ELLIES HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2007/007084/06)
JSE share code: ELI ISIN: ZAE000103081
(“Ellies” or the “Company” or the “Group”)


TRADING STATEMENT


In terms of the JSE Listings Requirements, companies are required to publish a trading statement as soon as they are satisfied
that a reasonable degree of certainty exists that the financial results for the period to be reported upon next will differ by at
least 20% from the previous corresponding period.

Shareholders are accordingly advised that Ellies expects a loss per share (“LPS”) for the financial year ended year 30 April
2023 of between 10,07 cents and 11,26 cents per share (being an increase of between 69% and 89%) when compared to the
LPS of 5,96 cents for the year ended 30 April 2022. A headline loss per share (“HLPS”) for the financial year ended 30
April 2023 of between 10,20 cents and 11,62 cents (being an increase of between 43% and 63%) is also expected compared
to the HLPS of 7,13 cents per share for the year ended 30 April 2022. As reported in the interim results, the restructure
process had an impact of R 18 million in respect of retrenchment costs and amounts to 2.24 cents per share of LPS and
HLPS in the current year.

Over the course of the Group’s financial year, 1 May 2022 to 30 April 2023, the South African economy experienced a
deterioration in many economic indicators, rising inflation, the impact of the war in Ukraine on fuel costs, increasing interest
rates with the prime rate having commenced the year in May 2022 at 7.75% and ending in April 2023 at 11.25% It was a
tough year for the consumer and in turn for retail spending. Consumer confidence, whilst initially showing signs of
improvement in the first half of the financial year, subsequently slumped in the second half with consumer spending on
essentials taking a bigger share of the consumer wallet and placing the share of discretionary expenditure under pressure.

The Group had a disappointing second half of the financial year with reduced revenue when compared with the first half.
The continued decline in the satellite installation business especially due to the FIFA World Cup also being broadcast on
SABC, as well as the impact of the restructure put revenue under pressure in the second half. Whilst the Group saw increased
demand for Ellies’ products in solar, generator, backup power and surge protection due to the impact of increased
loadshedding, the Group was not able to maximize the opportunity with constrained working capital and therefore was
unable to leverage scale for better competitive pricing and additional inventory.

The interim results reported on the restructure that the Group had embarked on during the 2023 financial year in order to
reposition the business. We are happy to report that this process is now substantially complete, and the Group has begun to
see the benefits of the reduced operating cost base, being one of the objectives of the restructure. The second objective of
the operational restructure was to provide the foundation for the Group’s strategy of diversifying away from the purely
traditional satellite business toward a smart home infrastructure business, including comprehensive solutions for alternative
energy, water storage, connectivity, and the connected home.

It was reported in the interim results that the Group had signed a term sheet with its bankers for an increased working capital
facility. Ellies expects the new facility agreements to be finalised and implemented during August 2023, thereby providing
the working capital support to execute on the Group’s strategy discussed above.

Ellies reported to the market in February 2023 that the Group had concluded an agreement to acquire 100% of the members
interest in Magetz Electrical cc and Power On Wheels cc (collectively, "Bundu Power"), and later in June 2023, we
announced that the Group would undertake a fully underwritten rights offer, with the support of the Group’s two largest
shareholders, in the amount of R120 million through the issue of new Ellies shares at an issue price of R0.07 per share, in
order to fund the initial payment due to the sellers of Bundu Power. The Group expects further details in this regard to be
distributed to shareholders after the publication of the Group full year results.

Bundu Power had an exceptional year with revenue growth of over 60% and growth in after tax profits from R11.2 million
for the year ended 28 February 2022 to R32.4 for the year to 28 February 2023.
The acquisition is a key part of the strategy to expand the Group’s footprint into alternative power. Additionally, it
strengthens the Group’s balance sheet and earnings and provides a platform asset in the strategy pivot toward the smart
home infrastructure business.

The board and management believe that with the acquisition of Bundu Power, the expected increase in working capital
facilities and the conclusion and benefits realised from the restructure, the Group will be well positioned for the next
financial year.

The financial results for the year ended 30 April 2023 are anticipated to be released on or about 31 July 2023.

The forecast financial information on which this trading statement is based has not been reviewed or reported on by the
Company´s external auditors.

25 July 2023

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