Raubex shares dive in line with all share index

THE RAUBEX Group share price slid more than 29 percent in early trade on the JSE yesterday, taking a cue from the sharp decline on the JSE all share index, which fell more than 5 percent on escalating fears over the spread of the coronavirus across the world and rising tensions between Russia and Opec.

Raubex’s share declined to its lowest level on the day to R15 a share from Friday’s close of R21.41.

However, a positive trading update for the year to end February released in the afternoon swung the share price’s performance as it reversed some of the losses.

The group said in the trading guidance that it expected its earnings per share (Eps) to lift at least by 325 percent compared to last year.

The guidance pushed the group’s shares up 2.2 percent in the afternoon to R22 before closing at R19.75.

The group said that the significant increase in earnings is due to a present value charge and work in progress adjustment of R75.9 million after tax, related to the accounts receivable balance due from the Road Development Agency in Zambia, a goodwill impairment charge of R51.5m after tax attributable to the asphalt cash-generating unit and both of these charges having been incurred in the previous corresponding period and are non-recurring.

Its headline earnings per share (Heps) are expected to surge by 75 percent.

“This translates to Eps being at least 103.7 cents higher and Heps being at least 42.8c higher than the earnings per share and headline earnings per share of 31.9c and 57c achieved last year respectively,” the group said.

The group also said that the improvement in operating performance was attributable to the positive effect from the right-sizing initiatives undertaken in the previous corresponding period in the roads and earthworks division as well as an increase in activity in the infrastructure division.

The group announced the disposal of Raubex Property Investments to Acorn Black Investment at the end of February.

The group said that the initial fair value charge of R53m after tax relating to the financing structure of the transaction and the profit on disposal of R56.7m after tax relating to the disposal of the property portfolio was taken into consideration in the earnings guidance.

“In terms of the JSE Listings Requirements the fair value charge of R53m after tax has been included in Heps, while the profit on disposal of R56.7m after tax has been excluded from Heps and is a reconciling item between Eps and Heps,” the group said.

Raubex expects to release its results on May 11.