PFG - Pioneer Foods - Trading Statement And Cautionary Announcement
PIONEER FOOD GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1996/017676/06)
JSE share code: PFG
ISIN: ZAE000118279
("Pioneer Foods" or "the Company")
TRADING STATEMENT AND CAUTIONARY ANNOUNCEMENT
Trading Statement
Shareholders are referred to the announcements dated 19 February 2010
regarding the Chairman's statement and the update on the competition issues,
in which the Company issued a business update and, inter alia, stated its firm
intention to bring the bread matter and other matters before the Competition
Commission to a swift close.
The Company has raised a provision of R 196 million to settle the penalty in
the bread matter, following the release of the Competition Tribunal's decision
on 3 February 2010.
As a result of the provision raised, earnings per share and headline earnings
per share for the six months ending 31 March 2010, is expected to decrease
between 25% and 45% from the previous corresponding period.
Shareholders are further advised that if this provision is not taken into
account, an increase of between 20% and 40% is expected in earnings per share
and headline earnings per share for the six months ending 31 March 2010, from
the previous corresponding period.
This earnings guidance may well be subject to change given the unpredictable
nature of trading expected in the remaining two months of the interim period.
Further clarifications may follow in due course.
Cautionary Announcement
Shareholders are advised that Pioneer Foods is currently in negotiations with
the Competition Commission to settle the milling matter. The quantum of a
potential administrative penalty to settle the matter is not yet determinable.
Shareholders are also advised that the Competition Commission has decided to
appeal the decision of the Competition Tribunal in the bread matter with
regard to the criteria used to determine the revenue on which the penalty was
based and, if successful, may result in the penalty imposed by the Competition
Tribunal, being increased.
The Company has resolved that it is in its interests to oppose the Competition
Commission's appeal and to lodge a cross appeal which, if successful, may have
the effect of the penalty being reduced.
Pioneer Foods will however continue to pursue amicable resolutions of this and
other matters before the Competition Commission.
Shareholders are accordingly advised to exercise caution until a further
announcement on these matters, is made.
Paarl
25 February 2010
Sponsor
BJM Corporate Finance (Proprietary) Limited
Date: 25/02/2010 11:16:01 Produced by the JSE SENS Department.
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