AST Group says it is making good progress in its plan to save more than R200 million a year.
The group announced in May that it was implementing a business improvement programme aimed at eliminating costs and cutting debt levels.
"We are on track to achieve our estimate of a sustainable annualised cost saving exceeding R200 million per year, on full implementation of the business improvement programme," it says in an update to shareholders. "A cost reduction of R9 million per month is already evident."
Of the 11 businesses identified as non-core at the beginning of the year, seven have been sold, with talks around the disposal of the remaining four close to an end.
"We envisage that all four will be finalised before end-December 2003. The sale of these businesses results in either elimination of cash burn, or cash received, which is applied to reduce debt."
Debt levels are now about R90 million less than at the June year-end and the group says it is on track to rebuild the balance sheet.
"The business improvement programme is meeting expectations and we are fully committed to its successful implementation. The idea generation and planning part of the programme will be completed by March 2004 with full implementation by December 2004.
"However, the full annualised financial benefits will only become evident in the 2005 financial year, as previously advised."
The results for the first quarter of the 2004 financial year are in line with expectations, which AST says is tangible evidence that the business improvement programme is starting to have a positive effect.
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