Invicta rallies on earnings forecast

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Invicta rallies on earnings forecast

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Published Date: 2019-11-18 | Source: Stephen Gunnion | Author: Stephen Gunnion

Invicta rallies on earnings forecast

The engineering and capital equipment group says profit will be significantly higher after a big tax provision affected its previous earnings.

Invicta's shares rose as much as 10% on Friday after it primed shareholders for a sharp increase in first-half profit after last year's results were impacted by a tax provision.

In an updated trading statement, the engineering and capital equipment group said profit for the six months to end-September would be between R145 million and R155 million higher than the R8.71 million reported in the previous corresponding period and it would report earnings per share (EPS) of between 135c and 145c, up from 8c last year. Headline EPS for the period are expected at between 140c and 155c, from 2c previously.

In the first half of its 2019 financial year the group paid the final R200 million of a R750 million settlement with the SA Revenue Service. The other R550 million was accounted for in prior years. The settlement related to a number of historical transactions that it was advised were tax compliant but it decided to settle due to the lingering uncertainty, which had weighed on its share price.

It didn't pay a dividend last year due to the tax settlement and higher debt levels but said its normal dividend policy would resume once cash flows and gearing allowed.

It expects to release its results on 25 November. Its shares retraced some of their gains to close 7.5% higher at R21.90 on Friday.





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