Trading statement Pinnacle Holdings Limited (Previously Pinnacle Technology Holdings Limited) Registration number 1986/000334/06 Share Code: PNC ISIN: ZAE000184149 (“Pinnacle” or “the Group” or “the Company”) TRADING STATEMENT The trading statement is published in compliance with paragraph 3.4(b) of the JSE Listings Requirements. Revenue, Earnings per Share (“EPS”) and Headline Earnings per Share (“HEPS”) Shareholders are advised that the Company is reasonably certain that its interim results for the 6 months ended 31 December 2014 will reflect the following: 6 months to 6 months to 6 months to 31 December 2013 31 December 2014 31 December 2014 Actual Expected change Expected Values percentage Revenue R3,161 million +14% to +15% R3,600 to R3,640 million Headline earnings R151 million -16% to -21% R120 to R127 million EPS 102.6 cents -22% to -27% 75 to 80 cents HEPS 95.4 cents -14% to -19% 77 to 82 cents A. Revenue for the six months ended 31 December 2014 grew in a satisfactory manner with particularly pleasing growth into markets outside South Africa being recorded. B. This revenue growth was achieved despite a month long Numsa strike that hampered trading at the Pinnacle Africa facilities in Gauteng during July 2014. C. As previously highlighted to the market, gross margins have continued to be under pressure and, as a percentage of revenue, will be approximately 2.5% lower than the comparative period. This was brought about by competitive pressures and product mix as the group continues its progress into large technology projects which typically carry lower margins. Management has addressed the declining gross margins by focusing specifically on the procurement process and all aspects of margins are a top priority for the group. D. Cost management was acceptable, with increased efficiencies resulting in operating expenses, as a percentage of revenue, decreasing by approximately 0.5% when measured against the prior period. This is after adjusting for the once-off profit on sale of assets of R10.5 million and the Reclassification adjustment of R4.3 million, which was recorded in the prior period. The EPS decline is higher than the HEPS decline due to these effects. E. The Board is currently considering various options to mitigate the Group’s high level of gearing and hopes to inform the market in the near term of its intentions. The above information has not been reviewed or reported on by the Company's auditors. The Company's unaudited interim financial results for the six months ended 31 December 2014 are expected to be published on SENS on or about 9 March 2015. Midrand 18 February 2015 Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd Date: 18/02/2015 01:00:00 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.