Reunert Ltd Unsp/Adr

Good morning, ladies and gentlemen, and welcome to Roinert's results presentation for the year that ended 30 September 2025. I'm Alan Dixon, the Group Chief Executive, and together with Mark Caffin, our Group Chief Financial Officer, we'll be presenting our results today. This is a pre-recorded webcast with a live Q&A session immediately after the webcast. 2025 was a challenging year for the group, as tough macroeconomic conditions and global volatility were evident throughout the year. This was specifically true in the South African environment, where, as we guided in our half-year prospect statement, the macroeconomic conditions remained challenging. Pleasingly, Roynard's strategy of increasing our non-South African revenues provided good results and largely offset the challenging South African environment that we faced. In South Africa, despite there being solid progress made towards improving several of the country's key structural impediments to accelerate economic growth, the real impact on the ground is yet to be felt. The key drivers of Reunits growth, which are reflected in the macroeconomic indicators of GDP and business confidence for our ICT segment, and gross domestic fixed investment, or GDFI, for the electrical engineering segment all tracked negatively through this year. South Africa's infrastructure investment specifically decreased year on year and fell well below both government commitments and expectations. We do, however, believe that this decrease will be temporary, but in this financial year it fell to the extent that it negatively impacted both the electrical engineering segment and the overall group's financial results. Conversely, our non-South African markets have much better macroeconomic dynamics, and their general growth rates remain positive. Within this operating environment, the group's businesses performed well, specifically in the second half of the year, where we delivered on the commitments that we made to shareholders at the half-year results period and produced good growth in profit and built positive momentum for 2026. Although the full-year headline earnings per share were down by 5%, the second half delivered a strong performance, with HEPs increasing by a pleasing 6% over what was already a good second-half performance in the prior year. Importantly, despite the challenging conditions, the cash flow generation of the group was strong. The group converted profit for the year to free cash flow at 128%, which was 8% better than last year, and generated cash of nearly R1.2 billion, which resulted in our net cash position increasing by R207 million to R743 million by the end of the year. In addition to the financial performance, Good strategic progress was made across the group as we improved access to our key international markets and took decisive action to optimize the group's portfolio. Internationally, in total, the group secured just under 5 billion rand or 35% of its revenue from non-South African sales this year. The defence cluster made significant progress in entrenching their long-term market participation in the key growth markets of Europe and the Middle East. while in the electrical engineering segment, over 40% of the segment's revenue now comes from outside of South Africa. The group's portfolio was strengthened through the efficient sale of Blue Nova Energy and the mergers of Etion Create and Nanotech in the secure communications cluster in our defence business, and Skywire and ECN in the business communications cluster in ICT, which were all successfully completed, with the latter coming into effect from 1 October 2025. These mergers bolster the financial capacity of these businesses, they create quantifiable synergistic benefits, and they position the merged businesses for increased resilience and accelerated growth. Shareholder value was created in the year as a strong second half performance and the good cash flow generation enabled the final dividend to be increased by 6% to 293 cents per share, resulting in the total dividend for the year increasing by 5% to 383 cents per share. Although the group's return on capital employed decreased to just over 17% on the back of the slightly lower earnings this year, it pleasingly remains well in line with the steady increase in trend that we've been delivering over the past four years. And finally, the three-year CAGR in total shareholder return remained at a healthy 14% per annum, despite the challenging environment. So in summary, the good strategic progress, the group's positive performance in the second half, the strong cash flows have generated meaningful momentum, and we believe this establishes the base for the group's growth trajectory into the new financial year.

I'll now hand over to Mark, who will take us through the details of the financial year's performance. Thanks, Alan.

