CIC Holdings Limited - Reviewed group results for the year ended 28 February 2010

REVIEWED GROUP RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2010 KEY INFORMATION
- Profit from operations up 49,6% to N$105,1 million.
- Headline earnings up 24,4% to N$58,2 million.
- Headline earnings per share up 24,3% to 25,6 cents.

COMMENTARY
The Group's income streams emanate from three main business segments, being the agency division, sales and merchandising and staffing solutions. Revenue growth has been satisfactory in most markets, given the challenges in African economies and the global financial crisis.
Whilst businesses outside of South Africa fared better for the period, the general trend can be described as positive. The agency divisions remain the largest segment of the Group's business both from a revenue and profit perspective, followed by the sales and merchandising business, and then staffing solutions.

RESULTS
Total revenue for the period increased by 12% to N$2,5 billion. Profit from operations grew a satisfactory 49,6% to N$105,1 million and operating profit margins improved to 4,2% from 3,1%.
This growth was due to a combination of improving category mix in the agency divisions, good margin improvements in staffing solutions, and acquisitions within the sales and merchandising space.
Foreign exchange exposure in the Mozambique operations resulted in a loss of N$9,5 million. This was due to a weakening of the Mozambique Metical against theRand during the period.
Profit before tax improved 37,6% to N$95,2 million. Income tax charges were adversely affected by secondary, withholding and additional taxes that relate mainly to dividend payments by Group companies.

SEGMENTAL REVIEW AGENCY DIVISIONS
All businesses performed to expectation at operating profit level. The performance of this division was marred by the significance of the foreign exchange loss in the Mozambican business.
Namibia enjoyed good top line trading with good additional volumes being generated cross border with Angola for most of the year. Botswana also enjoyed top line growth in many categories with some Zimbabwean cross border upside in the first six months of the year.

Mozambique experienced a difficult year of trading as the local currency played havoc with pricing to the customers as the currency devalued. Consumers resisted price increases and consumption in almost all categories were negatively affected. A number of new categories were added during the year which assisted
in bolstering the basket of sales. Whilst this year has had its challenges there remains a good air of optimism with an expected improvement in the local economy.

STAFFING SOLUTIONS
The staffing solutions business performed well in a tough trading environment. The hospitality division increased its customer base and performed to expectation.
The Botswana division performed particularly well as it expanded its service offering during the year.

SALES AND MERCHANDISING
The Group is now well represented throughout South Africa. CIC increased its shareholding in Vital Merchandising Services Holdings (Pty) Limited ("VMS") by 24,5% during the year. VMS acquired a major shareholding in Peak Instore (Pty) Limited, a brand activations company, during the last quarter.
Profitability was bolstered somewhat by the increase in shareholding in the sales and merchandising business. The business as such performed fairly well in South Africa against the backdrop of a slow economy, high wage increases and trade destocking.

PROSPECT
The fall of published inflation numbers may well be a positive sign for the regional economy. However, higher wage increases and the threat of lingering and persistent high fuel prices will aggravate cost increases and put pressure on margins.
In many instances there are price decreases in the pipeline that merely aggravate margin pressure, whilst consumers remain hawkish regarding increased spending.
Focus will have to be on cost innovation to impact positively on margins, but not affecting service delivery.
It is hoped that there is stability in Mozambique towards the World Cup. In addition the government published salary and wage increases at a new minimum level in May. It is hoped that this will restore some upside to consumer spending, particularly around the World Cup.
Staffing solutions should enjoy some strong upside with the World Cup activity in the hospitality sector in the first six months of the financial year. The Group has a major shareholding in Horizon Distributors Limited, an agency business based in Zambia. This is a start up business and it is an exciting
venture for the Group. A number of Principals have already signed up, with exciting prospects of additions during the year. Whilst the business will achieve profitability for the full year, it is anticipated that meaningful
results will be achieved in the second year of operation.

The Group continues to focus on acquisitions and expansions within the Southern African region. This remains a cornerstone requirement for growth to expand CIC's footprint in Africa.

The Group acquired a further effective 24,5% interest in VMS. As result of the transaction VMS became a subsidiary of CIC and is no longer treated as an Associate. In terms of IFRS 3 (revised) a deemed disposal of the equityaccounted investment took place at fair value when the additional shares were
acquired. This resulted in an accounting loss of R5,4 million which represents the difference between the carrying value and the fair value of the equity accounted investment on the effective date. This loss is excluded from the calculation of Headline Earnings.

Operating lease commitments
The Group has outstanding operating lease commitments totalling N$85,3 million  (2009 - N$87,1 million).

Dividend
The directors are pleased to announce that they have declared a final dividend of 7 cents per share on 12 May 2010 (2009 - 5,5 cents). Shareholders are further advised that non-resident shareholders' tax ("NRST") of 10% is deductible by CIC from any dividend distributed by CIC to its shareholders who are non-resident in Namibia and who do not carry on business in Namibia.

The salient dates for the payment of this dividend are set out below:
Last date to trade cum dividend Friday, 25 June 2010
Trading ex dividend commences Monday, 28 June 2010
Record date Friday, 2 July 2010
Payment date Monday, 5 July 2010