| Tue 14 Dec 2010, 15:06 | | RAC - Racec Group Limited - Trading Update |
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RAC
RAC
RAC - Racec Group Limited - Trading Update
RACEC GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/006153/06)
Share code: RAC ISIN: ZAE000105409
("RACEC" 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 20%
from that of the previous corresponding period.
Accordingly, a review of the financial results for the year ended 30 September
2010 by management has indicated that the earnings per share is expected to be
between 11.1 and 13.6 cents and the headline earnings per share is expected to
be between 12.1 and 14.5 cents, compared to the loss per share of 12.6 cents and
the headline loss per share of 12.3 cents for the year ended 30 September 2009.
For comparative purposes with prior periods, if the impact of the consolidations
of Solethu Civils Holdings (Proprietary) Limited, as required in terms of SIC 12
is removed, the "normalised" earnings per share is expected to be between 13.1
and 13.3 cents and the "normalised" headline earnings per share is expected to
be between 13.6 and 14.0 cents, compared to the "normalised" earnings per share
of 1.4 cents and the "normalised" headline earnings per share of 1.8 cents for
the year ended 30 September 2009.
The year under review saw a fierce local tendering environment and exceptionally
difficult trading conditions, with construction activity remaining stagnant and
contractors aggressively competing against each other for limited opportunities.
Despite the uncertain economic climate, the Group experienced a significant
upturn in its business during the second half of the 2010 financial year. This
was assisted by the award and implementation of two large reticulation projects
in the Western Cape, being the R95 million N1 street lighting project for the
Department of Transport and Public Works, as well as the R80 million sub-contact
for the Civil and Electrical Upgrade at the Cape Town Container Terminal.
Other operations within the Electrification division maintained steady
profitability, being attributed to its long-standing track record in the
industry, supported by its staff and RACEC`s status with its clients as a
preferred contractor.
RACEC Rail has been successful in being awarded contracts in Western and
Northern Cape, as well as through newly founded operations in Mozambique and
Sierra Leone, all contributing to the better than anticipated profit margins.
Over the last year RACEC Rail has procured a sizeable fleet of heavy duty on
track equipment and associated plant, which further places RACEC Rail in a
favourable position to be able to provide heavy on track mechanised services to
the rail market.
RACEC`s long-term rail maintenance contracts continued to perform well, offering
some support during the lean months before the major contracts were awarded.
Additional management has been employed in this African division to assist with
the on-going growth within this sector.
The 2010 financial year also heralded a change to the management structure of
the Group with Gary Harrod replacing well-known and highly respected, outgoing
Chief Executive Officer, Charles Harrod. Further new management appointments and
organisational restructuring will allow for additional capacity and future
sustainable growth.
The financial information on which this trading statement is based has not been
reviewed or reported on by RACEC`s auditors. RACEC`s financial results are
expected to be released on SENS on or about 23 December 2010.
Cape Town
14 December 2010
Designated Adviser
Merchantec Capital
Date: 14/12/2010 15:06:02 Produced by the JSE SENS Department.
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