Good morning to everyone, and thank you for joining us on the webcast today. I truly appreciate the opportunity to present our financial performance for the year ended 30 September 2025. Before I dive into the numbers, let me highlight some of the key drivers of the macroeconomic environment that impacted the group and its operations through the past financial year. On a positive note, we have experienced an improvement in the ports and consistent electricity supply. These factors contributed to a 1% growth in GDP, albeit sluggish. The Consumer Price Index is into a lower range between 2.7% and 3.8%. The repo rate dropped by 1% over the past 12 months. Both the Rand and the Zambian Quocha strengthened against the US dollar in the last quarter of the year. On the commodity front, Copper and aluminium prices remained high throughout the period. Against this backdrop of low growth, low inflation, lower interest rates and a currency strengthening, I would like to take you through the group set of results that hold testimony to our resilience. The results presented in these slides are summarized extracts from the 2025 Group Audited Annual Financial Statements, which are available in full from Reunit's website under the Investor Centre tab. The Group's auditors, KPMG, have issued an unmodified audit opinion on these financial statements. Consolidated Statement of Profit and Loss This slide represents total operations. The slides thereafter will only focus on continuing operations, and the comparatives for 2024 have been re-presented to accommodate the discontinued operation. The performance from total operations shows a decline in headline earnings per share of 5%. which is similar to continuing operations. The difference between continuing and total operations relates to the disposal of the discontinued operation Blue Nova Energy which we highlighted in the first half of the year. Management and the corporate finance team efficiently concluded the disposal on the 15th of September of 2025. The total loss incurred, including the trading loss, impairments and the loss of disposal was R142 million. The impact of the discontinued operation was 64 cents per share on basic earnings and 19 cents per share on headline earnings. We have excluded the impact of this disposal from the continuing operations performance. Revenue from continuing operations has declined for the reporting year by 2%. The decline in revenue can largely be attributed to weak transmission infrastructure spend by state-owned entities. That impacted the electrical engineering segment's revenue of $7.5 billion, which is 3% lower than the 2024 year. On the positive side, circuit breaker revenue benefited from exports into the USA. The ICT segment's revenue of $3.9 billion was resilient given the low growth environment and this was flat year-on-year with operating profits down by 9% to $644 million. The 7% lower applied electronics revenue of $2.8 billion was primarily due to a stronger RAND and lower activity in the South African market. This translated into a 21% increase in operating profit to $500 million, up from $414 million in 2024. Approximately 35% of the Group's revenue now originates from outside South Africa, and is spread across five continents. The contribution of international revenues to the group's revenue has grown since 2021. The 8% decline in profit is attributable to the drop in financial performance in the electrical engineering and ICT segments. This was partially offset by a strong performance in Applied Electronics' defence cluster. As highlighted in the interim results, the non-recurring COVID-19 business interruption insurance claim received positively impacted the prior year's results. Operating expenses were well managed. As a result, the operating margin that was delivered was 11%. Basic and headline earnings per share for the year declined by 5%. However, when we reflect on the first half's HEPS performance, which declined by 20%, then the second half's financial performance demonstrated a clear momentum by delivering a 6% growth on 2024's second half. When you adjust HEPs by the non-recurring COVID-19 insurance claim receipt, then the year-on-year headline earnings per share performance would be more or less flat. The group continues to maintain a strong balance sheet and remains in a net cash position which has improved from 536 million last year to 743 million. The decline in long-term borrowings arose from the net settlement of external loans of almost 300 million rand. The headroom of unutilized debt facilities amounts to $1.8 billion. The put option liability relates to the issuance of a put in favor of a non-controlling interest resulting from the merger of Plus One X and IQ Business. Furthermore, the balance sheet is strengthened when reflecting on the net asset value per share which has improved by one percent to almost 45 rand the group generated more than 1.7 billion in cash from operations working capital remains well controlled however the 103 million outflow relates to the high level of revenue in the last two months of the financial year. Included in the reduced tax paid of 284 million is a SARS refund of 62 million rand relating to the quince fraud transactions identified in 2020. The excellent free cash flow of almost 1.2 billion allows the company to pay a healthy final dividend of 293 cents per share. The total dividend for the year represents a cover of 1.6 times and a total yield of about 6.6% based on a 58 rand share price. The group has been extremely disciplined in respect of capital spend and allocation. During the year, the group spent $225 million on capital expenditure. Of this, $130 million was for expansion projects, while $95 million related to sustenance capital. The capital spend for the year was lower than the depreciation charge. The expansionary spend was directed towards growth projects for international markets, expansion of the last mile broadband network, and technological advancements. With our strong balance sheet, our significant unutilized banking facilities, a continued positive cash generation, the Group remains well positioned to continue executing its strategy and generating positive cash returns for our shareholders. In conclusion, I would like to thank my finance team throughout the Roinet Group for concluding these results quite efficiently throughout this period. With that, I will hand back to Alan to take us through the segmental review, the group strategy and the group's prospects for 2026.

