| Thu 8 Apr 2010, 14:47 | | BDM - Buildmax Limited - Trading statement |
|
BDM
BDM
BDM - Buildmax Limited - Trading statement
Buildmax Limited
(Registration No. 1995/012209/06)
Share Code: BDM ISIN Code: ZAE000011250
("Buildmax" or the "group")
TRADING STATEMENT
In terms of the Listings Requirements of the JSE Limited, companies are required
to publish a trading statement as soon as they are reasonably satisfied that the
financial results for the reporting period will differ by 20% or more from prior
year results. Shareholders are referred to the trading statement issued by
Buildmax on 26 February 2010 in which Buildmax stated that:
- The financial results for the year ended 28 February 2010 were expected to
be more than 20% lower than the prior year;
- The earnings were dependent on the annual independent valuation of the
group`s fixed assets (primarily fleet) and on the annual assessment of the
carrying value of goodwill and intangible assets;
- Buildmax was not at that stage in a position to give specific earnings
guidance as required by the JSE Listings Requirements.
The critical review by management and an independent valuation of the group`s
fleet was substantially completed at the end of March 2010. Buildmax is now in a
position to give an update with regard to the financial results before any
impairment of goodwill and intangibles.
Core headline loss per share ("Core HLPS")
Core HLPS is based on headline losses per share ("HLPS") excluding non-cash flow
items relating to amortisation of intangibles (including mining rights), and the
implied/actual interest incurred on a deferred vendor consideration as required
in terms of International Financial Reporting Standards("IFRS").
Shareholders are advised that the Core HLPS and HLPS for the year are expected
to be between 1,6 cents and 3,6 cents and 3,1 cents and 5,1 cents respectively.
Key contributing factors to the Core HLPS and HLPS are:
- Abnormally high rainfall in the last four months of the year resulted in
the loss of revenue for both mining services and construction materials;
- The continued slowdown in the construction industry during the period under
review;
- Industrial action at Diesel Power, a subsidiary of Buildmax`s mining
services business unit, by a significant portion of its workforce severely
disrupted operations culminating in strike activity during the months of
May 2009 and June 2009. Normal activities only resumed in August 2009;
- The decline in the value of second hand equipment and the scarcity of bank
finance for new equipment forced the mining services business unit to hire
in equipment at punitive rates and to increase the use of sub-contractors.
In addition, the business unit has had to extend the life of its yellow
metal fleet, resulting in increased maintenance costs and reduced plant
availability and productivity.
- Inability to fully recover internal cost inflation from customers.
- Certain loss making contracts in Vukuza which contributed to the majority
of Vukuza`s approximately R40 million after tax loss (before plant
impairments). These contracts have been terminated since year end.
As a result of the critical review by management and the independent valuation
of the group`s fleet, the group expects to report an impairment to the carrying
value of its fleet of between R300 million and R400 million (before tax). In
addition it is anticipated that there will be appropriate impairments to the
carrying value of goodwill and intangible assets.
Although the anticipated impairments to the carrying value of the fleet,
goodwill and intangible assets do not impact on Core HLPS or HLPS they are taken
into account in the calculation of loss per share and Buildmax anticipates a
loss for the financial period of at least 25 cents per share (before taking into
account any impairments to the carrying value of goodwill and intangible
assets). Buildmax will only be in a position to provide more specific guidance
in relation to the anticipated loss per share once the impairments to the
carrying value of goodwill and intangible assets have been finally determined.
The information on which this trading statement has been based has not yet been
reviewed or reported on by the company`s auditors.
8 April 2010
Sponsor
Java Capital (Proprietary) Limited
Investor relations
Envisage Investor & Corporate Relations
Date: 08/04/2010 14:47:01 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.
