Sage Group Limited - ELN financing
Sage Group Limited
(Incorporated in the Republic of South Africa)
Registration number : 1970/010541/06
JSE share code: SGG
ISIN: ZAE000006623
(`Sage Group` or ` the Group `)
CORPORATE UPDATE
ELN financing
Following the reference in the Group`s interim report issued on 7th September
2004 to discussions with certain major shareholders to ensure that the necessary
facilities are in place to fund the redemptions of the Group`s Equity Linked
Notes (`ELNs`), the Group advises that a loan agreement has been entered into
with the ABSA and Remgro groups in this regard.
As a result, the Group has exercised its call option over the ELNs which will
result in all outstanding ELNs being redeemed before the end of January 2005.
The Group has also cancelled all remaining currency hedging contracts relating
to the ELNs.
Shareholders are advised that, while the redemption of the ELNs from the
proceeds of this new loan facility will benefit the Group, the new facility will
need to be refinanced during 2005,and ways to give effect to this are being
explored by the Group.
As reported at the interim stage, group net earnings for the year ending 31
December 2004 will be severely impacted by the ELN financing costs.
Operational results update
At an operational level, the Group has shown improved trading results for the 11
months to November 2004. Individual Life recurring premium new business is now
9.8% ahead of the previous year (5.9% up at end June 04), while Individual
single premium new business is now 32.6% up on the previous year (27.3% up at
end June 04). Individual new business Annual Premium Equivalent (APE - new
recurring premiums plus 10% of single premiums) is therefore now 12.0% ahead of
the previous year (7.9% up at end June 04). Employee Benefit new business, which
comprises less than 20% of total new business, continues to lag last year and
reflects a decline of 21.1% in APE over last year to end November. The Group has
benefited from the bouyant equity market with strong nominal returns achieved
across domestic portfolios and improved relative performance within the Unit
Trust portfolios. Discontinuance rates remain at improved levels compared to
last year, with some significant reductions being experienced in 1st year
lapses.
13 December 2004
Sponsor
Grant Thornton Corporate Finance (Proprietary) Limited
For further information, please contact:
Sage Group Limited 011 377 5555
Garth Griffin, Chief Executive 011 377 5364
Leon Kaplan, Group Financial Director 011 377 5562
Nombini Mehlomakulu, Investor Relations 011 377 5821
College Hill South Africa 011 447 3030
Nicholas Williams 083 607 0761
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