Conduit Capital : Constantia Update and Trading Statement

CONDUIT CAPITAL LIMITED Incorporated in the Republic of South Africa

(Registration number 1998/017351/06) Share code: CND ISIN: ZAE000073128

("Conduit")

CONSTANTIA UPDATE AND TRADING STATEMENT

Conduit Capital is a JSE-listed investment holding company invested primarily in the insurance industry. Our goal is to compound capital at a high rate over the long-term on a per share basis.

Conduit wholly owns the Constantia Insurance Group of companies ("Constantia"), a diversified niche insurance company operating in South Africa and 18 other African countries. Constantia's target combined ratio is 95% or better over the medium-term. In addition, investments are made in public and private opportunities that contribute to the increase in the capital base of Constantia and allow the insurer to write more profitable business and generate more float for investment. Conduit's private investments include real estate brokerage Century 21 South Africa, Africa Special Opportunities Capital Fund I, and Conduit Ventures.

Constantia

Constantia is a diversified pan-African insurer writing business in Health, Life, Medical Malpractice and Property & Casualty (General and Specialty). First licensed in 1952, Constantia operates 3 insurance licenses providing insurance solutions across 19 countries, with dominant positions in Health and Medical Malpractice insurance.

Despite the headwinds posed by the economy and the insurer's capital position, Constantia delivered an increase of 7.3% in gross premiums with double digit growth in its specialist businesses including Health and Medical Malpractice. The turnaround saw underwriting profit improve 10% over the corresponding period in the prior year.

Constantia generated strong positive operating cashflows with R30.7 million of cash being generated in the 6-month period. Float increased to R618.2 million. By February 2022, the operating cash flows increased by a further R50.5 million and float increased by a further R39.5 million.

Constantia has a solid pipeline of opportunities that should deliver material growth at a combined ratio below 100%, once the business is recapitalised.

Key highlights for Constantia:

• • Gross premium income grew 7.3% to R1.025 billion.

• • The focus on disciplined underwriting saw the business achieve a loss ratio of 47.9%.

• • Operating expense growth remains below inflation.

• • The combined ratio was 100.4%.

• • Cash inflow from operations was R30.7 million.

• • Cash balances at period end, excluding investment outflows, was in excess of 100% higher than that at the corresponding prior period end.

• • Net float generated during the period amounted to R55.1 million, and total float increased to R618.2 million.

• • The business culture has been transformed with all people metrics maintaining a positive trajectory: employee turnover reduced from 30% in 2019 to a healthy 8% in 2022 while the employee Net Promoter Score rose to 38 (over 30 is considered excellent).

• • The business turnaround is complete, and attention is now being focused on scaling and growing the business.

Other Investments

Century 21, our real estate brokerage business, recorded similar sales to its record year in the prior period. The remaining investment in ASOC Fund I is expected to be realised in the 2022 calendar year, generating cash inflows for Conduit.

Conduit Capital Trading Statement

In terms of the Listings Requirements of JSE Limited, companies are required to publish a trading statement as soon as they become reasonably certain that the financial results for the period to be reported on will differ by more than 20% from that of the previous corresponding period.

Shareholders are reminded that mark-to-market investment gains and losses are included in the loss per share and the headline loss per share. Management believes the underwriting, combined ratio, float and operating results from insurance operations are more relevant performance metrics.

A review by management of Conduit's financial results for the six months ended 31 December 2021 has indicated that:

• a. Net float increased by 10.5% from the prior corresponding period to R618.2 million.

• b. The IFRS loss per share ("LPS") is expected to be between 10 cents and 11.5 cents, compared to the LPS of 7.5 cents for the six months ended 31 December 2020, a decline of between 33.3% and 53.3%;

c.

The IFRS headline loss per share ("HLPS") is expected to be between 9.9 cents and 11.5 cents, compared to the HLPS of 8.4 cents for the six months ended 31 December 2020, a decline of between 17.9% and 36.9%.

The financial information on which this trading statement is based has not been reviewed or reported on by Conduit's auditors. Conduit's financial results are expected to be released on SENS on or about 31 March 2022.

Johannesburg

25 March 2022

Sponsor Merchantec Capital