The JSE has warned the Huge Group that its shares will be suspended if it does not submit its financial report by the end of this month.
According to JSE rules, companies have three months in which to submit financial results after the end of the reporting period. Huge's year-end was at the end of February, and the company should have issued results by the end of May.
CEO James Herbst explains the duty of getting the numbers published has fallen in his lap since the company's acting FD, Yvette Neveling, resigned “with immediate effect” at the beginning of the month.
Herbst, a qualified charted accountant, says the numbers have been audited, but the mechanical process of collating the figures into a publishable statement is taking some time as he is not familiar with the required software system.
The group is in a sound financial position, and the delay does not indicate anything untoward, says Herbst. He adds he is “trying my level best” to get the figures out before the JSE's deadline.
Debate delay
Earlier this month, the company told shareholders it was “clarifying the appropriate accounting treatment relating to certain asset and liability balances as at 28 February 2011 with its auditors, KPMG”.
Because of this, the board could not release the group's year-end results, nor those of its subsidiaries, a statement said. “Shareholders should expect a short delay in the publication,” Huge said.
Herbst says the debate hinged on the termination of connection incentive bonuses from operators at half-year. He explains the bonuses added around R55 million a year in pure profit for the company, and there was a debate with the auditors as to whether this loss required goodwill being written down.
Since the loss of the connection incentives, operators have dropped retail rates, which has aided the fixed-to-mobile operator, but did not offset the loss at full-year, says Herbst.
Huge expects its results will be more than 20% lower than a year ago. Last year, the company reported revenue down to R573.5 million, from R608.5 million. However, net profit was higher at R9 million, up from R7.4 million.
However, the company's restructuring, in combination with further price reductions, bodes well for the current year, says Herbst. “Since the start of the year, we've had a phenomenal performance.”
The JSE says Huge's listing on its system has been annotated with an “RE” to indicate its results are overdue.
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