Winhold Limited - Trading Statement
WINHOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1945/019679/06)
Share code: WNH ISIN: ZAE000033916
(`Winhold` or `the Group`)
TRADING STATEMENT
Shareholders are advised that the results for the six-month period ended 31
March 2005 are expected to be down in earnings by 15% to 20% and the headline
earnings per share down by 25% to 30%, on the comparative results for the
previous year. These results have not been reviewed, audited or reported on by
the Group`s auditors.
During the first four months of this financial year the Gundle businesses
performed substantially better than during the same period last year, however,
the last two months of the current six-month period fell far below
expectations.
Demand for manufactured products softened considerably during February 2005
and March 2005. During the same two months last year, record sales were
achieved in anticipation of rising raw material prices. This did not re-
occur, as the market was aware that material price decreases were to be
implemented from 1 May 2005. Over and above this impact on demand, the two
long weekends this year in March, affected demand and production adversely,
resulting in reduced profits for this period.
Production problems at Sasol Polymers, required that the Group import 40% of
its requirements since April 2004, resulting in longer lead times and
increased stock levels. The cost of higher stockholding and debtor financing
increased considerably as raw material prices, rose by 50% since 1 April 2004.
As these increases could not be passed on fully to the customers, margins
decreased.
Inmins managed in difficult times to retain its profitability for the six
months to 31 March 2005, with a slight improvement in earnings versus that of
the comparative period.
In addition to the above factors, preference shares were converted automatically
to ordinary shares which increased the overall number of shares by 3%, resulting
in lower earnings per share.
Indications are that improvements should be seen in the future due to:
- increased demand for flexible plastic products;
- normalisation of local polymer supplies by Sasol Polymers, with consequent
stock reductions being implemented;
- two major capital projects in Gundle having been commissioned, making
available more capacity and improved quality on certain products with
possible increase in new business;
- the delisting of Inmins, where cost savings come into effect immediately,
(although the implementation costs are still to be expensed, with a payback
period less than three years);
- prospects of concluding a BEE deal in the near future and implementing
strategies on successful conclusion thereof.
The results for the six months ended 31 March 2005, are currently being
finalised and are expected to be published by 8 June 2005.
By order of the board
Germiston
25 May 2005
Sponsor
LPC Manhattan Moela(Pty)Ltd
(Registration number 2001/009215/07)
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