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AET - Alert Steel Holdings Limited - Trading Statement for the year ended 30


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AET
AET                                                                             
AET - Alert Steel Holdings Limited - Trading Statement for the year ended 30    
June 2011 and CEO`s newsletter                                                  
ALERT STEEL HOLDINGS LIMITED                                                    
(Incorporated in the Republic of South Africa)                                  
(Registration number 2003/005144/06)                                            
JSE code: AET ISIN: ZAE000092847                                                
("Alert", "group" or "the company")                                             
TRADING STATEMENT FOR THE YEAR ENDED 30 JUNE 2011 AND CEO`S NEWSLETTER          
This is the first in what is intended to be a regular series of newsletters     
designed to keep our shareholders and others with an interest in the company    
informed about developments at Alert Steel in the intervals between our results 
reports.  I hope you find it useful.                                            
Trading statement for the year ended 30 June 2011                               
In accordance with paragraph 3.4(b) of the JSE Limited Listings Requirements,   
companies are required to publish a trading statement as soon as they become    
reasonably certain that the financial results for the reporting period will     
differ by more than 20% from those of the previous corresponding period.        
Shareholders of Alert are therefore advised that the loss per share for the year
ended 30 June 2011 is expected to be between 52.90 cents and 56.90 cents per    
share (2010: loss of 39.80 cents per share) and the headline loss per share for 
the year ended 30 June 2011 is expected to be between 45.70 cents and 49.70     
cents per share (2010: loss of 25.50 cents per share).                          
The information on which this trading statement is based has not been reviewed  
and reported on by Alert Steel`s auditors.                                      
Restructuring                                                                   
The restructuring process announced in March this year is progressing well and  
developments in this regard such as the redesigning of the group`s corporate    
identity and relaunching of our branches are explained more fully elsewhere in  
this newsletter.  As previously announced a circular setting out the            
restructuring was posted to shareholders on 29 August and a rights offer        
circular will be posted to shareholders on 19 September.                        
Operational update                                                              
Trading conditions remained tough since we reported our interim results for the 
six months ended 31 December 2010.  Recovery in the demand for steel remains    
depressed and our performance during the month of July was further impacted by  
the National Union of Metalworkers` (NUMSA) strike action, which considerably   
affected the supply of steel to our operations.  The lower sales during June and
July were not solely due to the industrial action over this period as the       
process of exiting non-core product lines and introducing new ones aligned to   
our core business also affected the sales function to some degree.  The new     
product lines have seen significant growth in the past two months and we are    
very confident that these products will substantially contribute to the future  
growth of Alert.  The launch of the Alert Express container project has also    
exceeded our expectations and will enhance the group`s market penetration.      
Group sales will have to improve continuously over the next few months to ensure
that Alert sustains the turnaround budgeted results for 2012.  To this effect,  
we have introduced customer satisfaction and employee relationship surveys to   
gather insights into the factors which matter most to our staff and our clients 
in a bid to help improve motivation and productivity as well as to assist us in 
improving our service standards.  These surveys will be conducted by an         
independent research company and will be used to identify and promote areas of  
excellence, and to effect remedial measures where necessary.                    
Branding changes and branch relaunches                                          
We decided to make a visual statement of the current transformation of the group
through a redesign of our existing logo and the development of a new slogan.    
The design of the new logo picks up on the shape of a construction bolt which   
gives the feeling of strength and power.  The bolt metaphor also highlights the 
key attributes of Alert Steel - strength, support, connectivity and reliability.
The new slogan, strength through service, is intended to give a message that    
Alert Steel sells dependable products and is committed to providing great       
service.                                                                        
To complement the redesigned logo and to give effect to our strategy of         
refocusing on our core business, we relaunched our branches based in East Lynne 
Pretoria, Brits, Klerksdorp, Tshwane, Burgersfort, Lephalale, Polokwane,        
Tzaneen, Louis Trichardt, Thohoyandou, Mokopane, Lichtenburg, Wonderboom and    
Randfontein.  We also used this exercise as an opportunity to explain to our    
customers the changes taking place within the group and to introduce our        
expanded product lines and new value added services.  We have seen a marked     
improvement in revenue in the relaunched branches and anticipate that this will 
enhance the growth of the company substantially during the next few months.     
Expanded distribution network                                                   
We have also identified an opportunity to significantly expand our distribution 
network through the deployment of small mobile retailing units in rural areas as
well as areas where we currently have no presence.                              
Known as the Alert Express container project, these retailing centres are       
converted shipping containers with a floor area of 36mSquared.  One half of the 
floor space will be used to stock long length products while the other half will
be used to stock steel related items and will also serve as the retail floor.   
The containers will stock all fast moving products as identified by the nearest 
Alert store and customers will also be able to place orders for items not       
carried.  The first six containers have been commissioned in Maboloka near      
Brits; Zebediela near Mokopane; Lebowakgomo near Polokwane; Mofolo near         
Randfontein; Abbotspoort near Lephalale and Itsoseng near Lichtenburg.          
We intend to dispatch 50 Alert Express containers within the current financial  
year ending 30 June 2012 and each container is projected to sell approximately  
24 tonnes of material per month.                                                
Prospects                                                                       
A recovery in the demand for steel looks likely to remain slow in the short     
term, as growth in the construction and manufacturing sectors, which accounts   
for some 75% of all the domestic steel produced, continues to stay muted.       
Looking ahead, we expect infrastructural growth in the sub-Saharan region to    
continue in the next five to ten years given that its population is expected to 
reach 340 million by 2020.  We therefore believe that investors should take a   
long-term view of Alert Steel, as a well-managed African-based steel business   
with value-added propositions, a large geographic spread and a diversity of     
steel products, will therefore offer a relatively low risk investment.  The     
return by the group to its core business will also enable us to take full       
advantage of any growth opportunities in the SADC region which will, in all     
possibility, arise in the medium to long term.                                  
In the meantime, we remain focused on our immediate strategic priorities, which 
are to continue with the restructuring process, optimise our existing           
businesses, drive efficiencies and keep costs down.                             
Annual results                                                                  
The group`s results for the year ended 30 June 2011 will be released on SENS on 
or around 29 September 2011.  There will be a presentation on the results in    
Johannesburg on the day they are published.  If you would like to attend this   
presentation, please e-mail your details to our investor relations office at    
alertsteel@dpapr.com.                                                           
Yours sincerely                                                                 
Johan du Toit                                                                   
Chief executive officer                                                         
Pretoria                                                                        
8 September 2011                                                                
Designated Adviser                                                              
Vunani Corporate Finance                                                        
Date: 08/09/2011 12:15:28 Produced by the JSE SENS Department.                  
The SENS service is an information dissemination service administered by the    
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or            
implicitly, represent, warrant or in any way guarantee the truth, accuracy or   
completeness of the information published on SENS. The JSE, their officers,     
employees and agents accept no liability for (or in respect of) any direct,     
indirect, incidental or consequential loss or damage of any kind or nature,     
howsoever arising, from the use of SENS or the use of, or reliance on,          
information disseminated through SENS.                                          
   


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