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CSP
CSP
CSP - Chemical Specialities - Trading Statement For The Year Ended 31 March 2009
Chemical Specialities Limited
(Incorporated in the Republic of South Africa
(Registration number 2005/039947/06)
JSE share code: CSP
ISIN Number: ZAE000109427
("ChemSpec" or "the Company")
TRADING STATEMENT FOR THE YEAR ENDED 31 MARCH 2009
In terms of the Listings Requirements of the JSE Limited ("the JSE Listings
Requirements"), companies are required to publish a trading statement as soon as
they are satisfied that a reasonable degree of certainty exists that the
financial results of the period to be reported upon will differ by 20% or more
from the financial results of the previous corresponding period.
Accordingly the directors have pleasure in advising the following compared to
the previous corresponding period:
Profit after taxation ("PAT") is expected to increase to between R38 million and
R41 million compared with the audited PAT and loss amounting to R23.7 million
and R3.4 million for the 2008 and 2007 financial years, respectively.
Earnings per share is expected to be between 12.5 to 14 cents per share compared
with the earnings and loss per share of 10 cents and 2.1 cents per share for the
2008 and 2007 financial years, respectively. This amounts to an increase in the
2009 financial year of between 25% and 40% and is based on the weighted average
number of shares in issue of 306.4 million shares in the 2009 financial year
(2008 : 240.2 million).
Headline earnings is expected to increase to between R24 million and R27 million
compared with the audited headline earnings and headline loss amounting to R22.2
million and R5.8 million for the 2008 and 2007 financial years, respectively.
Headline earnings per share is expected to be between 8 to 9 cents per share
compared with the headline earnings per share of 9.25 cents per share for the
2008 financial year. This decrease of between 3% and 12% is due to the increase
in the weighted average number of shares in issue from 240.2 million shares in
the 2008 financial year to 306.4 million shares in the 2009 financial year.
Revenue growth for the 2009 financial year is expected to be between 6% to 8%.
Cash generated per share is expected to increase to between 25 to 30 cents per
share if the disposal of the Canelands property, as announced on SENS on 4 May
2009 (the "SENS announcement") (all inclusive "the Disposal"), is taken into
account, based on 310 million shares in issue as at 31 March 2009. This increase
will amount to between 20 to 24 cents per share if the Disposal is disregarded.
Net asset value per share is expected to increase by between 30% to 35% to
between 52 cents and 59 cents per share based on 310 million shares in issue as
at 31 March 2009.
Net tangible asset value per share is expected to increase by between 28.5% to
41.0% to between 41 cents and 45 cents per share based on 310 million shares in
issue as at 31 March 2009.
2008 was a tumultuous year for most businesses around the world. This was no
different for Chemspec. The first challenge lay in the relocation of our four
distinctly separate manufacturing facilities to the new Canelands manufacturing
site. This vital process came with its own set of challenges, many of which were
beyond our control. This resulted in this process taking an additional 18 months
to completion which has impacted negatively on the savings anticipated from this
move flowing through to our headline earnings in this reporting period. This
process is on track to be completed during August of this year.
ChemSpec will post pleasing results considering the current trading environment
and has benefited from a continued focus on cash generation and working capital
management.
Continued focus on key product costs helped maintain profit margins with strict
fiscal discipline and a good understanding of cost drivers helping to control
operating expenses. This contributed significantly to the growth in operating
profit. This is further emphasized by our improvement in operating profit
margins in the current year.
The purchase and capital expenditure incurred on the Canelands property will
leave the group with a world class manufacturing facility with significant
increased production capacity, funded in the most part by the surplus cash
generated by the sale of the property as per the SENS announcement.
The financial information on which this trading statement is based has not been
reviewed or reported on by the Company`s auditors.
Canelands
26 June 2009
Designated Advisor: QuestCo Sponsors (Pty) Ltd
Date: 26/06/2009 14:55:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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