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Vunani reports real progress

Johannesburg - Financial services group Vunani [JSE:VUN] reported a diluted headline loss per share of 3 cents for the year ended December 2010 compared to a loss of 11.4 cents per share the previous year.

The group said however that since the recapitalising of the balance sheet - raising R313m in the process - at the start of the year, significant progress had been made during the year under review towards achieving the objectives of the restructuring.

"The board is proud to report that Vunani's commitment has paid off with revenue increasing by R70.78m on the corresponding figure in 2009; operating profits of R66.3m compared to R1.7m last year and income from investments and associate companies of R66.8m (2009: R38m)," it said.

But notwithstanding the R35m reduction in finance costs compared to 2009, these costs remained uncomfortably high.

Accordingly, management had engaged in further restructuring of the balance sheet and operations which had resulted in the disposal of investments such as Vunani's interest in JHI, and the rationalisation of some operating divisions.

"Whilst the restructuring has resulted in impairments of goodwill and fair value adjustments of R29.7m in the 2010 financial year, management believes this was necessary to eliminate loss making activities and non-performing investments and will benefit the group going forward. Vunani believes that the existing business platform is now positioned correctly to start fulfilling its ambitions," Vunani stated.

On the group's prospects, Vunani said: "Management's focus is on building the core businesses whilst reducing the legacy interest burden on the balance sheet. The current year's results reflect management's determination to achieve this goal. In order to accomplish this, certain facilities with lenders will need to be renegotiated before their October 2011 moratorium date."
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