Business Connexion, which has changed its financial year from 31 May to 31 August, believes it will have saved about R100-million through its revitalisation programme before financial year-end, but its costs will contribute to a reduction in earnings.
In a statement, the company says the revitalisation programme has made significant progress. Cost savings will be achieved through the streamlining and outsourcing of non-core functions and optimising commercial, finance, human resources and other business functions. Costs incurred to date related to the revitalisation programme amount to R46,1-million and it is expected that a further R48,4-million of costs will be incurred by 31 August.
"We currently anticipate the programme to generate annualised savings in excess of R100-million," the company states.
Including revitalisation costs, the groups basic earnings per share for the period is expected to be between 30% and 35% lower than the previous corresponding reporting period.
"This decrease is attributable to the secondary tax on companies of R15,8-million on the special dividend of 60.0 cents per share paid during the first half of the year, foreign exchange movements impacting the African subsidiaries of R19,1-million and the revitalisation spend," the company states.
The group's headline earnings per share is anticipated to be between 40% and 45% lower than the previous corresponding reporting period.
The differential between basic earnings and headline earnings relates to the profit of R21,5-million (pre tax and minority interest) realised on the sale of the group's property in Faerie Glen during the period, and this is reflected in basic earnings only.