Ellies FY loss worse than expected

For the annual period to April 2015, headline loss per share is expected to be between 80 cents and 85 cents, compared with the headline earnings per share of 23.46 cents in a corresponding period in 2014.

On May 4, Ellies said it expected its headline loss per share to be more than 66 cents from 23.46 cents.

In a trading statement and operational update, the electrical goods maker said on Wednesday its financial performance had been negatively affected by difficult trading conditions, severe liquidity constraints and higher interest charges. Ellies' infrastructure division was implicated by the impairment of goodwill and intangibles of about R28.8 million relating to Botjheng Water, and the reversal of prior year deferred tax assets of about R9.1 million.

As for the consumer division, inventory impairments mainly resulted from cancelled projects of R48.1 million.

In its operational update, Ellies said it had completed its debt and corporate restructure and its board was in the process of implementing a number of initiatives, which were expected to improve its financial position. "This includes the company having resolved to dispose of its property portfolio. The company has received various expressions of interest to acquire the company's property portfolio. "These expressions of interest are being considered by the company and once terms have been agreed the details thereof will be communicated to shareholders," Ellies said.

"With various capital raisings undertaken in the past six months, it is expected that the group's term debt will be reduced by around R250 million, resulting in a reduction of interest paid off approximately R16.7 million," it said.

The group's results for the year ended April 2015 are expected to be released on or about July 28.

Source: INET BFA