UNAUDITED INTERIM RESULTS

FOR THE SIX MONTHS ENDED

31 October 2017
Improvement Deterioration

Revenue (Continuing operations)

8,1% HEPS of 3,05 cents 166,4%

PAT (Continuing operations) 159,3% NAV per share 48,26 cents (8,4%)
Cash flows from operating activities
137,7% NTAV per share 39,97 cents (8,4%)

EPS of 3,3 cents 110,5%

Interim consolidated statement of financial position Interim consolidated statement of comprehensive income Reconciliation of basic earnings and headline earnings
Unaudited Unaudited Audited Unaudited Unaudited Restated Unaudited Unaudited Restated
as at as at as at six months six months year six months six months year
31 October 31 October 30 April ended ended* ended* ended ended* ended*
2017 2016 2017 31 October 31 October 30 April 31 October 31 October 30 April
  R’000 R’000 R’000 2017 2016 2017 2017 2016 2017
ASSETS   R’000 R’000 R’000   R’000 R’000 R’000
Non-current assets 138 849 192 370 148 691 Revenue 696 687 644 529 1 311 492 Net profit/(loss) for the period attributable to
Property, plant and equipment 74 771 120 100 76 492 Cost of sales (487 259) (460 285) (977 369) equity holders of the parent 20 454 (195 273) (245 986)
Goodwill and other intangible assets 51 438 56 251 51 438 Gross profit 209 428 184 244 334 123 Adjusted for:
Investment in associate – 9 963 – Other income 1 618 11 538 9 550 Profit on sale of property, plant and equipment (2 544) (355) (1 063)
Deferred taxation 12 640 6 056 20 761 Operating expenses (166 722) (206 444) (357 507) - Infrastructure continued operations – (51) (51)
Current assets 618 746 640 939 612 723 Profit/(loss) before interest, taxation, - Infrastructure discontinued operations – (62) –
depreciation and amortisation (“EBITDA”) 44 324 (10 662) (13 834) - Consumer continued operations (2 544) (242) (1 012)
Inventories 360 153 385 962 374 502
Depreciation (6 245) (6 094) (10 547) Reversal of impairments (1 210) – –
Trade and other receivables 234 288 231 592 221 840
Amortisation of intangibles – (198) (397) Impairment of intangibles – – 2 381
Taxation receivable 233 5 387 1 161
Reversal of impairments 1 210 – – Impairment of goodwill – – 2 234
Bank and cash balances 24 072 17 998 15 220
Impairment of goodwill – – (2 234) Loss as a result of loss of control – 160 955 163 373
Non-current assets held for sale/distribution 15 040 – 27 130
Impairment of intangibles – – (2 381) Foreign currency translation reserve as a
Consumer segment 15 040 – 27 130
Impairment of Assets – – (17 181) result of loss of control – 1 521 –
Group disposals held for sale/distribution 11 131 23 584 –
Impairment of investment in associate (1 505) (4 542) (15 380) Impairment of assets – – 17 181
Infrastructure segment (Note 1) – 23 584 –
Impairment of receivables from related parties – (4 712) – Impairment of investment in associate 1 505 4 542 15 380
Consumer and property segment (Note 1) 11 131 – –
Profit/(loss) before interest and taxation 37 784 (26 208) (61 954) Tax effect on adjustments 712 99 298
Total assets 783 766 856 893 788 544 Interest received 1 556 59 2 883 Headline profit/(loss) attributable to ordinary
EQUITY AND LIABILITIES Interest paid (10 410) (13 616) (23 446) shareholders 18 917 (28 511) (46 202)
Capital and reserves 289 439 326 946 270 906 Share of losses from associate – (550) (2 427) * Restated – Refer to discontinued operations note
Stated capital 837 212 837 212 837 212 Net profit/(loss) before taxation 28 930 (40 315) (84 944)
Non-distributable reserves (175 784) (176 230) (176 532) Taxation (8 750) 6 258 14 225 Segmental analysis
Accumulated Losses (362 140) (334 107) (382 594) Profit/(loss) for the period from continued Unaudited Unaudited Restated
Equity attributable to equity holders of operations 20 180 (34 057) (70 719) six months six months year
