| Thu 23 Apr 2009, 16:30 | | DLV - Dorbyl - Trading Update |
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DLV
DLV
DLV - Dorbyl - Trading Update
DORBYL LIMITED
(Incorporated in the Republic of South Africa)
(Registration no. 1911/001510/06)
Ordinary share code: DLV
ISIN: ZAE000002184
("Dorbyl" or "the Group")
TRADING UPDATE
In the interim results released on 24 November 2008, the impairment assessment
considered the interrelationship of the Group`s properties with the operations
as singular integrated cash-generating units, thus recognising the net
impairment only. The Group is expected to report significant losses per share as
indicated below, mainly as a result of a change in accounting policy, in which
the property revaluations are now being recognised in a revaluation reserve
directly in the balance sheet, thus not off-setting the estimated business
impairments which are being recognised directly in the income statement. This
change in accounting policy will require the prior periods to be restated. It
should be noted that although the net earnings for prior periods will not
change, the net asset value in the financial statements will be affected. In
light of the current status of the Group, the Board believes that this change in
accounting policy will give the shareholders a more informed indication of the
net asset value. The net asset value per share at 31 March 2009, after allowing
for the change in accounting policy, is expected to be between 613 and 850 cents
per share.
For the financial year ending 31 March 2009, it is expected that headline loss
per share will reflect a loss of between 299,6 and 328.4 cents per share
(compared to the headline loss per share of 143,9 cents for the previous
comparative year) and in respect of basic loss per share, a loss of between
666,4 and 705,6 cents per share (compared to the basic loss per share of 196,4
cents for the previous comparative year). The headline loss per share includes
significant provisions including severance packages and stock provisions
recognised during the second half of the year that relate to the restructuring
of the various operations. The substantial loss reflected in basic loss per
share takes into account the above change in accounting policy.
In addition to the operating losses, impairments significantly affected earnings
and the consequent effect on the net asset value. The net asset value was also
impacted by the revaluation of the properties. The impairment and revaluation
assessments reflect assumptions and judgements by the management of Dorbyl
concerning anticipated future outcomes. These assumptions and judgements may or
may not prove to be correct as there is significant uncertainty in the current
economic environment and should accordingly be viewed with caution. These
assessments do not consider the impact of secondary tax on companies (STC) and
do not include future corporate costs to be incurred while implementing the
various strategic actions.
Shareholders are referred to the interim results released on 24 November 2008,
wherein details were set out of the various interventions and actions being
taken in respect of the five business units as well as the five properties owned
by the Group.
The current status of the aforementioned interventions are summarised as
follows:
- The Dorbyl Automotive Systems business (28% of group turnover for the
financial year ending 31 March 2009) and the Rosslyn property. The
disposals of this business unit and the property were announced in October
2008 and December 2008 respectively. These disposals have not been
finalised, pending the securing of finance by the purchaser.
- Univel Transmissions (29% of group turnover for the financial year ending
31 March 2009). It has been proposed by the two Joint Venture partners,
GKN (Europe) and Dorbyl, that the business be closed because it is not seen
as a viable business.
- Guestro Forging and Machining (25% of group turnover for the financial year
ending 31 March 2009). After various interventions to first make this
operation profitable, negotiations are now at an advanced stage for the
disposal of this business unit.
- Dorbyl Magnetto Wheels. Dorbyl will retain its 50% interest in this
business.
- Guestro Castings and Machining (18% of group turnover for the financial
year ending 31 March 2009). To make this a viable business the operation
has been drastically restructured from a two shift to a one shift operation
retaining only those products with acceptable margins. The property on
which this operation is located, is also being evaluated with a view to
extracting maximum value.
- Uitenhage and Struandale properties. The futures of these two properties
are currently being evaluated by the Board.
- Korsten property. As was announced in the press on 20 March 2009, this
property was sold for a consideration of R36 million. This transaction is
now only subject to shareholder approval at a general meeting of
shareholders to be held on 5 May 2009 and the proceeds will be received on
transfer of the property into the purchaser`s name.
In respect of the possible disposals, the appropriate announcements will be made
as and when required, in compliance with the rules and regulations of the JSE
Limited.
The information in this trading statement has not been reviewed or reported on
by Dorbyl`s auditors.
Johannesburg
23 April 2009
Sponsor: PSG Capital (Pty) Limited
Date: 23/04/2009 16:30:01 Produced by the JSE SENS Department.
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