Faritec Holdings is expecting its earnings per share and headline earnings per share for the six months ending 31 December 2009 to be between 80% and 90% higher than for the same period last year. The company has also issued a cautionary announcement.
The increased earnings for this period still represent a loss, although the company hopes to return to profitability before the end of its financial year.
In a statement today, Faritec reminds shareholders that, according to the rights issue of 22 June 2009 and the specific issue of Faritec ordinary shares to Shoden Data Systems, there will be 1 891 544 567 ordinary Faritec shares in issue at the end of the current period compared to 258 211 233 ordinary Faritec shares in issue at the end of the prior period.
Shareholders are further advised that, in order to successfully implement its turnaround and growth strategies, Faritec is required to normalise trading conditions with trade creditors, and has entered into discussions to raise additional funding of about R60-million. This transaction is expected to be detailed and concluded in January 2010.
The materiality and timing of the intended funding transaction, as well as the directors' assessment that this funding is required to ensure adequate working capital to execute the company's business plan, will result in a delay of up to one month of the posting of Faritec's annual financial statements for the year ended 30 June 2009.
A statement from Faritec stresses that the company still expects to return to profitability over the course of the current financial year.
* Update: on 4 January, the JSE noted that Faritec had not submitted its annual results in time and annotated its listing with "RE". It has set a deadline of 29 January for the company to submit its results, failing which it could face delisting.