the parent 299 288 326 875 278 086 ended ended* ended*
Discontinued operations – Infrastructure
Non-controlling interests (9 849) 71 (7 180) segment (Note 3) – (159 690) (178 766) 31 October 31 October 30 April
Non-current liabilities 20 003 38 841 32 806 Discontinued operations – Consumer and 2017 2016 2017
property segment (Note 3) (2 395) – –   R’000 R’000 R’000
Interest-bearing liabilities 17 888 38 119 30 689
Profit/(loss) for the period 17 785 (193 747) (249 485) Revenue 702 572 699 957 1 382 760
Deferred taxation 2 115 722 2 117
Other comprehensive income: Infrastructure – continued operations – 2 749 1 285
Current liabilities 466 060 442 696 484 832
Items that may be reclassified subsequently Infrastructure – discontinued operations – 47 545 51 494
Interest-bearing liabilities 6 631 62 6 700
to profit or loss Consumer – continued operations 695 709 610 891 1 268 727
Vendor loans payable 3 000 3 000 3 000
– Foreign currency translation reserve 490 1 405 (449) Consumer – discontinued operations 5 885 7 883 19 774
Loans payable to subsidiary external
shareholder – 2 000 2 000 Total comprehensive profit/(loss) for Manufacturing – continued operation 64 392 103 814 166 668
Trade and other payables 186 179 164 948 200 300 the period 18 275 (192 342) (249 934) Inter Segment (63 414) (72 925) (125 188)
Provisions 70 436 40 519 75 576 Attributable to: Segmental profits/(losses) from operations
Taxation payable 1 406 250 886 Equity holders of the parent 20 454 (195 273) (245 986) Net profit/(loss) before interest and taxation 35 389 (185 904) (236 893)
Third party loan 74 970 74 384 75 960 Non-controlling interests (2 669) 1 526 (3 499) Infrastructure – continued operation (970) (12 237) (19 156)
Shareholders for dividends – 35 – - Continued operations (1 471) (676) (3 499) Infrastructure – discontinued operation – (159 329) (174 817)
Bank overdraft 123 438 157 498 120 410 - Discontinued operations (1 198) 2 202 – Consumer goods – continued operations 34 251 (16 282) (25 674)
Group disposals held for sale/distribution 8 264 48 410 – Net profit/(loss) after taxation 17 785 (193 747) (249 485) Consumer – discontinued operation (2 396) (367) (121)
Infrastructure segment (Note 2) – 48 410 – Property division – continued operation 4 752 (597) (14 703)
Attributable to:
Consumer and property segment (Note 2) 8 264 – – Manufacturing – continued operation (248) 2 908 (2 422)
Equity holders of the parent 20 944 (193 868) (246 435)
Interest received 1 556 93 2 985
Total equity and liabilities 783 766 856 893 788 544 Non-controlling interests (2 669) 1 526 (3 499)
Infrastructure – continued operation – 11 18
Supplementary information: - Continued operations (1 471) (676) (3 499)
Infrastructure – discontinued operation – 32 100
Net asset value per share (cents) 48,26 52,71 44,84 - Discontinued operations (1 198) 2 202 –
Consumer goods – continued operation 6 968 7 706 18 119
Net tangible asset value per share (cents) 39,97 43,64 36,55 Total comprehensive profit/(loss) for Consumer goods – discontinued operation – 2 2
Number of shares in issue at the end of period 620 158 235 620 158 235 620 158 235 the period 18 275 (192 342) (249 934)
Inter Segment (5 412) (7 658) (15 254)
Unaudited Unaudited Audited * Restated – Refer to discontinued operations note
Interest paid (10 410) (13 644) (27 397)
as at as at as at Supplementary information:
Infrastructure – continued operation (83) (3 938) (677)
31 October 31 October 30 April Basic earnings/(loss) per share (cents) 3,30 (31,49) (39,67)
Infrastructure – discontinued operation – (28) (3 951)
2017 2016 2017 - Infrastructure continued operations (0,17) (2,60) (3,25)
Consumer goods – continued operation (8 317) (9 678) (18 043)
