Caxton and CTP Publishers and Printers Limited Forecasts Decline in Earnings Amid Challenging Economic Climate

  • Caxton and CTP forecasts earnings decline due to economic challenges: inflation, slow growth, and ongoing power outages.
  • Headline earnings per share expected to drop by 4.1% to 8.5%, while earnings per share may plummet by 27.6% to 31.3%.
  • Despite challenges, the company maintains strong cash flow, with cash and equivalents reaching R2 170,0 million.
Amber House RF

Caxton and CTP Publishers and Printers Limited has issued a trading statement indicating a projected decline in earnings for the six months ending on December 31, 2023. The company attributes this downturn to various factors, including consumer struggles with inflation, sluggish economic growth, and persistent power outages.

Headline Earnings Decline: According to the trading statement released by Caxton and CTP Publishers and Printers Limited, headline earnings per share are expected to decrease by 4.1% to 8.5% compared to the same period in the previous year. The forecasted range for headline earnings per share is between 83,0 and 87,0 cents. This decline reflects the challenging trading environment the company faced during the review period.

MetricExpected RangePercentage Change
Headline Earnings Per Share83,0 – 87,0 cents-4.1% to -8.5%

Factors Contributing to Earnings Decline: The company attributes the decline in headline earnings to several key factors. These include the challenging economic climate characterized by consumer hardship due to inflation, sluggish economic growth, and ongoing loadshedding. Despite efforts to control costs and an increase in net finance income, overall revenues experienced a decline, resulting in a slight margin squeeze.

Earnings Per Share Projection: In addition to the decline in headline earnings, Caxton and CTP Publishers and Printers Limited anticipates a substantial decrease in earnings per share for the same period. Earnings per share are projected to range between 73,0 and 77,0 cents, reflecting a decline of 27.6% to 31.3% compared to the previous year.

MetricExpected RangePercentage Change
Earnings Per Share73,0 – 77,0 cents-27.6% to -31.3%

Causes of Earnings Per Share Decline: The significant decrease in earnings per share is primarily attributed to the profit recorded from the sale of Private Property South Africa Proprietary Limited in the previous year, as opposed to the loss incurred from the disposal of the investment in Novus Holdings Limited during the current reporting period. The difference in these financial transactions has had a notable impact on the company’s earnings.

Financial Position and Cash Flow: Despite the projected decline in earnings, Caxton and CTP Publishers and Printers Limited reports a strong cash flow position. At the end of the review period, cash and cash equivalents amounted to R1 810,1 million, which has further improved to R2 170,0 million.

Conclusion

Caxton and CTP Publishers and Printers Limited’s trading statement underscores the challenges faced by companies operating in South Africa’s current economic climate. The projected decline in earnings reflects the impact of various factors, including consumer hardship, economic sluggishness, and operational challenges such as loadshedding. The company remains focused on managing costs and maintaining financial stability amid these challenges.

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