AEL: ALLIED ELECTRONICS CORPORATION LIMITED - Unaudited Consolidated Interim Results for the six months ended 31 August 2018 and Interim Dividend Announcement
Unaudited Consolidated Interim Results for the six months ended 31 August 2018 and Interim Dividend Announcement

Allied Electronics Corporation Limited
(Registration number 1947/024583/06)
(Incorporated in the Republic of South Africa)
Share code: AEL ISIN: ZAE000191342
("Altron" or "the company")


2018 UNAUDITED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED
31 AUGUST 2018 AND INTERIM DIVIDEND ANNOUNCEMENT

HIGH LEVEL OVERVIEW

During the past financial half year Altron delivered substantially on executing its One Altron
strategy anchored in four strategic pillars, namely improve revenue growth, improve profitability,
transform the customer experience and employee excellence.

Key Results Highlights on a normalised (adjusted for restructuring costs during the period)
basis:

-   Revenue from continuing operations increased by 44% to R9.8 billion
-   EBITDA from continuing operations increased by 16% to R686 million
-   HEPS from continuing operations increased by 25% to 71 cents
-   Adjusted net debt reduced to R991 million
-   Free cash flow increased by 220% to R295 million
-   Interim dividend declared of 28 cents per share

The Altron group ("the Group") has made considerable progress in expanding its operations in
various jurisdictions, successfully integrating three acquisitions. 57% of the Group's revenue is
generated offshore, with Altron being the number one Microsoft licensing partner in the UK. 70%
of the Group's operations have net promotor scores above industry average. During the period
the company has further lowered debt levels and completed the divestment of non-core assets.

The Group has again delivered on the stated goal of consistent double-digit growth at an
EBITDA level despite the ongoing difficult local South African economy.

As announced through SENS on 29 September 2018, the Group completed the acquisition of
the iS Partners group, including its primary subsidiaries Karabina Solutions and Zetta Business
Solutions. iS Partners group adds to Altron's existing Microsoft business offerings and will be
integrated into the Group in building a cloud and data analytics business of scale.

An element of the Group's strategy was the disposal of the remaining non-core assets. This has
now been materially concluded. Powertech Transformers was disposed of with effect from 31
July 2018. As communicated to shareholders on SENS on 25 September 2018, agreement has
been reached to dispose of Altech UEC/Multimedia, the Group's last non-core control asset.
The final conditions precedent to this transaction, including Competition Commission approval,
are expected to be concluded by the end of November 2018.

As previously communicated at the Group's last results announcement, the Board has approved
a resumption in dividends payment to shareholders at 2.5 times cover ratio. This is a result of
the Group's much improved performance over the last eighteen months, which has resulted in
strengthening of the management and leadership team, driving top line growth, improved
profitability, better working capital management, selective bolt-on acquisitions in strategic areas,
as well as a much-improved balance sheet and cash generation for the Group, and has resulted
in the first dividend paid to shareholders since the financial year-ended February 2016.

FINANCIAL OVERVIEW

Due to the inclusion of non-core operations in the total results for the first six months, the
continuing operations' results provide stakeholders with an accurate measure of the core 
sustainable earnings of Altron.

Continuing operations
Revenue for the continuing operations grew by 44% to R9.8 billion, while EBITDA increased by
16% to R686 million on a normalised basis. Organic EBITDA growth for the period was 10%,
(excluding Altron ARH' ("ARH") 5% negative growth - see further comments
below) supported by acquisitive growth of 11%. The normalised EBITDA margin decreased to
7% compared to the prior period's 8.7%. The lower increase in EBITDA compared to revenue
increase, as well as the lower EBITDA margin for the current period, are both largely due to
some deliberate actions in the UK business. The Phoenix Software acquisition in the UK in
September 2017, which has more than doubled the profitability of our UK operations, is a high
volume but lower margin business due to its public sector focus. We are also pleased to report
that the borrowings relating to the purchase price for Phoenix Software were fully paid off. Bytes
UK also made a strategic decision to win the National Health Service ("NHS") contract at initially
much lower margins in return for future strategic trade-offs. Another less significant contributor
to the current period's lower margin were some delays experienced in some of the public sector
contracts for ARH. The latter's order book for the second half of the
year is satisfactory.

Normalised headline earnings increased by 26% from R210 million to R264 million while
normalised headline earnings per share grew by 25% to 71 cents against the prior period of 57
cents.

Discontinued operations
The results of the discontinued operations continued to show a significant improvement from
the previous financial half year. EBITDA improved to a profit of R65 million compared to a prior
period loss of R9 million. The main improvement came out of the Powertech Transformers and
Altech UEC/Multimedia businesses that delivered a strong EBITDA turnaround.

