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Blue reins in losses

Jun 01 2011 11:47 I-Net Bridge

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Johannesburg - Blue Financial Services [JSE:BFS] said on Wednesday it has managed to drastically reduce its losses in the year ended February 28 2011.

The group incurred a loss of R284.9m for the 12 months compared to a loss of R1.0bn in the 2010 financial year - a 72% improvement.

This translates into a decline in loss per share from 170.25 cents for 2010 to a loss of 29.59c per share for 2011. Headline loss per share improved in a similar manner, declining from 134.96c/share to a headline loss of 27.77c/share - a 79% improvement.

The group reported a loss of R168.2m for the six months ended August 31 2010. The loss for the second half of the financial year of R116.7m, without removing once-off costs and loan advance write-offs in excess of R100m, is an improvement of 30.6% over that for the first six months.

"The 2011 financial results represent a significant improvement from those reported in 2010, a year which signalled severe financial difficulties in the group and which brought into question its ability to continue operating as a going concern," it said.

Recapitalisation of the group by Mayibuye and a turnaround strategy which was started in September 2010 have yielded improvements, it said. 

Blue has restored the net asset value to R46.6m from the negative R19.4m in February 2010 and negative R205.8m in August 31 2010.

It has also concluded a debt rescheduling agreement with lenders comprising R746.3m, and has successfully converted R274m million of debt to equity.

 
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