Thanks, Mark.

I'll now take you through the segmental review, which will give you an understanding of what's taken place in this year so far, as well as looking forward. The electrical engineering segment had a challenging year as a result of three discrete factors. Firstly, there was negative growth in South Africa's GDFI. Despite government's commitment to drive local infrastructure investment and credible progress being made on investment into the transmission grid, rail liberalisation and port infrastructure, the extent of the actual investment on the ground fell this year and negatively impacted both the South African circuit breaker and power cables volumes. Secondly, there were forex losses and a product mix change in Zambia. In June of this year, Zambia's currency reversed the long-term weakening trend against the US dollar and rapidly strengthened, which resulted in margin degradation and foreign exchange losses at the business. In addition, the drought in Zambia last year resulted in reduced energy generation for the Zambian power utility Zesco. This negatively impacted Zesco's cash flow and reduced the volumes our Zambian power cable business sold to them. Pleasingly, these volumes were replaced by exported copper rod and cable, but this change in product mix negatively impacted margins. And then finally, the third impact was the USA import tariffs on South Africa. The implementation of a 10% import tariff on South African product imported into the USA in April, which was further escalated to 30% in August, resulted in an unplanned increase in costs for the circuit breaker business. The business engaged with its customer base and successfully retained the market. However, some costs could not be fully recovered by the circuit breaker business and some margin degradation occurred during this period. These three key challenges were somewhat offset by a solid non-South African performance. Power cable volumes remained stable and the circuit breaker business had a strong export performance. Although there was some margin degradation, as I discussed before, into the USA market, significant steps were taken by the business and were implemented to offset the additional tariff costs and to retain the market. And these two actions resulted in volumes increasing year on year by 25%. Going forward, the USA remains a significant market for our circuit breaker business. The actions taken have ensured that the business's market share has been retained, and product volumes into the USA are expected to increase. The extent of the tariff costs that we faced in 2025 are unlikely to be experienced in future financial years. Looking forward for this segment, the segment's non-South African business remains positioned for continued growth. The circuit breaker volumes are expected to retain the positive growth trajectory they've had over the last number of years, and new product releases into the US market will support this continued growth. The non-South African power cable volumes should increase as Zesco now has improved cash flow and the investment into mining infrastructure in Central and Southern Africa remains healthy. In South Africa, however, the market conditions are likely to remain somewhat constrained until overall our infrastructure spending improves. Whilst orders for the Transmission Development Plan, or TDP, have already been received, the volumes remain quite a bit lower than desired. Pleasingly, the ESCOM framework agreements for the TDP have been awarded, which will secure volumes for the power cable business as these projects accelerate. In the ICT segment, the South African market for the group's businesses remained challenging, as low GDP and weak business confidence extended sales cycles and reduced market activity. The segment's performance was achieved as collectively three of the four clusters delivered a year-on-year growth in operating profit, which demonstrated good resilience and strategic execution. The business communications cluster performed well with a pleasing growth in operating profit. Fixed-line minutes remained stable throughout the year, and the cluster's last-mile broadband connectivity solutions grew healthily. The rental-based finance cluster performed well. The cluster's revenue was negatively impacted by a lower average rental book than the prior year and reduced revenues due to the lower interest rates in the country. These were, however, more than overcome by additional efficiencies delivered through the implementation of improved control systems and processes. The collections remained of a high quality and resulted in actual bad debts being well within the normal limits at less than half a percent of the book value. The closing rental book remained nominally flat at just over R2.35 billion. In the total workspace provider cluster, Nashua delivered a stable revenue and operating profit result, despite some of the complementary revenues coming under pressure as renewable energy sales fell due to reduced load shedding in the country. The business continued its strategy of enhancing the entrepreneurial strength of the franchise channel, and two further franchises were sold this year. resulting in Nashua now only owning equity in the large metro franchises. The decrease in segment operating profit all occurred in the solutions and systems integration cluster, specifically due to reduced spending in the enterprise market vertical. Importantly, the business restructured its cost base to align to the expected future