CASH MANAGEMENT

The overall net debt of R1.4 billion (R991 million when adjusted for disposal of group assets
and deferred receipts balances) showed a meaningful improvement on the 28 February 2018
year-end position of R1.9 billion due to increased cash generated from operations (R720 million
compared to R598 million for the prior period), as well as better working capital management.
This resulted in a 220% increase in free cash flow to R295 million, which enabled the Group to
allocate R249 million towards repaying its long-term loans during the period.

BUSINESS UNITS REVIEW

Bytes UK had another strong half year, growing revenue by 109% and EBITDA by 90% to R207
million. The performance of the business was positively impacted by the acquisition of Phoenix
Software in the second half of the previous financial year, which added scale to Bytes UK,
making it a significant player in the UK software market. Bytes UK further secured a five-year
GBP150 million contract with the NHS. The cross-selling of Altron's South
African CyberTech offering in the UK market is gaining traction.

Altron Bytes Secure Transaction Solutions ("BSTS") continued to perform well, growing revenue
by 15% and EBITDA by 22% to R134 million, driven by profit margins of 23% and a number of
new contracts secured during the period. BSTS maintains its status as a key growth focus for
the Group. All components of this business performed well, with the NuPay division again being
the outstanding performer. The HealthTech side of the business continues to grow its ecosystems 
and platforms to deliver higher value services to health care professionals as well as
the public health sector. FinTech is advancing its new product offerings into the unbanked
environment, which presents a significant growth opportunity for this division. The CyberTech
division is seeing gains from the completion of its technology centre to provide security for
customer networks.

ARH experienced a challenging first half of the financial year, with a number of delays in public
sector contracts. Despite this, the business continues to win and deliver on current broadband
network opportunities, such as the Phase 2 Gauteng broadband network contract, valued at
R2.8 billion over three years, building on its momentum of evolving into the preferred safe city
solution provider for the smart city evolution.

Altron Bytes Document Solutions ("BDS") has seen revenue improve by 9% to R720 million and
EBITDA increase by 28% compared to the prior period, supported by improved margins in the
production systems division. Strategically, the business remains focused on selected growth
areas, including managed print services and the high-end production environment. BDS' growth
strategy into the rest of Africa remains on course, with the business driving cross-selling of
Altron's other offerings into its extensive base of more than 4 500 customers.

Altron Bytes Managed Solutions ("BMS") reported revenue and EBITDA largely in line with the
prior year. The performance of this business is being improved through a conversion of the
traditional retail sector with new technologies such as self-service checkouts and an expansion
of managed services to incorporate Internet of Things ("IoT") solutions. Further improvement in the 
performance of BMS will be driven by the ongoing diversification of its offerings, such as the 
current launch of cloud-based retail solutions for the hospitality and restaurant sectors.

Altron Bytes Systems Integration ("BSI") produced strong EBITDA results through margin
increase and benefitting from some integration gains. EBITDA increased by 24% and revenue
by 12% against the prior year. Management is taking additional steps to improve EBITDA
margin by, inter alia, focusing the business on high-growth areas and reducing overhead costs.
BSI continues to refine its operating model through the streamlining of the business and driving
the Group's initiatives into IoT, Security, Big Data and Cloud solutions.

Altron Bytes People Solutions("BPS") grew revenue by 8%, with EBITDA improving by 21% against the
prior year, the latter as a result of efficiencies in the call centre business and a focus on outbound
sales campaigns. The business also saw the appointment of a new managing director, Mr
Igshaan Soules, during the reporting period. The business is set to grow through a broadening
of skills development offerings beyond ICT sector training, and driving efficiencies in the
Business Process Outsourcing environment by focusing on enabling technologies, including
robotic processes and multi-channels.

Under new leadership, Netstar is driving customer centricity and cost reductions, backed by
strong revenue and EBITDA growth at an organic level. The business in total reported an 11% increase
in revenue and a 14% improvement in EBITDA against the prior year. Netstar improved the
growth in its subscriber base, particularly in stolen vehicle recovery, with churn and retentions
under close control. Its most recent Australian acquisition, EZY2C, is performing well ahead of
prior year, with Altron's total market share in Australia now at 9%.

Altron Arrow's revenue was largely in line with the prior year, while EBITDA declined by 29%.
The reduction in EBITDA was primarily as a result of lower gross margin levels and overall
market pricing pressures, together with exchange rate fluctuations and supply chain delays. In
challenging economic conditions, the business maintained its leading component distributor
position in this market. Altron Arrow continues to work on key new lines of business, including
driving its eCommerce solutions. It is well placed to deliver in the second half of the financial
year through a strong order book on hand and sizeable new business opportunities.

