Ellies, which is in the midst of issuing shares to raise cash, will report a loss for the six months to October, it told shareholders today.
The company said in an announcement its loss per share for the interim period would be between 10c and 15c a share. This is in comparison to the 25.27c it reported as earnings per share last year - a decline of between 139.57% and 159.35%.
Ellies added its headline loss per share will also come in at between 10c and 15c, a drop of between 139.85% and 159.77% when compared with 2013. Analysts view headline earnings per share as a key indicator of performance, as they strip out unusual items.
The listed company is also busy with a fully-underwritten rights offer that will see it raise about R115 million. The rights offer is being undertaken in a bid to restructure its debt - including management loans - and reschedule its obligations with Standard Bank.
Ellies, which had a challenging period in the year to April, has borrowed around R45 million from two of its executives, which it now wishes to settle. The company is issuing 104.5 million shares at 110c a share, and shareholders have the opportunity to subscribe between next Wednesday and Friday.
Chairman Ellie Salkow lent the group R25 million to fund its consumer business. He has also guaranteed Standard Bank an amount capped at R45 million. Executive director Ryan Otto - who is also CEO of Megatron - has committed R20 million.
In the year to April, Ellies grew revenue marginally, by 5.5%, to R2.1 billion. However, it experienced substantially lower margins, especially in its consumer division - which produces television products - where the margin lost was 14%.
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