Faritec management remains confident that the troubled JSE-listed IT group will return to profitability in the financial year to June 2010, in spite of expecting to report a loss in the six months to December 2009.
However, it has had to seek an additional R60m in funding to ensure it has sufficient working capital.
“In order to successfully implement its turnaround and growth strategies, Faritec is required to normalise trading conditions with trade creditors, and the company has consequently entered into discussions to raise additional funding of about R60m,” it says in a statement issued to shareholder on Monday.
“This transaction is expected to be detailed and concluded in January 2010.”
The statement does not say which parties Faritec is talking to.
Faritec says it expects earnings to be between 25% and 45% higher in the interim period to 31 December. Headline earnings per share are expected to rise by as much as 90%, but this still represents a loss for the current period, it says.
The company, which changed its management and shareholding in 2009 — it is now controlled by the privately held technology company, Shoden Data Systems — has increased its ordinary share capital substantially as it has fought to stave off bankruptcy.
The share price has plummeted, trading as low as 3c/share in recent weeks. In lunchtime trading on Monday, it was trading up 25% at 5c.
Former Shoden CEO Fanie van Rensburg has taken over from former CEO Simon Tomlinson and is leading the turnaround effort.
Faritec says the “materiality and timing of the intended funding transaction, as well as the directors’ assessment that such funding is required by the company to ensure adequate working capital to execute its business plan, will result in a delay of up to one month of the posting of Faritec’s annual financial statement for the year ended 30 June 2009”. — Staff reporter, TechCentral
