Full Year 2026 Mustek Ltd Earnings Call

September 30, 2026

Speaker #1: I'm the Group CEO of Mustek, and with me is Shabana Abu Bakr Ebrahim. She's the Group Financial Director, and we'll take you through the numbers.

Hein Engelbrecht: Good morning, everybody, and thank you very much for joining us on this results presentation for the year ended 30 June 2026. My name is Hein Engelbrecht. I am the Group CEO of Mustek, and with me is Shabana Aboo Baker Ebrahim. She is the Group Financial Director. We will be taking you through the numbers. I think what we will do is I will start off by just maybe giving a bit of background of where we are, where we come from, and how do we see ourselves and how do we see ourselves going forward. Maybe some highlights from the results and maybe some comments on that. Then Shabana will carry on and drill down in lot more detail about the financial performance of the business. I think also just to say that the long format of the announcement is available on the Mustek website.

Speaker #1: I think what we'll do is I'll start off by just giving a big background of where we are, where we come from, how we see ourselves, and how we see ourselves going forward.

Speaker #1: Maybe I'll share some highlights from the results, and offer a few comments on them. Then Shabana will carry on and drill down in a lot more detail about the financial performance of the business.

Hein Engelbrecht: I think what we will do is I will start off by just maybe giving a bit of background of where we are, where we come from, and how do we see ourselves and how do we see ourselves going forward. Maybe some highlights from the results and maybe some comments on that.

Speaker #1: I think also then, just to say that the long-form metabolic announcement is available on the Mustek website, as are the financial statements, on www.mustek.co.za. So if you want to go and look at that, you're more than welcome.

Hein Engelbrecht: Then Shabana will carry on and drill down in lot more detail about the financial performance of the business. I think also just to say that the long format of the announcement is available on the Mustek website.

Speaker #1: So, let's start the presentation on, you know, who we are and where we're coming from. You know, we were established in 1987 and listed in the JSE in 1997, you know, originally it was very much component distribution, which later evolved into assembly operation and assembly focus as well.

Hein Engelbrecht: So is the financial statements, on www.mustek.co.za. If you want to go and look at that, you are more than welcome. Let us start the presentation on who we are and where we are coming from. We were established in 1987 and listed on the JSE in 1997. Originally, it was very much component distribution, which later involved into assembly operation and assembly focus as well, with Mecer, our own brand, in those days, which does exceptionally well for us. I think as time went past, we have evolved, and we have become more of a technology investment house than anything else where we invest in, integrate, and elevate the businesses that we hold. Our vision is to become more of that. Not to say that we are going to disregard the distribution side of the business, but I think we heavily weighted towards that.

Hein Engelbrecht: Is the financial statements, on www.mustek.co.za. If you want to go and look at that, you are more than welcome. Let us start the presentation on who we are and where we are coming from. We were established in 1987 and listed on the JSE in 1997.

Speaker #1: with Mesa our own brand in those days, which does exceptionally well for us. but I think as, as, as time went past, you know, we've evolved and, we've become more of a technology investment house than, than anything else where we invest in integrate and, and elevate the businesses that we hold.

Hein Engelbrecht: Originally, it was very much component distribution, which later involved into assembly operation and assembly focus as well, with Mecer, our own brand, in those days, which does exceptionally well for us.

Hein Engelbrecht: I think as time went past, we have evolved, and we have become more of a technology investment house than anything else where we invest in, integrate, and elevate the businesses that we hold.

Speaker #1: And our vision is to become more of that. Not to say that we're going to disregard the distribution side of the business, but I think we're heavily weighted towards that, and I think there is an opportunity for us to diversify, looking at alternative investments that we can get involved in.

Hein Engelbrecht: Our vision is to become more of that. Not to say that we are going to disregard the distribution side of the business, but I think we heavily weighted towards that.

Speaker #1: There are a lot of opportunities that actually does, present itself, in the current environment in, and, and we feel that we are, you know, well equipped and well positioned to, to maybe look at some of those opportunities.

Hein Engelbrecht: I think there is an opportunity for us to diversify, looking at alternative investments that we can get involved in. There are a lot of opportunities that actually does present itself, in the current environment. We feel that we are well equipped and well-positioned to maybe look at some of those opportunities and obviously then bring that into the group and hopefully give you long-term and sustainable value for our stakeholders. If you look at the Mustek Group currently, we are breaking it up in four different segments. What we are looking at is obviously the distribution side of the business, and that is where the bulk of the revenue still comes from, consisting mainly of Mustek and Rectron. We will go into a bit more detail when we get to the actual numbers, what contributions do come from the different ones.

Speaker #1: And obviously, then bring that into the group and hopefully give you long-term, sustainable value for our stakeholders. If you look at the Mustek Group currently, and we're breaking it up into four different segments, what we're looking at is obviously the distribution side of the business, and that's where the bulk of the revenue still comes from.

Hein Engelbrecht: We feel that we are well equipped and well-positioned to maybe look at some of those opportunities and obviously then bring that into the group and hopefully give you long-term and sustainable value for our stakeholders. If you look at the Mustek Group currently, we are breaking it up in four different segments.

Speaker #1: consisting mainly of, of Mustek and, and, and, and Rectron. and we'll go into a bit more detail when we get to the actual numbers, you know, what contributions do come from the different ones.

Hein Engelbrecht: What we are looking at is obviously the distribution side of the business, and that is where the bulk of the revenue still comes from, consisting mainly of Mustek and Rectron. We will go into a bit more detail when we get to the actual numbers, what contributions do come from the different ones.

Speaker #1: because if you look at some of the, you know, some of the revenues, the growth in revenue was muted, but we did indicate a couple of years ago that we do believe that, you know, we can be more profitable by even being smaller and not necessarily chasing revenue for the sake of chasing revenue.

Hein Engelbrecht: Because if you look at some of the revenues, the growth in the revenue was muted. But we did indicate a couple of years ago that we do believe that we can be more profitable by even being smaller and not necessarily chasing revenue for the sake of chasing revenue. Then on the training side, although they did not have a great year, I think there is a lot of opportunities there still. If you look at the skills gap that is available and the shortage of skills that is in the current environment, we think that that is quite a key component of the group going forward. Then on the manufacturing and assembly side, yes, we have mentioned Mustek and obviously the Mecer brands we do assemble, which is still doing quite well for us, or very well for us to be precise. CPS Technologies, which is manufacturing cases and racks, had a fairly good year.

Speaker #1: Then, on the training side, although they didn't have a great year, I think there are still a lot of opportunities there. If you look at the skills gap and the shortage of skills in the current environment, we think that's quite a key component of the group going forward.

Hein Engelbrecht: Then on the training side, although they did not have a great year, I think there is a lot of opportunities there still. If you look at the skills gap that is available and the shortage of skills that is in the current environment, we think that that is quite a key component of the group going forward.

Speaker #1: Then, on the manufacturing and assembly side, yes, we've mentioned Mustek, and obviously the Mesa brand. We do assemble, which is still doing quite well for us, or very well for us to be precise.

Speaker #1: CPS, which is manufacturing, cases and, and, and racks, at a fairly good. And then the one that's exceptionally well this year is Yawa Cable, which is our fiber cable manufacturing concern that we've got in, in Durban, in Dubai Airport, where we, we're 25.1% shareholder, and the, and the balance is held by a company called YOFC, which is one of, the biggest, cable manufacturers, fiber cable manufacturers, in the world.

Hein Engelbrecht: Then on the manufacturing and assembly side, yes, we have mentioned Mustek and obviously the Mecer brands we do assemble, which is still doing quite well for us, or very well for us to be precise. CPS Technologies, which is manufacturing cases and racks, had a fairly good year.

Hein Engelbrecht: The one that did exceptionally well this year is YOA Cable, which is our fiber cable manufacturing concern that we have in Durban, in Dube TradePort, where we are 25.1% shareholder, and the balance is held by a company called YOFC, which is one of the biggest fiber cable manufacturers in the world. We have seen some exceptional growth from them, as the demand for fiber increases. A lot of people think it might be saturated, but what we have experienced now is not only additional roll-outs that is happening, but also a refresh of the old infrastructure that is in the ground, and they are obviously benefiting quite handsomely for that. With saying that, the prices of cable have shot through the roof. There is big demand worldwide. That obviously gives opportunities then to make additional margin.

Speaker #1: So we've seen some exceptional growth from them. As the demand for fiber increases, a lot of people think it might be saturated, but, you know, what we've experienced now is not any additional rollouts that's happening, but, I mean, also a refresh of the old infrastructure that's in the ground.

Speaker #1: And they obviously benefit quite handsomely from that. We're saying that, you know, the prices of cable have shot through the roof. There's big demand worldwide.

Speaker #1: And that obviously gives opportunities then to, you know, to make additional margin, although we were tied in certain contracts where we still had to supply at a certain value this calendar year.

Speaker #1: that will change as we start doing negotiations with them. part of the reason for, for, for, you know, for big demand and it's not only an essay, but, but, but worldwide that we see is, number one, China Telecom has now issued a, a, a huge tender, tender obviously in, in, in, in China.

Hein Engelbrecht: Although we were tied in certain contracts, where we still had to supply at a certain value this current year. That will change as we start doing negotiations with them. Part of the reason for the big demand, and it is not only in SA, but worldwide, that we are seeing is, number 1, China Telecom has now issued a huge tender, obviously in China, and allocated quite a substantial portion of the business to the big players, of which YOFC is one. That has created a lot of demand, which obviously is outperforming the supply side of things. Then obviously, not obviously, but it is quite interesting for me, is the war in the Middle East. I did not know, but a lot of those drones are being directed by fiber cable.

Speaker #1: And allocated quite a substantial portion of the business to the big players, of which YOFC is one. So that's created a lot of demand.

Speaker #1: with, with, with, which obviously is out, out, outperforming the supply side of things. And then obviously the, not obviously, but, I mean, it was quite interesting for me is the war in, in the Middle East.

