COMMENTARY

Datatec is an international ICT solutions and services group operating in more than 50 countries across North America, Latin America, Europe, Africa, Middle East and Asia-Pacific. The Group's service offering spans the integration and managed services, technology distribution and management consulting sectors of the ICT market.

Datatec's strategy is to improve shareholder returns over the medium term through a combination of corporate and business development actions aimed at enhancing the competitiveness and profitability of its subsidiaries and operating divisions.

Datatec's strategy is to improve shareholder returns over the medium term through a combination of corporate and business development actions aimed at enhancing the competitiveness and profitability of its subsidiaries and operating divisions.

As previously announced, the Board engaged Lazard & Co. Limited to assist with a comprehensive evaluation of strategic options and initiatives (the "Strategic Review") to unlock and maximise shareholder value going forward. The Strategic Review seeks to address the persistent gap between Datatec's valuation and the inherent value of its underlying assets whilst also ensuring that the Group is positioned to take full advantage of the positive market dynamics for its technology solutions and services. The Board will continue to consider potential options including, but not limited to, private equity participation, joint ventures, international listings, divisional asset unbundling and other value-creation structures.

From an operational perspective, the Group achieved a strong performance in the year ended 28 February 2022 ("FY22") as it continued to benefit from increased networking, cloud usage and cyber security trends. Datatec's positioning enabled all divisions to deliver robust revenue and profit growth.

The supply chain issues, and global semiconductor shortage created extended lead times on certain hardware product deliveries in FY22 which impeded revenue and resulted in significantly higher closing backlog (sales orders waiting to be fulfilled) in both Logicalis and Westcon International. Whilst an improvement in the situation was expected, further supply chain disruptions resulting from Covid-19-related lockdowns in China, the Russian invasion of Ukraine and spiralling energy costs have already had an adverse impact on the current financial year.

Overall, the Group’s businesses have successfully repositioned away from many forms of traditional hardware to software, subscriptions and services with growing annuity revenue. The Group continues to focus on supporting the digitisation trends and the requirements for increased cyber security.

DIVIDENDS

Following the sale of Westcon Americas to SYNNEX in September 2017, Datatec advanced funds to Westcon International (the part of the Westcon business retained in the Group with a minority interest held by SYNNEX) to fund working capital as the business restructured. During H1 FY22, Westcon International repaid approximately US$70 million of intercompany loans to Datatec. Thereafter, US$70 million was returned to shareholders in the form of a special cash dividend with a scrip distribution alternative in November 2021.

The Group's policy is to maintain a three times cover relative to underlying* earnings when declaring ordinary dividends. Accordingly, the Board has declared a final dividend for FY22 of 111 ZAR cents per share equivalent to 7 US cents per share, in total US$15 million, with the customary form of a cash dividend with a scrip distribution alternative.

LOGICALIS

Logicalis is the largest contributor to the Group in terms of profitability. The division also has the widest geographical exposure and Datatec intends to continue to develop and grow Logicalis globally, both organically and through acquisitions.

Logicalis revenue increased by 14.2% to US$1 656.0 million compared to US$1 449.5 million revenue for FY21. EBITDA increased by 12.9% to US$92.5 million (FY21: US$81.9 million).

Whilst Logicalis is ideally positioned to continue to respond to changing market needs as technology plays an even more integral role in the global economy, the supply chain shortages experienced as the world emerged from the Covid-19 pandemic remain mostly unresolved. This, coupled with recent geopolitical issues such as the war in Ukraine, energy prices, economic uncertainty in South America and China's ongoing response to Covid-19, have created a lot of uncertainty, both in the short and medium term, that will impact on the division's performance.

WESTCON INTERNATIONAL

Westcon International revenue increased by 11.8% to US$2 890.4 million (FY21: US$2 585.7 million) due to strong demand for networked infrastructure, remote access solutions with enhanced cyber security for flexible working and virtual office environments and unified collaboration. In constant currency***, revenue improved by 10.0%. EBITDA increased by 52.0% to US$68.1 million (FY21: US$44.8 million).

