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.