Speaker #1: I didn't know, but a lot of those drones are being directed by fiber cable. It's one of those drone areas where they keep them.

Speaker #1: It looks like a bowl of spaghetti, you know, with all the fibers that are there. Obviously, it's not the longest ones, but it's the shorter distance ones, and they control it.

Speaker #1: Fiber, and that also created a lot of demand from there. Then, on the services side, and, you know, what we're looking at there, the investment we've made fairly recently in business AI, although it's still in early stages.

Hein Engelbrecht: Some of those drone areas where they keep them looks like a pile of spaghetti, with all the fiber that is there. Obviously, it is not the long-distance ones, but it is short-distance ones, and they control it with fiber, and that also created a lot of demand from there. Then on the services side, and you know what you are looking at there, the investment we have made fairly recently in Business AI, although it is still in early stages. We have seen some positive movement in that environment. I think what we have realized there that the sales cycle, that we initially thought would be shorter, is a bit longer. There is still a lot of uncertainty in the market on what the benefits of AI might be in the environment, what the risks are going to be in the environment.

Speaker #1: We've seen some positive movement in that environment. I think what we've realized there is that the sales cycle, which we initially thought would be shorter, is actually a bit longer.

Speaker #1: There's still a lot of uncertainty in the market, you know, on what the benefits of AI might be in the environment, what the risks are going to be in the environment, you know, in the environment.

Speaker #1: And, and the people need a lot of help. And we've got the skills there to obviously help them—on the platform that they've got.

Speaker #1: It is still available, you know, for people to come and procure. But it seems like it's a much longer sales cycle than what we initially thought.

Hein Engelbrecht: The people need a lot of help, and we have got the skills there to obviously help them. The platform that they have got is still available, for the people to come and procure. But it seems like it is a lot longer sales cycle than what we initially thought. Khulisa, which is a desktop maintenance service and support organization, also had a very, very good year. They got some new contracts. They have been doing quite a bit of business in Western Cape, in a joint venture with some other companies. But also locally, Appia has a fairly sizable SAPS contract which is profitable to them. Then there is various others as well, but they seem to be on the right track, and I think that the profitability from them going forward can still become quite substantial. The other one that they had a great performance this year, CyberAntics.

Speaker #1: Then Calisa, which is a desktop maintenance service and support organization, also had a very, very good year. They got some new contracts. I mean, they've been doing quite a bit of business in Western Cape, in a joint venture with some other companies.

Speaker #1: But also, locally up here, a fairly sizable SAPS contract, which is profitable to them. And there are various others as well, but they seem to be on the right track, and I think that the profitability for them going forward can still become quite substantial.

Speaker #1: And then the other one that's had a great performance this year is Cyber Antix, which I think, you know, if you look at what they're doing, although they basically...

Speaker #1: A SOC—Security Operations as a Service—so they would monitor your network 24/7, and if they do pick up that maybe something untoward is happening or somebody's trying to penetrate or infiltrate your environment, obviously they will raise an alarm.

Hein Engelbrecht: I think if you look at what they are doing, although they basically a SOC, security operations as a service. So they would monitor your network 24/7, if they do pick up that there is maybe something untoward is happening or somebody is trying to penetrate or infiltrate your environment, obviously they will make alarm. We do not get involved in actually the remedial work. It is more of a preventative, just to make sure that everything that is supposed to be working is working, everything that needs to be implemented is implemented. They started a consulting leg to the business as well, which is also doing quite well for them or very well for them. They call it a Journey to Green, where they would get involved with large organizations and say, "You know what?

Speaker #1: We don't get involved in the actual remedial work. It's more of a preventative measure, just to make sure that, you know, everything that's supposed to be working is working.

Speaker #1: And everything that needs to be implemented is implemented. They started a consulting leg to the business as well, which is also doing quite well for them—or very well for them.

Speaker #1: They call it a journey to green, where they would get involved with large organizations. And so there's the, you know, what for you to be ready for cybersecurity to the extent that you can.

Speaker #1: These are all the different boxes that you need to tick to make sure that, from a board point of view at least, you're comfortable that the right areas of concern are being addressed.

Speaker #1: We've seen a lot of requests there, where they're assisting customers, and then obviously putting the right things in place. Then they would go and check if, you know, if you said you did something, did you actually do it?

Hein Engelbrecht: For you to be ready for cybersecurity to the extent you can be, these are all the different boxes that you need to tick to make sure that from a board point of view at least, that you are comfortable that the right areas of concern are being addressed." We have seen a lot of requests there where they are assisting customers, then obviously put the right things in place, then they would go and check if you said you did something, did you actually do it? Then try and assist the people out there to protect themselves to the extent possible. I think it is well known, we have had discussions internally. I think most organizations, it is more a case of when and not if. People need to be ready because it can be very disruptive.

Speaker #1: and then try and assist, the people out there, to protect themselves to the extent possible. I think it's, it's, it's well known, and then we've had it, you know, we've had discussions internally.

Speaker #1: I think for most organizations, it's more a case of 'when' and not 'if.' People need to be ready because it can be very disruptive. Unfortunately, we had an incident that we acted on, but we managed to stop that quite quickly, and there wasn't really any real damage.

Speaker #1: It was, that occurred in the, in the rectory environment. But yeah, you know, it's a scary thought to think that somebody else is in your system and can possibly do things that you're not comfortable with.

Hein Engelbrecht: Unfortunately, we had an incident at Rectron, but we managed to stop that quite quickly, there was not any real damage that occurred in the Rectron environment. But yeah, it is a scary thought to think that somebody else in your system and can possibly do things that you are not comfortable with. So that is on a high level what the group consists of. I think, coming back to the earlier comment, is to try and get a little bit of diversification in the group and spread the risk and spread the revenue and profitability contributions to more than just the distribution side of business. If we look at just some of the salient features, the revenue at ZAR 7.3 billion, which is slightly up from last year, 1%.

Speaker #1: So that's, that's a—that's, in, in, in, in, in, on live level, what the group systems. So I think, coming back to the earlier comment, is to try and get a bit of diversification in the group and spread the risk and spread the revenue and profitability contributions to more than just the distribution side of the business.

Speaker #1: If we look at just some of the salient features—the revenue: R7.3 billion, which is slightly up from last year, 1%. But I think a couple of things that I should just highlight there is, you know, if you look at the PC...

Speaker #1: Market in. Say compare this, say, last two three quarters compared to the same time last year, you know, the estimates. You know, from a, from a, unit point of view, you know, the market's down at least 20%.

Hein Engelbrecht: But I think a couple of things that maybe I should just highlight there is, if you look at the PC market in SA, compare this, say, last two, three quarters compared to the same time last year. The estimates are that from a unit point of view, the market is down at least 20%. With that, I think part of the reason why we still managed to do very similar revenues than the year before, the prices of notebooks specifically and PCs have gone up quite a bit over the last years. I think if you look at, say, for some of the entry-level machines, which generally would give you higher volumes in units. Those machines are probably, if not more than at least double the price that it used to be maybe two, three years ago. So the market is under pressure.

Speaker #1: with that, and I think part of the reason why we still managed to do very similar revenues in the year before, you know, the prices of, of, of, of notebooks specifically and PCs have gone, have gone up quite a, quite a, quite a bit over the last years.

Speaker #1: I think if you look at, say, some of the entry-level machines, which generally would give you higher volumes in units, those machines are probably, if not more, then at least double the price of what they used to be, maybe two or three years ago.

Speaker #1: You know, so the market is under pressure. I think the pricing is giving effect; the component pricing at some stage, it seemed like it could stabilize, but it's still moving up.

Speaker #1: I think the demand, specifically from AI-related initiatives, is still putting the supply side under pressure. There are some alternatives that we've seen that are coming to the fore.

Hein Engelbrecht: I think the pricing is giving effect. The component pricing, at some stage, it seemed like if it could stabilize, but it is still moving up. I think the demand, specifically from AI-related initiatives, are still putting the supply side under pressure. There are some alternatives that we have seen that is coming to the fore, but the real big players are more focused on the high-end, and then obviously servicing that market. But we still believe that from a Mustek point of view, we are well positioned that obviously benefit from that in the high-end segment of the market as well. EBITDA, I think up 12%, and Shabana will go into a bit more detail. I think the number is actually a bit better than what we are reflecting in the financial statements, and we will explain to you why. Cash from operations coming in at ZAR 116 million.

Speaker #1: The real big players are more focused on the high-end, And then, you know, obviously servicing. That market, but we still believe from a mustic point of view, we're well positioned that obviously to benefit from that, from that in the high-end segment of the market as well.

Speaker #1: EBITDA, I think, is up 12%, and Shabana will go into a bit more detail. I think the numbers are actually a bit better than what we’re reflecting in the financial statements, and we’ll explain to you why.

Speaker #1: Capital operation coming in at $116 million. Again, I think, if you look at the last, say, probably three years where we indicated that the main focus of the business, yes, obviously, will be profitability, but also cash generation.

Speaker #1: You know, over the last couple of years—I know this year, obviously, it's $116 million. This year, but last year was $670 million, and the year before.

Speaker #1: There was also a substantial improvement in cash from operations. And you'll see the benefits of that obviously coming through on the interest line as well.

Hein Engelbrecht: Again, I think, if you look at the last, say, probably three years, where we indicated that the main focus of the business, yes, obviously will be profitability, but cash generation. Over the last couple of years, I know this year, obviously it is ZAR 116 million this year, but last year was ZAR 670. But in the year before, there was also a substantial improvement in cash from operations. You will see the benefits of that obviously coming through on the interest line as well. I think there we and the management, both in Mustek, Rectron, and in all operating, I think we have done exceptionally well to get that gearing down and give us a stronger balance sheet. Well, more profitability as well. Headlines, earning per share up 181%, NAV per share is ZAR 30 per share.

Speaker #1: so I think so there we and, and the management, both the mustic on and, and, and all our planning, I think they've done exceptionally well.

Speaker #1: You know, to get that gearing down and give us a stronger balance sheet and, well, more profitability as well. Headline earnings per share up 181%.