market demand. The restructure process and all of the associated costs were concluded in the 2025 financial year. Looking forward, although the local conditions remain tight, the broad market trends remain positive and position the ICT segment for growth and an improved performance in 2026. The business communications clusters merger of ECN and Skywire is already delivering synergies, and the market growth on their broadband connectivity continues at double-digit levels, specifically in Skywire's underserved target markets. Nashua is likely to deliver steady growth as complementary revenues increase and stable print volumes are expected to continue. These Nashua revenues also support both the Quince rental book and its earnings, although we do expect Quince's revenue to remain relatively stable in this low-interest environment. The new LENA solutions and systems integration cluster provides agility specifically for the consulting leg of IQ Business, and the ongoing demand for digital transformation, cloud, and AI supports an improved performance for 2026 for this segment. In the applied electronics segment, the reduction in segment revenue was caused by the impact of a stronger RAND on the cluster's large foreign-denominated export sales and reduced demand in the local maintenance and support services market. The quality of the revenues, however, improved significantly as segment operating profit increased strongly. This was driven by efficient production, improved margins, and some foreign exchange gains that were made on some of the long-term export contracts. Within the defence cluster, they had an excellent year, increasing operating profit on the prior year by more than 20%. There were record financial performances that were delivered by the radar and the fuse businesses, as they executed their strong order books and delivered improved operating profit and margins. The investment into the fuse factory in prior years produced a positive outcome as increased product volume was delivered to our major customers. In the half-year results, we reported that a key fuse order had been delayed. Importantly, this order was successfully delivered in the second half and contributed to the record performance. At the radar business, They secured record defense and mining sales, and the business continues to expand both its product offering and its geographic footprint. There were also good performances from the dynamic control business, Etion Create, and the communications business, which all contributed to the strong result for the cluster. There were some foreign exchange gains that were made in the year due to the well-hedged long-term foreign exchange positions that were taken. The cluster's revenue for the first half of 2026 is already hedged, which limits any potential foreign exchange risk, but post this period, the cluster's revenue and income will be more exposed to the strength of the rand against the euro and the US dollar. Importantly, the arrangements with the South African regulatory authorities that control the export of our defence products, the ports efficiency, and the availability of electronic subcomponents are operating well and are expected to continue for the foreseeable future. Strategically, the defense cluster also progressed well in 2025. We developed new fuses, and these were launched successfully into the Middle East, while the completion of the radar strategic IP co-development program that we've been sharing with you over the last number of results will be achieved by the end of this calendar year. This achievement positions the radar business to participate in the future large volume production orders, and in addition to that, more fuse orders are imminent. Equally importantly, the cluster also entered a number of new markets for existing products at the radar company in Southeast Asia, North America and Europe, while the communications business made its first sales into South America. Looking forward, all three of the defence cluster's key markets of Europe, Southeast Asia and the Middle East retain their strong growth trajectories. The graph at the bottom of the slide illustrates the cluster's order book as it currently stands, which is well balanced across both local and export markets. This provides a cluster with a diversified product and geography exposure, and largely eliminates any product, geography or customer concentration risk. Importantly, the strong execution performance of the cluster over the past four years has enabled it to now bid for larger and higher margin defence export contracts, as our customers seek to secure the long-term supply of critical products and services. The pipeline for the cluster remains robust and is complemented by good mining demand and increased spending on the South African rail infrastructure. And finally, after many slow years, there is improved activity in the South African defence space, which will further boost the cluster. We retain our view that the defence cluster's growth trajectory is medium to long term in nature. Within renewable energy, The growth continued at the group's solar energy business as the key metric of EBITDA exceeded the prior years, although as expected and as we've guided, the growth rate has diminished of the double-digit levels that we've delivered in prior years. The business delivered good project margins and increased the quantity of owned assets under management during the year. By year-end, Owned, in-construction and near-financial-closed build-own-operate