Cape Town - Empowerment investment group Hosken Consolidated Investments believed its beleaguered clothing and textile subsidiary, Seardel Investment Corporation, would operate profitably in the second half of the financial year ending March 2010.
In comments accompanying year-end results released on Thursday evening, HCI CEO Johnny Copelyn said the company anticipated the loss-making Seardel would be turned around or curtailed over the next six months.
He said the second half of the financial year would see Seardel's continuing operations producing profitably.
"While we appreciate there is a fair amount of market scepticism in this regard, we are satisfied that we have the right vision, dedication and the right management to make a go of the turnaround."
HCI acquired a 70% stake in Seardel after underwriting a R300m rescue rights issue in late 2008.
Copelyn said that in the four months since taking over the Seardel, HCI had introduced new management, closed a textile production facility in New Germany and taken key steps to limit the overhead of several clothing factories.
"While the past philosophy was essentially to leave each factory as a free-standing business entity, the new direction of the group intends these units to function as a single integrated production platform for the group."
Copelyn said HCI was committed to raising the standards of Seardel "to being a world class operation that is demonstrably better able to provide the local manufacturing requirements of all major clothing and textile retailers".
HCI reported a 27% increase in basic earnings with investments in free-to-air television broadcaster E-tv (which chipped in gross profits of R568m), gaming group Tsogo Sun (R1,65bn), hotels (R790m) being the stand-out performers.
The group - which has long term borrowing of almost R5bn - opted not to declare a dividend.
- Fin24.com