Speaker #1: NAV per share to R30 per share. And then, in line with what we've done in the past, we're looking at about 20%.

Speaker #1: But, dividend per share. So 37.5 sounds like a funny number, but I think the people that, it's not exempt from, from, from, from, from dividend stacks, they will get a, a round 30 cents.

Speaker #1: So, that was the thinking about it. So I think, overall, a fairly good performance. The company cost containment that we've implemented has started giving us the desired results.

Hein Engelbrecht: Then, in line with what we did in the past, we are looking at about 20% odd dividend per share. So 37.5 sounds like a funny number, but I think the people that is not exempt from dividends tax, they will get around 30 cents. So that was the thinking behind it. I think overall, a fairly good performance by the company. Cost containments that we have implemented have started giving us the desired results. The currency was fairly stable during this financial year, and I think that also there is no big FX losses, although there were actually FX profits. Again, I think like I said to you, Shabana will explain to you that even if the GP percentage looks like it is down on the year before, there are specific reasons for that which we will obviously highlight as we go through the presentation.

Speaker #1: The currency was fairly stable during this financial year, and I think that also, you know, there were no big Forex losses, although there were actually Forex profits.

Speaker #1: And again, I think, like I said to you, Shabana will explain to you that even if the GP percentage looks like it's down on the year before, there are specific reasons for that, which we will obviously highlight as we go through the presentation.

Speaker #1: So with that, then, I'll—oh, yeah, just on that, we will, at the end, have questions, because I'm sure there might be some.

Speaker #1: So, if you do have any questions, please just use the Teams meeting—on the side there, you know, you can pop your questions in, and then I'll control the room with Dimitri and Simon here.

Speaker #1: we'll feed it through to us, and we'll, we'll try and answer it, you know, in this, in this session. if not, we will just make some notes and get back to you guys and, and then give you the answers, if we're not a capa able, able to, to actually answer it.

Hein Engelbrecht: So with that then I will oh, yeah, just on that, we will at the end have questions because I am sure there might be some. If you do have, please just use the, on the Teams meeting on the side there. You can pop your questions in there, and then our control room with Dimitri and Simon here will feed it through to us, and we will try and answer that in this session. If not, we will just make some notes and get back to you guys and then give you the answers if we are not able to actually answer it. On that, over to Shivona.

Speaker #1: So on that, over to Shabana. Thank you, Haim, and good morning, everyone. Thank you very much for joining us in this investor presentation, or results presentation, for our results for FY26.

Speaker #1: Just starting off with the overall five-year financial summary, just to give you an overview of how the Group has performed over the past five years.

Speaker #1: Obviously, you look at—and I'll go into detail—the main line items across our income statement as well as our balance sheet, just to give you more color, or some color, as to what the numbers represent and what occurred over the year.

Shabana Aboo Baker Ebrahim: Thank you, Hein. Good morning, everyone. Thank you very much for joining us in this investor presentation or results presentation for our results FY26. Just starting off with an overall five-year financial summary, just to give you an overview of how the group has performed over the past five years. Obviously, you look at, and I will go into detail in the main line items across our income statement as well as our balance sheet, just to give you more color or add some color as to what the numbers represent and what occurred over the year. If you just look at the five-year summary of FY23 standing out there on a revenue from a revenue perspective at ZAR 10.1 billion.

Speaker #1: if you just look at the five-year summary, FY23 standing out there on a revenue from a revenue perspective, a 10.1 billion. and I'd just like to, for those of you who haven't really followed Mustic for a long time, just to remind you that FY22 was pretty much coming out of COVID, which we, we, we were very we benefited significantly from the COVID boom, work from home, et cetera.

Speaker #1: And then FY23 was sustainable energy. So, if you recall, Mustek and Rectron both have fantastic offerings from a sustainable energy perspective on solutions, inverters, batteries, solar panels.

Shabana Aboo Baker Ebrahim: I would just like to, for those of you who have not really followed Mustek for a long time, just to remind you that FY22 was pretty much coming out of COVID, which we benefited significantly from the COVID boom, work from home, et cetera. FY23 was sustainable energy. If you recall, Mustek and Rectron both have fantastic offerings from a sustainable energy perspective on solutions, inverters, batteries, solar panels, which contributed significantly to our FY23 revenue number of close to ZAR 2 billion. That dropped off very suddenly, and we are seeing the drop off coming through in FY24 and then FY25. That is pretty much where the story is around where the massive change in revenue, the 30% drop, if you want to call it.

Speaker #1: which contributed significantly to our FY23 revenue number of a proper close to R2 billion. And then that dropped off very suddenly, and we've seen the drop-off coming through in FY24 and then FY25.

Speaker #1: So, so that's pretty much where the story is, around where the massive change in revenue—the 30% drop, if you want to call it.

Speaker #1: but I think from our traditional business, call it the distribution of ICT hardware and equipment, you know, we've, we've remained fairly stable. And I'll go into more of the numbers going forward as well as, you know, what does the GP margins mean, the ones of adjustments that we've had in the current year and what the, what, what the sustainable number looks like going forward.

Shabana Aboo Baker Ebrahim: I think from our traditional business, call it the distribution of ICT hardware and equipment, we have remained fairly stable, and I will go into more of the numbers going forward, as well as what does the GP margins mean, the once-off adjustments that we have had in the current year, and what the sustainable number looks like going forward. Obviously from a return on equity, good improvement from where we were last year in FY24. However, we are not still at where we would like to be, and we continue moving forward. Moving on to our revenue and just adding some in addition to what Hein mentioned. As Hein introduced our four segments that make up the group, distribution still being the most significant contributor to our revenue as well as our bottom line. That is part of our strategy is to diversify the group from that perspective.

Speaker #1: So, obviously, from a return on equity perspective, good improvement from where we were last year in FY24. We're still not at where we would like to be.

Speaker #1: And, we continue moving forward. So moving on to our revenue and just adding some, some, in addition to what I mentioned, so as we, as I introduced our four segments that make up the group, distribution still being the most significant contributor to our revenue as well as our bottom line.

Speaker #1: And that's part of our strategy—to diversify the group from that perspective. But, the distribution segment was fairly flat for this year.

Speaker #1: We've seen a shift in spending across the channel, particularly in the public sector. Our channel is broken up into retailers, normal resellers, public sector, and export sales.

Speaker #1: So, we did see a bit of a drop-off in public sector as well as export sales, and then that was replaced with more of the local spend in retail and resellers.

Shabana Aboo Baker Ebrahim: The distribution segment was fairly flat for this year. We have seen a shift in spending across the channel. Our channel is broken up into retailers, your normal resellers, public sector, and export sales. We did see a bit of a drop off in public sector as well as export sales and then replaced with more of the local spend in retail and resellers. As Hein mentioned, there was actually, if you look at that ZAR 7.3 billion, the dollar pricing, our revenue is linked to dollar pricing, because most of our inventory and most of our products are imported. Dollar pricing has increased, not because of the rand.

Speaker #1: we, as Haim mentioned, there was actually if you look at that 7.3 billion, the dollar pricing, our, our, our revenue is linked to dollar pricing, because a lot of our most of our inventory and most of our products are imported.

Speaker #1: And dollar pricing has increased, not because of the rand. Rand pricing obviously is dependent on the exchange rate, but because the exchange rate was lower in this year versus where we were last year, the actual dollar pricing increased because of the shortages in your components, specifically storage and memory.

Speaker #1: you know, your normal entry-level notebooks, we the, the days of 3999, for entry-level notebooks is, is, is was not is not there anymore. And we've seen massive increases in that.

Shabana Aboo Baker Ebrahim: Rand pricing obviously is dependent on the exchange rate, but because the exchange rate was low in this year versus where we were last year, the actual dollar pricing increased because of the shortages in your components, specifically storage and memory. Your normal entry-level notebooks, the days of ZAR 3,999 for entry level notebooks is not there anymore, and we have seen massive increases in that. That has resulted in a shrinkage in volumes, just because of where pricing is sitting at this year. Hein mentioned that we have seen industry trends of around 20% decline in the market, and that is probably where we also seen a decline in our volumes. Overall, in our service and support, specifically CyberAntics, we have seen good performance, obviously coming on from a very low base, but good improvement in their revenue.

Speaker #1: And that has resulted in a shrinkage in volumes, just because of where pricing is sitting at this year. Haim mentioned that we've seen industry trends of around a 20% decline in the market, and that's probably where we have also seen a decline in our volumes.

Speaker #1: Overall, in our service and support, specifically Cyber Antics, we've seen good performance. Obviously, coming off a very low base, but good improvement in their revenue.

Speaker #1: And then, in our training business specifically, Mesa Inter Ed, we did see a slowdown in training. You know, whenever there is any pressure in the market, training is one of those spends that gets cut, probably first.

Speaker #1: Also, from, as I mentioned earlier, when, when I looked at the financial overview over the five years is sustainable energy, so the sustainable energy in this year, energy revenue was very minimal, in this year from obviously the 2 billion rand that I mentioned in June 2023.

Shabana Aboo Baker Ebrahim: In our training business, specifically Mecer Inter-Ed, we did see a slowdown in training. Whenever there is any pressure in the market, training is one of those spends that gets cut probably first. Also, as I mentioned earlier when I looked at the financial overview over the 5 years, is sustainable energy. The sustainable energy in this year, energy revenue was very minimal in this year from obviously the ZAR 2 billion that I mentioned in June 2023. That also does not really make any impact to what our FY26 numbers are and our revenue then looking very based on sustainable revenue, and where we can grow from here. As Hein mentioned, revenue is not our target that we chase. We believe that we can be smaller, but bigger from a bottom-line perspective, and growth is measured from a bottom line and not top line necessarily.

Speaker #1: So that obviously also doesn't really make any impact to what our FY26 numbers are. And our revenue then, looking very much based on sustainable revenue, and where we can obviously grow from here.

