Brimstone Investment : posts outstanding performance with profit of R920 million

• Group profit of R920.9 million compared to a loss of R43.8 million in the comparative period
• Group earnings per share up 500% to 292.3 cents
• Group headline earnings per share up 586% to 298.9 cents
• Dividend declared of 30 cents per share
• Finance costs down by 45% to R219.0 million
• Reduction of debt of R1.2 billion
• Repurchase of 5.8 million "N" Ordinary shares for R34.9 million
• Improved debt and liquidity ratios

[Cape Town, 29 March 2022] Brimstone today released its Group results, reporting an outstanding performance for the year ended 31 December 2021.

The Group reported a profit before tax of R920.9 million, a significant improvement from a loss of R43.8 million in the prior year. The profit is mainly due to strong performances by certain of the Group's subsidiaries, the upward revaluation of investments held at fair value through profit or loss, an increase of R103.6 million in share of profits of associates and joint ventures and a significant reduction of R181.6 million in finance costs compared to the comparative period.

"This solid set of results is testimony to the resilience of our investments that performed exceptionally well despite still operating during periods of partial lockdown. Brimstone is anchored by quality assets in the food sector which have proven their defensive nature during this challenging economic period.

At the start of the COVID pandemic we set ourselves a very clear target to reduce debt. We are delighted that our total debt has reduced by another R1.2 billion in the year under review resulting in a cumulative reduction in debt of approximately R2 billion since the start of lockdown in 2020. This reduction in debt has commensurately reduced finance costs which is pleasing in the current environment of an upward interest rate cycle," says Brimstone's CEO Mustaq Brey.

"As a Group we continue to consider all value enhancing mechanisms including buying back our own shares. During the period the Company repurchased 5.7 million Brimstone shares, which is value enhancing to all our shareholders. We had also aimed to reduce costs at Company level, which we have done quite successfully and this further contributed to the solid results" says Brey.

FOOD SECTOR

Brimstone's subsidiary, JSE-listed Sea Harvest Group once again proved its resilient and defensive nature and delivered a strong set of results despite the ongoing volatility caused by COVID-19 during the year. Continuing the sound performance of the prior year, Sea Harvest reported profit after tax of R434 million, up from R398 million in the prior year. Earnings per share increased by 9% to 168 cents. The fair value of Brimstone's investment in Sea Harvest at year end was R2.2 billion. Brimstone will receive a dividend of R89.3 million from Sea Harvest on 11 April 2022.

Sea Harvest's revenue for the year increased by 5% to R4.6 billion up from R4.4 billion in the prior year. Sea Harvest benefitted from good performances from the South African Fishing

segment and the Australian operations. The Cape Harvest Foods segment had a mixed year and the Aquaculture segment, while showing an improving trend, continues to be impacted by the effects of COVID-19.

"Sea Harvest continued to execute on its growth strategies in 2021. In value-added dairy, Sea Harvest commissioned a third powder plant and a new butter factory at Ladismith Cheese and acquired 100% of Mooivallei Suiwel, a producer and supplier of value-added dairy products,

thereby securing additional cheese capacity. In the broader food sector, Sea Harvest acquired 53.7% of BM Foods, a manufacturer and distributor of a range of chilled and frozen food products and convenience foods, thereby diversifying the group's South African food offering

across multiple new categories. Post year-end Sea Harvest announced the acquisition of the Western Australia-based fishing and related businesses of MG Kailis, one of the oldest and leading vertically integrated fishing businesses in Australia,"says Brimstone's Executive Chairman Fred Robertson.

Brimstone held 32.6 million shares in Oceana with a market value of R1.8 billion at year end. Brimstone recognised R234 million as its share of profits from Oceana based on Oceana's reported earnings for the year to 30 September 2021. Brimstone received dividends of R35.9 million from Oceana during the year under review and will receive a final dividend of R80.9 million on 4 April 2022 in respect of the 2021 year.

"The outcome of the Fishing Rights Allocation Process (FRAP) was announced earlier this year. This process was important for the stability and sustainability of our key fishing assets. The new allocations bring certainty and will enable these businesses to continue their incredible journey of being major economic drivers, market leaders, and sustainable job creators in their respective sectors," says Robertson.

OTHER SUBSIDIARIES

Brimstone owns 70% of Obsidian Health, a leading supplier of innovative healthcare solutions to both the private and public healthcare sectors within Sub-Saharan Africa.

Obsidian contributed R20.7 million to Group profit during the year under review, up from R6.9 million in the prior year. Although elective surgery caseloads have improved over the course of 2021, they were still negatively impacted by the varying degrees of COVID-19 lockdown regulations and restrictions within hospital theatres. This resulted in Obsidian's

sales relating to elective surgeries underperforming compared to budget and pre-COVID-19 sales levels. The Point of Care business unit however continued to outperform targets and produced strong growth driven by rapid Antigen COVID-19 testing and HIV screening testing. The stabilisation of the Rand also assisted with relieving margin pressure, which resulted in increased profitability during the year under review.

House of Monatic disposed of its manufacturing assets and transferred related factory staff to a subsidiary of major local retailer on 1 April 2021. In tough trading conditions the company reported a loss of R38.6 million compared to a loss of R104.8 million in the prior year.

OTHER ASSOCIATES

Brimstone's 18% stake in Aon Re Africa, a leading reinsurance broker licensed and operating in Sub-Saharan Africa and the rest of Africa, contributed R12 million to profits and delivered a dividend of R8 million during the year under review.

South African Enterprise Development (SAED), an investment vehicle providing equity growth capital to high potential small and medium sized enterprises, of which Brimstone owns 25% contributed R1.1 million in equity accounted earnings for the period. Brimstone accrued a dividend of R1.5 million from SAED for the year under review.

Milpark Education is a leading provider of higher education and training qualifications. Milpark contributed R8.3 million in equity accounted earnings during the year under review, a remarkable turnaround from R40.1 million in losses in the prior year. Brimstone received a dividend of R17.1 million from Milpark during the year under review. The Group invested a further R30.1 million in Milpark to early-settle the acquisition of the business of CA Connect during the period under review. CA Connect has performed exceptionally well in terms of student numbers and profitability.

INVESTMENTS

The Group's investment in Equites was revalued upwards by R78.4 million to R320.9 million at year end. Brimstone received a dividend of R22.2 million from Equites during the year under review.

FPG Property Fund is a Cape-based black-owned and managed unlisted property fund specialising in the retail convenience market. It owns 22 convenience shopping centres in South Africa with an expanding footprint in the United Kingdom. The property portfolio is valued in excess of R6 billion on a gross basis. The investment was revalued upwards by R47.1 million to R229.7 million at year end. Brimstone received a dividend of R2.6 million from FPG Property Fund during the year under review.

Brimstone's stake in MTN Zakhele Futhi was revalued upwards by R38.8million to R56.4 million at year end and its stake in Phuthuma Nathi was also revalued upwards by R30.7 million to R255.8 million at year end. Brimstone received a dividend of R42.1 million from Phuthuma Nathi during the year under review. Brimstone's investment in listed higher education group STADIO was revalued upwards by R78.4 million to R163.4 million at year end.

"The solid performance of our investments together with our de-gearing strategy have had an exceptional impact on our results, despite the constraints of operating within and around a pandemic.At the start of the pandemic when the outlook was so uncertain we decided to temporarily suspend paying any cash dividends and thereby preserve cash. We are now pleased to announce that based on the outstanding results we have declared a dividend of 30 cents per share. As a Level 1 B-BBEE contributor we have again proven and lived up to our philosophy of profitability, empowerment and positive social impact," concluded Robertson.