Westcon International remains focused on revenue growth and margin expansion supported by continued investment in process automation, digital tools to support the channel and cost controls. Whilst several macroeconomic risks exist, the FY22 results highlight Westcon International’s continued improvement in financial performance over the last four years.

MANAGEMENT CONSULTING

Analysys Mason revenue increased by 23.5% to US$90.4 million (FY21: US$73.2 million). EBITDA increased by 8.8% to US$11.1 million (FY21: US$10.2 million).

Analysys Mason has a strategy focused on specialisation in the TMT sector where increasingly the industries of telecommunications and information technology are converging and driving rapid digitisation across many industries often brought about by the move to cloud computing.

The underlying trends in our industry remain positive and our businesses are well positioned to benefit from continuing demand for software and services in networking, cyber security and cloud infrastructure.

However, headwinds from semiconductor shortages, compounded by various factors, including the war in Ukraine, Covid-19 lockdowns in China and global inflationary pressures will continue to disrupt global supply chains for the foreseeable future. This is expected to especially impact Logicalis in Latin America during the first half of the current financial year as macroeconomic challenges are compounded by these severe supply chain constraints.

Datatec's strong financial position provides a firm foundation to support growth and new initiatives as most economies start to recover and supply chain constraints ease over time. The Board is focused on driving shareholder value and implementing opportunities arising from the Strategic Review.

All divisions delivered solid performances with strong revenue and bottom-line growth. This is despite South America suffering most from supply chain constraints.

There were no restructuring costs incurred in FY22 (FY21: US$22.4 million of restructuring costs).

Product backlog	FY22 US$' million	FY21 US$' million
Logicalis	400	206
Westcon International	824	261
Datatec Group	1 224	467

The Group's gross margin in FY22 was 16.6% compared to 16.8% in FY21. Gross profit was US$770.4 million (FY21: US$690.5 million).

The share-based payment charge under IFRS 2 included in operating expenses was US$22.5 million, almost double the equivalent charge in FY21 of US$11.5 million, which reflects the increasing valuations of the divisions' cash-settled share-based payment plans, particularly Westcon International and Analysys Mason. To be more in line with international peers, the Group is now presenting the adjusted** figure for EBITDA excluding share-based payment charges as well as restructuring costs. On this basis, adjusted** EBITDA in FY22 was US$177.0 (FY21: US$152.5 million) and adjusted** EBITDA margin was 3.8% (FY21: 3.7%).

Depreciation and amortisation increased to US$72.4 million (FY21: US$68.6 million) and operating profit was US$82.1 million, 64% up on FY21 (FY21: US$50.0 million).

The net interest charge increased to US$31.3 million (FY21: US$25.7 million) mainly due to increased interest rates in Latin America and profit before tax more than doubled to US$50.9 million (FY21: US$25.2 million).

A tax charge of US$10.6 million (FY21: US$19.5 million) has arisen on the pre-tax profits. The effective tax rate of 20.8% has benefited from an increase in UK tax losses recognised as deferred tax assets, part of which arose from the increase in the UK corporation tax rate enacted earlier in the year. The effective tax rate reduced as profits grew and the profit mix continued to improve. As at 28 February 2022, there are estimated tax loss carry forwards of US$231.2 million with an estimated future tax benefit of US$57.2 million, of which US$36.3 million has been recognised as a deferred tax asset.

Underlying* earnings per share were 18.7 US cents (FY21: 13.6 US cents). Headline earnings per share were 16.2 US cents (FY21: 1.8 US cents). Earnings per share were 16.7 US cents (FY21: 1.3 US cents).

