A G Industries Limited - Trading Update
A G INDUSTRIES LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1980/004051/06
Share Code: AGI
ISIN: ZAE000039467
(`The Company` or `the Group`)
TRADING UPDATE
The Group is currently finalising its results for the six month period ended
31 December 2004 (`the reporting period`). In terms of the Listings Requirements
of the JSE Securities Exchange South Africa, relating to Trading Statements a
listed company is required to publish a trading statement as soon as it becomes
aware that the financial results for the next period to be reported on will
differ by at least 20% or more from those of the previous corresponding period.
Shareholders are advised that the anticipated headline earnings per share for
the reporting period will be 25% to 30% higher than the results of the previous
corresponding period, while the basic earnings per share will be 45% to 50%
higher. The Group has adopted AC140: Business Combinations with prospective
effect from 1 July 2004. The effect of this change was an increase in basic
earnings per share of 2 cents per share for the reporting period. The adoption
of the statement had no effect on headline earnings per share. Comparative
figures on the consolidated income statement have not been restated. The
information in this trading statement has not been reviewed or reported on by
the company`s auditors.
The following is a brief update on trading conditions during the reporting
period.
Domestic
The domestic market was robust with strong demand for products supplied by the
Group. Double digit volume growth, particularly in the Aluminium and Value Added
Glass Divisions, resulted in a 22% increase in revenues. Gross margins increased
slightly, even with inflationary cost increases and no corresponding
inflationary increase in selling prices. This was as a result of increased plant
efficiencies which drove the cost per unit down. The overhead to revenue ratio
remained unchanged and operating margins remained at a similar level to those in
the previous corresponding period. The Group forecasts that domestic performance
will remain strong for the next six month period.
International
Due to the strength of the Rand, export revenues have been constrained over the
past reporting periods. The Group, whose focus over the past years has been on
an export strategy, has been forced to place less reliance on export revenues.
As a result export revenues and margins have decreased and factories geared
around these exports have shifted focus to service the strong growth in domestic
markets. In addition, the International businesses have established strong trade
links and operate independently and as stand alone business units. Favourable
product mixes in Germany and Denmark have resulted in losses being contained,
and a steady growth in more profitable lines is expected to return these
businesses to profitability. The U.K. has performed well, increasing revenues
and margins and producing a record set of results. The USA operated at a
marginal loss for the reporting period.
Conclusion
Full details of the Company`s operations and it`s prospects for the second half
of the 2005 financial year will be provided with the announcement of the results
for the reporting period which will be published on SENS on or about 8 March
2005.
17 February 2005
Johannesburg
Sponsor : Sasfin Corporate Finance, a division of Sasfin Bank Limited
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