| Thu 26 Nov 2009, 16:39 | | BFS - Blue Financial Services - Trading Statement |
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BFS
BFS
BFS - Blue Financial Services - Trading Statement
BLUE FINANCIAL SERVICES LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number: 1996/006595/06)
JSE Code: BFS & ISIN: ZAE000083655
("Blue" or "the Company" or "the Group")
TRADING STATEMENT
In accordance with paragraph 3.4 (b) of the Listings Requirements of the JSE
Limited, a company is required to publish a trading statement as soon as it
becomes aware, with a reasonable degree of certainty, that the financial results
for the next period to be reported on are likely to vary by more than 20% from
the previous corresponding period.
Further to the trading update and cautionary announcement released on SENS on 10
November 2009, shareholders are advised that the Company has incurred a loss of
R162.3 million for the six months ended 31 August 2009. This translates into a
basic loss of 27.07 cents per share and a headline loss of 27.11 cents per share
attributable to ordinary shareholders, compared to basic earnings per share and
headline earnings per share of 11.03 cents and 10.96 cents, respectively, for
the previous comparable interim period.
The decline in the Company`s results is mainly attributable to unusually
challenging trading conditions during the interim period, which were primarily
as a result of:
- reduced levels of funding available to the Group emanating from the impact
of the global economic crisis;
- an overall increase in expenses of 119% from the comparative period fuelled
by the increase in number of branches from 192 in the comparative period to
260 for the period under review;
- an increase in the provision against non-performing loans of 155% from R147
million at the previous reporting date to R374 million for the interim
period under review; and
- the weakening in most of the African currencies to the Rand during the
period under review, which impacted negatively on the Rand-based results of
many of the African businesses.
The Company has initiated a number of key strategic actions aimed at restoring
the Group to profitability in the medium term and thereby ensuring the overall
sustainability and long-term success of the business. These actions include:
- aggressive cost rationalisation and increase in operating model
efficiencies;
- assessing the profitability of all business segments and product lines;
- amending the Group`s product mix to restore profitability in the near term;
- increasing Group liquidity in the short-term;
- delaying the execution of any further expansion opportunities for the short
term, and focusing on organic growth and scalability of the Group`s
existing operations; and
- improving business sophistication, including the strengthening of the
treasury management and business optimisation.
The Board is confident that these strategic actions will restore the Group to
profitability and ensure that it remains well positioned to benefit from its
market position, distribution network, brand and products on the continent.
The Company has also responded to a number of improvements in corporate
governance including the appointment of an independent non-executive chairman.
The Board has made the necessary recommendations and discussions with potential
candidates are in progress.
All of the above matters will be expanded upon in the Company`s interim
financial results for the six months ended 31 August 2009 which will be released
on 30 November 2009.
This trading statement has not been reviewed or reported on by the Company`s
external auditors.
Cautionary
The cautionary included in the trading update and cautionary announcement
released on SENS on 10 November 2009 is hereby withdrawn.
Shareholders are however referred to the separate cautionary announcement also
released on SENS on 10 November 2009 which has not been withdrawn as the company
is still in negotiations which if satisfactorily concluded may have a material
effect on the company and the price of its shares. Shareholders are accordingly
advised to continue to exercise caution in dealing in their shares until a
further announcement is made.
Pretoria
26 November 2009
Designated Adviser: PSG Capital (Proprietary) Limited
Date: 26/11/2009 16:39:01 Produced by the JSE SENS Department.
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