or BOO plants increased by 22% to 95 MW. Normalised EBITDA from these plants grew positively and exceeded the prior year by an impressive 71%. The group's wheeling business, Apollo, had a solid year. Shortly after Nursa awarded Apollo its trading licence in October 2024, Eskim indicated that it would take the award of the trading license and the other three companies that were awarded licenses at the same time on legal review. Apollo has continued normal business operations throughout the year and Eskim's actions have not impeded the business development achievements that they have made. Importantly, Apollo is concluding its first customer power purchase agreement and this agreement secures the business's revenue-generating capability, which will commence when the independent power producer finalises its construction. Looking forward, the renewable energy cluster will continue to grow into 2026. The solar energy business has a good pipeline of boos, and its track record on project execution and cost management protect the returns on these projects. The commercial and industrial market, or CNI market, which is the solar energy business's target market, remains robust as high energy inflation, unreliable municipal grids and battery storage all present longer-term support for this market. Pleasingly, Apollo is likely to commence trading in 2026, with only the successful conclusion of the IPP project and ESCOM's legal challenges being the inhibitors. In 2025, the strategic initiatives of the group had two key focus areas. Firstly, strengthening of our international market positioning to continue the recent good growth in non-South African revenues. And secondly, to optimize the group's portfolio to strengthen the financial returns and growth prospects of our assets, specifically for our South African-focused businesses where the current low-interest, low-growth environment may continue for some time. Internationally, despite the stronger RAND and the reduced revenue into Africa, the Group's non-South African revenues grew again this year. The Group secured nearly R5 billion in non-South African revenues, delivering a 17% CAGR over the past four years. This focus on increasing these revenues and entering international markets remains a key strategic focus across the Group. Both the electrical engineering and defence markets remain robust, and we believe defence specifically retains its high expectations for continued strong growth. Importantly, the circuit breaker access to the USA market and an improving Zambian economy after the devastating drought of last year create increased opportunities for the electrical engineering segment. The second key strategic focus area was to enhance the resilience and agility in some of our key operations. This was achieved through two mergers of existing assets and the disposal of one. The group concluded the sale of Blue Nova Energy this year. The rapid change in the South African battery market precipitated this sale, which has been concluded efficiently with no job losses and with a result that was significantly better than we projected in our half-year announcements. In the secure communications cluster in our defense area, Etion creates a nanotech merged, and in the ICT segment, ECN and Skywire merged in the business communications cluster. These two mergers have delivered rapid synergies, have created larger business units which have increased financial resilience, and have simplified the Roinet portfolio. But perhaps most importantly, these mergers position these businesses for stronger growth. Nanotech's encryption technology will provide new revenue streams to Etion Create's export markets and will accelerate profitability of that entity, while in the business communications, Skywire's successful direct B2B go-to-market strategy will leverage ECN's channel partners and accelerate the growth rate of their last-mile broadband connectivity solutions. So, ladies and gentlemen, in conclusion, and if we offer a view to next year, The momentum created through the group's positive second-half performance and strategy execution positions Roenick well for growth in the 2026 financial year. It is anticipated that the South African economy will steadily improve as the impact of the energy and rail liberalisation and port infrastructure investments continues, private participation in infrastructure projects increases, and the benefits of the structural improvements flow into the economy. Whilst we believe this will be a steady increase, Royner's track record reflects that steady economic improvement results in positive operating leverage and improved financial performance. Pressure is, however, expected to continue on the South African electrical engineering product volumes until the infrastructure investment increases, which is not anticipated to materially improve in the first half of the financial year, although they are, at least, expected to perform in line with 2025's results. when it will continue executing on its strategy and will deliver growth into next financial year through firstly, solid growth in our offshore markets in the defence and circuit breaker business. Secondly, a refocused and restructured ICT segment is set to deliver sustainable growth. And finally, our renewable energy investments are expected to grow in both asset ownership and an enhanced trading footprint. Ladies and gentlemen, thank you for your interest and attention this morning.

We'll now move into the live Q&A session. Thank you.

