Cognition Holdings Limited (JSE:CGN) News - Unaudited Condensed Consolidated Interim Results for the Six Months Ended 31 December 2021 COGNITION HOLDINGS LIMITED Incorporated in the Republic of South Africa (Registration number: 1997/010640/06) Share code: CGN ISIN: ZAE000197042 (“Cognition” or “the Group” or “the Company”) SHORT FORM ANNOUNCEMENT - UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 Financial Position as at: 31 Dec 2021 31 Dec 2020 30 Jun 2021 (Unaudited) (Unaudited) (Audited) Change R’000 R’000 R’000 Total assets -19.9% 247 719 309 196 298 173 Cash and cash equivalents 11.3% 105 270 94 611 109 811 Capital and reserves -22.4% 190 424 245 254 243 029 Total liabilities -10.4% 57 295 63 942 55 144 Financial Performance for the period: Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 31 Dec 2021 31 Dec 2020 30 Jun 2021 R’000 R’000 R’000 Revenue -1.6% 120 598 122 610 230 562 Gross profit -0.6% 101 602 102 182 198 670 (Loss) / Profit before tax -442.9% (54 062) 15 764 18 957 Total comprehensive (loss) / income -570.8% (52 414) 11 132 11 455 Earnings per share: Basic (loss) / earnings per share (cents) -912.0% (23.81) 2.93 0.90 Headline (loss) / earnings per share (cents) -123.9% (0.70) 2.93 3.03 Net asset value: Net asset value per share (cents) -26.6% 71.40 97.24 95.21 Net tangible asset value per share (cents) -1.2% 38.52 38.99 39.22 After many challenges within the Cognition group and the depressed business environment during the past six months, Cognition saw several board changes and an overall reduction in income and earnings. It has become increasingly clear that, while the world looks to recover from the global pandemic, Cognition is at a point where it can reset, rebuild, and focus on core strategies that will improve the future of the business. It has been evident that several business areas need to be strengthened, which has led us to focus on areas that we can improve on and allow us to respond more effectively to our customers and their requirements. We will focus on delivering improved performance, collaborating better with group companies, with the goal of better returns to shareholders over the medium and long term. The decline in earnings per share is the result of: • a strategic investment by Private Property South (Pty) Ltd (“PPSA”) into core systems and process which resulted in an increase in PPSA’s operational costs and staff cost base and which is expected to continue for the medium term resulting in an impairment of goodwill amounting to R41.6 million; • the impairment of other intangible assets amounting to R11.3 million; and • a loss of R3.2 million arising from the disposal of a subsidiary. Prospects Albeit early days in the turnaround plan at Cognition Holdings, the general confidence within the business is improving daily with a clear sense of direction. In addition, management has identified several key initiatives that will strengthen the core of the Company and drive revenue and profit growth. These include, but are not limited to, the following: • A clear focus on increasing technological capacity, which will enable us to react quickly to customer needs; • Improved solutions for customers to drive revenue growth; • Right-sizing of the business, and simplification of internal systems and processes; • Ongoing monitoring and control of costs within the business; and • This direct and strategic focus leaves us in a solid position to make concise and accurate decisions regarding future acquisitions better aligned with our fundamental strategy, enabling immediate integration and faster growth. DIVIDEND POLICY Given the current uncertain market conditions the Group wishes to preserve its cash resources and the board has therefore resolved not to declare an interim dividend. Directors: Paul Jenkins#* - Chairman, Rob Fedder – Chief Executive Officer, Pieter Scholtz - Financial Director, Graham Groenewaldt – Sales Director, Steve Naudé#*, Miles Crisp #*, Dennis Lupambo#*, Servaas de Kock #, Amasi Mwela# # Non-executive * Independent This short-form announcement is the responsibility of the directors. This announcement is only a summary of the information in the full announcement and does not contain full or complete details. The full announcement is available at https://senspdf.jse.co.za/documents/2022/jse/isse/cgn/interim22.pdf and can be found on the Company’s website at www.cognitionholdings.co.za. Copies of the full announcement may also be requested at the Company’s registered office or the office of the sponsor, Merchantec Capital, at no charge, during office hours. Any investment decision should be based on the full announcement released on SENS and published on the Company’s website. Johannesburg 7 March 2022 Sponsor Merchantec Capital Date: 07-03-2022 05:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.