  R’000 R’000 R’000 - Infrastructure discontinued operations 0,00 (26,05) (28,83)
Property division – continued operations (2 010) (1 824) (8 592)
Note 1 – Group disposals held for - Consumer continued operations 3,86 (2,81) (7,57)
sale/distribution       Manufacturing – continued operation (5 412) (5 834) (11 388)
- Consumer discontinued operations (0,39) (0,03) (0,02)
Non-current assets 76 1 822 – Inter Segment 5 412 7 658 15 254
Headline earnings/(loss) per share (cents) 3,05 (4,60) (7,45)
Property, plant and equipment 42 1 822 – - Infrastructure continued operations (0,17) (2,60) (2,89) Share of losses in Associate – (550) (2 427)
Deferred taxation 34 – – - Infrastructure discontinued operations 0,00 (0,10) (2,47) Net profit/(loss) before taxation 26 535 (200 005) (263 732)
Current assets 11 055 21 762 – - Consumer continued operations 3,61 (1,87) (2,07) * Restated – Refer to discontinued operations note
Inventories 5 857 4 668 – - Consumer discontinued operations (0,39) (0,03) (0,02) Segment Assets
Trade and other receivables 250 9 534 – Weighted average number of shares in issue 620 158 235 620 158 235 620 158 235 Infrastructure – continued operation 29 010 51 446 31 710
Taxation receivable 14 123 – Ellies has no dilutionary instruments in issue Infrastructure – discontinued operation – 23 584 –
Bank and cash balances 4 934 7 437 – Note 3 – Discontinued Operations       Consumer Goods and Services – continued
  11 131 23 584 – Revenue 5 885 55 428 71 268 operation 589 907 568 309 585 145
Note 2 – Group disposals held for (Loss)/profit before interest, taxation, Consumer Goods and Services – discontinued
sale/distribution       depreciation and amortisation (“EBITDA”) (2 387) 1 276 (11 511) operation 11 131 – –
Non-current liabilities – 940 – Depreciation (8) (17) (55) Property division – continued operations 55 640 77 087 66 891
Interest-bearing liabilities – 183 – Loss on loss of control – (160 955) (163 373) Manufacturing – continued operation 98 078 136 467 104 798
Deferred taxation – 757 – Loss before interest and taxation (“PBIT”) (2 395) (159 696) (174 939) Total Assets 783 766 856 893 788 544
Current liabilities 8 264 47 470 – Interest received – 34 102 Segment Liabilities
Shareholder loans payable 2 000 62  – Interest paid – (28) (3 951) Infrastructure – continued operation 113 127 135 562 118 733
Trade and other payables 6 264 15 881 – Loss before taxation (“PBT”) (2 395) (159 690) (178 788) Infrastructure – discontinued operation – 48 410 –
Net inter-group loan balances – 31 527 – Taxation – – 22 Consumer goods and property division –
Loss after taxation (“PAT”) (2 395) (159 690) (178 766) continued operation 310 152 259 428 313 717
  8 264 48 410 –
* Restated – Refer to discontinued operations note Consumer Goods and Services – discontinued
operation 8 264 – –
Interim consolidated statement of cash flows Interim consolidated statement of changes in equity Property division – continued operations 24 709 50 017 38 643
Unaudited Unaudited Restated Manufacturing – continued operation 38 075 36 530 46 546
Unaudited Unaudited Audited
six months six months year Total Liabilities 494 327 529 947 517 639
six months six months year
ended ended* ended*
ended ended ended
31 October 31 October 30 April
31 October 31 October 30 April products and solutions. In the corporate lighting division a number of blue chip clients
2017 2016 2017
2017 2016 2017 (Growthpoint, EOH, Investec and Glencore amongst others) have signed up where our product
  R’000 R’000 R’000
  R’000 R’000 R’000 offering is considered technically advanced and innovative. We expect to make significant
Cash flows from operating activities 13 147 5 531 52 546 strides in this area.