DIVIDEND

Notice is hereby given that an interim gross cash dividend of 28 cents per share (22.4 cents net
of 20% dividend withholding tax) for the six months ended 30 August 2018 has been declared,
payable to shareholders recorded in the register of the company at the close of business on the
record date appearing below. The Board has confirmed by resolution that the solvency and
liquidity test as contemplated by the Companies Act, No. 71 of 2008, as amended, has been
duly considered, applied and satisfied. This is a dividend as defined in the 
Income Tax Act,No.58 of 1962 and is payable from income reserves. The income tax number of the 
company is 9725149711. The number of ordinary shares in issue at the date of this declaration 
is 399 186 510, including 28 180 080 treasury shares. The salient dates applicable to the interim 
dividend are as follows:

Dividend dates:

Last day to trade cum interim dividend        Tuesday, 13 November 2018
Commence trading ex interim dividend          Wednesday, 14 November 2018
Record date                                   Friday, 16 November 2018
Payment date                                  Monday, 19 November 2018

Share certificates may not be dematerialised or rematerialised between Wednesday, 
14 November 2018 and Friday, 16 November 2018.

DIRECTORATE

During the past financial half-year, our Board took further steps to ensure alignment to our new
ICT focused strategy and implementing its diversity policy at board level. As part of this process,
Ms Berenice Francis was appointed as an independent non-executive director on the Board
with effect from 21 June 2018. Shareholders also approved the appointment of Ms Francis as
a member of the Altron Audit Committee on 1 August 2018.

The Board further announced that Dr WP Venter, Chairman Emeritus and the founder of Altron
53 years ago, retired as non-executive director of the Board, with effect from 31 July 2018.

Mr Tim Jacobs resigned as acting Chief Financial Officer ("CFO"), with effect from 19 October
2018. Mr Andrew Holden, the current Chief Operating Officer ("COO") of Altron, was appointed
in the joint role of COO and acting CFO on 19 October 2018. As previously communicated, the
recruitment process of identifying a permanent CFO remains ongoing.

OUTLOOK

Altron remains well-positioned for continued growth and execution of its One Altron strategy of
offering end-to-end solutions to its extensive customer base. We continue to focus on organic
growth, supplemented by selective acquisitions. In particular, we will:

-   fully integrate Altron Karabina;
-   build stronger Cloud and Data Analytics capabilities;
-   operationalise the Huawei and Altron Internet of Things partnership;
-   establish a presence in India through Netstar; and
-   conclude a debt refinancing package.

This information is the responsibility of the directors and has not been reviewed or audited
by the auditors.


