| Tue 26 May 2009, 16:26 | | FPF - Finbond - Revised Trading Update for the Year Ended 28 February 2009 |
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FPF
FPF
FPF - Finbond - Revised Trading Update for the Year Ended 28 February 2009
(Following Further Impairment of Goodwill and Intangibles in
the Mortgage Origination Division)
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 FURTHER
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 and the Revised Trading Update published by the Company on 16
March 2009.
In terms of the Listings Requirements of the JSE Limited, an issuer must publish
another trading statement if it becomes reasonably certain that a previously
published number, percentage or range in a prior trading statement is no longer
correct.
Given the further rapid deterioration and decline in Finbond`s Mortgage
Origination Division that is not expected to recover in the short or medium
term, Finbond`s directors in terms of IAS36 - Impairment of Assets, have
determined that they will need to further impair a portion of goodwill and
intangible assets relating to the mortgage origination division of the Company
by R18 million bringing the final impairment of goodwill and intangibles to
R91,2 million as opposed to the R73,2 million impairment communicated in the
Revised Trading Update published on 16 March 2009. As a result Finbond now
expects to report, on a fully diluted basis, a loss of between 18,6 and 23,4
cents per share as compared to the earnings, on a fully diluted basis, of 23,8
cents reported for the year ended 29 February 2008. Finbond currently expects
to report, on a fully diluted basis, between a headline loss of 2,6 cents per
share and a headline profit of 2,2 cents per share as compared to the fully
diluted headline earnings of 23,8 cents per share, reported for the year ended
29 February 2008,
Mortgage advances by the four major banks have slowed significantly over the
past year and dramatically so in the last quarter of the year ended 28 February
2009. Standard Bank withdrew completely from the mortgage origination market and
is not accepting any business from originators. Due to much stricter lending
criteria the other three major banks are declining about 70% - 90% of mortgage
applications submitted by mortgage originators. Finbond`s monthly mortgage
origination volumes measured by formal grants have declined from R1,8 billion in
May 2007 to R 1,17 billion in November 2007, R 934 million in March 2008, R580
million in November 2008, R346 million in December 2008 and R 198 million in
April 2009. The aforementioned had a material negative impact on volumes and
profits in Finbond`s mortgage origination division.
The financial information on which this Trading Update has been based has not
been reviewed or reported on by the Company`s external auditors. Finbond will
publish it results for the year ended 28 February 2009 before the end of May
2009.
Pretoria
26 May 2009
DESIGNATED ADVISER:
GRINDROD BANK LIMITED
Date: 26/05/2009 16:26:06 Produced by the JSE SENS Department.
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