Good morning, ladies and gentlemen, and thank you for your interest in Ronit and for joining us today for this 2025 results presentation. Prior to us just kicking off of the Q&A, I'd like to just spend a minute on my transition, which was also covered in a sense that was issued yesterday. We weren't able to include it in the webcast because the webcast was pre-recorded and for confidentiality purposes, it was left out of the webcast itself. Ladies and gents, just on behalf of the board, I just wanted to share the following key messages, and there's four of them, that I think should be seen in conjunction with the sentence that we issued to the market yesterday. Firstly, this is a well-planned and structured process, and it carries the full support of both the board and myself, and is a culmination of an extensive and thorough process to identify and appoint the best person for the role. Secondly, the board has confirmed that the group's strategy, operational and financial trajectory remains consistent with that that we've been following for the past five years. Thirdly, I'm deeply invested personally in the success of Roadit and the success of this transition, and my arrangements with the company and with the board mean that I will remain involved with Roadit for the next 12 months to assist in ensuring its success. to deliver sustainable growth for ruiners and long-term value for shareholders. And I think particularly important, his value system and culture are well aligned with ruiners and we have full confidence in him. Ladies and gentlemen, on behalf of the chair of the board, any shareholder who would like to meet to discuss anything in the respect of this transition, if you could please let Corin Smith know, and we'll make the necessary arrangements to engage you directly with either the chairman himself or the chairman and myself, should you so request. So, ladies and gents, the Q&A will be managed by Mark Caffin, our chief financial officer, and myself. I'll sort of try and chair the questions and move them in a direction where it's most suitable between the two of us to answer those questions. The first question comes from Charles Bowles at Titanium Capital. This question relates to the circuit breaker business. And the question is, over the long, medium to long term, will Reuters remain competitive in exporting these products? Do these products not become commodity items over time when it struggles to compete in the export market? So, Charles, where we play, particularly in the U.S. market, is we actually sell into the OEM market. We don't sell into the mass market as we typically do in South Africa. We design our circuit breakers together with the OEMs for the specific application that they are looking at. So there is a long run-up while we design, develop and approve those products. Those products go into their systems and typically they remain in those systems for the life of those systems. So when we talk about being involved in telecommunications or 5G rollout, once we approve, we tend to remain in that system for the life of that rollout. So they are long-term in nature. and they are designed into those products where we work very closely with those OEMs in that regard. And those two elements give us quite a significant capability or competitive advantage to remain in those areas for a long time. More generally, if you look at our circuit breaker business today, we export 66% of all the product that we manufacture. So two-thirds of our product are exported globally. The fastest growing of those markets is the USA, but we export globally. And that's not a new number. We've been exporting in that nature for at least 10 years, if not more than that. And I think that is also an indication of the sustainability of our ability to export our circuit breakers and the likelihood that we will continue to do that, both from a strategic point of view, but also from the tactical way in which we get ourselves into those markets and remain in those markets. The second question is from Rowan Geller, actually the second and third, from Rowan Geller from Cro-Nux Research. The first question relates to whether we expect an acceleration in transmission projects in the coming years given the 14,000 kilometres that need to be put in place or built by 2033. The short answer to that, Rowan, is yes. But if I give a little bit of colour to it, we referred in our presentation that we have received and delivered some cables into those transmission projects that were executed by ESCOM this year. But these are small projects. And we would argue that these volumes in the 2025 financial year are less than 10% of what ESCOM will consume when these projects get up to full scale. So we anticipate a growth from where we are now that could have less than 10% of what we expect, somewhere up to about 100% for those ESCOM projects over the next two or three years as they ramp up those projects and the construction phases of those continue to accelerate. The other part of that question is that ESCOM will do a portion of these transmission lines, and private, the PPP projects, will do another portion. And to date, there are no PPP projects in place. The bids for those have been delayed. They were meant to be submitted now in November. They've been delayed into the middle of next year, and then those will start to ramp up from there. So there's none of those volumes in these volumes that we see at the moment. So we see a significant ramp up. in tables to go into those transmission projects. First of all, it's the estimated projects and then following those into the triple P projects, which will come a little bit later on. Robin's next question relates to the growth rates that we expect in the defense cluster over the next three years, given the increased global spend on the defense segment. So in terms of that, we do anticipate still steady growth in terms of that defense market. We shared with you in the presentation the distribution that we have globally of our order book at the moment, which roughly is about 25% for each of our major markets, which really gives us a broad market access. All of those markets are looking for our products and services, and we're able to sell into those consistently across the globe at the moment. So without putting too fine a number on it, two comments I want to make. First of all, we believe it's a medium to long-term trend in growth in our defense business. We've got that type of sustainability, and we anticipate that we will be doing double-digit growth for the next three years at least. The next question comes from Timothy Olds from L'Oreal Capital. There's three questions he's put in. One is that segmental EBIT from other dropped from $196 million last year to $109 million this year. And he's asked for some clarity on that. We don't often give too much clarity on it, but I am going to ask Mark if he's got something. I asked him when the question first came on, perhaps he's got something to offer without giving too much away on it. But Mark, do you want to fill that one first, please? Yeah.