Johannesburg
25 October 2018


Sponsor
Investec Bank Limited


CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                                               Six months         Six months             Year
                                                                                    ended              ended            ended
                                                                                31 August          31 August      28 February
                                                                      %              2018              2017*            2018*
 R millions                                                      change       (Unaudited)        (Unaudited)        (Audited)
Continuing operations
Revenue                                                              44             9 779              6 792           14 743
Operating costs before capital items**                                            (9 102)            (6 248)         (13 518)
Earnings before interest, tax, depreciation and amortisation
and capital items (EBITDA before capital items)**                    24               677                544            1 225
Depreciation and amortisation**                                                     (256)              (210)            (442)
Operating profit before capital items                                26               421                334              783
Capital items (note 1)                                                                 16               (16)             (38)
Result from operating activities                                                      437                318              745
Finance income                                                                         72                 85              164
Finance expense                                                                     (162)              (172)            (342)
Share of profit of equity accounted investees, net of taxation                          -                (1)              (1)
Profit before taxation                                                                347                230              566
Taxation                                                                             (78)               (60)            (145)
Profit for the period from continuing operations                                      269                170              421
Discontinued operations
Revenue                                                                               921              1 905            2 938
Operating costs before capital items                                                (856)            (1 914)          (2 930)
Earnings before interest, tax, depreciation and amortisation
and capital items (EBITDA before capital items)                                        65                (9)                8
Depreciation and amortisation                                                           -                  -                -
Operating profit/(loss) before capital items                                           65                (9)                8
Capital items (note 1)                                                               (48)               (63)            (271)
Result from operating activities                                                       17               (72)            (263)
Finance income                                                                         13                 25               56
Finance expense                                                                      (14)               (42)             (77)
Profit/(loss) before taxation                                                          16               (89)            (284)
Taxation                                                                                4                (6)               31
Profit/(loss) for the period from discontinued
operations                                                                             20               (95)            (253)
Profit for the period from total operations                                           289                 75              168
Other comprehensive income
Items that will never be reclassified to profit or loss
Remeasurement of net defined benefit asset/obligation                                   -                  -              (5)
Items that are or may be reclassified subsequently
to profit or loss
Foreign currency translation differences in respect
of foreign operations                                                                 165                  5             (62)
Transfer to reserves                                                                    -                  -              (3)
Effective portion of changes in the fair value of cash flow hedges                     12                  5                2
Other comprehensive income for the period, net of taxation                            177                 10             (68)
Total comprehensive income for the period                                             466                 85              100
Net profit/(loss) attributable to:                                                                                                     
Non-controlling interests                                                             (3)               (12)             (19)   
Non-controlling interests from continuing operations                                    -                  7               17   
Non-controlling interests from discontinued operations                                (3)               (19)             (36)   
Altron equity holders                                                                 292                 87              187   
Altron equity holders from continuing operations                                      269                163              404   
Altron equity holders from discontinued operations                                     23               (76)            (217)   
Net profit for the period                                                             289                 75              168   
Total comprehensive income attributable to:                                                                                     
Non-controlling interests                                                               -               (11)             (18)   
Non-controlling interests from continuing operations                                    -                  7               17   
Non-controlling interests from discontinued operations                                  -               (18)             (35)   
Altron equity holders                                                                 466                 96              118   
Altron equity holders from continuing operations                                      434                178              356   
Altron equity holders from discontinued operations                                     32               (82)            (238)   
Total comprehensive income for the period                                             466                 85              100   
Basic earnings per share from                                                                                                
continuing operations                                    (cents)     66                73                 44              109   
Diluted basic earnings per share from                                                                                           
continuing operations                                    (cents)     64                72                 44              108   
Basic profit/(loss) per share from                                                                                              
discontinued operations                                  (cents)    129                 6               (21)             (58)   
Diluted basic profit/(loss) per share from                                                                                      
discontinued operations                                  (cents)    129                 6               (21)             (58)   
Basic earnings per share from total operations           (cents)    229                79                 24               51   
Diluted basic earnings per share from                                                                                           
total operations                                         (cents)    239                78                 23               50   

*   The group has initially applied IFRS 15 using the modified retrospective method. Under this method, the comparative information is not
    restated. During the current year, the group has also adopted IFRS 9 and, in accordance with the standard, comparative information has not
    been restated. See note 12.
**  Contract fulfilment costs relating to hardware and fitment have been reclassified to depreciation. These expenses were previously included
    in operating costs before capital items.

CONDENSED CONSOLIDATED BALANCE SHEET

                                                                                        Six months   Six months          Year
                                                                                             ended        ended         ended
                                                                                         31 August    31 August   28 February
                                                                                              2018        2017*         2018*
R millions                                                                             (Unaudited)  (Unaudited)     (Audited)     
Non-current assets                                                                           3 787        3 187         3 709   
Property, plant and equipment                                                                  618          570           615   
Intangible assets including goodwill                                                         1 761        1 193         1 669   
Equity-accounted investments                                                                    20           23            20   
Other investments                                                                              463          503           468   
Rental finance advances                                                                         88           95            98   
Contract fulfilment costs and other                                                            448          432           461   
Defined benefit asset                                                                          170          162           164   
Deferred taxation                                                                              219          209           214   
Current assets                                                                               6 169        5 626         5 749   
Inventories                                                                                  1 002          931           993   
Trade and other receivables                                                                  3 343        2 605         3 270   
Financial assets at fair value through profit and loss                                          83            -             -   
Contract assets                                                                                226            -             -   
Assets classified as held for sale                                                             274        1 013           714   
Taxation receivable                                                                              4            5             4   
Cash and cash equivalents                                                                    1 237        1 072           768   
Total assets                                                                                 9 956        8 813         9 458   
Equity and liabilities                                                                                                          
Total equity                                                                                 3 062        2 523         2 545   
Equity holders of Altron                                                                     3 264        2 760         2 790   
Non-controlling interests                                                                    (202)        (237)         (245)   
Non-current liabilities                                                                      1 192        1 694         1 491   
Loans                                                                                        1 128        1 633         1 413   
Provisions                                                                                       5            4             5   
Deferred taxation                                                                               59           57            73   
Current liabilities                                                                          5 702        4 596         5 422   
Loans                                                                                          354          323           314   
Bank overdraft                                                                               1 187          808           972   
Trade and other payables                                                                     3 014        2 654         3 582   
Financial liabilities at fair value through profit and loss                                     20            -             -   
Contract liabilities                                                                           762            -             -   
Provisions                                                                                      52           19            20   
Liabilities classified as held for sale                                                        196          739           465   
Taxation payable                                                                               117           53            69   
Total equity and liabilities                                                                 9 956        8 813         9 458   
Net asset value per share                                                           (cents)    880          744           752   