Speaker #1: But as I mentioned, revenue is not our target that we chase. We always believe that we can be smaller, but bigger from a bottom-line perspective.

Speaker #1: And growth is measured from the bottom line, not the top line, necessarily. Moving over to our gross profit margin, I've also shown a five-year trend on this here.

Speaker #1: Overall, we actually have seen an improvement in our—so it doesn't look like where there's an improvement, but included in our GP or in our cost of sales for FY26 is over 70 million, over 80 million rand in stock write-downs, of which 70 million rand of that relates to sustainable energy stock.

Shabana Aboo Baker Ebrahim: Moving over to our gross profit margin. I have also shown a 5-year trend on this year. Overall, we actually seen an improvement in our. It does not look like there is an improvement, but included in our GP or in our cost of sales for FY26 is over ZAR 80 million in stock write-downs, of which ZAR 70 million of that relates to sustainable energy stock. Recall that when the sustainable energy boom or when Eskom stopped load shedding, we were sitting with approximately ZAR 660 million worth of sustainable energy stock. The reason for that was that we had orders already on the water based on what our past sales were, and nobody expected load shedding to be suspended so quickly. We were sitting with loads of sustainable energy stock.

Speaker #1: So, you recall that during the sustainable energy boom, or when Eskom stopped load shedding, we were sitting with approximately R660 million worth of sustainable energy stock.

Speaker #1: And the reason for that was that we had orders already on the water, based on what our past sales were. And nobody expected load shedding to be suspended so quickly.

Speaker #1: And we were sitting with loads of sustainable energy stock, which we still do have some stock, and we have written it down back to what the market is, calling on those on that stock.

Speaker #1: And so, included in our gross profit margin is an impact of R70 million of write-downs, specifically relating to sustainable energy stock. So, if we had to add that back, we would have ended up with a GP margin of 14.2%, call it on your normal operations.

Shabana Aboo Baker Ebrahim: We still do have some stock, and we have written down back to what the market is calling on that stock. So included in our gross profit margin is an impact of ZAR 70 million of write-downs specifically relating to sustainable energy stock. If we had to add back that, we would have ended up on a GP margin of 14.2%, call it, on your normal operations. The graph that I have got at the bottom is more of an adjusted GP percentage, taking into account FX. Our Forex gains and losses sits below the GP line from a financial reporting standards perspective, because we cannot put it through cost of sales, because we do not apply hedging in the sense of IFRS 9 hedging.

Speaker #1: The graph that I've got at the bottom is more of an adjusted GP percentage, taking into account FX. So our forex gains and losses sit below the GP line from a financial reporting standards perspective, because we cannot capitalize, or we cannot put it through cost of sales.

Speaker #1: Because we don't apply hedging in the sense of press nine hedging. so if you had to add back the G the, the FX gain that we have in the current year, you'll see that the GP margin stabilizes quite nicely over time.

Speaker #1: And this is something that we’ve always explained — that FX does have an impact on our business. And once you add it back, you’ll see over time that the GP margin then does stabilize.

Speaker #1: in the current year, we had a 53 53 million rand FX gain, that sits below the GP line. and that's pretty much, 37 million rand of that is realized in the balance remains unrealized.

Shabana Aboo Baker Ebrahim: If you had to add back the FX gain that we have in the current year, you will see that the GP margin stabilizes quite nicely over time. This is something that we have always explained, that FX does have an impact on our business. Once you add it back, you will see over time that the GP margin then does stabilize. In the current year, we had a ZAR 53 million FX gain that sits below the GP line. That is pretty much ZAR 37 million of that is realized, and the balance remains unrealized. We had the rand averaging of ZAR 16.90 over the period versus an ZAR 18.16 in the prior year, which drives where that FX gain is coming from. If I look at our EBITDA and just trying to explain how the movement in our EBITDA, what it came from FY25 to FY26.

Speaker #1: And we had the rand averaging of 16 rand 90 over the period versus an 18 rand 16 in the prior year. Which drives where that FX gain is coming from.

Speaker #1: If I look at our EBITDA and just try to explain how the movement in our EBITDA came about from FY25 to FY26.

Speaker #1: So, for FY25, we finished off with an EBITDA of $249 million. And how we get back to the $278 million, which is approximately a $30 million, or 11.6% improvement, is made up of changes in, first of all, the impact of the GP on the increase in revenue, and taking off the stock write-offs.

Speaker #1: And as I mentioned, to not to just confuse you, 86 million rand was the total stock write offs of which 70 million rand was sustainable energy stock.

Shabana Aboo Baker Ebrahim: FY25, we finished off with an EBITDA of ZAR 249 million. How we get back to the ZAR 278 million, which is approximately about 11.6% improvement, is made up of changes in, first of all, the impact on GP, on the increase on revenue, taking off the stock write-offs. As I mentioned, not to just confuse you, ZAR 86 million was the total stock write-offs, of which ZAR 70 million was sustainable energy stock. Just to highlight that and not confuse anyone. Then we had the Forex movement. In the prior year, we had Forex gains of ZAR 10 million versus ZAR 53 million in this year, so we had an additional ZAR 43 million in FX gains this year. Then cost savings of ZAR 19 million due to the cost-saving initiatives that we implemented over the past 18 months in terms of right-sizing of the business, et cetera.

Speaker #1: So just to highlight that and not confuse anyone. And then we had the forex movements. In the prior year, we had forex gains of $10 million versus $53 million in this year.

Speaker #1: So, we had an additional R43 million FX gains this year. And then cost savings of R19 million due to the cost saving initiatives that we implemented over the past 18 months in terms of the right sizing of the business, et cetera.

Speaker #1: So that basically shows where the improvement in our EBITDA number comes in. obviously taking into account if you had to strip out the 70 million rand, stock write offs in our EBITDA, we would probably ended up, much close, you know, much healthier, EBITDA number, which, which we believe is sustainable to what our business can achieve.

Speaker #1: Then moving below the EBITDA line in driving another driver for our improved in our performance is our net financing cost. As you would, as Hyde mentioned, over the past two or three, three years, working capital management has been our massive focus for the entire group.

Shabana Aboo Baker Ebrahim: That basically shows where the improvement in our EBITDA number comes in. Obviously, taking into account if you had to strip out the ZAR 70 million stock write-offs in our EBITDA, we probably ended up much healthier EBITDA number, which we believe is sustainable to what our business can achieve. Then moving below the EBITDA line, another driver for our improved performance is our net financing cost. As Hein mentioned, over the past two or three years, working capital management has been our massive focus for the entire group. By reducing our working capital, reducing our leverage, we have been able to manage and reduce our net financing cost over and above what the improvements or the reductions in the overall financing cost or interest rates have been.

Speaker #1: And by reducing our working capital, reducing our leverage, we've been able to manage and reduce our net financing costs, over and above what the improvements or the reductions in the financing cost or interest rates have been.

Speaker #1: So, over the period, we had about an 8% improvement in the prime interest rate, which obviously now will reverse with the interest rate increases happening now.

Speaker #1: But a 33% improvement in net financing cost has been as a result of a reduction in working capital over the past two years.

Speaker #1: and, and, and lower, lower leverage. Our trade finance, yeah, so our trade finance, which is our interest bearing debt, has reduced from approximately 1.2 billion rand at the end of at June 2025 versus, to eight approximately 820 million rand at June 2026.

Shabana Aboo Baker Ebrahim: Over the period, we had about an 8% improvement in the prime interest rate, which obviously now will reverse with the interest rate increases happening now. A 33% improvement in net financing cost has been as a result of a reduction in working capital over the past two years, and lower leverage. Our trade finance, which is our interest-bearing debt, has reduced from approximately ZAR 1.2 billion at June 2025, to approximately ZAR 820 million at June 2026. That is one of the reasons or the biggest reason for a reduction in financing cost. We believe that this reduction is sustainable. Our finance cost is something that we manage very closely together with our working capital and will remain a continued focus for the group. Headline earnings per share, 181% up to 205 cents.

Speaker #1: And that has also that is one of the reasons for the biggest reason for reduction in financing cost. And we believe that this reduction is sustainable.

Speaker #1: Our finance cost is something that we manage very closely, together with our working capital, and it will remain a continued focus for the group. Headline earnings per share are up 181% to 205 cents.

Speaker #1: One of the other reasons for the improvement in our overall results, as Hyde mentioned, is our improvement in our share of profit of associates. Specifically, we had a R25.8 million share of profit of associates in the current year versus R6.3 million in the prior year.

Speaker #1: The biggest improvements coming from Yangtze Optical Cable as well as Kaoliza. Performing very well on, on YOA, we the for or the focus or what we've seen or happening over the year, they're still doing extremely well and performance has been very positive.

Shabana Aboo Baker Ebrahim: One of the other reasons for the improvement in our overall results, as Hein mentioned, is our improvement in our share of profit of associates. Specifically, we had a ZAR 25.8 million share profit of associates in the current year versus ZAR 6.3 million in the current year. The biggest improvements coming from Yangtze Optical Fibre and Cable, as well as Khulisa, performing very well. On YOFC, the focus of what we've seen happening over the year, they're still doing extremely well, and performance has been very positive. As Hein mentioned, the demand for cable is still very high and we're still very happy with that investment. As part of our strategic objectives, which Hein will cover, in terms of our capital allocation, it's something that we are going to look at going forward. Dividend per share, 20% of earnings, so 37.5 cents.

Speaker #1: And as Hyde mentioned, the demand for cable is still very high. And we still have a lot of—we are still very happy with that investment.

Speaker #1: But as part of our strategic objectives, which Hyde will cover, in terms of our capital allocation, it's something that we would look at. We are going to look at it going forward.

Speaker #1: Dividend per share is 20% of earnings, so 37.5 cents. We've maintained our 20% payout that we have in the past, and we'll also talk about capital allocation and how we manage dividends and earnings going forward, in terms of capital allocations from a capital allocation perspective.

Speaker #1: So, sheet and some of the highlights on that. So, just a high-level overview of our net asset value and tangible net asset value. Our balance sheet is looking strong and continuously improving.

