BFS - Blue Financial Services Limited - Trading Update
BFS
BFS
BFS - Blue Financial Services Limited - Trading Update
BLUE FINANCIAL SERVICES LIMITED
(Incorporated in the Republic of South Africa)
Registration Number: 1996/006595/06
Share Code: BFS
ISIN: ZAE000083655
("Blue" or "the Company")
TRADING UPDATE
In accordance with paragraph 3.4(b) of the Listings Requirements of the JSE
Limited, companies are required to inform shareholders as soon as there is a
reasonable degree of certainty that the earnings of the company are likely to
vary by more than 20%
compared to the previous reporting period.
The Board of Directors draws the attention of shareholders to the interim
results at 31 August 2009, which reflected a loss for the six month period of
R162.3 million. Trading conditions have continued to weaken in the second half
of the year as revenue levels have decreased due to low levels of liquidity
available to meet required volumes. Shareholders are therefore advised that
basic earnings per share and headline earnings per share attributable to
ordinary shareholders for the year ended 28 February 2010 are expected to be
more than 20% lower than the restated basic earnings per share and headline
earnings per share of 15.92 cents and 12.73 cents, respectively, for the
previous comparable period (i.e. the Company expects to report a basic loss
and headline loss per share for the period ended 28 February 2010).
As reported in the interim results, the decline
in the Company`s results is
mainly attributable to:
1. Restricted levels of funding available in the market emanating from the
Global financial crisis, which has limited the Company`s ability to grow
its loan book;
2. Operating costs being disproportionately high when compared to revenue
owing to the lower than expected levels of available funding;
3. Increase in the impairment of loan advances particularly in the South
African portion of the loan book; and
4. Weakening in many of the local African market currencies against the
Rand.
The Company has taken many positive steps to improve trading, including a
significant saving in operating expenses, a reduction in the number of trading
branches in South Africa, rationalisation in some African countries, and
emphasis on shorter term cash generative loan products. In addition,
discussions with funders and other potential investors continue with the main
objective of recapitalising the Company and securing new funding lines going
forward. An updated trading statement will be released once the Company is
able to quantify, with reasonable certainty, the expected range of the profit
decline.
The information in this trading update has not been reviewed or reported on by
the Company`s auditors.
Reminder of cautionary
Shareholders are referred to the renewal of cautionary announcement dated 24
February 2010, and are reminded that the negotiations referred to therein are
still in progress and, if
successfully concluded, may have an effect on the
price at which the Company`s securities trade on the JSE Limited.
Accordingly, shareholders are advised to continue exercising caution when
dealing in the Company`s securities until a further announcement in this
regard is made.
Pretoria
11 March 2010
Designated Advisor: Grindrod Bank Limited
Date: 11/03/2010 15:53:01 Produced by the JSE SENS Department.
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