* The group has initially applied IFRS 15 using the modified retrospective method. Under this method, the comparative information is not
  restated. During the current year, the group has also adopted IFRS 9 and, in accordance with the standard, comparative information has not
  been restated. See note 12.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                        Attributable to Altron equity holders
                                                Share                                                           Non-
                                          capital and      Treasury                 Retained             controlling    Total
R millions                                    premium        shares     Reserves    earnings     Total     interests   equity
Balance at 28 February
2017 (Audited)*                                 2 747         (299)      (2 536)       2 356     2 268         (240)    2 028
Total comprehensive
income for the period
Profit for the period                               -             -            -          87        87          (12)       75
Other comprehensive
income
Foreign currency translation
differences in respect of
foreign operations                                  -             -            5           -         5             -        5
Effective portion of changes
in the fair value of cash flow
hedges                                              -             -            4           -         4             1        5
Total other comprehensive
income                                              -             -            9           -         9             1       10
Total comprehensive income
for the period                                      -             -            9          87        96          (11)       85
Transactions with owners,
recorded directly in equity
Contributions by and
distributions to owners
Dividends to equity holders                         -             -            -           -         -           (5)      (5)
Issue of share capital                            410             -         (10)           -       400             -      400
Share-based payment
transactions                                        -             -           13           -        13             -       13
Total contributions by and
distributions to owners                           410             -            3           -       413           (5)      408
Changes in ownership
interests in subsidiaries
Acquisition of subsidiary                           -             -            -           -         -             2        2
Buy-back of non-controlling
interest                                            -             -         (17)           -      (17)            17        -
Total changes in
ownership interests in
subsidiaries                                        -             -         (17)           -      (17)            19        2
Total transactions with
owners                                            410             -         (14)           -       396            14      410
Balance at 31 August 2017
(unaudited)*                                    3 157         (299)      (2 541)       2 443     2 760         (237)    2 523
Total comprehensive
income for the period
Profit for the period                               -             -            -         100       100           (7)       93
Other comprehensive
income
Foreign currency translation
differences in respect of
foreign operations                                  -             -         (67)           -      (67)             -     (67)
Remeasurement on net
defined benefit asset                               -             -          (5)           -       (5)             -      (5)
Transfer to reserves                                -             -          (3)           -       (3)             -      (3)
Effective portion of changes
in the fair value of cash flow
hedges                                              -             -          (3)           -       (3)             -      (3)
Total other comprehensive
income                                              -             -         (78)           -      (78)             -     (78)
Total comprehensive income
for the period                                      -             -         (78)         100        22           (7)       15

* The group has initially applied IFRS 15 using the modified retrospective method. Under this method, the comparative information is not
  restated. During the current year, the group has also adopted IFRS 9 and, in accordance with the standard, comparative information has not
  been restated. See note 12.

                                                         Attributable to Altron equity holders
                                                Share                                                           Non-
                                          capital and      Treasury                 Retained             controlling    Total
R millions                                    premium        shares     Reserves    earnings     Total     interests   equity
Transactions with owners,
recorded directly in equity
Contributions by and
distributions to owners
Share-based payment
transactions                                        -             -            7           -         7             -        7
Issue of share capital                              3             -          (3)           -         -             -        -
Total contributions by and
distributions to owners                             3             -            4           -         7             -        7
Changes in ownership
interests in subsidiaries
Buy-back of non-controlling
interest                                            -             -            1           -         1           (1)        -
Total changes in ownership
interests in subsidiaries                           -             -            1           -         1           (1)        -
Total transactions with
owners                                              3             -            5           -         8           (1)        7
Balance at 28 February
2018 (Audited)*                                 3 160         (299)      (2 614)       2 543     2 790         (245)    2 545
Impact of change in
accounting policy (note 12)                         -             -            -         (4)       (4)             -      (4)
Restated total equity
at the beginning of the
financial year                                  3 160         (299)      (2 614)       2 539     2 786         (245)    2 541
Total comprehensive
income for the period
Profit for the period                               -             -            -         292       292           (3)      289
Other comprehensive
income
Foreign currency translation
differences in respect of
foreign operations                                  -             -          165           -       165             -      165
Effective portion of changes
in the fair value of cash flow                
hedges                                              -             -            9           -         9             3       12
Total other comprehensive
income                                              -             -          174           -       174             3      177
Total comprehensive income
for the period                                      -             -          174         292       466             -      466
Transactions with owners,
recorded directly in equity
Contributions by and
distributions to owners
Dividends to equity holders                         -             -            -           -         -           (6)      (6)
Share-based payment
transactions                                        -             -           12           -        12             -       12
Issue of share capital                              1             -          (1)           -         -             -        -
Total contributions by and
distributions to owners                             1             -           11           -        12           (6)        6
Changes in ownership
interests in subsidiaries
Non-controlling interest
disposed                                            -             -            -           -         -            49       49
Total changes in ownership
interests in subsidiaries                           -             -            -           -         -            49       49
Total transactions with
owners                                              1             -           11           -        12            43       55
Balance at 31 August 2018
(unaudited)                                     3 161         (299)      (2 429)       2 831     3 264         (202)    3 062