Balances at beginning of the period 270 906 519 288 519 288
Cash generated from operations 23 463 30 769 103 620 Ellies and ElSat remain strong South African brands that are trusted and found in most homes
Realisation of foreign currency translation
Interest received 1 556 59 2 885 reserve – – 1 402 in Southern Africa. We will endeavour to grow the brand and remain a trusted technology
Interest paid (10 410) (13 616) (23 419) Share based payment reserve 258 – 150 leader in all of our categories.
Taxation received 768 1 469 884 Total comprehensive income/(loss) for Infrastructure
Dividends paid – – (35) the period 18 275 (192 342) (249 934) The only operating entities in the infrastructure segment (Ellies Infrastructure (Pty) Ltd and
Cash flows – continuing operations 15 377 18 681 83 935 Botjheng Water (Pty) Ltd (“Botjheng”)) are classified as continuing operations until such time
Balances at end of the period 289 439 326 946 270 906
as inter alia, the arbitration that Botjheng is involved in has been heard in February 2018,
Cash flows – discontinued operations (2 230) (13 150) (31 389)
whereafter management will commit to disposal and or wind down as applicable. It should be
Cash flows from investing activities 10 481 (274) (19 012) The statement of profit and loss and other comprehensive income and statement of cash noted that the deconsolidation of the remaining Infrastructure segment companies will result
Additions to property, plant and equipment (5 232) (5 168) (9 065) flows are restated for the comparative period in terms of IFRS 5 as a result of discontinued in a profit, on loss of control, in excess of R80 million.
Proceeds on disposal of property, plant operations.
Update of restructuring of debt with Standard Bank of South Africa Limited
and equipment 15 713 7 548 6 976 Non-current assets held for sale and disposal We are in the final stages of agreeing the facilities agreement and security sharing agreement,
Loss of control – (3 126) (9 575) This relates to the remainder of the properties identified at the end of April 2017 as being more fully disclosed in the Integrated Report of 30 April 2017, all of which will be signed by
Loan to associate – 551 (7 293) non-core, which are Erf 195 Selby and portions 1, 2 and 3 of Erf 347 Chloorkop extension 19, the end of April 2018.
of which transfer occurred subsequent to 31 October 2017 on 20 November 2017. There is
Cash flows – continuing operations 10 481 (195) (18 957) Dividend policy
interest in the Selby property and potential buyers have engaged with engineers to assist in
Cash flows – discontinued operations – (79) (55) this process. The dividend policy will be reviewed periodically taking into account prevailing circumstances
Cash flows from financing activities (12 870) (39 169) (40 573) and future cash requirements. In view of the Group’s financial position, no dividend is proposed
Subsequent events at this stage.
Repayment of interest bearing liabilities (12 870) (39 316) (39 863) 1. The transfer of Chloorkop extension 19 occurred on 20 November 2017 at the carrying Appreciation
Loans paid to subsidiary external shareholders – (36) (98) value of R9,5 million.
The directors and management once again continue to recognise and appreciate the focused
Cash flows – continuing operations (12 870) (39 352) (39 961) 2. As announced on SENS on 20 November 2017, the Chief Executive Officer, Wayne Samson, efforts and hard work of the Group’s staff and also continue to appreciate the support
Cash flows – discontinued operations – 183 (612) resigned in order to pursue new interests. He remains available to the executive until the its customers, business partners, advisors, suppliers, funders and most importantly
end of February 2018, in order to facilitate an orderly hand over. The Board thanks him for shareholders provide.