Speaker #1: We haven't seen massive erosion or any erosion in our balance sheet over, over the years. The two biggest line items on our, on our balance sheet from a, from a working is working capital, from an asset perspective.

Shabana Aboo Baker Ebrahim: We've maintained our 20% payout that we have in the past, and Hein will talk about capital allocation and how we manage dividends and earnings going forward from a capital allocation perspective. Moving on to just the balance sheet and some of the highlights on that. Just a high-level overview of our NAV and tangible NAV. Our balance sheet looking strong, and continuously improving. We haven't seen massive erosion or any erosion in our balance sheet over the years. The two biggest line items on our balance sheet is working capital, from an asset perspective, and that's inventory and trade receivables. Inventory on hand, finishing off at ZAR 1.7 billion. As we mentioned, you can see from 2023, 2024, 2025, we have started reducing our inventory.

Speaker #1: And that's inventory and trade receivables. Inventory, sitting at inventory on hand at one point, finishing off at 1.7 billion rand. As we mentioned, you can see from 2023, 2024, 2025, we've started reducing our inventory.

Speaker #1: We were very bloated at that point in time, and that was one of our biggest focuses. Because with the high working capital, we had high leverage, and then finance costs were, were really high.

Speaker #1: there we, we've reduced our, we've reduced our working capital and we are slightly higher on trade, on inventory at year end, but that's specifically because of some of the stock shortages, some of the opportunities that they are in the pipeline.

Speaker #1: And we are quite comfortable with the help of our stock. As I mentioned on the sustainable energy stock, our net exposure at year end is approximately R185 million.

Shabana Aboo Baker Ebrahim: We were very bloated at that point in time, and that was one of our biggest focuses, because with the high working capital, we had high leverage and then finance costs were really high. There we've reduced our working capital, and we are slightly higher on inventory at year-end, but that's specifically because of some of the stock shortages, some of the opportunities that they are in the pipeline, and we're quite comfortable with the help of our stock. As I mentioned, on the sustainable energy stock, our net exposure at year-end is approximately ZAR 185 million. Coming down from where we were in June 2024 with ZAR 660 million, we've done very well, and we continue. There are initiatives across both Mustek and Rectron in ensuring that we clear out that stock as soon as we can.

Speaker #1: coming down from where we were in June 2024 with 660 million, we've done, we've done very well. And we continue they are initiatives across both Mustek and Rectron in ensuring that we clear out that stock as soon as we are, as soon, as soon as we can.

Speaker #1: And inventory, our inventory cycle—buying cycles—continue to be a major focus for both the distribution businesses within the group. Then the next biggest line item is trade receivable days.

Speaker #1: We've seen an improvement in our trade receivable days at year end, dropping from 66 days down to 57 days. Risk management has been a big focus as well, in terms of how we manage our debtors and how we select our deals, against margin and credit thresholds.

Speaker #1: And we continue managing our inventory, our receivable days, and our receivable agents to ensure that we don't have any long outstanding debts, and that our provision for estimated credit losses is maintained at healthy levels.

Shabana Aboo Baker Ebrahim: Our inventory cycles, our buying cycles, continue to be a massive focus for both the distribution businesses within the group. The next biggest line item is trade receivable days. We've seen an improvement in our trade receivable days at year-end, dropping from 66 days down to 57 days. Risk management has been a big focus as well in terms of how we manage our debtors, how we select our deals against margin and credit thresholds. We continue managing our receivable days, our receivable aging, to ensure that we don't have any long outstanding debts and that our provision for estimated credit losses are maintained at healthy levels. All this then drops down directly into cash generation.

Speaker #1: And then all this drops down directly into cash generation. Last year, we had a massive cash generation of $686 million from operations.

Speaker #1: And that can be seen, as you can see, from the big drop in our inventory values over the past year. Still positive cash generation from operations in the current year, at $116 million.

Speaker #1: Something very important to also note is that included in that R116 million is R360 million worth of repayments towards our trade financing. As I mentioned earlier, that dropped from R1.2 billion down to about R800 million, R820 million.

Speaker #1: So, that’s a repayment of those trade finance, sitting in cash generated from operations. And that $116 million is the net of those repayments. Our cash conversion cycle has improved to 97 days from 109 days in the prior year.

Shabana Aboo Baker Ebrahim: Last year, we had a massive cash generation of ZAR 686 million from operations, and that can be seen, as you can see from the big drop in specifically our inventory values over the past year. Still positive cash generation from operations in the current year at ZAR 116 million. Something very important to also note, that included in that ZAR 116 million is ZAR 360 million worth of repayments towards our trade financing. As I mentioned earlier, that dropped from ZAR 1.2 billion down to about ZAR 800, ZAR 820 million. So that repayment of those trade finance is sitting in cash generated from operations, and that ZAR 116 is the net of those repayments. Our cash conversion cycles have improved to 97 days from 109 days in the prior year.

Speaker #1: We've set ourselves a target for trying to get closer to 90 days, and we're quite confident that we'll be able to do that through our continued focus on our working capital management.

Speaker #1: And that's me from the numbers perspective. I'll hand back over to Hyde, who will take us through the strategic priorities and some of the opportunities that we see within the group going forward.

Speaker #1: Thank you. Thank you very much. Yeah, for you know, from, from, from, from an executive point of view, some of the things that we're gonna be focusing on and continue to focus on, is, is, is capital release.

Speaker #1: And what we mean by that is we went through a quite extensive exercise with all the individuals, organizations within the group, trying to get to a situation where our return on equity in those, you know, in those individual operations, makes sense.

Shabana Aboo Baker Ebrahim: We've set ourselves a target for trying to get closer to 90 days, and we're quite confident that we'll be able to do that through our continued focus on our working capital management. That's me from the numbers perspective. I'll hand over back to Hein to take us through strategic priorities and some of the opportunities that we see within the group going forward.

Speaker #1: And if there's excess capital, then obviously, from a holding point of view, we are extracting that. Then, obviously, that will give us opportunities going forward.

Speaker #1: From a diversification point of view, it's opportunities that actually present themselves to maybe get involved in there. Or, if there's nothing, then nothing—the decision, you know, probably, it can definitely be a board decision, but maybe in the next two or three years.

Hein Engelbrecht: Thank you. Thank you very much. From an executive point of view, some of the things that we're going to be focusing on and continue to focus on, is capital release. What we mean by that is, we went through quite an extensive exercise with all the individual organizations within the group, trying to get a situation where our return on equity in those individual operations make sense. If there's excess capital, then obviously from a holding point of view, we are extracting that. Then obviously that will give us opportunities going forward. From a diversification point of view, if there's opportunities that actually present themselves to maybe get involved in there. If there's nothing, then I think the decision, it will definitely be a board decision, but maybe in the next 2, 3 years.

Speaker #1: So, you know, we haven't really identified something that we want to deploy the capital in, and maybe then return it to shareholders, whether that's a special dividend or whatever the case may be.

Speaker #1: So we've gone through that whole exercise, and I think part of the reason was, you know, historically we've been criticized quite a bit about our return on equity. And then, when you can see it there, it's improved, but it's still not where it should be.

Speaker #1: We'd like to get it, probably maybe not double that, but yeah, probably over time doubling that. But yeah, that's the exercise that we've gone through, and we drive it quite hard, and everybody bought in to understand where we come from.

Speaker #1: and, and, and that should enable us to, you know, obviously, you know, see if we can diversify the group even further, over and above what we're currently do have.

Speaker #1: And then, just from a marketing point of view, I think maybe a bit more of identifying the group, what the group is all about.

Hein Engelbrecht: We haven't really yet identified something that we want to deploy the capital in, and maybe then return it to shareholders through either a special dividend or whatever the case may be. So we've gone through that whole exercise, and I think part of the reason was, historically, we've been criticized quite a bit about our return on equity, and you can see it there, it's improved, but it's still not where it should be. We'd like to get it to probably, maybe not double that, but yeah, probably over time doubling that. That's the exercise that we've gone through, and we're driving it quite hard and everybody bought in, understand where we're coming from. That should enable us then to obviously see if we can diversify the group even further over and above what we currently do have.

Speaker #1: I think everybody still very much has the idea it's only Mustek and Mecer and Rectron, but I think there's a lot more to it, and we'd like to give those individual organizations a lot more exposure within the group identity as well.

Speaker #1: And if you look at some of the opportunities—and I'm gonna just go, you know, through some of the industry outlook that we've got in our long format—just to maybe give you some idea, and I've put down there where we do believe there are opportunities now.

Speaker #1: Let's maybe cover on, on why we think so. 'Cause we look at, you know, currently the finding supply side story for the years, obviously memory, AI data center demand has pulled manufacturing capacity away from the, you know, from the commodity DRAM.

Speaker #1: And, for the group, I mean, this changes the future—the nature of memory-heavy product lines—moving away from volume-driven turnover to a question of allocation and timing.

Hein Engelbrecht: And then just from a marketing point of view, I think just maybe a bit more of identifying the group and what the group is all about. I think everybody is still very much got the idea it is only Mustek and Mecer and Rectron. But I think there is a lot more to it, and we would like to give those individual organizations a lot more exposure within the group identity as well. Then if you look at some of the opportunities, I am going to just go back to some of the industry outlook that we have gone in our long format, just to maybe give you some idea, and I have put down there where we do believe there are opportunities, just maybe cover on why we think so. Because if you look at currently, the defining supply side story for the year is obviously memory.

Speaker #1: And we've also seen that a second tier of supplies emerging as, as new Chinese manufacturer gain share. And certifications that, you know, that obviously brings certification and, and, and confirmation of product quality.

Speaker #1: That becomes a bit of an issue, but we are quite comfortable that the products we bring in meet the necessary STAR standards. I think the clearer growth opportunity lies in AI.

Speaker #1: most of, you know, most organizations will adopt it through licenses and hardware ready. And it refreshes that really fair. and, this is precisely where the group's AI services opposition to add value across the enterprise and the mid-market customers.

