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 year ended 30 June 2005.
In terms of the Listing Requirements of the JSE Limited, 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 year ended 30 June 2005 (`the reporting period`) will
be 15% to 20% lower than the results of the previous corresponding period, while
the basic earnings per share will be 60% to 65% lower than the results of the
previous corresponding period.
These results have been materially impacted by both changes in accounting policy
and by discontinued operations. Changes in accounting policy account for a 1
cent per share decrease in headline earnings and the discontinued operations
account for 8 cents per share decrease in headline earnings. With regard to
basic earnings, changes in accounting policy account for 9 cents per share
decrease in basic earnings and the discontinued operations account for 12 cents
per share decrease.
The adoption of AC140 : Business Combinations requires that goodwill is no
longer amortised but that impairment reviews are done annually or more
frequently if there is an indication that goodwill may be impaired. The adoption
of AC140 has no impact on headline earnings per share but has the effect of
decreasing basic earnings per share in the current year by 8 cents per share.
The impairment of goodwill was as a result of the discontinuation of operations
in the USA and Denmark.
The Group restated operating lease payments in line with AC105: Leases and IAS
17 with retrospective effect from 1 July 2004. These statements require payments
under an operating lease to be recognised as an expense on a straight line basis
over the lease term. The effect of this change was to decrease headline earnings
per share in the current year by 1 cent per share and basic earnings per share
by 1 cent per share. Comparative figures on the consolidated income statement
will be restated.
The Executive Committee of the Company had set a target that the USA business
should break even on a sustainable basis by April 2005. As this target was not
achieved a decision was taken to withdraw from the USA market. The USA business
is currently being disposed of and substantially all costs of disposal have been
accounted for in the current financial year. The results of this business will
be separately disclosed as a discontinued operation and the effect of the costs
of closure and operating losses on headline earnings is 8 cents per share.
There has been little improvement in market conditions in Europe resulting in
continued pricing pressure and declining volumes. A decision has been taken to
service the Denmark market from Germany thereby simplifying administration and
reducing costs. The effect of the closure of the business on headline earnings
per share is not material.
The information in this trading statement has not been reviewed or reported on
by the company`s auditors.
Information in regard to the Company`s operations and its prospects for the 2006
financial year will be furnished in the company`s announcement of the results
for the reporting period which will be published on SENS on or about 13
September 2005.
31 August 2005
Johannesburg
Sponsor: Sasfin Corporate Finance, a division of Sasfin Bank Limited
Date: 31/08/2005 12:29:05 PM
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