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SHODDY RESULTS AND PROFIT WARNINGS LAST PAST THE POST

22 Dec General

Durban – Shoddy financial results and profit warnings by a handful of companies have slipped through the back door during a week in which the business community has packed its bags and gone on holiday. The first murmurs came from Hosken Consolidated Investments (HCI). Earlier this week it posted a R7,4 million loss in the six months to September 30, from a R1,1 million loss a year ago. This translated into a headline loss of 20,7c a share from a 10,1c loss a share previously. Directors blamed HCI’s greater share in the losses of Midi TV after HCI upped its stake to 50 percent from 34 percent. They nevertheless expected satisfactory returns from the group’s main investments going forward. Another group that slipped in last-minute disappointing news was Masterfridge, which manufactures white goods such as refrigerators and stoves. It warned that it would report a loss for the six months to December 31 after directors had to reorganise the group following “unanticipated declines in retail sales of white goods”. Management also said margins were reduced by a deteriorating rand. The unexpected announcement followed a healthy full-year performance, thanks to strong cost-cutting and productivity measures. In the year to June 30, the white goods maker posted a 473,4 percent increase in headline earnings a share to 14,45c from 2,52c. National Chick (NatChix), the broiler and layer chick producer, said headline earnings plunged 34 percent to 25,3c a share in the year to September. It blamed poor trading conditions and the cost of a starting up a feed mill in its nutrition division. Next came Cullinan Holdings, the tourism and outdoor leisure group, which again slid into the red after only two years of profit. For the year to September, Cullinan showed a headline loss of 0,8c a share because of heavy losses from the outdoor lifestyle division, while gearing stood at 184 percent. Yesterday, Samrand Development Holdings, the property group of Malaysian investor Dato Samsudin, reported a headline loss of 1,3c a share for the six months to September after failing to secure budgeted sales of landed properties. “A loss is a loss, we’re not trying to hide anything,” said Samsudin, who blamed subdued business sentiment on the group’s performance. “We’ve done a lot of work in the second half of this year and we’re sure we can turn it around next year.”

Source: Business Report – Ingrid Salgado