Johannesburg - Financial services group Alexander Forbes yesterday warned that its earnings for the six months to September would be as much as 35 percent lower than in the previous comparative period.
In the half year to September 2005, Alexander Forbes generated a restated headline profit of R255 million.
The group said it would be hit by a R35 million charge for professional fees and other costs related to the sale of its International Risk Services business. Once the sale was concluded, Alexander Forbes said, the transaction costs would be offset against the net capital proceeds on the sale of £67.5 million (R945 million).
In August the company agreed to sell International Risk Services to Lockton International, the largest US insurance broker.
Regulatory approvals are the outstanding condition for the deal to be concluded.
The company would also take a R20 million charge in terms of an announcement made last month and R17 million of interest costs accruing on the provision for client settlements in the current period.
Alexander Forbes got itself into hot water for admitting that it engaged in bulking - aggregating clients' pension money to achieve higher interest rates from banks - without disclosing this fact to clients.
The group would also report a loss of R7 million from its cell captive insurance arrangement, compared with a profit of R19 million in the prior period.
And there would be no recurrence of the R22 million exceptional profit from the reduction of onerous lease provisions reported in the prior period.
Over the weekend the UK's Daily Mail reported that private equity group Actis Capital was in advanced negotiations to buy Alexander Forbes.
Yesterday Alexander Forbes said it was in continuing discussions with a consortium of private equity investors regarding its potential acquisition, but a binding offer had not yet been submitted.
Spokesperson Debbie Kotzen said the company had been under cautionary since October 2 and Actis's partner in South Africa, John van Wyk, said the company would not comment on speculation.
The shares rose 0.3 percent to R16.85, while the non-life insurance sector fell 0.04 percent.