CASH AND NET DEBT

The Group generated US$96.7 million of cash from operations during FY22 (FY21: cash generated of US$234.4 million) and ended the period with a net debt of US$130.1 million (FY21: US$60.9 million). Excluding lease liabilities, net debt would have been US$35.7 million (FY21: net cash of US$53.4 million).

The operating cash outflows were mainly as a result of an increase in inventory as well as increased receivables on the back of the very strong revenue growth.

US$' million	Audited  year ended  28 February  2022	Audited  year ended  28 February  2021
Cash resources	453.9	488.6
Bank overdrafts	(166.6)	(131.4)
Short-term interest-bearing liabilities and short-term leases	(299.5)	(297.9)
Long-term interest-bearing liabilities and long-term leases	(117.9)	(120.2)
Net debt	(130.1)	(60.9)

LIQUIDITY AND BORROWING FACILITIES

The Group continues to closely monitor the outlook for liquidity in its divisions to ensure that sufficient cash will continue to be generated to settle liabilities as they fall due.

Logicalis is supported by a corporate facility of US$155.0 million, covering all operations outside of Latin America, comprising a rolling credit facility to fund working capital requirements and an acquisition facility. The Latin America region is supported separately via a number of uncommitted overdraft facilities and short-term lending arrangements.

Westcon International has an invoice assignment facility of EUR390.6 million (recently increased from EUR275.0 million) for its European subsidiaries, as well as an extended payables facility of US$65.7 million. Westcon International has a securitisation facility of US$100.0 million for its Asia-Pacific facilities (up from US$80 million in the prior year). In addition, Westcon International utilises accounts receivable facilities in the Middle East (US$15.0 million) and Indonesia (US$11.0  million) as well as overdraft facilities in Europe (EUR4.0 million) and Africa (US$1.0 million), a securitisation facility in South Africa (ZAR250.0 million) and a line of credit in Singapore (US$1.2 million) to finance the business.

Analysys Mason repaid its intercompany borrowing from Datatec during H2 FY22 and has access to bank overdraft facilities to support its working capital requirements.

The Group continues to monitor the funding needs of its individual operations and works closely with various financial institutions to ensure adequate liquidity.

The Group has performed covenant projections for the next 12 months to confirm that banking covenants are expected to be met.

ACQUISITIONS

On 1 March 2021, Logicalis Group's 65% held subsidiary PromonLogicalis Latin America Limited, exercised its option to acquire an additional interest of 20.1% of the issued share capital in Kumulus for US$1.2 million. Kumulus will continue to be equity-accounted for in the Group's results because the Group does not have management control.

On 31 March 2021, Logicalis acquired 70% of the issued share capital in Áudea, a Spanish company which specialises in cyber security and data protection, governance and compliance, for a consideration of US$2.1 million in cash. Áudea's cyber security capabilities are complementary to Logicalis Spain's security portfolio, creating a much broader professional and managed service offering.

On 1 June 2021, Logicalis acquired Siticom, a German company that is a leading services and solutions provider in the software-defined networking and 5G market, through a new company Logicalis Siticom GmbH. The transaction involved the acquisition of 100% of the issued share capital for a consideration of US$12.7 million followed by the immediate disposal of 29.6% of the issued share capital to two of the previous owners/managers for a consideration of US$5.4 million. There are two options for Logicalis to repurchase this non-controlling interest for an agreed amount of up to US$10.5 million over the next two years, whereafter Logicalis will own 100% of Siticom. Of this agreed amount, US$9.3 million is required to settle these options and has been placed in an escrow account that is not reflected as part of cash and cash equivalents, but included in other receivables. A potential maximum EUR1.0 million (approximately US$1.2 million) earn-out liability, subject to certain performance conditions, is included in the purchase price and payable in the financial year ending 29 February 2024. Due to these fixed priced options, Logicalis consolidated 100% of the results of Siticom for the period it was owned in FY22, and will continue to do so in the future. The total purchase price of the Siticom acquisition (including the options and earn-out liability) is up to a maximum of EUR15.0 million (approximately US$17.9 million), of which US$10.5 million was accounted for as a liability at the acquisition date and included in acquisition-related liabilities. In H2 FY22, US$5.9 million of this liability was settled, as at 28 February 2022.

