The Group successfully concluded some smaller property acquisitions during the year and aims to invest further in strategic properties for Group use.

PROSPECTS

Trading conditions in the sectors in which the Group operates appear to have stabilised. The current strength of the Rand is however a source for concern as it could lead to a reduction in the price of Group
products and reduce the income of key customers which operate in export orientated sectors.

Volumes in BMG appear to have stabilised, but trading is still subdued. The macro global environment indicates a return to normal trading in the medium term. This should, in turn, result in increased demand
for BMG products and services.

In CED, agricultural machinery conditions are expected to continue to be challenging. Low grain prices are expected to keep the demand for agricultural machinery at current muted levels. Conditions in the construction equipment market are still depressed and management does not expect this to improve in the next 12 months. The division has successfully reduced its costs to ensure profitable trading and working capital is carefully managed. The acquisition of Criterion Equipment has been bedded down and the Company is now profitable. It should make a meaningful contribution to CED in the coming year
and will help to spread the construction equipment sections overheads.

In light of the more stable trading conditions and better economic expectations, the Board has declared a final dividend of 102 cents per share resulting in total dividends for the year of 151 cents per share, up
9,4% on last year. This is a 3,0 times dividend cover ratio, which the Board intends to maintain until market conditions have returned to normal.

CONCLUSION

The Invicta Group has proven its resilience in the worst recession the world has experienced in living memory. In spite of the enormous challenges in the market, Group revenue declined only modestly, while earnings per share increased modestly. Particularly noteworthy was the exceptional working capital management which resulted in cash generated from operations of R590 million being achieved, the highest ever. All Group operations contributed to this achievement.

The Group was again awarded Top 100 status on the JSE, the only JSE-listed company to have achieved this for 15 years in a row. This is a team effort and we thank all our loyal staff members for their
contribution.

Mr RE Sherrell is retiring from the board at this year’s annual general meeting. He has been associated with BMG since 1986 and served as its chairman for many years when BMG was listed separately. He has served as a non-executive director of Invicta since BMG was de-listed in 2006. The Board wishes to thank Mr RE Sherrell for his devoted service to the Group and wishes him well in his retirement.

The Board of Directors is very appreciative of the immense hard work put in by all staff members during this very tough past year, especially for the laudable way in which the Group was de-risked through such
excellent reduction in working capital. We look forward to markets settling down, which should enable the Group to return to its profit growth record.

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