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Voluntary performance update and trading statement
Insimbi Industrial Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2002/029821/06)
Share code: ISB ISIN: ZAE000116828
(“the Group”)
Voluntary Performance Update and Trading Statement
The Group’s results for the year ended 28 February 2019 will be published on or before 29
May 2019 however management considers it appropriate to provide shareholders with a
brief voluntary performance update on the business.
Economic and political volatility persisted across most of our markets during the 2019
financial year. The US China trade stand-off and Brexit impacted negatively on markets and
commodity prices although most of these rebounded in the 4th financial quarter which bodes
well for the financial year ahead. Industrial action also affected output at four of our plants for
sustained periods, suppressing profitability at our plastics operation in particular.
Inconsistent power supply further hampered operations with the increase in the price of fuel
having a significant impact on road transportation costs.
We continued our strategy of growth through acquisition and having considered a number of
targets concluded the acquisition of Group Wreck International Non-Ferrous Proprietary in
November 2018. The synergies that exist between this operation and the rest of the Group
are expected to have a positive and value accretive impact on the Group’s results in the
2020 financial year and beyond.
Despite the challenging economic environment, Group revenue for the year under review is
expected to be more than 30% up on the comparative period. However, due to the reasons
mentioned above, gross margins were negatively impacted and at 8.3% were approximately
1.6% lower when compared to the 9.9 % achieved in the previous financial year.
Normalised Earnings
Notwithstanding the lower margins achieved in 2019, the increased revenue has offset this
negative impact and normalised profit before tax for the year is expected to be on a par with
that achieved in the previous financial year ended February 2018.
Trading Statement
Shareholders are advised that both earnings per share (“EPS”) and headline earnings per
share (“HEPS”) are expected to be between 15.10 cents per share and 15.80 cents per
share representing a decrease in:
* EPS of between 14.5% and 18.3% compared to 18.47 cents per share for the period
ended 28 February 2018; and
* HEPS of between 14.4% and 18.2% compared to 18.45 cents per share for the
period ended 28 February 2018.
If the once of costs associated with acquisitions (including legal fees, additional facility fees
and due diligence costs) and other non-recurring expenditure related to IT security upgrades
EPS and HEPS would have been approximately 2.0 cents per share higher.
The national strike in the plastic industry affected our Plastic segment negatively and we
may decide to impair goodwill as a result. This has not been incorporated in the above.
The financial information on which this voluntary performance update and Trading Statement
is based has not been reviewed nor reported on by the Group’s external auditors.
16 April 2019
Johannesburg
Sponsor and Corporate Advisor: Bridge Capital Advisors Proprietary Limited
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