Johannesburg - Stefanutti Stocks [JSE:SSK] said regarding the group's results for the year ended 28 February 2017, earnings per share is expected to be a loss of between 70.00 cents and 90.00 cents per share and headline earnings per share a profit of between 0.00 cents and 20.00 cents per share.
The corresponding period reflected earnings per share and headline earnings per share of 104.31 cents and 89.62 cents respectively.
The key aspects contributing to the decrease in earnings include the recording of a once-off present value charge of R138.8m relating to the settlement agreement concluded with the South African government. This was disclosed in a Sens announcement released on 11 October 2016.
This charge is not reversed for purposes of calculating headline earnings per share. However, should this isolated charge be eliminated then the adjusted headline earnings per share would be expected to be a profit of between 80.00 cents and 100.00 cents per share.
The Group said it is required to test goodwill for impairment at each reporting period or when there is an indicator of impairment. At 28 February 2017, based on tests performed relating to the goodwill attributable to the Cycad Pipelines acquisition, R154.8m of goodwill has been impaired in the current financial year. This impairment is reversed in determining headline earnings per share.
In line with Group policy, land and buildings are independently valued every five years. Based upon these latest valuations, an impairment charge of R14.2m has been recognised in the current year, which is reversed in the calculation of headline earnings per share.
The strengthening of the rand during this reporting period and the weakening of African currencies in which Stefanutti Stocks operates have had a significant negative effect on the Group's results for the year by approximately R80.9m.
Operations with the Group's business units have performed in line with management's expectations. The financial information on which this trading statement is based has not been reviewed or reported on by the Group's auditors. The release of the results for the year ended 28 February 2017 is anticipated to be published on 18 May 2017.Read Fin24's top stories trending on Twitter:
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