Investment holding company Labat Africa has withdrawn its five-year profit forecasts, including the projections it had for its current financial year to end-August 2020, due to the coronavirus pandemic.
The company is undergoing a turnaround as it seeks to get more exposure in the fast-growing cannabis industry.
It recently won a licence in Lesotho that allows it to trade in cannabis. Other recent deals that promise to expand Labat’s presence in the industry include the acquisition of CannAfrica, a cannabis education company, and the acquisition of Biodata, a medical research firm.
Labat joins a list of companies, including lender Nedbank and investment manager Quilter, that have withdrawn their guidance amid the fallout from the pandemic.
Labat’s revenue for the six months to end-February 2020 tumbled 35% to R219m, the company said on Friday in a trading statement.
Total income increased 180% to R2.8m from a previous loss of R3.5m while earnings surged 182% to 0.70c per share. Headline loss per share was up 73.7% for the period.
The company’s health-care and technology operations have performed reasonably well since March when the coronavirus surfaced in the country, but the lockdown has had a negative effect on its fuel volumes, Labat said.
Labat said it would be issuing a new forecast for its 2021 and 2022 financial years due to its venture into the hemp and cannabis industries.
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