Adcorp Holdings Limited - Trading Statement
Release Date: 24/07/2003 17:10:02 Code(s): ADR
ADCORP HOLDINGS LIMITED - TRADING STATEMENT
ADCORP HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(REGISTRATION NUMBER: 1974/001804/06)
SHARE CODE: ADR ISIN: ZAE000000139
("Adcorp" or "the Group")
TRADING STATEMENT
Adcorp"s headline earnings for the six months ended 30 June 2003 are expected to
be lower than that for the same period last year.
The main reason for this is that the United Kingdom ("UK") operations in which
Adcorp has a 51% stake, have failed to perform as expected. The recruitment
company Astbury Jones Limited, for which Adcorp paid GBP420 000 for it"s 51%
stake, has been placed in voluntary liquidation due to cashflow problems.
Possible fraud at senior management level within Astbury Jones has been alleged
and is currently being investigated. Adcorp is currently considering its legal
position with regards to recovery of all monies possible.
Sandton Group Limited, the other 51% owned UK recruitment company has also
experienced difficult trading conditions as a result of the depressed state of
the financial and investment markets in the UK. Better results have been
reported for July 2003, but the sustainability of this improved performance is
untested at this time. No further funds will be committed to the UK operations
by the Group.
The overall performance of Adcorp"s wholly-owned South African operations has
exceeded expectations with the exception of certain elements which, in line with
Adcorp"s ongoing strategy of eliminating loss making and cash consuming
operations, have either been closed or disposed of. The companies affected are
the training operation, Warwick Institute (Proprietary) Limited and the
recruitment company D / @ bility (Proprietary) Limited in which Adcorp had a 50%
stake. Adcorp is assisting DEC Trust ("Disability Employment Concerns Trust")
to run the latter business as a Section 21 Company.
Whilst the above will have a short term negative impact on earnings due to the
write-off of goodwill and loan accounts, the long term impact will be positive
on both the profits and cash flows of the group.
Sponsor
RAND MERCHANT BANK
A division of FirstRand Bank Limited
CORPORATE FINANCE
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