Pinnacle moves to protect shares
Under-fire ICT firm, Pinnacle Holdings, has moved to explain its current operating status amid a sustained weakening of its share price.
Shares in the group have weakened substantially since March, following the arrest of a company director for allegedly trying to bribe a senior police official, while allegations of insider trading also surfaced.
Tshivhase has denied the charges, while CEO Arnold Fourie has refuted claims that the company has breached rules on timely disclosure.
The group lost approximately 50% of its market value on March 25-26 after the South African Police Service (SAPS) made the announcement of an arrest the day prior.
The hardware and software distributor closed March 24 at R20.00, but has since declined to a current price of R8.55 (16h00, 20 August), valuing the company at approximately R1.44 billion.
On August 8, Pinnacle published a trading statement where it stated that it expects to report headline earnings per share (HEPS) of between 160 and 175 cents per share and earnings per share (EPS) of between 165 and 180 cents per share for the year ended June 2014.
This compares to HEPS of 205.6 cents in the comparative period to end of June 2013, a decline of between 15 and 22%, and to EPS of 205.8 cents, a decline of between 13 and 20%.
Shares in Pinnacle had reached a high of R13.05 on the JSE on 8 August, but it noted that its shares have tumbled since.
The company said in a statement on Wednesday, that “it wishes to address some perceived concerns and hopefully lay to rest any rumours that may be circulating in the market”.
“During the last quarter of the financial year, Pinnacle´s revenue grew by a robust 7%,
although the benefit of this was negated by lower margins and increased expenses.”
“In addition, Pinnacle incurred material once-off charges relating to write downs on
large holdings of inventory which were becoming end of life. It is important to note
that there has not been any significant diminution in public sector business in the
last quarter,” it said.
Moving to the matter pertaining to alleged bribery charges against executive director, Takalani Tshivhase, Pinnacle said the matter has been postponed until 9 September 2014.
“There is no further information to report on this matter at this stage and shareholders will be advised once any new information becomes available,” Pinnacle said.
“The group remains focused on its day to day business operations. Its customers, all of its suppliers and financiers remain in place and continue to be supportive of the
business,” it said.
“It is therefore business as usual at Pinnacle,” the group said.
More on Pinnacle
The state’s case against Pinnacle: report
Pinnacle insider trading probe
Pinnacle bribery scandal digs deeper: report
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