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INSIMBI INDUSTRIAL HOLDINGS LIMITED - Trading Statement

Release Date: 02/10/2020 07:05
Code(s): ISB     PDF:  
Wrap Text
Trading Statement

Insimbi Industrial Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration    number:     2002/029821/06)
Share code: ISB ISIN: ZAE000116828
(“Insimbi” or “the Group”)

TRADING STATEMENT

In terms of the JSE Limited Listings Requirements, a listed Group is required to publish a
trading statement as soon as it becomes reasonably certain that the financial results for the
next period to be reported on will differ by 20% or more from the financial results for the
previous corresponding period.

Due to the Covid-19 restrictions and lockdown measures implemented by the South African
government, the Group’s operations have been severely impacted. The Group’s activities
were not classified as essential services and were effectively closed from 27 March 2020 and
re-opened in a phased approach from 4 May 2020. This Level 5 lockdown, therefore, took
place within our first financial quarter and as a result impacted significantly on this quarters’
performance. During the second financial quarter, the Group had resumed activities in
accordance and compliance with the appropriate gazetted levels and so for the benefit of
stakeholders, we have disclosed EPS and HEPS for first quarter, second quarter and full
interim period in the table below.

We estimate that Covid-19 and the resultant lockdown levels has had a negative impact on
the Group’s interim revenue of approximately R800 million to R900 million and a resultant loss
of gross profit of between R65 million and R75 million.

All Covid-19 related expenses (which includes restructuring and retrenchment costs
amounting to approximately R1.8 million) have been expensed in the current period.

Cash generated from operations are expected to be between R87.73 million and R77.94
million.

Consequently, the Group hereby advises that a reasonable degree of certainty exists that for
the six months ended 31 August 2020:

                     Aug 2020          Aug 2019         % decrease      Aug 2020 Q1        Aug 2020 Q2
 Earnings / (loss)   between 0.55      9.48 cents       between 84%     between (6.77)     between 7.32
 per share           cents and 1.49                     and 94%         cents and (6.60)   cents and 8.09
                     cents                                              cents (loss)       cents (profit)

 Headline            between 0.56      9.42 cents       between 84%     between (6.76)     between 7.32
 earnings / (loss)   cents and 1.50                     and 94%         cents and (6.60)   cents and 8.10
 per share           cents                                              cents (loss)       cents (profit)

 Earnings before     between R         R85.2 million    between 29%     between R7.53      between
 interest,    tax,   60.51   million                    and 39%         million and        R52.98 million
 depreciation        and R 51.99                                        R4.05 million      and R 47.94
 and                 million                                                               million
 amortisation
 (EBITDA)

COVID-19 has adversely impacted trading results and debt levels during the period with
concomitant negative impacts on funding covenants. Accordingly, the Group has obtained
covenant relaxations from its lenders for both the 30 August 2020 and the 31 November 2020
measurement periods with a return to normal covenant levels expected to be reached by
February 2021.

The Group’s debt: equity ratio has improved from 129% at 29 February 2020 to 105% at 31
August 2020.

The financial information on which this trading statement is based has not been reviewed or
reported on by the auditor of the Group. The summarised consolidated financial results for the
six months ended 31 August 2020 are expected to be published on or about 16 October 2020.

Based on the Group’s second quarter performance and our proactive reaction to the
consequences of the Covid-19 pandemic, the Group remains optimistic about the year ahead.

Johannesburg
2 October 2020

Sponsor
PSG Capital

Date: 02-10-2020 07:05:00
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