RCG Holdings Limited provided earnings guidance for the year ended December 31, 2012. For the year, the board, it is expected that the Group will record a net loss for the year. During 2012, the Group continued to focus on the solutions, projects and services business segment, while in the process of shifting away from the lower margin distributorship model, and continued to divest less profitable and non-core businesses as part of the company's reorganization effort. As a result of the above and paving ways for new areas of revenue models to grow, revenues for the year ended December 31, 2012 are estimated to have decreased significantly compared to the year ended December 31, 2011. The Group continued to experience margin pressure with continuing lower selling prices arising from increased competition, coupled with rising cost of sales. This has resulted in a higher negative
gross margin than was experienced in the first half of 2012. The Board is currently reviewing the level of impairment provisions against the carrying value of trade receivables and stocks. This review, combined with the lower revenues and margins referred to above, is expected to result in a net loss position for the full year ended December 31, 2012 of the same order of magnitude as the previous year.