LOGICALIS

Logicalis revenue increased by 14.2% to US$1 656.0 million compared to US$1 449.5 million revenue for FY21. Revenue increased across all regions in absolute terms including Europe on an organic basis, considering contributions from the Áudea and Siticom acquisitions completed during FY22.

Revenue contribution by geography is shown below:

Logicalis' gross profit contribution by geography is shown below:

US$' million	Audited  year ended  28 February  2022	Audited  year ended  28 February  2021
Cash resources	127.4	154.4
Bank overdrafts	(159.1)	(126.5)
Short-term interest-bearing liabilities and short-term leases	(52.1)	(69.4)
Long-term interest-bearing liabilities and long-term leases	(67.4)	(81.9)
Net debt	(151.2)	(123.4)

Logicalis continues to develop its capabilities within cloud, IoT, software, security, data management and intelligent networks in support of its strategy to provide full life-cycle services around IT infrastructure solutions to its customers.

The future will likely involve hybrid workplaces of part-time office and remote workers. Preparing and planning for this environment will be essential in providing a better digital experience for customers, partners and employees.

Logicalis remains confident about the long-term prospects for the industry and its positioning within it. Over the short term, macroeconomic conditions are expected to remain volatile. Logicalis is currently facing the severe impact of supply chain issues, particularly on the South America business. This is not only causing delays to revenue recognition but also leading to changes in customers' purchasing preferences based on availability.

US$' million	Audited  year ended  28 February  2022	Audited  year ended  28 February  2021
Cash resources	204.5	243.1
Bank overdrafts	(7.5)	(4.9)
Short-term interest-bearing liabilities and short-term leases	(243.5)	(225.4)
Long-term interest-bearing liabilities and long-term leases	(38.5)	(31.8)
Net debt	(85.0)	(19.0)

Datatec Financial Services provides financing/ leasing solutions for ICT customers. The business has been moved to Westcon International during FY22 to leverage the capabilities and scale of both businesses. The business recorded revenue of US$0.6 million in FY22 (FY21: US$1.1 million) and an EBITDA loss of US$0.9 million (FY21: US$1.1 million loss). The FY22 results are included in the Westcon International segment with the FY21 results included in the "Corporate and Management Consulting" segment.

Current conditions are driving demand for all technologies in the Westcon International portfolio. The multi-year investments in advanced systems and business automation and focus on portfolio expansion with software and subscription-based solutions have enabled the business to record double-digit revenue growth despite the product supply constraints.

The global semiconductor shortage continues to impact all technology participants across multiple verticals and the additional geopolitical issues such as the war in Ukraine as well as energy costs are likely to compound this situation. Westcon International continues to monitor and mitigate the impact on availability and costs where possible.

CORPORATE AND MANAGEMENT CONSULTING

The Management Consulting unit, comprising Analysys Mason, delivered an excellent performance in FY22; the fifth successive year of growth. Revenue increased by 23.5% to US$90.4 million (FY21: US$73.2 million). Gross profit increased by 31.0% to US$40.6 million from US$31.0 million in FY21. EBITDA increased by 8.8% to US$11.1 million (FY21: US$10.2 million) and EBITDA margin decreased to 12.3% compared to 13.9% in FY21.

Analysys Mason delivers bespoke consultancy on strategy, transaction support, transformation, regulation and policy, further strengthened by globally respected research. Although markets remain challenging and unpredictable in the short to medium term, management believes that the overall outlook is positive for the business.

Datatec Financial Services, previously reported in the "Corporate and Management Consulting" segment has been moved to Westcon International during FY22 in order to leverage the capabilities and scale of both businesses and is now reported in the Westcon International segment.