* The group has initially applied IFRS 15 using the modified retrospective method. Under this method, the comparative information is not
  restated. During the current year, the group has also adopted IFRS 9 and, in accordance with the standard, comparative information has not
  been restated. See note 12.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                                       Six months    Six months          Year   
                                                                                            ended         ended         ended   
                                                                                        31 August     31 August   28 February   
                                                                                             2018          2017          2018   
R millions                                                                            (Unaudited)   (Unaudited)     (Audited)   
Cash flows from operating activities                                                          486            15           582   
Cash generated by operations                                                                  720           598         1 234   
Interest received                                                                              77            86           178   
Interest paid                                                                               (177)         (214)         (417)   
Dividends received from equity accounted investees                                                                              
and other investments                                                                           4             1            32   
Changes in working capital                                                                   (90)         (363)         (298)   
Taxation paid                                                                                (48)          (90)         (141)   
Cash available from operating activities                                                      486            18           588   
Dividends paid, including to non-controlling interests                                          -           (3)           (6)   
Cash flows utilised in investing activities                                                  (65)         (296)         (971)   
Proceeds on the disposal of subsidiaries and businesses net of cash                            73           117           233   
Acquisition of subsidiaries, net of cash acquired                                               -          (86)         (698)   
Acquisition of intangible assets                                                             (24)          (43)          (84)   
Acquisition of property, plant and equipment                                                 (72)          (99)         (194)   
Investment in contract fulfilment costs                                                      (95)         (118)         (257)   
Other investing activities                                                                     53          (67)            29   
Cash flows (utilised in)/from financing activities                                          (249)            73         (160)   
Loans repaid                                                                                (251)         (335)         (627)   
Proceeds from share issue                                                                       -           400           400   
Loans advanced                                                                                  -             -            67   
Other financing activities                                                                      2             8             -   
Net increase/(decrease) in cash and cash equivalents                                          172         (208)         (549)   
Net cash and cash equivalents at the beginning of the period                                (204)           329           329   
Cash and cash equivalents at the beginning of the period                                    (204)           417           417   
Cash previously classified as held for sale                                                     -          (88)          (88)   
Effect of exchange rate fluctuations on cash held                                              82            20            16   
Bank overdraft classified as held for sale                                                      -           123             -   
Net cash and cash equivalents at the end of the period                                         50           264         (204)   

NOTES

                                                                                       Six months    Six months          Year   
                                                                                            ended         ended         ended   
                                                                                        31 August     31 August   28 February   
                                                                                  %          2018          2017         2018*   
Cents                                                                        change   (Unaudited)   (Unaudited)     (Audited)   
Headline earnings per share from continuing operations                           49            70            47           119   
Normalised headline earnings per share from                                                                                     
continuing operations                                                            25            71            57           135   
Headline earnings/(loss) per share from                                                                                         
discontinued operations                                                         286            13           (7)             2   
Headline earnings per share from total operations                               108            83            40           121   
Diluted headline earnings per share from total operations                        95            78            40           120   

* The group has initially applied IFRS 15 using the modified retrospective method. Under this method, the comparative information is not
  restated during the current year. The group has also adopted IFRS 9 and, in accordance with the standard, comparative information has not
  been restated. See note 12.

BASIS OF PREPARATION

The condensed consolidated interim financial statements for the six months ended 31 August 2018 are prepared in
accordance with International Financial Reporting Standard, (IAS) 34 Interim Financial Reporting, SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee (APC), Financial Pronouncements as issued by
the Financial Reporting Standards Council (FRSC), and the requirements of the Companies Act of South Africa.

