Battling security division drags CSG Holdings into loss
Heps deteriorated due to weaker performance at all three arms, but especially at 7Arrows and Revert Risk Management
Services group CSG Holdings warned on Monday it had swung into a headline loss in its year to end-March amid pressure from its underperforming security division.
The group said in a trading update it will report a headline loss per share of 8.23c-9.23c, from headline earnings of 4.99c previously, with the group also bracing for pressure from the Covid-19 pandemic.
Heps deteriorated to a loss due to the weaker performance across all three divisions, worsened by the poor performance of 7Arrows Security and Revert Risk Management in the security division and the accounting of additional future credit losses resulting from the Covid-19 pandemic, the group said.
The group’s results are expected on July 1.
It announced on Friday it will sell parts of 7Arrows to Fidelity for R65.85m.
The group is selling part of the armed response and monitoring business of 7Arrows, and part of its residential guarding business.
“As a result of the review of underlying operations, and considering the negative return on investment of 7Arrows over the last two years, certain of the 7Arrows business segments were considered to be noncore to the future strategy of the company,” CSG said.
In morning trade on Monday the group’s share price was unchanged at 12c, giving the group a market capitalisation of R63m. The group’s share price has fallen 77% over the past twelve months.