes shareholders in general meeting;
regulatory approvals, where necessary; and
- the registration of transfer of the properties.
1.4. Description of the properties
The properties are located south west of the town of Komatipoort and total
4963,4583 ha in extent, of which 2 000 ha are under sugar cane cultivation
and 450 ha under bananas.
1.5 Rationale for the disposal
As mentioned in previous Annual Reports, various claims on the Company`s
properties had been lodged over a period of time. The Company has
participated in numerous discussions with the Land Claims Commission and this
is the fourth settlement that has been finalised.
2. THE DEED OF LEASE
Crookes has entered into a lease agreement with the National Department of
Land Affairs to lease the properties as a going concern for a period of five
years from the date of transfer of the properties ("the lease"). Crookes has
the option to renew the lease on the same terms for a further five year
period.
3. FINANCIAL EFFECTS
The unaudited pro forma financial effects of the disposal and lease are set
out below. The unaudited pro forma financial effects have been prepared for
illustrative purposes only to provide information on how the disposal and
lease may have impacted on the results and financial position of Crookes.
Preparation of the unaudited pro forma financial effects is the
responsibility of the directors. Because of their nature, the unaudited pro
forma financial effects may not fairly present Crookes` financial position
after the disposal and lease or the effects on future earnings:
Before the After the Percentage
disposal and disposal change
lease for and lease %
the 6 months Unaudited
ended Pro forma
30 September
2008
Earnings per share 216.5 1023.5 372.7
(cents)(1)(2)
Headline earnings 216.8 291.2 34.3
per share (cents)(1)(2)
Net asset value and net 2445 3164 29.4
tangible asset value (cents
per share)(3)
Number of shares in issue 12 385 000 12 385 000 -
Weighted average number of 12 384 000 12 384 000
share in issue -
Notes and assumptions:
(1) Unaudited pro forma earnings and headline earnings are based on Crookes`
published unaudited interim results for the 6 months ended 30 September
2008 after taking into account the following adjustments:
- an average interest rate on call deposits of 10.93% on R126m and average
interest on borrowings of 14.33% on R74m; and
- a company tax rate of 28%.
(2) The unaudited pro forma earnings figures illustrate the possible
financial effects for the 6 months ended 30 September 2008 if the
disposal and lease had been implemented on 1 April 2008 for Income
Statement purposes and 30 September 2008 for Balance Sheet purposes.
(3) The net asset value and net tangible asset figures are based on the
assumption that the disposal and lease were effective from 30 September
2008 and an estimated net surplus on disposal of R89m.
(4) Transaction costs of R0.67m have been taken into account.
4. CATEGORISATION OF THE TRANSACTION AND DOCUMENTATION
The disposal is categorized as a Category 1 transaction in terms of the JSE
Limited Listings Requirements.
Accordingly the Company is in the process of preparing a circular to Crookes
shareholders incorporating a notice of general meeting to approve the
disposal. This circular will be posted to shareholders in due course.
5. WITHDRAWAL OF CAUTIONARY
Shareholders` attention is drawn to the announcement on 21 May 2008 wherein
the company stated that negotiations were in progress regarding the possible
development of 4 000 hectares of sugar cane in the SADC region. Crookes
wishes to inform shareholders that these negotiations have been discontinued.
As a consequence of this announcement, shareholders are referred to the
cautionary announcements, the last of which was dated 2 March 2009, and are
advised that caution is no longer required to be exercised when dealing in
the Company`s securities.
6. TRADING UPDATE
An announcement dated 2 July 2008 was published on SENS advising shareholders
that the Company`s Doornkop Farms had been sold to the National Department of
Land Affairs in terms of the Restitution of Land Rights Act for a purchase
consideration of R48.9 million. Transfer of the properties was effected on
25 March 2009, 50% of the purchase consideration was received on 27 March
2009 and the balance received on 7 April 2009.
The Company also concluded the sale of its Cedars farm to the National
Department of Land Affairs, on behalf of the Sbusiso Land Trust, for a
consideration of R26.2m. Transfer of the properties was effected on 3 April
2009 and full payment of the purchase consideration was received on 9 April
2009.
The proceeds from the sale of the Company`s Doornkop Farms will therefore be
included in the results of the Company for the year ended 31 March 2009 and
the proceeds from the sale of the Cedars farm will be included in the results
of the Company for the year ending 31 March 2010.
Shareholders are advised that the Company`s earnings per share for the year
ended 31 March 2009 are expected to be between 65% and 85% higher and
headline earnings per share are expected to be between 15% and 30% higher
than the results of the previous corresponding period. The difference is
mainly due to the capital profit on disposal of the Company`s Doornkop Farms
which amounted to R28m.
The financial information on which this trading statement is based has not
been reviewed or reported upon by the Company`s auditors. The Company`s
results for the year ended 31 March 2009 are expected to be published on 25
May 2009.
Renishaw
21 April 2009
Sponsor: Sasfin Capital
A division of Sasfin Bank Limited
Reporting Accountants:
Deloitte & Touche
Date: 21/04/2009 11:49:02 Produced by the JSE SENS Department.
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