OLYMPIA CAPITAL HOLDINGS LIMITED
Olympia Capital Holdings Limited (OCHL) owns 51% of Olympia Capital Corporation Limited (OCC), a company listed on the Botswana Stock Exchange. In December 2006, OCC purchased 74% of Plush Products (pty) Limited (Plush).
For the fnancial periods ended December 2006, February 2008 and February 2009, Plush did not contributed positively to the bottom line of the group. From September 2008, following the slipping of the South African economy into a recession, we saw a signifcant drop in our sales that made the company go into a loss making situation.
We believe in the products and the market, but not the model to market that we have used to date. A decision has been made to close the company, sell the assets to meet our obligations and consider re-entering the market with a leaner model.
The closure of Plush will not have any negative effect on the operational group proftability, however we will only tell with time the effect that the loss of the actual investment will have on our group balance sheet.
23rd June 2009
Many folks have been asking about Olympia Capital Holdings (Kenya). The shares' trading was suspended on Monday at 11am but resumed trading on Tuesday after the statement was released. We will have to wait for the FY 2008-9 results expected by 30 June 2009.
The conventional wisdom in financial markets is that the longer the delay in announcing results, the worse they are.
[KQ released their 2008-9 results 1 week later than usual. Well, there was a Kes 7.5bn charge to profits relating to hedging.]
It is highly likely that OCHL will have to write off the ENTIRE equity injection into Plush-Yokota. And there is a chance that the profitable units might suffer as well from the cash drain or 'connection'. Nevertheless, OCHL's acquisition of Plush has set Olympia back many years.
That said, Plush has NEVER contributed to the bottomline for OCC (Botswana). So this action will stop the cash outflows for now.