Remgro profit to slump

Johannesburg - Investment holding company Remgro (REM) on Monday advised shareholders that its reported headline earnings per share (HEPS) for the year ended March 31 2009 were expected to be between 35% and 45% lower than those of the previous comparable year ended March 31 2008.

Remgro said the decrease in HEPS was attributed to the following factors:

• On November 3 2008 Remgro distributed its investment in British American Tobacco Plc ("BAT") to its shareholders as an interim dividend in specie ("the BAT transaction"). As a result the investment in BAT will only be equity accounted for the seven months to October 31 2008 compared to twelve months in the comparative year;
• The BAT transaction has resulted in non-recurring costs amounting to approximately R720m that will be accounted for in headline earnings during the current year;
• Lower earnings being reported by both FirstRand Limited and RMB Holdings Limited than in the comparative year,
• Lower earnings from Total South Africa (Pty) Limited resulting from unfavourable stock revaluations due to the sharp decline in the international oil price; and
• Lower earnings from Kagiso Trust Investments (Pty) Limited during the first half of the financial year mainly attributable to unfavourable fair value adjustments relating to its holding of Metropolitan Holdings Limited convertible preference shares.

Remgro said that on a pro forma basis, which excludes the equity accounted income of BAT, as well as all non-recurring costs relating to the BAT transaction, HEPS were expected to be between 25% and 35% lower than those of the comparative year ended March 31 2008.

Remgro's results for the year ended March 31 2009, will be released on June 22 2009.

- I-Net Bridge