November 1, 2004
By Neesa Moodley
Durban - Kelgran, which quarries, processes and exports granite and granite products, has sold a 51 percent stake to Italian investment company JVK for R60 million, bringing the company`s cash and cash equivalents into the black for the first time in about four years.
The company indicated in July that half the proceeds from the sale would be used to reduce bank debts and the other half for working capital support.
The company`s restructuring scheme leaves Kelgran with a put option to sell its 49 percent stake to JVK after one year for R30 million or fair value at the time of sale, whichever is higher. The option is currently valued at R27.3 million.
Revenue dropped 47 percent to R182 million for the year to June, but its net loss was reduced by 31 percent to R60.8 million.
The headline loss narrowed 1.4 percent to R87.5 million, and the basic loss a share narrowed 31 percent to 64.7c.
Cash and cash equivalents inched back into the black at R144 000, up from a deficit of R73.5 million last year.
Shareholders saw net asset value a share plunge 69 percent to 29.1c from 94c.
Management said sales volumes had dipped by 10 percent from the previous year, and substantial freight charge increases had hampered sales further.
A second negative influence on sales volumes and pricing was competition from new entrants into the South African market.
According to the results statement, management is considering the future of the Barracuda tile factory, which processes granite blocks, although no decision has been reached at this stage.
The company is evaluating options to broaden its activity base. No dividend was declared. Kelgran was untraded at 17c and the mining sector gained 0.12 percent on Friday.
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