Hein Engelbrecht: AI data center demand has pulled manufacturing capacity away from the commodity DRAM. For the group, this changes the future and the nature of memory-heavy product lines to moving away from volume-driven turnover to a question of allocation and timing. We have also seen that a second tier of suppliers emerging as new Chinese manufacturers gain share and certifications that obviously bring certification and confirmation of product quality becomes a bit of an issue. But we are quite comfortable that the products we do are bringing in meet the necessary standards. I think the clearer growth opportunity lies in AI. Most organizations will adopt it through licenses and hardware ready and the refreshes that they already have. This is precisely where the group's AI services are positioned to add value across the enterprise and the mid-market customers.

Speaker #1: So we're pretty excited about the opportunities that AI will bring to us. I also think cybersecurity demand remains firmly non-discretionary; I don't think people have a choice anymore.

Speaker #1: Attack volumes continue to rise against the backdrop of stretched internal security teams. That reinforces the case for security as a durable, recurring revenue stream.

Speaker #1: You know, rather than just a project-based one. And then, I think underlying all of this is the local skill shortage, which shapes how much of this opportunity the group can convert into delivery rather than simply identify.

Speaker #1: You know, if you put all of this together, it's a harder market to operate in and a more valuable one to serve well.

Speaker #1: Component supply, hardware demand, AI adoption, and data center development all come with constraints. And constraints, then obviously, reward judgment more than scale. Because the Mustek Limited group, you know, we cover supply chain management, AI enablement, cybersecurity skills development, and certifications.

Hein Engelbrecht: We are pretty excited about the opportunities that AI will bring to us. Then I think cybersecurity demand remains firmly non-discretionary. I do not think people have a choice anymore. Attack volumes continue to rise against the backdrop of stretched internal security teams. Reinforcements. It reinforces the case for security as a durable recurring revenue stream rather than just a project-based one. Then, I think underlying all of this is the local skill shortage, which shapes how much this opportunity the group can convert into delivery rather than simply identify. If you put all of this together, it is a harder market to operate in and a more valuable one to serve well. Component supply, hardware demand, AI adoption, and data center development all comes with constraints. Constraints then obviously reward judgment more than scale.

Speaker #1: you know, we've got the ability to advise across, various this, you know, areas of the market. And, and, and participate in that. So, so all in all, I think we, we, we, we, we, we quite, quite positive about the future, keeping in mind that, you know, there's a lot of external influences that, which we don't necessarily kind of control over.

Speaker #1: But yeah, we're trying to manage it to the best of our abilities, but we do believe that there's a lot of opportunity still that we would like to pursue.

Speaker #1: Pursue. So, I think that's my story. If somebody wants to reach out to us, I mean, obviously our contact details are available. Are there any questions in between, or I can just maybe anticipate some of the questions that there might be?

Speaker #2: Just the questions I know.

Hein Engelbrecht: Because of Mustek Limited Group, we cover supply chain management, AI enablement, cybersecurity, skills development, and certifications. We have got the ability to advise across various areas of the market and participate in that. All in all, I think we are quite positive about the future, keeping in mind that there is a lot of external influences which we do not necessarily have control over. But yeah, we are trying to manage to the best of our abilities, but we do believe that there is a lot of opportunity still that we would like to pursue. I think that is my story. If somebody wants to reach out to us, obviously our contact details are available. Are there any questions, Dimitri? Or I can just maybe anticipate some of the questions that there might be.

Speaker #1: Thank you.

Speaker #2: I don't know the source. Please, can you talk to the quality of inventory on hand, such as aging, bad products still held, solar packs, etcetera?

Speaker #2: Has there been large charges in the current year? $76 million increase on bad inventory allowance, 35 inventories, that north, and no 22 of cash flow.

Speaker #2: Inventory adjustments of 127 million.

Speaker #3: All right. Yeah. So I think I did cover that in my, in my presentation. we quite comfortable with the, the, the, the aging or the, and the, quality of our inventory.

Speaker #3: As I mentioned, we do have about $185 million of ex net exposure to sustainable energy stock, of which we took massive write-downs in the current year.

Speaker #3: And we've got approximately $120 million of provisions against our inventory number. That's not specifically on sustainable energy, but across our inventory book, which we're quite comfortable that that provision is sufficient.

Dimitri Tserpes: First question online.

Hein Engelbrecht: Thank you.

Dimitri Tserpes: Anonymous asks, "Please can you talk to the quality of inventory on hand, such as aging, bad products still held, solar, bats, et cetera? Has there been large charges in the current year?" Sorry. "ZAR 76 million increase on bad inventory allowance, 35 inventory written off, and note 3 of cash flows shows inventory adjustments of ZAR 127 million.

Speaker #2: Are you currently gaining view together with the gross margin deterioration when asserting the overall margin performance for the year?

Speaker #1: That's our view, yes. From our accounting point of view, obviously the treatment's different. But I think from a business point of view, we continue to see adjusting prices based on what happens with the rand-dollar exchange rate.

Shabana Aboo Baker Ebrahim: All right. Yeah. I think I did cover that in my presentation. We are quite comfortable with the, A, the aging and the quality of our inventory. As I mentioned that we do have about ZAR 185 million of net exposure to sustainable energy stock, of which we took massive write-downs in the current year. And we have approximately ZAR 120 million of provisions against our inventory number. That is not specifically on sustainable energy, but across our inventory book, which we are quite comfortable that that provision is sufficient.

Speaker #1: So, so from a business point of view, we regard that as part of, of the GP and I think if you go back historic, like what Shabana has done, it gives you a fairer picture of, of, of, of, of consistent GP over time.

Speaker #1: Not all this up and down, up and down, because generally if you've got higher GPs, normally we have Forex losses, and then, you know, the opposite is also true.

Speaker #1: But I mean, we, we, we tend — we don't tend to. We look at it, combined in gross profit.

Speaker #2: So from Anonymous, what is the impact of the retro cyber attack on '27 profits in terms of lost sales and gross margin over that period that you can't recover?

Dimitri Tserpes: Can currency gains be viewed together with the gross margin deterioration when asserting the overall margin performance for the year?

Speaker #1: it was minimal.

Speaker #3: Very material. There were lines for pretty much a week, which was July. They had met their July budget, or were very close to meeting it, and probably exceeded their GP from a GP perspective.

Hein Engelbrecht: That is our view. Yes. From an accounting point of view, obviously, the treatment is different. I think from a business point of view, we continuously adjusting prices based on what happens with the rand/dollar exchange rate. From a business point of view, we regard that as part of the GP. I think if you go back historically, like what Shabana has done, it gives you a fairer picture of consistent GP over time. Not all this up and down, up and down. Because generally, if you have higher GPs, normally we have FX losses and then the opposite is also true. But we not tend to. We look at it combinedly in gross profit.

Speaker #1: Yes.

Speaker #2: Also from Anonymous: Do you expect a PC upgrade cycle due to AI, as older PCs may not have sufficient memory to run these AI applications?

Speaker #1: Yes. Yeah, I think we've seen that already happening, you know, worldwide. And I think that's part of the reason why stock is becoming a bit of an issue to get in.

Speaker #1: You know, you've got fairly long lead times. Although it's improved slightly, I mean the big, big multinationals are still looking at three months plus before you actually receive the stock.

Speaker #1: Historically, it was, say, six to eight weeks. So yeah, definitely we've seen the demand increase worldwide, and we're seeing it locally as well.

Dimitri Tserpes: From anonymous, "What is the impact of the Rectron cyber attack on 2027 profits in terms of lost sales and gross margin over that period that you cannot recover?

Speaker #1: So we do expect that there will be a refresh as people, you know, get themselves ready for the effect that AI might have in their businesses.

Hein Engelbrecht: It was minimal.

Shabana Aboo Baker Ebrahim: Very immaterial. They were offline for pretty much a week, which was July, and they had met or were very close to meeting their July budget and probably exceeding from a GP perspective.

Speaker #1: But it's not only PCs. I think it's, you know, it's if you look at the infrastructure back in infrastructure as well, your server, you know, all your storage and all those type of things, I think, you know, that's, that's something that people need to seriously look at.

Speaker #2: Which working capital do you realistically think you can release?

Hein Engelbrecht: Yes.

Dimitri Tserpes: Also from anonymous, "Do you expect a PC upgrade cycle due to AI, as older PCs may not have sufficient memory to run these AI applications?

Speaker #3: Well, we—like I've said on our cash conversion cycle—we finished off at 97 days. We're aiming for 90 days, and I think that's an achievable target. I'm not going to put a rand value to it.

Hein Engelbrecht: Well, I think we've seen that already happening worldwide, and I think that's part of the reason why stock is becoming a bit of an issue to get in. You've got fairly long lead times, although it's improved slightly. But the big multinationals, we're still looking at 3 months plus before we actually receive the stock, where historically it was, say, 6 to 8 weeks. So, definitely we've seen the demand increase worldwide, and we're seeing it locally as well. So, we do expect that there will be a refresh as people get themselves ready for the effect that AI might have in their businesses. But it's not only PCs. If you look at the back-end infrastructure as well, your servers, all your storage and all those type of things, I think that's something that people need to seriously look at.

Speaker #2: So, from anonymous, are the overs owned 57.6%? What specifically changes operationally or financially for Mustek, if anything?

Speaker #1: Absolutely nothing. I think, you know, with us all, you know, after the store, not concluded, they have been, you know, it's pretty much hands-off.

Speaker #1: We, we, we are carrying on as we have done in the past. I mean, we've got an independent board—obviously, the majority are non-executive directors. We've got the executives.

Speaker #1: As usual, I mean, we do our own things. We do our own products, and our own budgets, and our own strategic plan.

Dimitri Tserpes: How much working capital do you realistically think you can release?

Speaker #1: So, that's at this stage a big shoulder, obviously, but I'm not getting involved operationally or even on the management side at all.

