Unaudited Interim Results for the Six Months Ended 28 February 2018 LABAT AFRICA LIMITED Incorporated in the Republic of South Africa (Registration number 1986/001616/06) JSE code: LAB ISIN: ZAE000018354 (“Labat” or “the company”) UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 28 FEBRUARY 2018 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 6 months 6 months ended ended 28 February 29 February 2018 2017 Unaudited Unaudited R’000 R’000 Revenue 55 611 20 644 Cost of sales (42 158) (15 499) Gross profit 13 453 5 145 Other income - 1 475 Operating expenses (8 375) (5 553) Operating profit/(loss) 5 078 1 067 Investment revenue 25 - Finance costs (376) (69) Profit/(loss) before taxation 4 726 998 Taxation (289) 8 Profit for the period 4 438 1 006 Other comprehensive income - - Total comprehensive income for the period 4 438 1 006 Attributable to: Equity holders of the parent 4 438 1 006 Non-controlling interest - - Total comprehensive income for the period 4 438 1 006 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 28 February 28 February 2018 2017 Unaudited Unaudited R’000 R’000 ASSETS Property, plant and equipment 1 891 1 109 Other intangible assets 2 342 - Deferred taxation 8 238 7 904 Non-current assets 12 471 9 013 Inventories 2 725 3 625 Other financial assets 2 215 10 Trade and other receivables 16 090 12 085 SARS 2 547 (3 801) Cash and cash equivalents 4 814 3 312 Current Assets 28 391 19 032 Total Assets 40 862 24 244 EQUITY AND LIABILITIES Share Capital 16 654 7 362 Share premium 59 885 58 906 Non-Distributable Reserves 270 343 Distributable reserves (43 501) (51 617) Long Term Liabilities 1 197 - Deferred Taxation 138 Non-Current Liabilities 1 335 Trade and other payables 13 513 8 258 Short Term lease liability 96 - Provisions 9 264 8 070 Current Liabilities 22 873 16 612 Total Equity and Liabilities 40 862 24 244 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 6 months ended 6 months ended 28 February 28 February 2018 2017 Unaudited Unaudited R’000 R’000 Cash flows (used in)/ from operating activities: Cash receipts from customers 2 974 10 559 Cash paid to suppliers and employees (4 947) (16 108) Cash used in operations (1 973) (5 549) Investment revenue 25 - Finance costs (376) (69) Net cash from operating activities (2 324) (5 618) Cash flows (used in)/from investing activities: Purchase of property, plant and equipment (241) (53) Loans from group companies received (1 500) - Loans from group companies paid (920) - Net flow from investing activities (2 661) (53) Net flow from financing activities: Repayment of South African Revenue Services liability - (379) Lease Liability (78) - Directors and shareholders loans received - 82 Loans received 650 Net flow from financing activities 572 (297) Net decrease in cash (4 413) (5 968) Cash at beginning of period 9 226 9 280 Cash at end of period 4 813 3 312 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Non Distributable Share Total share reserves/ Accumulated Total capital capital Revaluations loss equity R'000 R'000 R'000 R'000 R'000 Opening balance at 1 September 2016 2 111 58 905 343 (52 621) 6 627 Profit for the period - - - 1 006 1 006 Balance at 28 February 2017 - Unaudited 2 111 58 905 343 (51 616) 7 632 Issue of shares 29 980 - - 980 Profit for the period - - 3 634 3 634 Transfer of revaluation reserve - - (43) 43 - Balance at 31 August 2017 - Audited 2 140 59 885 300 (47 938) 12 246 Profit for the period - - - 4 438 4 438 Transfer of revaluation reserve - (30) - (30) Balance 28 February 2018 – Unaudited 2 140 59 885 270 (43 501) 16 654 SEGMENTAL INFORMATION 6 months 6 months ended ended 28 February 28 February 2018 2017 Unaudited Unaudited R’000 R’000 Technology External sales 6 439 3 382 Logistics Logistics sales 49 172 17 262 Total revenue 55 611 20 644 Technology Profit /(Loss)before taxation for the period 743 (789) Logistics Profit before taxation for the period 3 695 1 793 Profit for the year before taxation 4 438 1 006 COMMENTARY Results We are pleased to announce that the Company’s revenue for the six months ended 28 February 2018 increased by 170% to R55.6 million from R20.6 million reported in the previous corresponding period due to the Company’s expansion into the logistics industry. The company achieved a positive growth in the operating profit from R1.067 million in the previous year to R5.078 million in the current year. Labat’s new logistics business has performed well. It has been profitable since inception and is growing substantially on a monthly basis. Net profit before taxation has gone from a