Earth-moving equipment group Bell Equipment on Tuesday warned investors of a severe drop in its earnings for its 2020 financial year to end-December.

The company is expected to make a headline loss per share for the year to end-December 2020 of between 25c and 35c per share, or between 96c and 106c lower, respectively, compared with the restated headline earnings per share of  71c for the year to end-December 2019.

The expected decrease in earnings was mainly because of the recognition of an impairment loss on the revaluation of a property owned by the group in Zambia and an increase in the refund liability relating to residual guarantees provided to a financial institution to support the financing of equipment sales to customers.

Shareholders were also advised that the group’s results contained a prior year adjustment and that the comparative balances therefore differed from those previously reported.

The prior year restatement resulted in a reduction in profit after tax for the year to end-December 2019 of R8.7m, related to the correction of errors in the provision for standard warranty costs.

Bell's largest shareholder, IA Bell, has made an offer to buy US group John Deere's stake, at R10 a share, after which it wants Bell Equipment to be delisted.  IA Bell owns a 38.7% stake in the company while John Deere owns a 31.41% stake.

Bell Equipment's share price closed 1.42% lower at R9.70 on Tuesday.


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