Net increase/(decrease) in cash and cash his many years of service and dedication to the company.
equivalents 10 758 (33 912) (7 039)
3. As announced on SENS on 28 November 2017, dispensation has been granted by the JSE By order of the Board
Cash and cash equivalents at the beginning
for the financial director Adrian Bock to act as the Interim joint CEO with Elliot Salkow,
of the period (105 190) (98 151) (98 151) ER Salkow AL Bock
until such time as either a new CEO or CFO is appointed, the process of which is under the
Cash and cash equivalents at the end of control of the Board and has commenced. Chairman and Interim joint CEO Interim joint CEO and CFO
the period (94 432) (132 063) (105 190)
Changes to the board 4 December 2017
* Restated – Refer to discontinued operations note
1. Refer to subsequent events, note 2 and 3.
Notes to the unaudited interim results
Commentary Ellies Holdings Limited The following director resigned during the
Basis of preparation and accounting policies
Overview (Registration number 2007/007084/06) period, and up to release date:
The unaudited interim results for the six months ended 31 October 2017 have been prepared
The predominant theme for the period under review is that the turnaround strategy is resulting JSE share code: ELI WMG Samson (20 November 2017)
in accordance with International Financial Reporting Standards (“IFRS”), and comply with
in the expected outcomes. What is pleasing is that the turnaround has been driven not only ISIN: ZAE000103081
IAS 34 – Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the (“Ellies“ or “the Company“ or “the Group“) Registered office
by the reduction of costs as expected but also top line growth. The state of the economy and
Accounting Practices Board or its successor, the requirements of the Companies Act, No. 71 reduced consumer spending remain a concern and management remains vigilant in driving 94 Eloff Street Ext, Village Deep,
of 2008 of South Africa and the Listings Requirements of the JSE Limited. The accounting efficiencies and exploring growth opportunities, without taking on undue risk. Executive directors Johannesburg, 2001
policies used in the preparation of the unaudited interim results for the six months ended ER Salkow (Chairman and interim joint CEO) (PO Box 57076, Springfield, 2137)
31 October 2017, are consistent with those applied in the audited financial statements for the Operations WMG Samson (Chief executive officer) –
Consumer resigned 20 November 2017 Sponsor
year ended 30 April 2017.
AL Bock (Chief financial officer and Java Capital
During the current interim period the Group adopted those standards and interpretations in Notwithstanding the trying conditions of the economy and reduction in consumer spending
the Consumer segment increased its turnover to R703 million, up from R650 million for the interim joint CEO) Auditors
issue and effective for the interim period. The adopting of these new and amended standards
same period ended 31 October 2016. What is pleasing is that we managed to grow the top Grant Thornton Johannesburg Partnership
and interpretations has not had a significant impact on the Group’s accounting policies. Lead independent non-executive:
line whilst still being able to increase the gross profit percentage by a percent from 29% to
These results have been compiled under the supervision of the Chief Financial Officer, OD Fortuin Company Secretary
30% and on a significantly reduced cost base. Operating expenses were down to R166 million
AL Bock CA(SA). The interim results have not been reviewed or reported on by the Group from R203 million for the same period ended 31 October 2016. The segment returned a profit Independent non-executive directors: CIS Company Secretaries (Pty) Limited
auditor, Grant Thornton Johannesburg Partnership. before interest and tax of R35 million for the period from a loss of R15 million for the same S Goldberg Transfer secretaries
Group disposals held for sale/distribution period ended 31 October 2016, with consumer continuing operations returning earnings per FS Mkhize Computershare Investor Services (Pty) Ltd
share of 3,86 cents, up from a loss per share of 2,81 cents.
Management continues to review the company’s structure in order to streamline the Non-executive directors:
business and to ensure that it remains fit for purpose. The business has identified that we are The satellite market remains robust and exceeded our internal forecasted numbers, whilst MJ Kuscus
increasingly competing with one of our minor subsidiaries, African Solar Power Proprietary our other product lines held their own, in a highly competitive environment. Our corporate
Limited, and as such management has committed to a plan to wind down its exposure in division is starting to show traction, and is very much expected to be the catalyst for growth
respect of the entity and to subsequently close the business and to do so in a manner that going forward.
best protects the company and the respective stakeholders. This process is expected to be www.elliesholdings.com
Ellies is embracing the green movement and is gradually becoming a recognised brand in ELDRÉ
completed by the end of April 2018. the Renewable/Energy efficient sector, mainly focusing on PV and alternative energy efficient www.ellies.co.za DTP SERVICES