Results of operations continued…
Adapt IT (Proprietary) Limited (“Adapt IT (Pty) Ltd”) contributed a profit before tax of R11.2 million (2009: R8.0 million), ITS Holdings, consolidated for eight months, contributed a profit before tax of R2.5 million. ApplyIT (Proprietary) Limited (“ApplyIT”) contributed a loss before tax of R0.3 million, previously a profit of R3.8 million to the group.

The group incurred non-recurring transaction costs, relating to the ITS Holdings acquisition, which were fully expensed in the period. The difficult market conditions prevailing mainly in the manufacturing and mining sectors have adversely impacted the results of certain operations exposed to these sectors, notably ApplyIT. There are however indications that these market conditions are improving. The improved market diversification of the group pursuant to its acquisitive strategy has mitigated some of the impact of the economic environment, enhancing the sustainability of the group.

Change of year-end
Pursuant to the ITS Holdings acquisition, the group’s financial year-end was changed to 30 June. The current financial reporting period has therefore been extended to 16 months.

Dividend
Ordinary dividend number 7 of 1.86 cents per share was paid to shareholders on 6 July 2009. This represented a five times dividend cover. The group has a policy to declare dividends at the end of the financial year and not at the interim reporting date. A dividend will be considered at the financial year-end.

Strategy
The group’s strategic objectives remain to increase operational efficiency, defend current markets, pursue organic growth, and pursue acquisitive growth into new markets, whilst being cognisant of ensuring sustainable growth in light of current market conditions.

The board
The board appointed Messrs PCM September and M Nhlapo as additional independent non-executive directors on 1 January 2010 and 11 March 2010 respectively. The board looks forward to their contribution over the coming years. These appointments form part of the group’s ongoing commitment to improving corporate governance and enhancing the strategic leadership of the group. W Mann resigned as company secretary of the group on 19 February 2010 and was replaced by RL Moodley. RP Collis resigned as nonexecutive chairman on 30 September 2009 and was replaced by Dr AB Ravnö.

Relocation
In January, Adapt IT (Pty) Limited relocated to a new office in La Lucia Ridge, which is also the registered office of all group companies. The office is a green building and includes a new technical infrastructure, which enhances the efficiency, security and reliability of our operations and allows for future growth.

Prospects
Notwithstanding the current economic situation, we are positive about the prospects of the group going forward, as the group is able to offer a more comprehensive service offering which will position us for growth within our target markets.

Appreciation
We express our thanks to our longstanding and new customers for their continued support. We also recognise all employees of the group for their dedication and hard work in serving our customers.

Dr AB Ravnö Independent non-executive Chairman

Sbu Shabalala Chief Executive Officer