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Tumultuous year deals Alexander Forbes a R45m loss

Dec 13 2018 20:45
Khulekani Magubane, Fin24

Alexander Forbes Group Chief Executive Dawie de Villiers has revealed a loss of R45m in the announcement of the company's interim financial results for the six months ended September 30, 2018.

The company held a briefing in Johannesburg, which reporters accessed from around South African and the United Kingdom on Tuesday morning.

The announcement comes after the company was rocked by the failure of a software program that cost the company R339m, which was expected to have a significant impact on the interim results.

Alexander Forbes is reportedly scrapping the ill-fated project, which was aimed at changing the company's IT infrastructure.  

"The impairment announced a week ago after ending relationship with the IT partner and the contract. We impaired the capitalised software and that resulted in R287m impairment. We had running costs of R52m committed to this," said De Villiers during the teleconference.

Profit from operations before non-trading and capital items decreased by 3% to R442 million, while headline earnings per share declined by 23% to 16.7 cents.

Profit from continuing operations for the period was down 115%.

The company's corresponding SENS announcement added, however: "The business continues to generate strong cash flows, reporting a 5% year-on-year increase in cash generated from operations to R492m."

In October, the company announced that it had appointed De Villiers as its new CEO. This followed the company firing former CEO Andrew Darfoor, citing a loss of confidence and trust as well as a view that shareholders were not getting value under his leadership.

The company is saw a group called the Unpaid Benefits Campaign protest outside of its headquarters over retirement funds that they say are sitting in "unclaimed funds", to an estimated value of R42bn.

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