The condensed consolidated interim financial statements should be read in conjunction with the annual financial
statements for the year ended 28 February 2018, which  have been prepared in accordance with International
Financial Reporting Standards (IFRS).

This report was compiled under the supervision of Mr Tim Jacobs CA(SA), acting Chief Financial Officer. The
condensed consolidated interim financial results have not been audited or reviewed by the company's auditor,
PricewaterhouseCoopers Inc.

Principal accounting policies

The group has adopted all the new, revised or amended accounting pronouncements as issued by the International
Accounting Standards Board (IASB) which were effective for the group from 1 March 2018. The following standards
had an impact on the group:

- IFRS 9 Financial instruments (IFRS 9), and 
- IFRS 15 Revenue from Contracts with Customers (IFRS 15).

The accounting policies applied in the preparation of the condensed consolidated interim financial statements
are in terms of IFRS and are consistent with those accounting policies applied in the preparation of the previous
consolidated annual financial statements except for the adoption of the accounting standards as stated above.  
Refer to note 12 for details. 

                                                                                       Six months    Six months          Year   
                                                                                            ended         ended         ended   
                                                                                        31 August     31 August   28 February   
                                                                                             2018          2017          2018   
     R millions                                                                       (Unaudited)   (Unaudited)     (Audited)   
1.   CAPITAL ITEMS                                                                                                              
     Continuing operations                                                                                                      
     Net profit on disposal of property, plant and equipment                                   16             1             1   
     Impairment of property, plant and equipment                                                -             -          (17)   
     Impairment of intangible assets                                                            -          (17)             -   
     Impairment of goodwill                                                                     -             -          (30)   
     Reversal of provision related to East Africa disposal                                      -             -            10   
     Impairment of historic proceeds receivable                                                 -             -           (2)   
                                                                                               16          (16)          (38)   
     Discontinued operations                                                                                                    
     Impairment of property, plant and equipment                                              (6)             -             -   
     Impairment of intangible assets                                                         (22)             -           (6)   
     Impairment of held-for-sale disposal groups                                             (53)          (48)         (175)   
     Profit/(loss) on disposal of discontinued operations                                      30          (15)          (90)   
     Net profit on disposal of property, plant and equipment                                    3             -             -   
                                                                                             (48)          (63)         (271)   
     Total                                                                                   (32)          (79)         (309)   

2.   RECONCILIATION BETWEEN ATTRIBUTABLE
     EARNINGS AND HEADLINE EARNINGS                                                         
     Attributable to Altron equity holders                                                    292            87           187   
     Capital items                                                                             32            79           309   
     Tax effect of capital items                                                                2          (12)          (22)   
     Non-controlling interest in capital items                                               (18)           (5)          (26)   
     Headline earnings                                                                        308           149           448   

3.   RECONCILIATION BETWEEN ATTRIBUTABLE
     EARNINGS AND HEADLINE EARNINGS FROM
     CONTINUING OPERATIONS                                               
     Attributable to Altron equity holders                                                    269           163           404   
     Capital items                                                                           (16)            16            38   
     Tax effect of capital items                                                                5           (5)           (1)   
     Headline earnings                                                                        258           174           441   

4.   RECONCILIATION BETWEEN ATTRIBUTABLE
     EARNINGS AND HEADLINE EARNINGS FROM
     DISCONTINUED OPERATIONS                                             
     Attributable to Altron equity holders                                                     23          (76)         (217)   
     Capital items                                                                             48            63           271   
     Tax effect of capital items                                                              (3)           (7)          (21)   
     Non-controlling interest in capital items                                               (18)           (5)          (26)   
     Headline earnings                                                                         50          (25)             7   

5.   RECONCILIATION BETWEEN HEADLINE EARNINGS
     AND NORMALISED HEADLINE EARNINGS FROM
     CONTINUING OPERATIONS                                             
     Normalised headline earnings from continuing operations have                                                               
     been presented to demonstrate the impact of material one-off                                                               
     costs on the headline earnings of the continuing operations.                                                               
     The presentation of normalised headline earnings is not                                                                    
     an IFRS requirement.                                                                                                       
     Headline earnings are reconciled to normalised headline earnings                                                           
     as follows:                                                                                                                
     Headline earnings                                                                        258           174           441   
     Foreign currency losses on transaction funding/gains on deferred                           -             2           (6)   
     acquisition liability                                                                                                      
     Retrenchment and restructuring costs                                                       9            47            77   
     Acquisition related costs                                                                  -             -             8   
     Tax effect of adjustments                                                                (3)          (13)          (20)   
     Normalised headline earnings                                                             264           210           500   

6.   RECONCILIATION BETWEEN ATTRIBUTABLE EARNINGS AND DILUTED EARNINGS

     There were no reconciling items between attributable earnings and diluted earnings.

