M Cubed to suffer loss

Johannesburg - m Cubed Holdings (MCU) said on Friday it is expecting its net attributable loss for the year to ENDFebruary 2008 to be in the range between R82.9m and R101.4m.

This is compared to a net profit of R21.2m for the previous year.

The group's net asset value as at February 29 2008 is expected to be between R211.1m and R258.1m. The net asset value amounted to R319.5m as at February 28 2007. This implies a net asset value per share of between 28.6c and 34.9c.

"As m Cubed ceased trading prior to the commencement of the financial year, the expected net loss for the year was largely caused by expenses incurred in the closing down of the underlying businesses, notably m Cubed Life Limited," the group said in a trading update.

It added that the following items were the main contributors to the expected net loss for the financial year in question, and a corresponding reduction in the group's net asset value at year-end:

• A settlement reached with Sars on a matter previously reported to the shareholders, involving m Cubed Specialised Lending Services (Pty) Limited;
• In the process of closing down m Cubed Life Limited and transferring its R7bn of policyholder assets to PSG FutureWealth Limited subsequent to the year-end, certain of the remaining assets had to be impaired or written off, leaving the group in a position where its assets are tangible and realisable;
• Professional fees escalated during the year in question, particularly the legal fees that were needed to regularise the contraventions included in the settlement agreement with the regulator; and
• Various other settlement costs involving the curators of Ovation Global Investment Services, policyholders and other third parties.

- I-Net Bridge