| Thu 31 Mar 2011, 11:03 | | AET - Alert Steel Holdings Limited - Alert Steel Announces Turnaround Plan |
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AET
AET
AET - Alert Steel Holdings Limited - Alert Steel Announces Turnaround Plan
Alert Steel Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2003/005144/06)
JSE code: AET
ISIN: ZAE000092847
("Alert Steel" or "Alert" or "the company")
ALERT STEEL ANNOUNCES TURNAROUND PLAN
Pretoria, 31 March 2011 - AltX-listed Alert Steel today announced that it was to
be restructured, refocused and recapitalised under new leadership in a bid to
return the company to long-term stability and sustainable profitability.
Alert said it would seek to raise between R40 and R50 million from shareholders
through a rights offer, negotiate a new debt funding arrangement with Nedbank,
and restructure its board and executive. In line with the latter objective, a
new chairman will be appointed to the board. In the meantime, founder Wynand
Schalenkamp will become executive deputy chairman and former Kelly Group
financial director and until recently the chief financial officer of the RTT
Group, Johan du Toit has been recruited as chief executive. These appointments
are effective from 1 April 2011.
In addition, the company will accelerate the process, initiated last year, of
refocusing on its core business of retailing steel and steel-related products
and services. Non-core activities will be sold or discontinued, as will
business units which do not pass a profitability potential review. At the same
time, Alert will actively pursue opportunities for increasing its presence in
areas which offer growth prospects, including cross-border African countries.
Alert said the financial and operational restructuring would take about 12
months. Next year will be a period of rebuilding and the company is expected to
return to profitability in 2012, with reasonable growth from 2013 onwards.
The company today also reported its interim results for the six months to 31
December 2010, posting an attributable loss of R84.2 million (against a loss of
R40.1 million for the comparable period in 2009) on revenue of R520.7 million.
It said trading conditions had continued to be difficult, and while turnover
increased, margins remained under pressure and operating costs were high. Many
branches continued to make losses, stock levels were too high and debt
collection became very challenging, exacerbating the company`s cash flow
problem. These factors, the results announcement said, forced the directors to
review the company`s strategy going forward.
For further information call Johan du Toit on 082 416 8888
Issued by du Plessis Associates on behalf of Alert Steel Holdings Limited.
dPA contact Helen McKane Tel : +27 11 728 4701, Fax: +27 11 728 2547, Mobile:
082 330 2034 or e-mail: alertsteel@dpapr.com
website: www.alertsteel.co.za
Date: 31/03/2011 11:03:03 Produced by the JSE SENS Department.
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