7.   DISPOSAL OF SUBSIDIARIES AND BUSINESSES

     Disposal of 80% interest in Powertech Transformers Proprietary Limited ("Powertech
     Transformers")
     Effective 31 July 2018, Powertech disposed of its collective 80% equity interest in Powertech Transformers for
     R250 million.

     This operation formed part of the Powertech group, which has been disclosed as a discontinued operation.

     R millions
     
     Net assets of the above operations disposed are as follows:           
     Non-current assets                                                                                                     2   
     Current assets                                                                                                       493   
     NCI                                                                                                                   49   
     Current liabilities                                                                                                (285)   
     Disposal value                                                                                                       259   
     Profit on disposal of subsidiaries                                                                                    30   
     Cash and cash equivalents disposed                                                                                  (39)   
     Proceeds receivable                                                                                                (189)   
     Proceeds received on disposal                                                                                         61   

8.   DISCONTINUED OPERATIONS

     Impairment of held-for-sale disposal groups

     Previously, the decision was taken to dispose of the Powertech group and the Multimedia group and, as a result,
     these businesses have been classified as discontinued operations. The relevant requirements of IFRS 5 have
     been met for this classification.

     The disposal groups are stated at fair value less costs to sell. The non-recurring fair value measurement of
     the disposal groups was determined with reference to amongst other things indicative offers from prospective
     buyers and any shortfall to the carrying value was then impaired.

     The impairments charged in the current period reflect a decline in expected proceeds due to the prolonged
     disposal processes and the performance of the operations.

     Powertech Transformers was disposed of in the current period (note 7).

     Management believes that the conclusion of the remaining disposals will be effected within the next 12 months.

     The Powertech and Mutimedia group businesses were previously classified as held-for-sale as well as
     discontinued operations.
     
                                                                                          31 August   31 August   28 February   
     R millions                                                                                2018        2017          2018   
     Net assets of disposal groups held for sale:                                                                               
     Assets classified as held for sale                                                         274       1 013           714   
     Non-current assets                                                                          75         256           129   
     Current assets                                                                             199         757           585   
     Liabilities classified as held for sale                                                  (196)       (739)         (465)   
     Non-current liabilities                                                                      -         (9)           (5)   
     Current liabilities                                                                      (196)       (730)         (460)   
     
                                                                                          31 August   31 August     31 August   
                                                                                               2018        2018          2018   
                                                                                         Multimedia                             
     R millions                                                                               group       Other         Total   
     Breakdown of disposal groups held for sale:                                                                                
     Assets classified as held for sale                                                         233         128           361   
     Non-current assets                                                                          34         128           162   
     Current assets                                                                             199           -           199   
     Impairment of held for sale disposal group                                                                          (87)   
                                                                                                                          274   
     Liabilities classified as held for sale                                                  (196)           -         (196)   
     Non-current liabilities                                                                                  -             -   
     Current liabilities                                                                      (196)                     (196)   
     
                                                                        28 February   28 February   28 February   28 February   
                                                                               2018          2018          2018          2018   
                                                                          Powertech    Multimedia                               
     R millions                                                        Transformers         group         Other         Total   
     Breakdown of disposal groups held for sale:                                                                                
                                                                                670           228           138         1 036   
     Non-current assets                                                         224            60             5           289   
     Current assets                                                             446           168           133           747   
     Impairment of held for sale disposal group                                                                         (322)   
     Assets classified as held for sale                                                                                   714   
     Liabilities classified as held for sale                                  (263)         (160)          (42)         (465)   
     Non-current liabilities                                                      -           (5)             -           (5)   
     Current liabilities                                                      (263)         (155)          (42)         (460)   
     
                                                                                        Six months   Six months          Year   
                                                                                             ended        ended         ended   
                                                                                         31 August    31 August   28 February   
     R millions                                                                               2018         2017          2018   
     Cash flows utilised in discontinued operations                                                                             
     Net cash utilised in operating activities                                                 110          (6)         (178)   
     Net cash generated from investing activities                                               62           84           186   
     Net cash utilised in financing activities                                                   -          (1)           (9)   
     Net cash flow for the period                                                              172           77           (1)   
     
9.   FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS

     The group measures two preference share investments, its derivative foreign exchange contracts used for
     hedging and contingent purchase considerations at fair value.

     Accounting classifications and fair values

     The following table shows the carrying amounts and fair values of financial assets and liabilities, including their
     levels in the fair value hierarchy.