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VMK
VMK
VMK - Verimark Holdings Limited - Trading Statement
VERIMARK HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/006957/06)
JSE code: VMK & ISIN: ZAE000068011
("the Group")
TRADING STATEMENT
In accordance with paragraph 3.4(b) of the Listings Requirements of the JSE
Limited, companies are required to inform shareholders as soon as there is a
reasonable degree of certainty that the earnings of the company are likely to
vary by more than 20% compared to the previous reporting period.
The Board of Directors therefore wishes to advise shareholders that both the
headline loss per share and the basic headline loss per share attributable to
ordinary shareholders for the six months ended 31 August 2009 is expected to
be between 9.1 cents and 11.1 cents compared to a headline loss per share and
a basic headline loss per share of 5.2 cents for the previous comparable
period.
The reduction in earnings is predominantly due to the impact of some once off
abnormal items which do not relate to the trading results. The impact of these
once off items on headline loss per share are expected to result in a
"normalised" headline loss per share of between 3.1 cents and 5.1 cents
compared to the prior period of 5.2 cents.
Although the turnaround strategy gained some momentum in the latter part of
the reporting period, the ongoing acquisition of our franchise stores has
negatively impacted on profitability. The resultant benefits of the conversion
to corporate owned stores in terms of improved turnover and margins, is
somewhat offset by the corresponding increase in costs associated with the
daily operations of these stores. It is expected that the turnaround strategy
for these stores will gain momentum in the medium term as turnovers start to
increase and unprofitable stores are replaced with newer and more profitable
stores.
In addition, the introduction of new products and improved prominence and
space utilisation within the retail environment contributed to sales growth.
Most of the management changes have been affected and the Board looks forward
to seeing the impact of the new team on the overall profitability of the
business.
Turnover for the period under review was higher than the previous period, for
the reasons mentioned above. The gross profit margin has also shown
improvement due to a better mix of products and the strengthening of the Rand
against all major trading currencies. The increased number of company-owned
stores has also benefited the overall margin as full retail selling prices are
achieved in these stores.
Although the first six months of the year have been challenging, the
turnaround strategy continues as anticipated and the company expects further
positive effects to be felt in the second half of the year.
The forecast information included in this trading statement has not been
reviewed or reported on by Verimark`s external auditors.
The Group`s results for the six months ended 31 August 2009 will be released
on SENS on or about 12 November 2009.
Randburg
29 October 2009
SPONSOR
PSG Capital (Proprietary) Limited
Date: 29/10/2009 09:38:21 Produced by the JSE SENS Department.
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