BASIS OF PRESENTATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The condensed interim consolidated financial statements have been prepared in accordance with the JSE Limited Listings Requirements for interim reports, and the requirement of the Companies Act of South Africa applicable for condensed interim consolidated financial statements. The Listings Requirements require interim reports to be prepared in accordance with the framework concepts and the measurement and recognition requirements of IFRS^® Accounting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by Financial Reporting Standards Council, and include disclosure as required by IAS 34 Interim Financial Reporting and the Companies Act of South Africa. The accounting policies applied in the preparation of the condensed interim consolidated financial statements from which the condensed interim consolidated financial statements were derived are in terms of IFRS and are consistent with those accounting policies applied in the preparation of the previous consolidated audited annual financial statements.

In preparing these interim condensed consolidated financial statements, management has made judgements, estimates and assumptions that may affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these judgements, estimates and assumptions.

PREPARATION AND RESULTS

These half year ended December 31 2024 results have not been audited or reviewed by the group's auditors. The condensed interim consolidated financial statements have been prepared by SG Larkin FCCA, under the supervision of DE Cleasby CA(SA), and were approved by the board of directors on February 25  2025.

Accounting estimates, judgements and fair values

During the period, the expected credit loss (ECL) provision increased from 5,6% (June 30  2024) to 5,8% at December 31  2024. The ECL percentage remains conservative compared to 2019 (pre-COVID-19 ECL percentage of 4,5%) as we operate in times of global economic uncertainty and heightened cash flow pressures on independent free trade customers, and particularly a more difficult macro-economic environment. It is possible that estimates and actual uncollectible amounts will differ, and additional charges may be required; however, it is also possible that reductions in the group's ECL provision could also occur over time.

As at December 31  2024 the provision for stock obsolescence is 2,0% of gross inventory (H1F2024: 2,4%).

The group has applied judgement to recognise subsequent measurement changes in the puttable NCI liabilities in accordance with the principles of IFRS 10.23. Changes in assumptions used to estimate the future purchase price of the puttable NCI liabilities are recorded directly in retained earnings in the statement of changes in equity. There is diversity in practice as to whether to recognise subsequent measurement changes in the carrying amount in profit or loss or equity. The total remeasurement changes of the puttable NCI liabilities during the period was R17,5 million (credit) (H1F2024: Rnil).

Significant commitments

The group's policy is to maintain a strong capital base to sustain future development of the businesses so that it can continue to provide benefits to its stakeholders. During H1F2025, R3,4 billion of the R6,2 billion F2025 approved capital investment (capin) has been spent mainly on infrastructure (through upgrades to (or new) distribution centres including the fit out of plant and equipment, purchase of land and vehicle fleet). For H2F2025, significant capital commitments will involve:

• Australia - infrastructure investment to grow capacity in south-east Queensland.
• United Kingdom - infrastructure investment in Manchester and Worcester depots, land in Durham, and continued IT-related capin and vehicle fleet replacement.
• New Zealand - infrastructure investment in distribution centres in Wellington and Waipapa, due to open June  2025 and October 2025, respectively.
• Netherlands - infrastructure investment in The Hague, Amsterdam and Rotterdam.
• Spain - investment in Barcelona depot to grow capacity.
• Portugal - infrastructure investment in Lisbon distribution centre to grow capacity.
• Southeast Asia - infrastructure investment in Malaysia.

Related parties

The group has a related party relationship with its subsidiaries and associates. Key management personnel has been defined as the executive and non-executive directors of the company. The definition of key management includes the close members of family of key management personnel and any other entity over which key management exercise control.

The group encourages its employees to purchase food products from group companies. These transactions are generally conducted on terms similar to those with third parties, although in some cases nominal discounts are granted. Transactions with key management personnel are conducted on similar terms. No abnormal or non-commercial credit terms are allowed, and no impairments were recognised in relation to any transactions with key management during the period, nor have they resulted in any non-performing debts at December 31  2024.

Trading relationships with associates and jointly controlled entities are generally concluded on terms similar to those of third parties and there are no abnormal or non-commercial credit terms allowed. No impairments in associates or jointly controlled entities were recognised during the period (H1F2024: nil).

