| Wed 5 Oct 2011, 12:01 | | RAC - Racec Group Limited - Disposals trading statement and withdrawal |
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RAC
RAC
RAC - Racec Group Limited - Disposals, trading statement and withdrawal
of cautionary
RACEC GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/006153/06)
Share code: RAC ISIN: ZAE000105409
("RACEC" or "the Company" or "the Group")
DISPOSALS, TRADING STATEMENT AND WITHDRAWAL OF CAUTIONARY
DISPOSALS
Shareholders are advised that the board of directors of the Company ("the
Board"), having refocussed the Company`s business strategy, has decided
to concentrate on RACEC`s core business as a rail construction,
electrification and maintenance contractor, which the Company has
successfully operated for over five decades.
Over the past six to nine months, RACEC has re-structured and right-sized
its rail and support service operations, moved applicable resources to
rail operations and will focus on acquiring and redirecting additional
rail resources to build the capacity of RACEC Rail (Proprietary) Limited.
The Group will commence the 2012 financial year 100% focused on rail
operations (including rail electrification) and has already delivered
successfully on contracts in other parts of Africa. This African
consolidation and further expansion is in line with RACEC`s regional
diversification strategy to get a balanced portfolio mix of regional and
cross-border contracts. RACEC will also look at further opportunities in
the annuity driven mechanised maintenance market to further diversify its
rail product mix.
Accordingly, the Company has entered into agreements to dispose of
certain of its non-core loss-making subsidiaries. These disposals
(collectively hereinafter referred to as the "Disposals") comprise
Northern Electric (Cape) (Proprietary) Limited, RACEC Electrification
(Proprietary) Limited (which includes RACEC Power (Proprietary) Limited)
and its non-core loss-making manufacturing operations, Greenbro
(Proprietary) Limited and Greenglo Geysers (Proprietary) Limited.
Although the Disposals do not require any formal disclosure in terms of
the Listings Requirements of JSE Limited ("JSE"), the Board would like to
inform investors and shareholders of the Company`s refocussed business
strategy.
TRADING STATEMENT
In terms of the JSE Listings Requirements, 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 2011 by management has indicated that earnings per share and
headline earnings per share are expected to be at least 20% lower than
those of the previous corresponding period.
Additional information will be provided to shareholders as soon as
management has a reasonable degree of certainty as to the range, within
20%, by which the earnings and headline earnings have decreased.
The financial information on which this trading statement is based has
not been reviewed or reported on by RACEC`s auditors. RACEC`s year end
results are expected to be released on SENS on or about 15 December 2011.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Further to the cautionary announcement dated 12 August 2011, and the
subsequent renewal of cautionary announcement dated 23 September 2011,
shareholders are advised that negotiations are no longer in progress
which, if successfully concluded, may have a material effect on the price
of the Company` securities. As such, caution is no longer required to be
exercised when dealing in the Company`s securities.
Cape Town
5 October 2011
Designated Adviser
Merchantec Capital
Date: 05/10/2011 12:01:02 Produced by the JSE SENS Department.
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