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Over the last week the follow trading updates were released. Read in conjunction with the previous week's set of trading updates it can be seen how the small cap market's (historic) profits have slumped. Bear in mind that reported profits are always going to be historical in nature, thus these recently reported declines in small cap stock profits attribute to six months to a year ago. The real question is whether this is the trough of the profit slump and things will pick up in the next six months to a year? Personally, I think that when compared to the previous year, the next one will generally be better for most small caps. Looking at the trading updates closer, RBA has reported that it is expecting to report a loss of between R31 million and R37 million. This translates into a loss per share of between 10c and 12c and the business blames this on "...the most difficult trading period in RBA`s history." The AltX-listed waste management group, Interwaste, also reports that it expects EPS and HEPS for the year to decrease by between 30% and 50%. IWE's performance is better than Hardware Warehouse's as during the week the latter reported that it expects its EPS to drop from the previous period's 11.42c to between 0.11c and 0.34c. The IT play, Dynamic Technology, also reported a drop in earnings during the week with it expecting its EPS to be between 25% and 40% lower. None of these trading updates are close to as bad as Vunani's, but the latter was expected. Vunani has major market exposure through its numerous investments and it financial services division is relatively small and exposed to the current harsh environment. The fledging financial group expects that its previous period's loss of R784 million will be reduced by more than 20%, but "...at this stage, the company is unable to quantify, with the degree of certainty required for a more accurate update, the expected basic and headline loss per share for the year ended 31 December 2009 and will release a further announcement containing such detail as soon as possible."
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