Results Comment- Friday, 02 February 2018

Hudaco final results November 2017

Turnover for the year went up 6.6% to R5.9 billion (R5.5 billion) whilst operating profit lowered by 5.7% to R676 million (R639 million). Profit attributable to equity holders grew 2.3% to R397 million (R388 million). Furthermore, headline earnings per share rose 2.8% to 1 256 cents per share (1 222 cents per share). Declaration of final dividend no 62 Final dividend number 62 of 380 cents per share (2016: 355 cents per share) is declared payable on Monday, 5 March 2018 to ordinary shareholders recorded in the register at the close of business on Friday, 2 March 2018. Directorate The company thanks Stuart Morris who retired from the board on 30 June 2017 for the significant contribution that he made to the group over the years and wish him well in his retirement. Mark Thompson was welcomed as a member of the board, the nomination committee and the audit and risk management committee and as chairman of the remuneration committee. Royden Vice, who has been an independent non-executive director since June 2007 and has served as chairman of the board since March 2008, has indicated that he will retire from the board after the annual general meeting in April 2018. Hudaco advised that Stephen Connelly, a non-executive director and former chief executive of Hudaco who knows the group intimately, will assume the chairmanship when Royden steps down. He will also chair the nomination committee. Daisy Naidoo will assume the role of lead independent non-executive director and will join the nomination committee. Nyami Mandindi will join the remuneration committee. All these appointments will take effect immediately after the annual general meeting. Results presentation and annual general meeting Hudaco will host presentations on the financial results in Johannesburg and Cape Town on Friday, 2 February 2018 and Monday, 5 February 2018, respectively. Anyone wishing to attend should contact Janine Yon at +27 11 657 5000. The slides which form part of the presentation will be available on the company's website from Friday, 2 February 2018. The company's 33rd annual general meeting will be held at Building 9, Greenstone Hill Office Park, Emerald Boulevard, Greenstone Hill, Edenvale at 11:00 on Thursday 5 April 2018. The notice and proxy form for the company's annual general meeting will be posted to the shareholders during the last week of February 2018 and will be included in the integrated report that will be published on Hudaco's website during February 2018. Company prospects Prospects for Hudaco in 2018 will depend on how the economy performs and that in turn depends largely on Government policy and its implementation. The year has started off in a much more positive vein with consumer and business confidence increasing after the election of Cyril Ramaphosa as president of the ANC. There is a great deal of optimism that he will deliver good governance, eradicate much of the corruption, put in place policies that support economic growth and assign responsibility to competent people. Withdrawal of the controversial Mining Charter would be a case in point. If that perception becomes a reality then the optimism is likely to translate into investment in those sectors of the economy that are traditional Hudaco markets. That will enable those of our businesses that have been in austerity mode for the past few years to thrive once again. Many of our businesses are well placed to benefit immediately from such a scenario, while others will need to wait for the positive cycle to mature first. If industry is active, we will supply the replacement parts it requires. We also believe that these positive developments, if they eventuate, will be enough to counter the pressure on pricing resulting from a strong Rand. On the other hand, if the government just delivers more of the same, we will again have to fall back on strategic acquisitions to deliver growth. We are optimistic.

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