Shabana Aboo Baker Ebrahim: Well, like I said, on our cash conversion cycle, we finished off at 97 days. We are aiming for 90 days, and I think that is an achievable target. I am not going to put a ZAR value to it.

Speaker #2: Thank you for the good results, and thank you for the opportunity to ask a few questions. Question one: Could you expand on the rationale for remaining listed, given the very limited free float, with Novus not having control of Mustek?

Dimitri Tserpes: From anonymous, "Now that Novus own 57.6%, what specifically changes operationally or financially for Mustek, if anything?

Speaker #2: What has changed, or do you expect to change once the mandatory offer process has been funded?

Hein Engelbrecht: Absolutely nothing. I think with this whole offer that is still not concluded, it is pretty much hands-off. We are carrying on as we used to in the past. We have got an independent board, obviously majority non-executive directors. We have got the executives. Business as usual. We do our own things. We do our own budgets, our own strategic plan. At this stage, a big shareholder, obviously, but not getting involved operationally or even on the management side at all.

Speaker #1: I think it's going to be difficult to speculate. I mean, there are discussions that we've had with Novus, where they would prefer us to stay listed at this stage.

Speaker #1: I mean, that might change, you know, depending on whether the offer gets accepted or not, and to what extent it gets accepted. But I think from our point of view, this executive point of view is, we're focusing on the business.

Speaker #1: Whichever decision then gets taken later, whether we remain listed or we get delisted, that's obviously a shareholder decision that needs to be made. And although we are also shareholders, we are bound by the decisions taken then. But to end what's going to happen, I think it's not for us to say.

Speaker #2: From an operational and capital allocation perspective, should we expect anything to change as a result of Novus becoming the majority shareholder? For example, could this lead to a greater appetite for acquisitions or disposals, or a different approach to working capital debt repayment, or returning excess capital to shareholders?

Dimitri Tserpes: Congratulations on the good results, and thank you for the opportunity to ask a few questions. Question one, could you expand on the rationale for remaining listed given the very limited free float, with Novus now having control of Mustek? What has changed or do you expect to change once the mandatory offer process has been finalized?

Speaker #1: I think once we get to a level where either we list it and, or not list it, or they, you know, they've already got control, it's obviously a discussion that we will have with them.

Hein Engelbrecht: I think it's going to be difficult to speculate. I think the discussions that we've had with Novus is that they would prefer us to stay listed at this stage. That might change, depending on whether the offer gets accepted or not, and to what extent it gets accepted. But I think from our point of view, and this executive point of view is, we're focusing on the business. Whichever decision then gets taken later, whether we remain listed or we get delisted, that's obviously a shareholder decision that needs to be made. Although we're also shareholders, we will abide by the decisions taken then. But to preempt what's going to happen, I think it's not for us to say.

Speaker #1: There is no indication of which specific way we're going to go. Currently, as is, you know, like we've explained just now, we're focusing on the business.

Speaker #1: We've got our strategy, which we want to execute on, and we're going to carry on in that sense until the next time, maybe when they do get involved at the board level, or not, and they feel that we should be doing something different.

Speaker #1: I mean, obviously it will be a discussion that we'll have at that point in time. And then, if something needs to change or is going to change, we'll communicate that to the market.

Speaker #2: Could you provide an update on the settlement agreement relating to the TRP ruling and the TSC appeal? Has there been any further progress towards TSC confirmation?

Dimitri Tserpes: From an operational and capital allocation perspective, should we expect anything to change as the result of Novus becoming the majority shareholder? For example, could this lead to a greater appetite for acquisitions or disposals, or a different approach to working capital, debt repayment, or returning excess capital to shareholders?

Speaker #2: And what remains outstanding before the mandatory offer can be finalized?

Speaker #1: I, I think it's probably best if we speak to the Novus guys, we are a bit removed from, from those discussions. the latest that last that I heard is there was some, submissions that was made to the, I think it's the TSC, I think.

Hein Engelbrecht: I think once we get to a level where either we're listed or not listed or they have already got control, it's obviously a discussion that we will have with them. No indication of which specific way we're going to go. Currently, as is, and like we've explained just now, we're focusing on the business. We've got our strategy, which we want to execute on, and we're going to carry on in that sense until such time maybe they do get involved on the board level or not, and they feel like we should be doing something different. Obviously, it will be the discussions we'll have at that point in time. Then if something needs to change or is going to change, we'll communicate that to the market.

Speaker #1: So is that. To committee, or whatever the case may be, where the different parties submitted their documentation, that's being reviewed and they are waiting for a ruling.

Speaker #1: When's it going to happen? It doesn't sound like they know. It could be soon, but I mean, this thing's been dragging on for a very, very long time already.

Speaker #1: So that's the, that's the most updated information that I've got is, it's, it's, it's waiting for the TSC to come up with a ruling on, on, on the way forward.

Speaker #2: How would you describe the current competitor environment across the group's businesses? How is trading developed since the financial year end?

Dimitri Tserpes: Could you provide an update on the settlement agreement relating to the TRP ruling and the Takeover Special Committee appeal? Has there been any further progress towards Takeover Special Committee confirmation, and what remains outstanding before the mandatory offer can be finalized?

Speaker #1: Trading has been fairly decent. I mean, we've, we've been not necessarily on the revenue side, but on the GP side, we've been close to the budget, in most, yeah, all of them.

Speaker #2: Yeah.

Speaker #1: So it's there. It's nothing spectacular. It is an environment now where, if you've got stock or inventory available, you tend to sell it quite quickly because there are constraints.

Hein Engelbrecht: I think it is probably best if you speak to the Novus guys. We are a bit removed from those discussions. The last that I heard is there were some submissions that was made to the, I think it is the Takeover Special Committee. I think it is that appeal committee or whatever the case may be, where the different parties submitted their documentation. That is being reviewed, and they are waiting for a ruling. When is it going to happen? It does not sound like they know. It can be soon. But this thing has been dragging on for a very long time already. That is the most updated information that I have got is it is waiting for the Takeover Special Committee to come up with a ruling on the way forward.

Speaker #1: So, you know, to a certain extent, you want to reduce your inventory to get certain levels of land. You want to keep some inventory, obviously, to be able to take advantage of the opportunities that do arise.

Speaker #1: But I think worldwide, the supply side is under pressure because of the demand.

Speaker #3: Yeah, we still see, there's based on industry outlook, there is the for the current shortages are, are expected to continue into, later into FY 26, into calendar year 2027.

Speaker #3: And we are still seeing, not as frequently as it was earlier this year, but we are still seeing price increases.

Dimitri Tserpes: How would you describe the current competitive environment across the group's businesses, and how has trading developed since the financial year-end?

Speaker #2: Final question from Richard: Could you provide some color on current inventory levels and aging, including provisioning for slow-moving inventory, particularly renewable energy-related stock?

Hein Engelbrecht: Trading has been fairly decent. We have been, not necessarily on the revenue side, but on the GP side, we have been close to the budget in all of them.

Speaker #1: Yeah, I think, I think we've covered that. hopefully that, hopefully that was also in the, in the presentation. But if it wasn't clear, please just pop us a mail or something and we can just go and revisit that.

Shabana Aboo Baker Ebrahim: Yeah.

Hein Engelbrecht: It is there. It is nothing spectacular. It is an environment now that if you have got stock or inventory available, you tend to sell it quite quickly because there are constraints. To a certain extent, you want to reduce your inventory to get certain levels. But on the other hand, you want to keep some inventory, obviously, to be able to take advantage of the opportunities that do arise. But I think worldwide, the supply side is under pressure because of the demand.

Speaker #2: Question from Anonymous: What social media term plans do you have in place to increase your ROE from the current approximate 6.7%, which is way below the cost of equity?

Speaker #2: What is your current target ROE? What role does the worldwide increase of semiconductor component prices, especially computer memory, have on your working capital requirements?

Shabana Aboo Baker Ebrahim: Yeah, we still see, based on industry outlook, the current shortages are expected to continue later into FY25 into calendar year 2027. We still are seeing, not as frequent as it was earlier in this year, but we are still seeing price increases.

Speaker #2: And have you seen memory prices moderating recently?

Speaker #1: I mean, the last one, no, we haven't seen the prices moderating. It's still increasing. There are some instances where it seemed to stabilize, but then it goes up again.

Speaker #1: From a working capital point of view, yes, it will take an effect, you know, increasing pricing. But at this stage, you know, with the drop in the market, I think it's equalized.

Dimitri Tserpes: One more question for Richard. Could you provide some color on current inventory levels and aging, including provisioning for slow-moving inventory, particularly renewable energy-related stock?

Speaker #1: We'll continue to work on the working capital—reduce as much net as we can until we're comfortable that, within the different operating entities, the debt that they do have, they can maintain, you know, they can service and support. And then, if there's excess capital, that'll obviously be a shareholder decision at a later stage, or a board decision. And then, you know, you've got this capital—what are you going to do with it?

Hein Engelbrecht: Yeah, I think we have covered that. Hopefully, that was also in the presentation. If it was not clear, please just pop us some email or something, and we can just go and revisit that.

Dimitri Tserpes: Question from anonymous. What short- and medium-term plans do you have in place to increase your ROE from the current approximate 6.7%, which is way below the cost of equity? What is your current target ROE? What role does the worldwide increase of semiconductor component prices, especially computer memory, have on your working capital requirements? Have you seen memory prices moderating recently?

Speaker #1: I think part of the challenge is, either it's going to be a substantial investment that's going to kick up our return on equity, or we're going to need to start looking at the equity side of the business.

Speaker #1: And so, are we going to reduce the equity? I think share buybacks are probably not on the table currently, because of, you know, the office that's out there, and what's happening currently.

Speaker #1: and then, maybe in a two, three years from now, consider maybe if, if, if, if it's affordable and we can, can then maybe dispatch after dispatch, you know, declare some, some special dividends to, to, to reduce the equity.