REVENUE DISAGGREGATION

Composition of revenue

• Revenue comprises amounts earned from customers from the sale of frozen, chilled, ambient and non-food products (goods) and from the rendering of services.
• Revenue is disclosed net of Value Added Taxation.
• Revenue is net of returns and allowances, trade discounts and volume rebates, all of which have been apportioned to the sale of goods.

FINANCIAL INSTRUMENTS

When measuring the fair value of an asset or a liability, the group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques categorised as follows.

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy for financial instruments measured at fair value. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Fair value

Valuation techniques and significant unobservable inputs

The table shows the valuation techniques used in measuring the DAC puttable non-controlling interests at December 31:

Sensitivity analysis on changes in significant variable unobservable inputs for puttable non-controlling interests (liability)

The group recognises any changes in the value of the liability as a result of changes in assumptions used to estimate the future purchase price directly in retained earnings in the statement of changes in equity.

Exchange rates

The following exchange rates were used in the conversion of foreign interests and foreign transactions during the periods:

SUPPLEMENTARY PRO FORMA INFORMATION REGARDING THE CURRENCY EFFECTS OF THE TRANSLATION OF FOREIGN OPERATIONS ON THE GROUP

The pro forma financial information has been compiled for illustrative purposes only and is the responsibility of the board. Due to the nature of this information, it may not fairly present the group's financial position, changes in equity and results of operations or cash flows. The pro forma information has been compiled in terms of the JSE Listings Requirements and the Revised Guide on Pro Forma Information by SAICA.

The illustrative information, detailed below, has been prepared on the basis of applying the H1F2024 average rand exchange rates to the H1F2025 foreign subsidiary income statements and recalculating the reported income of the group for the period.

ACQUISITION OF BUSINESSES AND SUBSIDIARIES

Acquisitions

As of December 31  2024 eight bolt-on acquisitions have been concluded, these were as follows:

• Turner and Price Limited, a food wholesaler servicing 2 500 customers in the Midlands and of England.
• Blanacluna Group, a broadline foodservice wholesaler based in Argentina, previously held as a jointly controlled entity.
• VDS Food, a cash and carry food wholesaler based in Belgium.
• Cesars SIA, a specialised oriental food importer and distributor in Latvia.
• Colofruit, a foodservice distributor based in Barcelona, Spain.
• Wild Nation, a vegetable processor based in New Zealand.
• Dairy Innovation, a long-life UHT soft serve ice cream manufacturer in South Africa.
• Mizoserve, a foodservice distributor based in Johannesburg, South Africa.

Goodwill arose on the acquisitions as the anticipated value of future cash flows that were taken into account in determining the purchase consideration exceeded the net assets or net liabilities acquired at fair value. The acquisitions have enabled the group to expand its range of complementary products, services and, as a consequence, has broadened the group's base in the market place. In addition, through the acquisitions the group has acquired managements skill and expertise as a platform from which to consolidate the regional and integration of the foodservice market. The purchase price allocations for these bolt-on acquisitions are provisional and may be retrospectively adjusted if the group obtains new information about facts and circumstances that existed at the acquisition date relating to these entities.

Total investment in acquisitions for the period was R2,2 billion, the benefits of which will be evident in the medium term as we extract synergies and efficiencies. There were no significant contingent liabilities identified in the businesses acquired.

The impact of these acquisitions on the group's results can be summarised as follows:

Disposal of business

Pier 7 Germany was disposed of at December 31  2024 for R180,5 million. Up to disposal, Pier 7 Germany contributed R646,0 million to revenue but had a trading loss of R10,0 million. A loss of R450,8 million was recognised on the disposal.

Subsequent events

There have been no material events subsequent to December 31  2024.

ADMINISTRATION

Directors

Independent non-executive chairman: S Koseff
Lead independent non-executive director: NG Payne
Independent non-executive directors: T Abdool-Samad, PC Baloyi, B Joffe, KR Moloko, CJ Rosenberg*, H Wiseman**
Executive directors: BL Berson* (chief executive officer), DE Cleasby (chief financial officer)

* Australian ** British