So Timothy, last year, The share price, the closing share price was higher than this year's share price, which is at 53. So when we provided for the ESOP, that's employee share plan on the BE scheme, as well as on the conditional share plan, we provided at a higher share price. So this year, we have a lower share price and hence we charge less for the income statement.

Thanks, Mark. Perfect. The second question that Timothy has is, what is the total EBIT loss for the renewable energy this year, and when do we expect it to break even? I'll need to do some homework again. We don't normally give the level of detail at a particular business unit as that. So, Timothy, we'll revert back to you on that one, but not be able to share with you the exact levels of numbers you've got, and I don't have those at hand as we speak right now. And then the third question relates to the record fuse and radar performance. And the question is, where will all the growth come from here? And are the higher EBIT margins of approximately 24% in defence sustainable? So there are a number of markets where further growth comes from. So in the fuse market, there is definitely further growth, and that really comes from increased volume into more geographies. We did share with you that we have got new fuses into the middle east and those haven't reached full capacity yet and equally we are under exposed to some markets in europe that we are actively trying to penetrate so those are the two areas in the fuse business that we still anticipate further growth and in the radar business a portion of the radar businesses and the radar's revenue and income in this year relates to what we call strategic ip co-development and that's a development of ip and a product And when that is approved, which will be done by the end of this year, that over time converts into a production run. And we will then benefit from that production run going forward, which actually brings run rate growth into that business. So that's the source of the growth both for fuel And then if we look more broadly across the rest of the cluster, we can anticipate greater and improved profitability still from our communications business and Etion Create on the back of improved export potential for them. So we have quite broad opportunities for growth across our defence businesses. And then with relating to the defence margins, we think our margins remain healthy. The supply and demand at the moment is such that we can price correctly. So there is one element in that that one should take cognizance of, and around about 90% of our sales this year were export to nature, and those are in hard currency, either euro or dollar based. So to the extent we have a strong rank, somewhere around about the 17 that we have now, or even if we get a little bit stronger than that. that we put a little bit of pressure onto those margins, not material pressure onto it, but just from an analyst point of view or shareholder point of view, one should remain or be aware and take confidence of the fact that our exports and defence are all hard currency based, and the RAN does play a little bit of a role on that. We tend to hedge those revenues to protect them, but obviously when it gets very much stronger, there would be some negative impact on the margin in terms of that. We then have another question, or the next question is from Miran Rajanatham from MIBFA. There's two questions. One is, is our circuit breaker business exposed to the data center market in the USA? Yes, it is. We have a couple of access points into those data centers, and it's part of the good growth that we're seeing into that market at the moment, and we expect that to continue for some time. And then also asked a question around for a group with diverse segments. If I was forced to choose, although both are important, is it more important for the group chief executive to be good as a technical engineering person or a good capital allocator? It's a question that we thought deeply about through the process. Rowena today has a very strong executive team. And the executive team is structured with Mark as the Chief Financial Officer, Mohini Mugi, HR Director and Sustainability Director, and then we have three segment heads. Each one is responsible for their line of responsibility, one for electrical engineering, one for ICT, and one for applied electronics. And those gentlemen carry the biggest responsibility of, let me call it the technical expertise and the delivery of the numbers. And our view was that within such a strong executive committee that we have at Runnings at the moment, that it was important to have somebody who was a good allocator, who understood how to run a portfolio and was capable to provide some inorganic strength to the group going forward as well. The next question is from from Matrix Fund Managers. He's asked, how should we be thinking about our circuit breaking margins into the USA? Will volumes more than cover the RAND that are lost? So we think there is some thinning in the margins. Roughly, we believe we are able to recover somewhere between 65% and 70% of the tariff costs that we've got. So that's the nature, more or less, of the margin degradation into those circuit breakers. But we think that's sustainable. We don't think it gets any worse. And we are working with our customers to try and make those recoverables better, but we don't think they're going to get any worse at the moment. So we think the margins that we see in this year are probably the lowest that we've seen since the circuit breaker business going forward. And at a percentage level, we don't necessarily think it gets much better in terms of how much of those tariffs we can recover, but certainly in a RAND volume point of view, or the RAND's growth that will come through the volumes, we do think that will more than cover the costs that we had in this year. from RMB. The question is continued cash generation in the business. May we understand if there are any key plans for this cash going forward? I'm going to ask Mark if he can tend to that one, please.

