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Sentula bolts up on profit forecast
Allan Seccombe
Posted: Fri, 27 Jun 2008
[miningmx.com] -- CONTRACT miner and coal group Sentula Mining bounced back strongly from a day of suspended trade with a profit forecast that showed headline earnings growing 81% in the year to end-March 2009.
The JSE suspended trade in Sentula shares, deeming the company to have violated regulations when it told a select audience what it expected profits to be in the coming financial year. The company released its 2008 results on Wednesday.
"Sentula's management held a conference call with certain investors on 25 June 2008, during which discussions certain comments were made on behalf of Sentula regarding future earnings which constituted a profit forecast, as envisaged by the Listings Requirements of the JSE," Sentula said.
Sentula management said pre-tax profit was seen at R477m and that headline earnings per share would be 170 cents. This is against 93.4 cents in the
2008 financial year.
The strong growth would come from an expanded operating fleet, consolidation of acquisitions made in 2008, a full year's performance from its investment in the Koornfontein colliery as well as additional contracts to be fully realised during the course of the year.
Sentula's shares leaped out of the starting blocks once the suspension was listed with the publication of
the forecast. The shares bolted to R15 from Wednesday's close of R13.70. It was last trading up 6.6% at R14.60 on fair volumes.
The market appears to be shrugging off news of an investigation by the Financial Services Board into possible insider trading at Sentula after recent events.
Sentula was estimated to have shed a billion rand of its market capitalisation since it told the market on 2 June that it would restate its results to account for various impairment charges. The shares fell to R11.
This followed a review of the accounts by new auditors KPMG who had been appointed by the Sentula board at the end of 2007.
Jonah Capital and Coronation Capital sold out the bulk of their stakes in Sentula at R21.75 a share on March 10 while two Sentula directors and one former director sold shares worth R14.2m between January 10 and February 27.
Two of those executives – non-executive director Treve Hendry and finance manager Jason Holland –
resigned last week.
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