Corporate includes the net operating costs of the Datatec head office entities which were US$18.1 million (FY21: US$17.2 million). Corporate costs comprise the remuneration of the Board and head office staff including share-based payments as well as consulting and audit fees. In FY22, foreign exchange gains were US$1.0 million (FY21: foreign exchange losses of US$0.4 million).

As at 28 February 2022, Datatec head office entities held cash of US$103.1 million of which US$30.8 million is held in South Africa and subject to the South African Reserve Bank regulations. These cash balances increased by US$28.9 million from 28 February 2021 mainly as a result of settlement of intercompany loans from subsidiaries net of dividends paid to shareholders of Datatec.

ACQUISITIONS

Effective 30 April 2022, Access Markets International (AMI) Partners, Inc. a 100% owned subsidiary of Analysys Mason Limited acquired 100% of the membership interests in Northern Sky Research, LLC ("NSR"). NSR is based in the US and specialises in research and consulting services to the space and satellite sector.

On 1 March 2022, Logicalis acquired the remaining 30% of the issued share capital from the non-controlling interest in Logicalis Portugal, a Cisco systems integrator and managed services business in Portugal, for a deferred consideration of US$5.4 million payable in September 2022.

IFRS 5 DISPOSAL GROUP

Subsequent to the year end, the Board has classified its management consultancy division, Analysys Mason, as a disposal group held for sale as the IFRS 5 criteria have been met.

Analysys Mason is included in the "Corporate and Management Consulting" segment of the Group.

The proposed sale is in terms of a process initiated by the Board pursuant to its strategic review and a transaction is expected to occur within 12 months from the date of these financial statements. Shareholders will be advised of any developments in this regard.

Ms Deepa Sita joined the Board as an independent non-executive director of the Company with effect from 1 March 2022 as previously announced.

The following changes to the functions of Directors have also taken place during FY22 and to date as previously announced.

With effect from 1 March 2021, Johnson Njeke, independent non-executive director of the Company, was appointed to the Social and Ethics Committee.

With effect from 1 March 2022:

• Maya Makanjee, independent non-executive director of the Company, became Chair of the Board in succession to Stephen Davidson;
• Maya Makanjee stepped down as Chair of the Remuneration and Social and Ethics Committees and remained a member of both committees;
• Maya Makanjee became Chair of the Nominations Committee in succession to Stephen Davidson who remained a member of the committee;
• Deepa Sita became a member of the Remuneration Committee;
• Stephen Davidson was appointed Chair of the Remuneration and Social and Ethics Committees.

INTRODUCTION

Notice is hereby given that the Board of Datatec has declared a final distribution for the year ended 28 February 2022, by way of a cash dividend of 111 ZAR cents per Datatec ordinary share ("Cash Dividend") payable to the ordinary shareholders (the "Shareholders"), which will be in proportion to your ordinary shareholding in Datatec at the close of business on the record date, being Friday, 15 July 2022.

Shareholders will be entitled, in respect of all or part of their shareholding, to elect to receive new, fully paid ordinary Datatec shares in proportion to their ordinary shareholding on the record date as an alternative to the cash dividend (the "Scrip Distribution"). The Cash Dividend has been declared and paid out of Datatec's distributable retained profits. A dividend withholding tax of 20% will be applicable in respect of the Cash Dividend to all shareholders not exempt therefrom after deduction of which, the net Cash Dividend is 88.8 ZAR cents per share.

The new ordinary shares will, pursuant to the Scrip Distribution, not by subject to a dividend withholding tax, and the issue price of the Scrip Distribution (which will equal the volume weighted average price ("VWAP") of Datatec's ordinary shares traded on the JSE for the 30-day trading day period ending on Monday, 4 July 2022) will be settled by way of a capitalisation of Datatec's distributable retained profits.

The Company's total number of issued ordinary shares as at 24 May 2022 is 216 957 874. Datatec's income tax reference number is 9999/493/71/2.

