Subdued market conditions resulted in no growth in revenue, which remained flat at R5,1 billion for the six months ended 31 March. However, effective action taken by management to counter the lack of growth in revenue and the negative effect of the strong rand on margins, enhanced Reunert’s operating profit by 9% to R582 million for the period.

The balance sheet remained strong with available cash of R1,4 billion. A higher tax rate reduced the growth in normalised headline earnings to 3% (238,9 cents per share).

NASHUA

Nashua performed well and revenue grew by 7% to R3,4 billion. Operating profit increased by 2% to R292 million.

The Office Automation operations had a particularly good start to the year. Unit sales were up on the same period last year despite a very competitive market that showed no growth overall.

The Electronics operations, comprising Nashua Communications and PanSolutions, performed in line with expectations. Nashua Communications, formerly Siemens Enterprise Communications, delivered pleasing results. The integration with Nashua Electronics is almost complete and the expected benefits of synergy are being realised. Exiting consumer electronics was a good decision, enabling PanSolutions to focus on business systems.

Nashua Mobile’s performance reflected the tough cellular communications environment in which it currently operates. Although net connections increased by 8%, revenue and operating profit remained virtually unchanged. The changes in termination rates have had no impact on the results to date.

The asset-backed finance activity of Nashua, Quince Capital, had a relatively good half. New business is of a high quality at margins reflecting the uncertain economic times. The first issue of commercial paper that forms part of a long-term funding programme should be placed shortly.

CBI-ELECTRIC

Revenue reduced by 18% to R1,3 billion as a direct result of a slump in demand for electrical products. Operating profit, however, increased by 8% to R218 million as a consequence of management actions that adjusted the operations to the lower levels of activity.

Energy Cables were not subject to copper pricing losses as experienced in the comparable period. Sales were at lower levels, but operating margins increased, as a consequence of cost reductions and improved efficiencies.

Low voltage experienced strong demand for its products from international markets. For the first time, export volumes far exceeded local volumes. Rand strength, however, significantly constrained growth in operating profit.

Telecommunications cables had a disappointing first period. Lack of demand for copper telecommunications cable led to a marked decline in revenue and operating profit. The anticipated roll-out of long-haul fibre networks is anticipated to start shortly.

REUTECH

Revenue from defence related equipment increased by 37% to R386 million. Rand strength led to a reduction in operating profit of 58% to R21 million primarily because of a mark-to-market loss of R6 million in respect of foreign currency holdings (versus a gain of R28 million in the comparable period).

NSN

Commission earned from our 40% interest in NSN decreased from R33 million a year ago to R31 million.

DIRECTORATE

At the annual general meeting held on 2 February 2010 Messrs MJ Shaw and KS Fuller retired from the board. The board expresses its appreciation to them for their valuable service to the group.

At the board meeting held on 2 February 2010 Ms ND Orleyn was appointed chairman of the remuneration committee, Mr R van Rooyen was appointed chairman of the audit and risk committee and Mr KJ Makwetla was appointed to the nomination committee.

PROSPECTS

Our businesses have been appropriately sized for current levels of demand. Sufficient capacity exists to take advantage of any improvement in the economy. Exports are strong, albeit at lower margins, because of a stronger rand.

Reutech is expected to be down on last year since most of its earnings are US$ based. In addition, delays in the placement of certain orders will lead to lower sales.

Based on the above and assuming stable economic conditions and given no surprises the group’s second half performance should be better than that of the first half.

The financial information provided above has not been reviewed or reported on by the company’s external auditors.

CASH DIVIDEND

Notice is hereby given that an interim cash dividend number 168 of 67 cents per share (2009: 65 cents per share) has been declared by the directors for the six months ended 31 March 2010. In compliance with the requirements of Strate, the following dates are applicable:

Shareholders may not dematerialise or rematerialise their share certificates between Friday, 11 June 2010 and Friday,
18 June 2010, both days inclusive.

On behalf of the board

Directors: T S Munday (Chairman)*, G Pretorius (Chief Executive), B P Connellan*, B P Gallagher, S D Jagoe*,
K J Makwetla*, T J Motsohi*, K W Mzondeki*, G J Oosthuizen, N D Orleyn**, D J Rawlinson, Dr J C van der Horst *,
R Van Rooyen*

*Independent non-executive   **Non-executive

Registered office: Lincoln Wood Office Park, 6 - 10 Woodlands Drive, Woodmead, Sandton. PO Box 784391, Sandton, 2146. Telephone +27 11 517 9000

Transfer secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001. P O Box 61051, Marshalltown, 2107

Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited),

Secretaries’ certification: In terms of Section 268 G(d) of the Companies Act, I certify that, to the best of my knowledge and belief, the company has lodged with the Registrar of Companies for the six months ended 31 March 2010 all such returns as are required by a public company in terms of the Companies Act and that all such returns are true, correct and up to date.

J A F Simmonds
For Reunert Management Services Limited
Company Secretaries

Enquiries: Carina de Klerk +27 11 517 9000 or e-mail invest@reunert.co.za.
For more information log on to the Reunert website at www.reunert.com