BFS - Blue - Trading Update And Cautionary Announcement
BFS
BFS
BFS - Blue - Trading Update And Cautionary Announcement
BLUE FINANCIAL SERVICES LIMITED
(Registration number 1996/006595/06)
(Incorporated in the Republic of South Africa)
JSE Code: BFS & ISIN: ZAE000083655
("Blue" or "the Company")
TRADING UPDATE AND CAUTIONARY ANNOUNCEMENT
Shareholders are hereby advised that the Company is in the process of finalising
its interim results for the six months ended 31 August 2009, and expects to
reflect a loss for the interim period then ended.
The decline in the Company`s results is mainly attributable to:
1. Restricted levels of funding available in the market emanating from the
Global Financial Crisis, which has limited the Company`s ability to grow
its loan book;
2. Operating costs being disproportionately high when compared to revenue
owing to the lower than expected levels of available funding;
3. Increase in the impairment of loan advances particularly in the South
African portion of the loan book; and
4. Weakening in many of the local African market currencies against the Rand.
The Company has implemented the following steps to improve profitability and
cash flows:
1. Cost rationalisation and increase in operating model efficiencies;
2. Improving business sophistication including the strengthening of the
treasury management and business optimisation functions;
3. Delaying the expansion into new markets in the short term; and
4 Engaging with funders to restructure current, or secure new funding lines.
Demand for the Company`s products remains high.
To enhance the provisioning policy, the Company is undertaking a thorough review
of its loan books in conjunction with the external auditors. The interim
results are dependent on this assessment and will be released to shareholders
before 30th November 2009.
At this stage, the Company is unable to quantify, with reasonable certainty, the
expected loss for the six months ended 31 August 2009. Accordingly, shareholders
are advised to exercise caution when dealing in the Company`s shares until such
time as a trading statement is released.
Pretoria
10 November 2009
Designated Adviser: PSG Capital (Proprietary) Limited
Date: 10/11/2009 15:36:01 Produced by the JSE SENS Department.
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