TERMS OF THE CASH DIVIDEND AND SCRIP DISTRIBUTION

The Shareholders will be entitled to receive the Cash Dividend of 111 ZAR cents per ordinary Datatec Share in respect of their shareholding as at the close of trading on the JSE at the close of business on the record date, being Friday, 15 July 2022, in proportion to their ordinary shareholding in Datatec and to the extent that such Shareholders have not elected to receive the Scrip Distribution alternative in respect of all or a part of their shareholding.

Shareholders will, however, be entitled to elect to receive a Scrip Distribution of new, fully paid Datatec ordinary shares in respect of their shareholding in Datatec as at the record date, being Friday, 15 July 2022, in respect of all or part of their ordinary shareholding, instead of the Cash Dividend.

The number of Scrip Distribution shares to which each of the Shareholders will become entitled pursuant to the Scrip Distribution (subject to their election thereto) will be determined by reference to such Shareholder's ordinary shareholding in Datatec (at the close of business on the record date, being Friday, 15 July 2022) in relation to the ratio that 111 ZAR cents bears to the VWAP of a Datatec ordinary share traded on the JSE during the 30-day trading period ending on Monday, 4 July 2022 , provided that, where the application of this ratio gives rise to a fraction of an ordinary share, the rounding principles will be applied. Where a Shareholder's entitlement to new Datatec ordinary shares calculated in accordance with the above formula gives rise to a fraction of a new ordinary share, such fraction of a new ordinary share will be rounded down to the nearest whole number, resulting in allocations of whole ordinary shares and a cash payment for the fraction. The applicable cash payment will be determined with reference to the VWAP of an ordinary Datatec share traded on the JSE on Wednesday, 13 July 2022, (being the day on which Datatec ordinary shares begin trading 'ex' the entitlement to receive the Cash Dividend or the Scrip Distribution alternative), discounted by 10%.

Details of the ratio will be announced on the Stock Exchange News Service of the JSE ("SENS") in accordance with the timetable below.

CIRCULAR AND SALIENT DATES

A circular providing shareholders with full information on the Cash Dividend or Scrip Distribution alternative, including a Form of Election to elect to receive the Scrip Distribution alternative will be posted to Shareholders on or about Thursday, 2 June 2022. The salient dates of events thereafter are as follows:

EVENT	2022
Audited financial results of Datatec for the year ended 28 February 2022 and declaration of Cash Dividend with Scrip Distribution alternative announced on SENS on	Tuesday, 24 May
Audited financial results of Datatec for the year ended 28 February 2022 and declaration of Cash Dividend with Scrip Distribution alternative published in the South African press on	Wednesday, 25 May
Distribution of Circular announced on SENS on	Thursday, 2 June
Circular and Form of Election (grey) distributed on	Thursday, 2 June
Distribution of Circular announcement published in the South African press on	Friday, 3 June
Announcement released on SENS in respect of the ratio applicable to the Scrip Distribution alternative, based on the 30-day VWAP ending on Monday, 4 July 2022, by 11:00 on	Tuesday, 5 July
Announcement published in the South African press of the ratio applicable to the Scrip Distribution alternative, based on the 30-day VWAP ending on Monday, 4 July 2022, on	Wednesday, 6 July
Last day to trade in order to be eligible for the Cash Dividend and the Scrip Distribution alternative	Tuesday, 12 July
Shares trade "ex" the Cash Dividend and the Scrip Distribution alternative on	Wednesday, 13 July
Listing and trading of maximum possible number of shares on the JSE in terms of the Scrip Distribution alternative from the commencement of business on	Wednesday, 13 July
Announcement released on SENS in respect of the cash payment applicable to fractional entitlements, based on the VWAP of a Share traded on the JSE on Wednesday, 13 July 2022, discounted by 10%, by 11:00 on	Thursday, 14 July
Last day to elect to receive the Scrip Distribution alternative instead of the Cash Dividend, Forms of Election (grey) to reach the Transfer Secretaries by 12:00 on	Friday, 15 July
Record Date in respect of the Cash Dividend and the Scrip Distribution alternative	Friday, 15 July
Cash Dividend payments made, CSDP/broker accounts credited/updated on	Monday, 18 July
Announcement relating to the results of the Cash Dividend and the Scrip Distribution alternative released on SENS on	Monday, 18 July
Announcement relating to the results of the Cash Dividend and the Scrip Distribution alternative published in the South African press on	Tuesday, 19 July
JSE listing of shares in respect of the Scrip Distribution alternative adjusted to reflect the actual number of ordinary shares issued in terms of the Scrip Distribution alternative at the commencement of business on or about	Tuesday, 19 July

