| Thu 4 Nov 2010, 17:33 | | CND - Conduit Capital Limited - Trading update |
|
CND
CND
CND - Conduit Capital Limited - Trading update
CONDUIT CAPITAL LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/017351/06)
Share code: CND ISIN: ZAE000073128
("Conduit" or "the group")
TRADING UPDATE
In terms of the Listings Requirements of JSE Limited, companies are required to
publish a trading statement as soon as they become reasonably certain that the
financial results for the period to be reported on will differ by more than
twenty percent from that of the previous corresponding period. In this regard a
review by management of the financial results for the year ended 31 August 2010
has indicated that net profit before tax, attributable earnings, headline
earnings, earnings per share ("EPS"), headline earnings per share ("HEPS"), net
asset value per share ("NAV") and tangible net asset value per share ("TNAV")
are expected to be as follows:
Unaudited 12 Audited
months to 12 months
31 Aug 2010 to % change
31 Aug 2009 Change
Net profit before tax 29 595 36 080 (6 485) (18.0%)
(R`000)
Attributable earnings 11 389 15 740 (4 351) (27.6%)
(R`000)
Headline earnings 11 392 14 464 (3 072) (21.2%)
(R`000)
EPS (cents) 4.55 6.29 (1.74) (27.7%)
HEPS (cents) 4.55 5.78 (1.23) (21.3%)
NAV (cents) 97.15 92.65 4.50 4.9%
TNAV (cents) 78.66 74.10 4.56 6.2%
Number of shares in 250 277 250 277
issue, net of treasury
shares (`000)
Weighted number of 250 277 250 277
shares (`000)
Note: The financial information on which the above trading statement is
based has not been reviewed or reported on by the group`s auditors.
General commentary
Notwithstanding the overall reduction in group profitability in the year to 31
August 2010, all operating segments were profitable. NAV advanced to 97.15 cents
per share (2009: 92.65 cents).
Legal expenses and accruals relating to a dispute over re-insurance arrangements
entered into by one of the group`s underwriting managers in 2006 and 2007
impacted attributable earnings by R4.2 million. The matter is complex and group
exposure (if any) will only be determined at the outcome of the arbitration
which is scheduled to take place in 2011.
A further material change to attributable earnings relates to an R8.3 million
reduction in interest earned on cash balances. Average daily cash held on
deposit in the 2010 financial year amounted to R240.5 million (2009: R245.5
million), which earned interest at an average of 6.03% compared with 9.31% in
the 2009 financial year. Maintaining appropriate levels of cash reflects the
importance that the group places on maintaining the A- Global credit rating in
the Insurance division.
Conduit Insurance and Risk Services
Higher retentions led to a 37.2% increase in net premium written and a 6.5%
overall increase in underwriting profitability before group overhead. A
controlled claims and underwriting management regime made a valuable
contribution to performance in the individual classes of business, the majority
of which produced positive underwriting results. The current growth and
diversification in the portfolio is very encouraging and will over time serve to
reduce concentration risk, negate volatility and bring to bear the benefits of
scale. In this regard marketing and distribution initiatives are proving
successful and are expected to result in further advances in premium growth,
underwriting profitability and return on capital.
Conduit Direct
Anthony Richards and Associates (Proprietary) Limited (40% held) once again
produced outstanding results, increasing profitability by 20% over the
comparable period to R22.9 million before tax and minorities.
Conduit`s full results for the year ended 31 August 2010, incorporating further
commentary on all operating units, are expected to be released during the second
week of November 2010.
Johannesburg
4 November 2010
Sponsor: Merchantec Capital
Date: 04/11/2010 17:33:17 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.
