Johannesburg — PINNACLE Point Group, the property development group, has warned shareholders it is going to report a headline loss for the year to February 28.

The company said that at the end of October it had expected to generate a profit per share of 0,3c, but it now expected to report a loss of about 2,5c per share.

The estimates may also be influenced by a property valuation process already under way. Management blamed the potential loss on the failure to sell 15 units at its Lagos Keys development in Nigeria in time and the fact that due diligence and competition authority approval needed to be completed for the sale of the Gardener Ross Golf and Country Estate.

"The profit resulting from the sale of this development will now move into the 2011 financial year."

The sale would have a positive effect on gearing and cash flow as debt relating to the development came to about R161m at February 28 , about 41% of the group's remaining interest bearing debt at that date.

Pinnacle's management said a three-month delay in a rights issue due to a delay in the underwriting agreement meant "the anticipated sale of the 15 units at Lagos Keys will now only be reflected in the 2011 financial year".

A key factor of the profit forecast had been the successful conclusion of the rights offer by December 7 last year.

Pinnacle said that Absa Bank loans totalling R125m had been capitalised and that the R95m cash payable in terms of the rights offer had been received by the company.

PINNACLE POINT

Half-year 2009 2008

Revenue (Rm) 9,2 80

Pretax (Rm) (89) 2,1

Net Income (Rm)(64) 3,1

Headline EPS (c) (1,40) (-)

Dividend PS (c)(-) (-)