Poor returns hit CET

Exceptional income of R2 million helped Cape Empowerment Trust (CET) offset some effects of the poor returns from its investment in Dynamic Cables. But it was not enough to prevent a 33% drop in attributable income.

CET, whose investments include Federal Guarding and DDB SA, is an empowerment holding company whose aim is to buy companies, add value and exit to the benefit of shareholders.

"Our major investment, Dynamic Cables RSA, has traded below expectations for a variety of reasons which include the relocation of its plant and foreign exchange losses," says CET CE Shaun Rai.

He said this had a severe negative impact on the group`s performance. "Fortunately head office activities resulted in exceptional income of R2 million which partially offset the drop in performance of Dynamic`s earnings."

CET incurred an operating loss of R1.15 million for the year to 31 December 2002, which compares with a profit of R626 000 the previous year.

However, despite the R2.15 million exceptional income, together with the group`s R2.38 million (2001: R4.2 million) share of associated companies` income, attributable income fell by 33.5% to R3.3 million (R4.96 million).

Rai says the group has instituted legal proceedings to recover previously written-off amounts.

The group is also a consortium member in the Prism bid for the taxi electronic monitoring system contract and Rai says the consortium has been short-listed by the trade and industry department. The outcome of the bid is expected to be announced during the first half of this year.