| Thu 30 Jul 2009, 10:25 | | SPG - Super Group - Trading statement and update regarding the recapitalisation |
|
SPG
SPG
SPG - Super Group - Trading statement and update regarding the recapitalisation
Super Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1943/016107/06)
ISIN: ZAE000011334
Share code: SPG
("Super Group" or "the Group")
Trading statement and update regarding the recapitalisation of Super Group,
disposal of non-core assets and appointment to the board and change in
executive`s responsibilities
Super Group is completing a restructuring process to refocus the Group on its
core supply chain businesses and to dispose of non-core and unprofitable
operations. Shareholders are advised that the continuing operations on which
the future Super Group will be based are profitable, that the Group remains
solvent, and that continuing operations remain cash generative.
Disposal and closure costs are substantial. These costs are the principle
factors in the expected losses reported below.
1. Trading statement
Super Group is scheduled to release its financial results for the financial year
ended 30 June 2009 in September 2009. In terms of the JSE Limited Listings
Requirements, issuers are required to publish a trading statement as soon as
they are satisfied that a reasonable degree of certainty exists that the
financial results for the period to be reported upon next will differ by at
least 20% from those of the prior comparative period.
Shareholders are advised that Super Group is expecting to report a consolidated
net loss for the financial year ended 30 June 2009 of between R1 120 million and
R1370 million, resulting in a loss per share of between 245 cents and 299 cents,
and a headline loss per share of between 141 cents and 195 cents. This compares
with earnings of 50.7 cents per share and headline earnings of 67.1 cents per
share for the financial year ended 30 June 2008.
The net loss from discontinued operations is expected to be between R1 117
million and R1 365 million, equivalent to between 244 cents and 299 cents per
share, and a headline loss per share of between 153 cents and 200 cents.
The net profit from continuing operations is expected to be a profit of between
R1 million and R5 million, equivalent to a profit per share of 1 cent. Super
Group`s continuing operations are however expected to generate positive headline
earnings per share of between 11 cents and 14 cents.
The Group`s losses arise primarily as a result of the following factors:
- closure costs, the impairment of goodwill and intangible assets on the
Group`s Balance Sheet and write-downs on inventory, mostly related to
Super Group Industrial Products and Mica;
- restructuring and severance charges to enable the Group to reduce costs
in line with current lower volumes and its strategic intent;
- the recognition of provisions for onerous leases within the discontinued
operations;
- the impairment in the carrying value of foreign investments; and
- the increase in the Group`s gearing during the prior financial year,
which combined with higher borrowing costs, resulted in an increase in
net finance charges compared to the prior financial year.
In addition to the above factors, the Group`s losses have been exacerbated by:
- a substantial reduction in trading volumes in line with the generally
depressed performance of the industry sectors in which the group
operates;
- the recent strengthening of the Rand resulting in lower translated
earnings from foreign operations, higher foreign exchange losses from the
translation of foreign denominated assets, higher than anticipated mark-
to-market adjustments on forward exchange contracts and interest rate
derivatives; and
- the insurance business experiencing an unusually high number of large
claims during the latter part of the financial year for which provisions
have been recognised.
The financial information on which this trading statement is based has not been
reviewed or reported on by Super Group`s auditors.
2. Recapitalisation of Super Group
Shareholders are referred to the cautionary announcement published on SENS on 18
March 2009 and the subsequent cautionary announcements released on SENS and
published in the press regarding the proposal to restructure the Group`s debt
and the intention to propose a rights offer to Super Group shareholders
underwritten to the extent which will ensure minimum proceeds of R1 billion (the
"Proposed Rights Offer"). Shareholders of Super Group, in a general meeting
held on 21 May 2009, approved the resolutions necessary to implement the
Proposed Rights Offer, details of which were included in the circular which
accompanied the notice of general meeting.
Shareholders are hereby informed that the restructuring agreement between Super
Group and the relevant funders setting out the key terms of the equity
recapitalisation and debt restructuring transaction, the facilities agreement
between Super Group and the relevant funders containing the terms of the
restructured debt and the underwriting agreement between Super Group and parties
which will underwrite the Proposed Rights Offer, have been agreed and signed.
Super Group may now proceed to prepare for the Proposed Rights Offer of 41 new
rights offer shares for every 10 Super Group ordinary shares held at the close
of business on the record date.
Further details regarding the Proposed Rights Offer, the terms of the proposed
restructuring, salient dates and processes to be followed will be included in a
rights offer circular and published on SENS and in the press.
3. Disposal of non-core assets
Shareholders are aware that Super Group is in the process of disposing of
certain of its non-core assets, including the entire issued ordinary share
capital of Emerald Insurance Company Limited and Partcorp Holdings Limited
("AutoZone"), as announced on SENS on 10 July 2009 and 30 July 2009
respectively, as well as the business of Mica, as notified to shareholders on
SENS on 28 May 2009. Agreement has been concluded for the disposal of the
business of Hermans Truck Accident Repairs. A separate announcement will be made
in this regard. The results reflected above incorporate the losses relating to
the disposal of these operations.
4. Appointment to the board and change in executive`s responsibilities
Shareholders are advised that Peter Mountford has been appointed Chief Executive
Officer ("CEO") of Super Group with effect from 29 July 2009, from which date he
is also appointed a member of Super Group`s board of directors. Peter was
previously the Divisional CEO of the core Supply Chain division.
Shareholders were informed, in terms of the announcement dated 17 April 2009,
that Phillip Vallet, Deputy Chairman of Super Group, had assumed the role of
interim CEO. Subsequent to the appointment of Peter Mountford as CEO of Super
Group, Phillip will continue to retain certain executive functions on behalf of
the Company, overseeing finalisation of the recapitalisation of Super Group,
corporate actions flowing therefrom as well as planned disposals of non-core
assets.
Sandton
30 July 2009
Financial advisor and Sponsor to Super Group: Deutsche Securities (SA)
(Proprietary) Limited
Corporate Law Advisor: Fluxmans Incorporated
Merchant Bank and Corporate Advisor: RAND MERCHANT BANK (A division of FirstRand
Bank Limited)
Legal Advisors to Merchant Bank and Corporate Advisors: Webber Wentzel
Date: 30/07/2009 10:25:01 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.
