Since the announcement of our 2008 results in November last year, market conditions have deteriorated radically. Consequently, revenue in the interim reporting period increased by only 1% to R5,1 billion compared to a year ago. The steep decline in volumes, specifically in our electrical engineering operations, resulted in operating profit decreasing by 27% to R531 million.

The lower levels of activity and prudent cash management have resulted in working capital decreasing with a corresponding increase in cash and cash equivalents to R962 million at the end of March. Net interest and dividend income increased by 69% and coupled with a lower tax rate, limited the decline in normalised headline earnings per share to 16% (232 cents per share).

Surprisingly the electrical engineering group, CBI-electric, excluding the telecommunication cables operation, which is directly exposed to infrastructure developments suffered significant volume declines. In addition, the collapse in the copper price led to once-off charges of R52 million.

Revenue decreased by 8% to R1,6 billion whilst operating profit dropped by 38%. The depreciation of the rand tended to offset some of the decline in volume preventing revenue from slipping further and as a result margins and cash flows held up remarkably well. Capital expenditure programs are being maintained.

Volume declines are attributable to fewer building plans approved, the slowdown in mining activities and destocking by customers. The demand for supertension cable is strong and a second production line has been commissioned. Unfortunately this will not be sufficient to compensate for the drop off in general demand for power cable.

The export of low-voltage products (circuit breakers for protection) remained strong despite the global economic downturn. Margins increased as a result of the weakening rand and bolstered the results.

The telecom cable operation performed better than in the comparable period. The demand for copper telecommunication cable was healthy while fibre demand remains subdued. Signs of increased demand for fibre cable are very positive based on the announced roll-outs of fibre networks for MTN, Vodacom and Neotel.

Revenue was up by 1% to R3,1 billion while operating profit was down by 13% to R269 million. Increased bad debts and lack of consumer financing negatively impacted results.

Our decision to exit the consumer electronics business was prudent and timeous. Exiting the business did not occur without cost, but positive results are expected going forward. From 1 April 2009, Panasonic Japan will distribute consumer products directly to the South African consumer market. Our cooperation with Panasonic will continue as we will be the sole representative of all business systems products. Building this business to acceptable levels of profitability is a priority.

Despite an increase in bad debts Nashua Mobile maintained profitability while increasing revenue marginally. Additional care is being taken to connect only credit worthy customers. It will be difficult to achieve future growth as subscribers cut back on airtime spend.

Office systems performed satisfactorily in an environment where customers found it very difficult to obtain finance. The relative change in the rand/yen versus the rand/euro exchange rate will enhance our competitive position in this business. We are confident that unit sales will increase going forward.

The finance company, in line with the difficulty of obtaining capital, tightened credit vetting criteria and adjusted margins to reflect increased risk. A conscious decision was taken to reduce the book in an orderly way. The benefits of this approach will be realised in future.

The first half of the year was a preparation period for Reutech to fulfil existing contract obligations. Deliveries commenced late in the second quarter and are now in full swing. Favourable exchange rates have been locked in for the remainder of the financial year. Reutech is expected to perform well ahead of last year.

Commission income, now disclosed as revenue and not other income, decreased from R86 million to R65 million on a comparable basis. The market is expected to remain subdued whilst competition is on the increase. Full year results are thus expected to be down compared to those of a year ago.

It is unlikely that the South African economy will turn positive in the short term. Recovery in South Africa will depend on a global recovery.

Previously we indicated that we were hopeful of achieving a result similar to that of the past financial year. The severity of the downturn will cause this to be challenging.

Notice is hereby given that interim ordinary share dividend Number 166 of 65 cents per share (2008: 78 cents per share) has been declared by the directors for the six months ended 31 March 2009. In compliance with the requirements of Strate, the following dates are applicable:

Shareholders may not dematerialise or rematerialise their share certificates between Friday, 12 June 2009 and Friday, 19 June 2009, both days inclusive.

REUNERT LIMITED (“REUNERT”)
Incorporated in the Republic of South Africa (Registration number 1913/004355/06)
Share code: RLO     ISIN code: ZAE000057428

Directors: MJ Shaw (Chairman)*, G Pretorius (Chief Executive), BP Connellan*, KS Fuller*,
BP Gallagher, SD Jagoe*, KJ Makwetla*, TJ Motsohi*, TS Munday*, GJ Oosthuizen, ND Orleyn**,
DJ Rawlinson, Dr JC van der Horst*
*Independent non-executive     **Non-executive

Registered office: Lincoln Wood Office Park
6 – 10 Woodlands Drive, Woodmead, Sandton
PO Box 784391, Sandton, 2146
Telephone +27 11 517 9000

Transfer secretaries: Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107

Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited)

Secretaries’ certification
In terms of section 268 G(d) of the Companies Act, 61 of 1973, as amended, I certify that, to the best of my knowledge and belief, the company has lodged with the Registrar of Companies for the six months ended 31 March 2009 all such returns as are required by a public company in terms of the Companies Act and that all such returns are true, correct and up to date.

JAF Simmonds
For Reunert Management Services Limited
Company Secretaries

Enquiries
Carina de Klerk +27 11 517 9000 or e-mail invest@reunert.co.za.
For more information log onto the Reunert website at www.reunert.com.