Yeah, we have a very defined cash allocation policy as to how we invest our cash. And we would look at number one, we would first look at business requirements, and that would take working capital into account, and then around our fixed assets around sustenance and expansion. And then at the same time, we would then look at how we would distribute cash on investments, if there are potential acquisitions, or at the end of the day, we look at dividends and share buyback. So there's a defined process that we go through, but the intention is obviously always to come back to shareholders and tell them what we're going to do with our cash.

Thanks, Mark. And I'll ask you to do the next one as well. From MIBFA, and he has asked, can you please give some colour into the nature of the amortisation of intangible assets that we have reported, as well as our annual investment into intangible assets in RAS?

Yeah. So, Myron, there are two distinct differences in the intangible assets, how we account for them. The first would be on acquisition, where we would allocate part of the purchase price into intangible assets. And that would be typically customer lists, et cetera, that we write off those intangibles, typically between three and five years. That would be part, that will be on acquisition. And then in our defense cluster, we would also create some level of intangible assets whereby we will start creating technology. And that would be part of our annual CapEx budget. And that will also be written off over the contractual period that we have with customers there.

Perfect. Thank you, Mark. Ladies and gents, that's all of the questions that we have at the moment. I'm maybe just going to wait 10 seconds or so just to see if there's any last-minute questions that pop in. Okay, we've got one from Corsair Aruba who just beat the bell from Melville Douglas. Can you please provide more insight into the expected improvements in South African defence, given that the key issue has been the Defence Forces' constrained budget? Yeah, I can, Kosi. There's been a little bit more budget that has been allocated, and certainly one of the programmes that have been announced, that have been awarded, is the Armoured Vehicle Programme, which is a large programme. vehicle program to replace the legacy rifle vehicles. And into that vehicle go some of our products, particularly our communication products. There's one example whereby we are seeing the kick-off of some larger-scale projects, and that first one, as I've described, has been allocated. So there is some more budget that's been allocated into the South African Defence Force. There is no shortage of need for projects and expenditure there. So as the funding becomes available and as, I think, South Africa's fiscal position becomes a little bit better, which we do anticipate over time, we do believe that there will be more funding flowing to the SAMDF for some of these projects. And our exposure at Royalty across South those requirements is actually very good. So invariably when any large capital project gets announced, we will get the benefit from that. It will take a little bit of time before that comes into play in the communications ones, they're probably not in 2026, but 2027 onwards. But those type of projects coming through are a real boost to our export volumes that we've got at the moment, which are also long-term. So, yeah, we do think sort of this increased allocation to the SENDF, we do believe is part of our view that South Africa gets steadily better. Miron, thank you for your kind words as well. That's appreciated. Thank you very much for that note. And ladies and gentlemen, that brings us to the end of the presentation today and the Q&A session. Thank you very much for your attention. We appreciate you taking time out to listen to Ronit and Mark and myself today. We appreciate your interest and value your contribution. Thank you very much, ladies and gentlemen. Good morning. Good morning.