| Tue 29 Mar 2005, 16:17 | | Trading update, factory relocation and cautionary |
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Beige Holdings Limited - Trading update, factory relocation and cautionary
announcement
BEIGE HOLDINGS LIMITED
(Registration number 1997/006871/06)
(`Beige` or `the company`)
JSE Code: BEG ISIN Code: ZAE 000034161
TRADING UPDATE, RELOCATION OF FACTORIES AND HEAD OFFICE
AND CAUTIONARY ANNOUNCEMENT
Trading update
Shareholders are hereby updated on Beige`s trading to 28 February 2005.
Although revenues were higher, earnings and headline earnings are expected to be
substantially lower in relation to the comparative period in the prior year,
moving from a profit of R2, 2 million to an expected loss of R4,7 million and an
expected headline loss of approximately R3,5 million compared to headline
earnings of R2.7 million for the prior year. Earnings per share and headline
earnings per share are accordingly expected to decrease from 0,82 cents per
share to (1.59) cents per share and from 1.02 cents per share to (1.20) cents
per share respectively. The decline in earnings is primarily attributable to
continued pressure on gross margins, partly due to the strengthening of the Rand
during the reporting period relating to export sales and to local pricing
pressure caused by increased competition from import substitution. Measures are
being put in place to address local and export pricing but the effects of these
measures will take time to reflect in the results.
In addition, the Tura contract secured during May 2004 has not come into full
production due to, inter alia, hand over delays from the previous supplier and
lower order volumes than expected from Nigeria, while infrastructure and
carrying costs have been incurred. The volumes are expected to continue to be
depressed for the next three to six months due to regulatory clearances being
required on a new Tura production facility in Nigeria.
The acquisition of additional plant was finalised during the year but expected
international sales of related products dropped due to the strong Rand.
Increased plant and equipment has resulted in the depreciation charge doubling
year-on-year. Factory relocation and refurbishment of equipment costs have also
been incurred, and the downtime has resulted in a small loss in sales and
production.
The above factors have, in turn, had an impact on financing costs which have
increased year-on-year.
Full details of the above will be provided when the company publishes its annual
results in May 2005. The earnings estimate has not been reviewed or reported on
by the company`s auditors. Shareholders are also advised that the company is
considering early adoption of International Financial Reporting Standards
(`IFRS`) which may have an impact on the audited results of Beige and may result
in a change to the earnings information reported above.
Relocation of factories and head office
Shareholders are advised that Beige have now signed a lease agreement for new
premises, located at 5 Brine Street, Chloorkop, Extension 1. The new telephone
number is 011 976 0900. The company`s registered address remains the same. An
option to purchase the premises is currently being negotiated.
Beige is in the process of relocating its seven factories and head office into
the new facility, which measures 23 000 square metres. The relocation commenced
during February 2005 and is expected to be completed during April 2005, with the
exception of Argo Soap, which relocation is expected during July 2005.
Initially high costs of relocation and installation of infrastructure are being
incurred, with some temporary loss of production and sales, but thereafter
economies of scale are expected to flow through. Beige is also restructuring
the organisation and management in conjunction with the relocation.
Cautionary announcement
Shareholders are advised that the company has entered into acquisition
negotiations which could affect the price at which its securities trade.
Accordingly, shareholders are advised to exercise caution when dealing in their
securities.
Warning statement
In accordance with AltX Listings Requirements, shareholders are advised of the
risks of investing in a company listed on the AltX. Shareholders are advised
that the JSE does not guarantee the viability or the success of a company
listing on the AltX. In terms of the JSE Listings Requirements, a Designated
Advisor has to be retained by the company. The Designated Advisor is required,
inter alia, to attend all board meetings held by the company to ensure that all
the JSE Listings Requirements and applicable regulations are complied with,
approve the financial director of the company and guide the company in a
competent, professional and impartial manner. If the company fails to retain a
Designated Advisor it must make arrangements to appoint a new Designated Advisor
within 10 business days, failing which the company faces suspension of trading
of its securities. If a Designated Advisor is not appointed within 30 days of
its suspension, the company faces the termination of its listing without an
offer to minorities.
Johannesburg
29 March 2005
Designated Advisor
Arcay Corporate Services
Date: 29/03/2005 03:43:47 PM
Produced by the JSE SENS Department
