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MKL
MKL
Makalani Holdings Limited - Trading Statement in Respect of the Financial Year
ending 30 June 2006
Makalani Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2005/000726/06)
Share code: MKL
ISIN: ZAE000066700
("Makalani" or "the company")
TRADING STATEMENT IN RESPECT OF THE FINANCIAL YEAR ENDING 30 JUNE 2006
1. Introduction
Makalani announced in its publication of the interim results on 22 February 2006
that it has, in terms of section 3.4(b)(v) of the JSE Limited ("JSE") Listings
Requirements, adopted headline earnings per linked unit ("HEPLU") as the
criterion for trading statements purposes.
In compliance with the JSE Listings Requirements, unitholders are advised that
Makalani"s HEPLU for the year ending 30 June 2006 is expected to be between 25%
and 35% below the profit forecast contained in Makalani"s listing prospectus
dated 28 April 2005 ("the profit forecast"). The primary reason for the
difference is the slower than anticipated rate of converting the cash raised
into long term assets ("invested assets"). The reasons for the slower rate of
asset accumulation are that, following the listing of Makalani:
- the lending and investment environment has seen increased competition, with
the resultant contraction in credit spreads;
- equity prices have increased, which in certain instances are not supported by
the underlying cash flows; and
- there is a higher appetite for quality assets in the market and pressure from
other institutions to gain market share and acquire Financial Sector Charter
compliant investments in order to meet their respective targets.
Makalani"s deliberate strategy since listing has been to avoid achieving
aggressive market share growth by lowering pricing. The benefit of this
strategy to date is the high quality of the invested assets in terms of
underlying credit and yields. Makalani continues to evaluate a number of
investments in line with its strategy.
2. Invested assets
In terms of Makalani"s portfolio update announced on 3 May 2005, Makalani had
R722.4 million of invested assets as at 30 April 2006. Taking into account the
current pipeline of mandated transactions, Makalani anticipates having R1.1
billion of invested assets by 30 June 2006.
The financial information on which this trading statement is based has not been
reviewed and reported on by the company"s external auditors. Makalani"s full
financial results for the 14 month period ending 30 June 2006 will be published
on or about 14 September 2006.
Sandton
12 May 2006
Merchant bank and sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 12/05/2006 02:38:59 PM Produced by the JSE SENS Department
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