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PFG
PFG
PFG - Pioneer Food Group Limited - Trading Update
PIONEER FOOD GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1996/017676/06)
JSE share code: PFG
ISIN: ZAE000118279
("Pioneer Foods" or "the Company")
TRADING UPDATE
Given the fact that Pioneer Foods will release its interim results in due
course and further to the announcements of February 25th, March 16th and April
1st shareholders are advised that Pioneer Foods has made a provision for a
potential administrative penalty from the wheaten and white maize flour
milling complaint referrals received from the Competition Commission in which
Pioneer Foods and other industry participants are named as respondents.
The provision of R154 million, applies a rate of 8.5% on the 2006 affected
revenue from the selling of wheaten and white maize flour of R1 821.6 million
for that year. In doing so the Company has followed approximately the same
approach as the Competition Tribunal in determining the penalty in the bread
matter, although the Competition Commission still maintains that they wish to
impose a 10% administrative penalty on the 2009 group revenue. The final
amount therefore still needs to be determined.
This provision is in addition to the R196 million provision raised by the
Company from the bread complaint referral, following the ruling of the
Competition Tribunal on February 3rd. The Competition Commission has taken
this ruling on appeal to the Competitions Appeal Court. Pioneer Foods has
opposed the appeal and lodged a cross-appeal as indicated before. This amount
may therefore increase or decrease as previously indicated.
Pioneer Foods wants to resolve the milling and other matters before the
Competition Commission through co-operation with the Commission, and without
recourse to proceedings currently before the Competition Tribunal, if
possible.
As a result of the additional provision of R154 million that is raised plus
the previous provision of R196 million that was raised (total amount of R350
million), earnings per share and headline earnings per share for the six
months ending 31 March 2010, is expected to decrease by between 50% and 70%
from the previous corresponding period.
Shareholders are further advised that should none of the abovementioned
provisions be taken into account, an increase of between 45% and 65% is
expected in earnings and headline earnings per share for the six months ending
31 March 2010, over the previous corresponding period.
Shareholders are further referred to the cautionary announcement dated 16
March 2010 and are advised to continue to exercise caution when dealing in
their Pioneer Foods shares until a further announcement is made. Pioneer Foods
will revert to shareholders on further progress in respect of this and other
matters once more certainty exists.
The results for the six months ended 31 March 2010 is expected to be published
on or about May 24th 2010.
Paarl
8 April 2010
Sponsor
PSG Capital (Pty) Limited
Date: 08/04/2010 15:50:01 Produced by the JSE SENS Department.
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