Hein Engelbrecht: Maybe the last one. No, we haven't seen the prices moderating. It's still increasing. There are some instances where it seemed to stabilize, but then it goes up again. From a working capital point of view, yes, it will take an effect, the increase in pricing. But at this stage, with the drop in the market, I think it's equalized. We will continue to work on the working capital, reduce as much debt as we can till we're comfortable that within the different operating entities, now that the debt that they do have, they can service and support. If there's excess capital, that will obviously be a shareholder decision at a later stage, or a board decision, and a shareholder decision at a later stage that you've got this capital, what are you going to do with it?

Speaker #1: so that's the plan, but at this stage, it's cash, cash, cash. reduce debt, and then if opportunities arise, we should be, should be able to, to, to, to take advantage of that.

Speaker #2: Question from Heinz Schenk: Hi Heinz. Bona, thank you for the presentation. Just from a very consumer-centric perspective, what is, from our expert view, the state of the consumer?

Speaker #1: No, I think we see it.

Speaker #2: Sustainable energies?

Speaker #1: sustainable energy?

Speaker #2: Yeah.

Speaker #1: Well, we've reduced our exposure there substantially. There are some opportunities still, but keeping in mind the really big stuff—generally, it comes with foreign funding, and they bring their own product.

Hein Engelbrecht: I think part of the challenge is, either it's going to be a substantial investment that's going to kick up our return on equity, or we're going to need to start looking at the equity side of the business and say, "How are we going to reduce the equity?" I think share buybacks is probably not on the table currently, because of the offices out there and what's happening currently. Then maybe in 2, 3 years from now, consider maybe if it's affordable, then we can then maybe declare some special dividends to reduce the equity. So that's the plan. But at this stage, it's cash. Reduce debt, and then if opportunities arise, we should be able to take advantage of that.

Speaker #1: But in the local market, call it the CEO market, small office/home office, and call it the consumer, there is still some demand, but obviously not remotely to what we've seen four years ago.

Speaker #1: So that helps us to reduce stock, and then obviously when we get down to a level where we're comfortable, we might look at maybe getting some more new product in. But until then, it's focused on getting rid of it.

Speaker #1: Trying to convert that 180-odd million rand into cash. And I think that will also help us then, you know, to build a bit of a cash pile—pile that we can obviously then deploy at either new acquisitions or to shareholders, or whatever the case may be.

Dimitri Tserpes: Question from Heinz Schenk. Hi, Hein and Siobhan. Thank you for the presentation. Just from a very consumer-centric perspective, what is, from Mustek's point of view, the state of the consumer?

Speaker #2: Question from Anonymous: What are the biggest AI opportunities that Mustek is capitalizing on?

Speaker #1: Well, I think on the hardware side, you know, you know, flip all the products to be supplying, hardware ready, whether it's PC, notebook, desk, you know, desktops, servers, yeah, all those type of things.

Hein Engelbrecht: No, I think we've seen-

Dimitri Tserpes: Sustainable energies.

Hein Engelbrecht: Sustainable energy.

Dimitri Tserpes: Yeah.

Hein Engelbrecht: Well, we have reduced our exposure substantially. There are some opportunities still. But keeping in mind, the real big stuff, generally, it comes with foreign funding, and they bring their own product. But in the local market, call it the SO market, small office/home office, and call it the consumer. There is still some demand, but not obviously up to the mark as what we have seen four years ago. So that helps us to reduce stock. Then, obviously, when we get down to a level where we are more comfortable, then we might look at maybe getting some more new product in. But till then, it is focused on getting rid of it.

Speaker #1: And then, obviously, with our investment in business, from an advisory point of view, we are assisting customers to get the right product and the right infrastructure in place.

Speaker #1: In the environment so they can benefit and get more profitable because of the use of AI.

Speaker #2: That's the last of our questions. I don't know if you want to give them a minute to make sure that we got everybody.

Hein Engelbrecht: Trying to convert that 180 odd million ZAR into cash, and I think that will also help us then to build a bit of a cash pile that we can obviously then deploy at either new acquisitions or return to shareholders or whatever the case may be.

Speaker #1: I think maybe the other one that hasn't popped up, but because I think it's a question out there is, is the regarding the reportable area like I already that, that, that, that our auditors have reported to Irva.

Speaker #1: Now maybe just some background on, on what that is and, you know, people saying, you know, what's the reputational risk and, you know, what's the risk for the business.

Speaker #1: I think, from a business point of view, there was no risk. From a reputational point of view, we don't believe that there are any.

Dimitri Tserpes: Question from anonymous. What are the biggest AI opportunities Mustek can capitalize on?

Hein Engelbrecht: I think it's on the hardware side. If you look at all the products we're supplying, hardware-ready, whether it's PC, notebook, desktops, servers. Yeah, all those type of things. Then obviously with our investment in Business AI, from an advisory point of view, assisting customers to get the right product and the right infrastructure in place in their environment so they can benefit and get more profitable because of the use of AI.

Speaker #1: but.

Speaker #3: The financial loss.

Speaker #1: Yeah, and there's been no financial loss. What it basically boils down to is, right in the beginning with the Novus transaction, when they realized that they were going to breach the 35% threshold, they prepared a firm intention offer to the market.

Speaker #1: As executives, we aligned with them, signing a consortium agreement and, you know, obviously publicizing and letting the market know that we consulted parties in this whole transaction going forward.

Dimitri Tserpes: There are still lots of other questions. I don't know if you want to give them a minute to make sure that we got everybody.

Speaker #1: Now, on that, we signed agreements on the 13th of November. On the 15th of November, you know, the SENS announcements went out regarding the firm intention offer, as well as the fact that we consulted parties.

Speaker #1: On that same day, independent board was established. You know, obviously to, to, to, to, to, to, to deal with all the regulated stuff from a mastech point of view, which excluded the executive directors.

Hein Engelbrecht: I think maybe the other one that hasn't popped up, but I think there's a question out there, is regarding the reportable irregularity that our auditors have reported to IRBA. Maybe just some background on what that is. People are saying, "What's the reputational risk?" "What's the risk of the business?" I think from a business point of view, there was no risk. From a reputational point of view, we don't believe that there are any.

Speaker #1: And we made them aware that, you know, we consulted parties and we're part of this, and obviously, that is—it's going to be handled independently.

Speaker #1: The first meeting where the whole transaction was discussed in detail by the independent board member who invited us to, you know, to sit in, was in—what was that?

Speaker #1: Somewhere in December, and at that stage, obviously, we declared to them our involvement in it. We showed them all the agreements; we presented all the agreements to them, and the process went on.

Shabana Aboo Baker Ebrahim: But there's been a financial loss.

Hein Engelbrecht: There's been no financial loss. What it basically boils down is, right in the beginning with the Novus transaction, where they realized that they're going to breach the 35% threshold. They prepared a firm intention offer to the market. As executives, we aligned with them, signing a consortium agreement. Obviously publicizing and letting the market know that we're concert parties in this whole transaction going forward. We signed the agreements on 13 November. On 15 November, the SENS announcements went out regarding the firm intention offer, as well as the fact that we're concert parties. On that same day, independent board was established, obviously to deal with all the regulatory stuff from a Mustek point of view, which excluded the executive directors.

Speaker #1: The auditors are. That the delay between the announcement that we had consulted the party and the date that we presented to the independent board were exact.

Speaker #3: Jones.

Speaker #1: Terms and the agreement weren't acceptable, and there was a time delay. We don't know what difference it would have made if we did give them all the agreements on day one.

Speaker #1: I think if we didn't declare that we've got any, and I think that will be the issue. But they felt that the time delay between the announcement that we consulted the party and the date at which we gave the actual agreements to the independent board caused certain concerns.

Speaker #1: And they felt that that is a breach of our fiduciary duty, and hence they reported that to Irva, which is the... But.

Speaker #3: Independent regulated board auditors.

Hein Engelbrecht: We made them aware that we're concert parties and we're part of this, and obviously that is going to be handled independently. The first meeting where the whole transaction was discussed in detail by the independent board, and they invited us to sit in, was in, what was that? Somewhere in December. At that stage, obviously, we declared to them our involvement in it. We showed them all the agreements. We presented all the agreements to them, and the process went on. The auditors are of the view that the delay between the announcement that we are a concert party and the date that we presented the independent board with the exact

Speaker #1: Of auditors, it's a non-recurring because, you know, when we gave the agreement, I mean, it was fixed. But they still felt that they needed to report it, and that's, that's where we are with that one.

Speaker #1: Right. So, yeah, once again, thank you very much for attending. Are we going to show them a—it's actually quite easy: INE@mustmakeinshabana.ai, Mastech. There we go.

Speaker #1: So if there are any more questions or you want to reach out to us, please feel free, and we really do appreciate your time that you spend with us. May we have, hopefully, a warmer day, although the full course is not from a warmer day because it's freezing in Madrid. But may we have a splendid day.

Shabana Aboo Baker Ebrahim: Terms

Hein Engelbrecht: terms and the agreement wasn't acceptable, the time delay. We don't know what difference it would have made if we did give them all agreements on day one. I think if we didn't declare that we've got any interest, nothing that will be issued. But they felt that the time delay between the announcement that we consulted the party and the date at which we gave the actual agreements to the independent board caused certain concerns, and they felt that that is a breach of our fiduciary duty, and hence they reported that to IRBA, which is the what?

Speaker #1: Thanks.

Speaker #3: Thank you very much.

Shabana Aboo Baker Ebrahim: Independent Regulatory Board for Auditors.

Hein Engelbrecht: Of auditors. It is non-recurring because when we gave the agreement, it was fixed. They still felt that they need to report it, and that is where we are with that one. All right. Once again, thank you very much for attending. We are going to show them. It is actually quite easy. heine@mustek.co.za and shabanaa@mustek.co.za. There we go. If there is any more questions or you want to reach out to us, please feel free, and we really do appreciate your time that you spend with us. May you have, hopefully, a warmer, although the forecast is not for a warmer day because it is freezing here in Midrand. May you have a splendid day. Thanks.

Shabana Aboo Baker Ebrahim: Thank you very much.

Hein Engelbrecht: Thank you.

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