Coronation Holdings Limited
Registration number: 1902/001739/06
("Coronation")
PROFIT COMMENT
Shareholders are advised that the profits of Coronation for the 6 months to 31
March 2001 will be lower than the earnings for the comparable period last year.
Overall headline earnings for the half-year to 31 March 2001 are expected to
decline by approximately 25%.
The reasons for this decline are:-
1. Coronation holds a significant investment in African Harvest Limited which
indicated yesterday that its profits for the six month reporting period ending
31 March 2001 would be substantially lower than the earnings last year. As a
result we expect Coronation's attributable portion of African Harvest's
earnings to decline from R54 million for the comparable period last year to
approximately R18 million for this reporting period.
2. Holdings including those in United Service Technologies Limited, UTI
Worldwide Incorporated and Brimstone Investment Corporation Limited have been
sold or written down resulting in a loss of approximately R30 million.
3. Income from trading and fees earned by Coronation Global Limited and
Coronation International Limited will show a decrease from last year and their
net income will decline by approximately 15% to R100 million.
The major operating businesses of Coronation continue to trade most
satisfactorily. These businesses are supported by outstanding teams of people
and a strong balance sheet. Attributable income from Coronation Capital will
increase by about 20% and Coronation Fund Managers earnings should approximate
those achieved in the comparable half-year period last year. Both of these
businesses have built up a strong base of earnings and Coronation remains
confident of their future potential.
Trading remains an integral part of Coronation's business. In the past few
months, the results from our trading activities whilst positive, were lower
than in previous reporting periods. Looking forward, Coronation will focus,
inter alia on growing its trading activity with the proper risk management
systems in place. This may have an impact on profitability in individual
reporting periods, however in the medium term returns should be maximized.
The Coronation group has funds on call and invested in the money market of
approximately R2.05 billion, of which approximately R900 million is held by
Coronation Global. Our expansion plans envisage the continued building up of
our businesses in London and Dublin and the funds in Coronation Global are an
integral part of these expansion plans. Coronation will also seek, as stated
above, to increase its domestic activities, including trading. A strong
balance sheet is required for this. Coronation is therefore not intending to
reduce its capital at present.
Cape Town
7 March 2001
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Member of the Deutsche Bank Group
(Registration number: 1995/011798/07)
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