DEALMAKERS KAP flags weaker earnings
INCE CONNECT / 19 JUNE 2019 - 14.57 / STEPHEN GUNNION
The industrial group says the costs for putting together last year's empowerment deal will strip 7.3c from earnings per share.
KAP Industrial says it will report reduced full-year earnings due to the financial impact of an empowerment deal it concluded last year.
In a trading statement, the industrial group said earnings per share (EPS) for the year to end-June would be at least 22.5% below the 13c it reported last year, while headline EPS would fall by 20% or more from the 12c previously reported. Excluding the R196 million in costs incurred to put the deal together, which work out at 7.3c per share, it said headline EPS would be at least 7.9% lower than the comparable period.
Under the deal, it sold stakes in its Unitrans Supply Chain Solutions subsidiary to the Sakhumzi Foundation Empowerment Trust and the FWG Pieters Trust for a total of R1.2 billion. Unitrans houses KAP's local contractual logistics and supply chain operations, servicing the petroleum, chemical, mining, cement, food and general freight sectors.
Meanwhile, the group said management's key focus remained on strong cash generation to improve its debt levels so that it can expand.
Operational execution remains sound with significant progress made during the year in key areas," the company said.
KAP said it would issue a further trading statement when it had more certainty on the extent of the earnings decline.
Its shares fell 1.7% to R6.49 yesterday.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER