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CNL - Control Instruments Group Limited - Business update and trading statement CONTROL INSTRUMENTS GROUP LIMITED - BUSINESS UPDATE AND TRADING STATEMENT (Incorporated in the Republic of South Africa) (Registration number: 1964/003987/06) Share Code: CNL ISIN: ZAE000001665 ("Control Instruments" or "the Company" or "the Group") BUSINESS UPDATE AND TRADING STATEMENT Shareholders were advised in the Group`s SENS announcement dated 4 October 2011 that the Group`s then subsidiary, Pi Shurlok Limited ("Pi Shurlok UK"), would be placed under administration. At the time it was anticipated that if the Group`s net investment in Pi Shurlok UK had been fully written off in the interim results for the six months ended 30 June 2011, it would have resulted in a reduction of approximately R82 million in profits after allowing for the realisation of accumulated foreign currency gains and losses. The Group is now able to advise shareholders that the net write-off of the investment in Pi Shurlok UK; the realisation of accumulated foreign currency gains and losses; and the trading losses in respect of Pi Shurlok UK, amount to approximately R80 million. In the SENS announcement dated 14 December 2011, shareholders were further advised that changes had been made by the Group so as to reduce its exposure to the OEM (original equipment manufacture) automotive industry. These changes included the exit from Pi Shurlok UK and significant restructuring of the OEM electronics manufacturing facility in Pietermaritzburg ("Pi Shurlok SA"). As a result of these changes, the Group would be primarily focused on the automotive aftermarket in sub-Saharan Africa through its Aftermarket Business, CI Automotive. It would also require a smaller head office. The exit from Pi Shurlok UK has been completed and the head office is in the process of being closed. These changes have resulted in once-off costs of approximately R28 million in the results for the year ended 31 December 2011. The 2011 results have also been negatively affected by the restructuring of Pi Shurlok SA and trading losses in that business. This resulted in the de-recognition of the deferred tax asset in Pi Shurlok SA of approximately R23 million. While the Group`s decision to exit Pi Shurlok UK and downsize Pi Shurlok SA has had a significant impact on the results, the Aftermarket Business has not been affected. On the contrary, exiting Pi Shurlok UK, (i) eliminates the cash drain it was placing on the Group and indirectly on the Aftermarket Business; (ii) reduces the Group`s risk profile; and (iii) enables the Group to focus on its Aftermarket Business and grow this business off the back of the profitable and solid performance it has delivered over the past three years. The Group`s loss per share for the year ended 31 December 2011 is expected to be between 103.0 and 113.0 cents, compared with earnings per share of 1.6 cents in the previous year and the headline loss per share is expected to be between 55.0 and 65.0 cents, compared with headline earnings per share of 1.7 cents in the previous year. The financial information on which this trading statement is based has not been reviewed or reported on by the Company`s auditors. Control Instruments` results for the year ended 31 December 2011 will be released on SENS on or about 16 March 2012. Cape Town 5 March 2012 Sponsor Investec Bank Limited Date: 05/03/2012 08:47:20 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