All times provided are South African local times. The above dates and times are subject to change. Any material change will be announced on SENS.

Share certificates may not be dematerialised or rematerialised between Wednesday, 13 July 2022 and Friday, 15 July 2022, both days inclusive. If Datatec maintains a certificated register, then the register will be closed from Wednesday, 13 July 2022 and Friday, 15 July 2022, both days inclusive.

FRACTIONS

Where a Shareholder's entitlement to new Datatec ordinary shares calculated in accordance with the below formula gives rise to a fraction of a new ordinary share, such fraction of a new ordinary share will be rounded down to the nearest whole number, resulting in allocations of whole ordinary shares and a cash payment for the fraction.

The applicable cash payment will be determined with reference to the VWAP of a Datatec ordinary Share traded on the JSE on Wednesday, 13 July 2022, (being the day on which a Datatec ordinary Share begins trading 'ex' the entitlement to receive the Cash Dividend or the Scrip Distribution alternative), discounted by 10%. For illustrative purposes, the VWAP of a Datatec ordinary Share traded on the JSE on Wednesday, 13 July 2022 is assumed to be 3700 ZAR cents. The basis for the applicable cash payment would therefore be 3330 ZAR cents (3700 ZAR cents discounted by 10%).

The basis for the applicable cash payment will be announced on SENS on Thursday, 14 July 2022, by 11:00.

Example of fractional entitlement:

This example assumes that a Shareholder holds 100 Datatec ordinary shares at the close of business on the record date (being Friday, 15 July 2022) and elects to receive the Scrip Distribution alternative in respect of all of their shareholding.

New ordinary share entitlement = 100 x 2.63158% = 2 new ordinary Scrip Distribution shares. The rounding provision described above is then applied and the shareholder will receive:

2 Scrip Distribution shares in respect of the 100 shares held and a cash payment for the fractional entitlement based on the 3330 ZAR cents noted above of 3330 x 0.63158 = 2103.1614 ZAR cents. This fractional entitlement payment will not be subject to Dividend Withholding Tax ("DWT").

TAX IMPLICATIONS

The Cash Dividend is likely to have tax implications for both resident and non-resident Shareholders. Shareholders are therefore encouraged to consult their professional tax advisers, should they be in any doubt as to the appropriate action to take. In terms of the Income Tax Act 58 of 1962 ("the Income Tax Act"), the Cash Dividend will, unless exempt, be subject to DWT. South African resident Shareholders that are liable for DWT will be subject to DWT at a rate of 20% of the Cash Dividend and this amount will be withheld from the Cash Dividend with the result that they will receive a net amount of 88.8 ZAR cents per share. Non-resident Shareholders may be subject to DWT at a rate of less than 20%, depending on their country of residence and the applicability of any Double Tax Agreement ("DTA") between South Africa and their country of residence.

The Scrip Distribution alternative and cash paid for a fraction of a Share will not be subject to DWT in terms of the Income Tax Act. The subsequent disposal of Datatec ordinary shares obtained as a result of the Scrip Distribution is likely to have Income Tax or Capital Gains Tax ("CGT") implications. Where any future disposals of shares obtained as a result of the Scrip Distribution are effected, the expenditure incurred in respect of such shares will be deemed to be nil in terms of the Income Tax Act.

