Impairments add to Sebata’s headline loss


Impairments add to Sebata’s headline loss

Published Date: 2020-07-29 | Source: Stephen Gunnion | Author: Stephen Gunnion

Impairments add to Sebata’s headline loss

The information and communications technology group says its headline loss was impacted by the write-down of financial assets.

Sebata Holdings says it will report a rise in full-year earnings due to the profit it made from disposals last year. However, its headline loss is likely to widen due to one-off expenses, including impairments.

In a trading statement, the information and communications technology (ICT) group said continued earnings per share (EPS) for the year to end-March would be as much as 306% higher than the 129.73c it reported last year. This was a direct result of the sale of its Water and Software Group of companies, which generated a collective profit on disposal of R398 million. The retained investments in the respective groups was remeasured and generated a fair value gain of R598 million.

The headline loss from continued operations was likely to be as much as 105.01c per share, from a 32.45c loss last year. The group impaired financial assets by R61.5 million, including the complete write down of R47.4 million of the vendor financing advanced to the purchasers of The Training Room Online (TTRO), which it sold in 2018, and the write down of R14.1 million due from the employee share trust scheme. After a prolonged period of the Sebata share price being below that of the strike price of the share options granted to employees, and with no immediate recovery of the share price to the required levels foreseen in the near future, it said its Board had taken a decision to impair the receivable.

Sebata operates across four segments, including software solutions, water technologies, consulting and ICT support services. It was previously called MICROmega before the 2018 disposal of the NOSA group of companies left it focused on the Sebata group of companies.

It expects to release its results this week.

Its shares closed 0.3% down at R3.89 yesterday. The trading statement was released after the close of trade.

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