Afdawn said it had to settle the R8.24m debt with Sars after it received a settlement gain of R11.8m last year. File Photo: IOL
DURBAN – African Dawn Capital (Afdawn) losses from continuing operations widened to R9.39 million during the year to end February from R1.3m last year on a long-standing debt with the SA Revenue Service (Sars).

Afdawn said it had to settle the R8.24m debt with Sars after it received a settlement gain of R11.8m last year. It said it also issued 26.8 million shares to Arvesco 153 at 35 cents a share in December to meet other obligations and to recapitalise its Elite Group subsidiary.

“The Arvesco transaction further de-risked the group and made it possible to access capital markets in the future. Arvesco, through its networks, will give the group access to funding and new revenue opportunities,” the group said.

Elite, a credit provider, was negatively affected by limited new funding while repaying Zarclear, with the group stating that this led to a decline in advances and revenues.

“Elite continued to reduce cash operating costs. Elite has excess capacity for growth, but needs funding to leverage it’s lending platform. The Zarclear debt will be repaid in full by March 2020,” the group said. 

It added that capital repayments of R2.90m to Zarclear would be made during the 2020 financial year for an average of R242 000 a month.

Afdawn, which listed on the JSE in 2004, is a niche finance provider specialising in micro finance, debtor discounting and structured property finance.

The group reported that its revenue declined by 23.38 percent to R13.34m, down from R17.41m, while diluted headline loss a share from continuing operations increased to 33.5c compared to 5.9c reported last year.

However, the net asset value decreased by R1.38m to R6.62m during the period.

BUSINESS REPORT