FOREIGN SHAREHOLDERS

The distribution of this Circular, and the rights to receive the Scrip Distribution shares in jurisdictions other than the Republic of South Africa, may be restricted by law and any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Accordingly, Shareholders will not be entitled to receive the Scrip Distribution shares, directly or indirectly, in those jurisdictions and shall be deemed to have elected the Cash Dividend alternative.

Such non-resident Shareholders should inform themselves about and observe any applicable legal requirements in such jurisdictions. It is the responsibility of non-resident Shareholders to satisfy themselves as to the full observance of the laws and regulatory requirements of the relevant jurisdictions in respect of the Scrip Distribution, including the obtaining of any governmental, exchange control or other consents or the making of any filing which may be required, compliance with other necessary formalities and payment of any issue, transfer or other taxes or other requisite payments due in such jurisdictions. Shareholders who have any doubts as to their position, including, without limitation, their tax status, should consult an appropriate adviser in the relevant jurisdictions without delay.

Payment of the Cash Dividend and the Scrip Distribution alternative is subject to approval by the Financial Surveillance Department of the South African Reserve Bank. An announcement will be published on SENS as soon as this approval is received.

DISCLAIMER

This announcement may contain statements regarding the future financial performance of the Group which may be considered to be forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty, and although the Group has taken reasonable care to ensure the accuracy of the information presented, no assurance can be given that such expectations will prove to have been correct.

The Group has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements and there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. It is important to note, that:

1. unless otherwise indicated, forward-looking statements indicate the Group's expectations and have not been reviewed or reported on by the Group's external auditors;
2. actual results may differ materially from the Group's expectations if known and unknown risks or uncertainties affect its business, or if estimates or assumptions prove inaccurate;
3. the Group cannot guarantee that any forward-looking statement will materialise and, accordingly, readers are cautioned not to place undue reliance on these forward-looking statements; and
4. the Group disclaims any intention and assumes no obligation to update or revise any forward-looking statement even if new information becomes available, as a result of future events or for any other reason, other than as required by the JSE Limited Listings Requirements.

On behalf of the Board

M Makanjee
Chair

JP Montanana
Chief Executive Officer

IP Dittrich
Chief Financial Officer

24 May 2022

DIRECTORS

M Makanjee (Chair), JP Montanana^# (CEO), IP Dittrich (CFO), SJ Davidson^#, JF McCartney^o, CRK Medlock^#, MJN Njeke, E Singh-Bushell^o, DS Sita

o	American
#	British
*	Excluding impairments of goodwill and intangible assets, profit or loss on sale of investments and assets, amortisation of acquired intangible assets, unrealised foreign exchange movements, acquisition-related adjustments, fair value movements on acquisition-related financial instruments, restructuring costs relating to fundamental reorganisations and the taxation effect on all of the aforementioned.
**	Adjusted EBITDA excludes share-based payments and restructuring costs.
***	The pro forma constant currency and adjusted EBITDA information, which is the responsibility of the Datatec directors, presents the Group’s revenue for the current reporting period had it been translated at the average foreign currency exchange rates of the prior reporting period as well as EBITDA had restructuring costs and share-based payment charges not been incurred. This information is for illustrative purposes only and because of its nature, may not fairly present the Group’s results. The pro forma supplementary information contained in this announcement has been reported on by the Group’s external auditor. The Group’s auditor, PwC, has issued a limited assurance report (in terms of ISAE 3420: Assurance Engagements to report on the compilation of pro forma financial information included in prospectus) on the pro forma financial information presented. Refer to Pro forma supplementary information on the Financials section for their unmodified opinion thereon and for more information on the calculation of constant currency and adjusted EBITDA information.