Trading Statement Verimark Holdings Limited Incorporated in the Republic of South Africa Registration number: 1998/006957/06 JSE share code: VMK ISIN number: ZAE000068011 ("Verimark" or "the company") TRADING STATEMENT It is anticipated that the Group will record earnings of between R5.5 million and R7.0 million for the year ended 28 February 2013 compared to earnings of R26.8 million reported on in the previous corresponding period. Headline earnings per share and earnings per share for the year ended 28 February 2013 is expected to be in the range of 5.3 and 6.8 cents per share compared to the headline earnings per share and earnings per share of 25.8 cents per share and 25.8 cents per share respectively, as reported on in the previous corresponding period. The lower profit is attributable, mainly due to the following factors: * The impact of the earnings loss of R5.3m (5.1 cps) incurred for the six months ended 31 August 2012, as reported upon per the interim results announced on 12 November 2012 * The weakening of the rand during our peak sales period (October 2012 to February 2013) resulted in narrower gross margins. * Certain once off events: - The impact of once off costs for the relocation into our new warehouse and head office facility - Legal costs incurred in the successful enforcement of a restraint of trade on two employees that joined our competitors - The uninsured portion of the loss incurred as a result of a large once off robbery at our distribution centre - The consolidation of the various warehouses brought about improved inventory visibility and control. This however also highlighted certain inefficiencies, which once rectified, resulted in a higher than expected inventory loss * As mentioned in previous communications, the business efficiencies were negatively impacted due to the sales and operations that have outgrown the infrastructure. Whilst concerted efforts have been made to improve the operational efficiencies and contain costs, these were unfortunately not realised during the year under review, due to the delay in the completion and relocation to the newly custom built, double the size warehouse & head office at the end of January 2013. FUNDING The group remains favourably geared and adequately funded to continue on the Verimark group’s growth path. PROSPECTS The Board remains confident that the medium and long term prospects of the group remain positive. We believe that the anticipated operational efficiencies of operating out of our new premises will begin to deliver results in the year ahead. In addition, we do not anticipate a repeat of the various once off events noted above. The information on which this trading update has been based has not been reviewed or reported on by the company’s auditors. 14 March 2013 Sponsor Grindrod Bank Limited Date: 14/03/2013 01:45:00 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.