profit of R0.998 million in the previous corresponding period to a profit of R4.726 million in the current period. Headline Earnings Reconciliation The headline earnings reconciliation is set out below R’000 R’000 Profit for the period 4 438 1 006 Adjustments - - Headline earnings attributable to shareholders of the group 4 438 1006 Share information Per share information: Basic and diluted earnings per share (cents) 1.71 0.39 Basic and diluted headline earnings per share (cents) 1.71 0.39 Weighted average shares in issue (‘000) 258 879 255 992 Number of shares in issue at period end 258 879 255 992 South African Micro Electronic-Systems Proprietary Limited (“SAMES”) The company is now back on track after its move to the new premises and the development of new products. Revenue has increased to R6.4 million from R3.4 million in the previous corresponding period. Revenue is expected to grow in the next two years when newly developed products are introduced. Logistics Business During the period under review, the logistics business generated solid gross margin and operating profit. Our marketing efforts are now beginning to show suitable results and the group is well positioned for growth based on work done over the past two years. Labat has identified more experienced operational partners and has entered into long term joint venture agreements with them. Prospects We have negotiated some long-term contracts with some of the large mining companies, whereas previously the Company only secured short term contracts. The prospects for the rest of the year are exciting and all indications are that we will continue to grow the business. BASIS OF PREPARATION Going Concern The Board is of the opinion that having regard to the future strategy and prospects of the group, the Labat group has sufficient resources to continue as a going concern. Statement of compliance These unaudited interim results are prepared in accordance with the framework concepts and the recognition and measurement criteria of International Financial Reporting Standards (IFRS), its interpretations adopted by the International Accounting Standards Board (IASB), the presentation and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by Financial Reporting Standards Council, IAS 34 – Interim Financial Reporting, the Listings Requirements of the JSE Limited and the requirements of the Companies Act of South Africa (Act 71 of 2008), as amended. The unaudited interim results are prepared in accordance with the going concern principle under the historical cost basis as modified by the fair value accounting of certain assets and liabilities where required or permitted by IFRS, and where applicable. All financial information presented in South African Rand has been rounded to the nearest thousand. The unaudited interim results have been prepared using accounting policies that comply with IFRS. The accounting policies used are consistent with those used in the audited annual consolidated financial statements for the year ended 31 August 2017. The unaudited interim results for the six months ended 28 February 2018 were prepared under supervision of the Group’s financial director, Mr DJ O’Neill (CA). Any reference to future financial performance included in this announcement has not been reviewed nor reported on by Labat’s external auditor. ACQUISITIONS AND DISPOSALS The proposed acquisition of a stake in Labat-Kufika was not successful and the arrangement was cancelled. No Labat-Kufika revenues or profits have been taken into account in these results. There were no other acquisitions or disposals during the period under review. SHARE CAPITAL No shares were issued or repurchased in the period under review. CHANGES TO THE BOARD Mrs Beverly Penny was appointed to the board on 30 November 2017. DIVIDENDS No dividend has been declared for the period under review (February 2018: Rnil). RELATED PARTIES There were no material transactions with related parties during the period under review. For and on behalf of the board BG VAN ROOYEN DJ O’NEILL CEO FINANCIAL DIRECTOR 7 May 2018 Directors BG van Rooyen*, DJ O’Neill*, R Majiedt^ R Mohamed^ B Penny Executive*, Independent non-executive^ Company Secretary: Arbor Capital Company Secretarial Proprietary Limited Registered Address: 23 Kroton Avenue, Weltevreden Park, 1709 Sponsor: Arbor Capital Sponsors Proprietary Limited Transfer Secretary: Computershare Investor Services Proprietary Limited Date: 07/05/2018 05:21:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 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