Trading statement 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") 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 year ended 30 April 2019 of between 3,8 cents and 5,1 cents per share when compared to the earnings per share ("EPS") of 6,84 cents per share for the year ended 30 April 2018. A headline loss per share ("HLPS") for the year ended 30 April 2019 of between 3,0 cents and 4,5 cents is also expected compared to the headline earnings per share ("HEPS") of 7,89 cents per share for the year ended 30 April 2018. The decline is mainly attributable to:- - a marginal decline in revenue compared to the 2018 fiscal year; - new management re-assessing the saleability of inventory and the recoverability of accounts receivable, both of which resulted in write-downs and increases in provisions; - impairment of the Ellies Industries Pty Ltd manufacturing plant in light of losses due to a lower throughput as a result of lower demand for the Company’s products; - significant operating expenses which included consulting and legal fees in dealing with a number of legacy litigation issues. The interim financial results for the six months ended 31 October 2018 ("Interim Results") included R75 million in respect of a profit on the discontinued operation of Botjheng Water ("Botjheng Water"), which after netting off legal fees and other expenses amounted to R69,8 million. It was expected by the then board of directors that Botjheng Water would be liquidated and deregistered by year end. Due to changes at executive level, the liquidation and deregistration were not concluded. The new Board, appointed on 4 April 2019, reviewed the decision and concluded that it was premature to deconsolidate Botjheng Water and reversed the decision. This resulted in the R75 million profit from the deconsolidation of Botjheng Water, not being included in the year-end results. During the period, R33 million was received from the Cooperative Muratori Cementisi Ravenna arbitration which has the effect of reducing the debt owing by Botjheng Water. Whilst a further gain is expected to be realised when Botjheng Water is wound up in a future period, it will not result in a cash flow. The financial results for the year ended 30 April 2019 are anticipated to be released on or about 31 July 2019. The forecast financial information on which this trading statement is based has not been reviewed or reported on by the Company´s external auditors. 24 July 2019 Sponsor Java Capital Date: 24/07/2019 02:30:00 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.