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MSS
MSS
MSS - Marshalls - Unaudited interim report for the six months ended
30 June 2007
Marshalls Limited
(Registration number: 1987/002656/06)
(Share code: MSS ISIN-number: ZAE000066684)
The unaudited interim results for the six months ended 30 June 2007 for
Marshalls Limited and its subsidiaries are as follows -
INCOME STATEMENT
Six months Six months
ended 30 ended 30 Year ended
June 2007 June 2006 31 December
R`000 R`000 2006
R`000
Confirming fees and interest 163 185 443
Investment income 441 307 548
Rental and parking income 8 172 7 946 15 866
Cash flows inherent in leases and 8 145 7 890 15 956
parking income
Lease smoothing effect 27 56 (90)
Revenue 8 776 8 438 16 857
Operating profit before interest 3 284 2 914 6 496
Interest received 339 216 445
Interest expense (1 020) (688) (2 323)
Operating profit after interest 2 603 2 442 4 618
Unrealised surplus on revaluation - - 24 959
of investment properties
Realised net surplus/(loss) on 92 (6) 586
disposal of listed investments
Loss on disposal of investment (40) - -
property
Cost of corporate transaction (405) - -
Profit before taxation 2 250 2 436 30 163
Taxation 1 180 1 041 3 460
Profit for the period 1 070 1 395 26 703
Earnings per share (cents) 6.2 8.0 153.7
Headline earnings per share 11.5 8.3 16.8
(cents)
Dividends per share - 7.0 6.5 13.5
ordinary(cents)
Dividends per share - 12.0 - -
special(cents)
Dividend cover (times)(note 1) 2.1 2.2 2.0
Shares in issue 17 372 300 17 372 300 17 372 300
Net asset value per share (cents) 652 507 654
Headline earnings calculation net
of taxation
Profit for the period 1 070 1 395 26 703
Unrealised surplus on revaluation - - (23 283)
of investment properties
Realised net (surplus)/loss on (92) 52 (510)
disposal of listed investments
Net loss on disposal of investment 607 - -
properties
Cost of corporate transaction 405 - -
Headline earnings for the period 1 990 1 447 2 910
Note 1: Dividend cover is the ratio which ordinary dividends paid
bears to operating profit after interest.
ABRIDGED BALANCE SHEET
Investment properties 98 469 71 709 104 007
Listed investments 28 829 21 892 25 783
Property, plant and equipment 3 159 3 170 3 192
Non-current portion of amortised 387 498 378
lease receivables
Current assets 2 519 3 906 3 639
Bank and cash balances 7 819 9 323 7 255
Total assets 141 182 110 498 144 254
Equity and reserves 113 250 88 083 113 608
Interest bearing borrowings 17 223 18 283 17 161
Deferred taxation 3 871 1 752 3 966
Current liabilities 2 745 2 173 3 441
Bank overdraft and short term 4 093 207 6 078
borrowings
Total equity & liabilities 141 182 110 498 144 254
STATEMENT OF CHANGES IN EQUITY
Stated capital 26 809 26 809 26 809
Non-distributable reserves 60 807 37 688 60 788
Balance at beginning of period 60 788 36 783 36 783
Transfer to distributable reserves - - (86)
Transfer from distributable - - 23 398
reserves
Currency translation movement 19 905 693
Distributable reserves 25 634 23 586 26 011
Balance at beginning of period 26 011 19 093 19 093
Profit for the period 1 070 1 395 26 703
Transfer of property revaluation - - (23 398)
to non-distributable reserves
Transfer from non-distributable - - 86
reserves
Surplus on revaluation of listed 1 853 4 227 5 872
investments
Dividends paid (3 300) (1 129) (2 345)
Total equity and reserves at the 113 250 88 083 113 608
end of the period
SUMMARISED CASH FLOW STATEMENT
Cash inflow from operating 4 351 6 290 10 178
activities
Net interest and taxation paid (2 179) (2 374) (4 174)
Operating cash inflow 2 172 3 916 6 004
Dividends paid (3 300) (1 129) (2 345)
Net cash inflow / (outflow) from (1 128) 2 787 3 659
operating activities
Net cash inflow / (outflow) from 3 677 6 825 (1 985)
investing and financing
activities
Net cash inflow for the period 2 549 9 612 1 674
SEGMENTAL ANALYSIS
Revenue
Properties division 8 172 7 946 15 866
Confirming division 163 185 443
Investment division 441 307 548
8 776 8 438 16 857
Operating profit before interest
Properties division 2 827 2 747 5 893
Confirming division 107 (224) 83
Investment division 350 391 520
3 284 2 914 6 496
COMMENTS
The unaudited results for the six months ended 30 June 2007 reflect
operating profit before interest of R 3 284 000 (2006: R 2 914 000).
Headline earnings per share have increased to 11.5 cents from 8.3 cents
for the comparative period. Net interest expense amounted to R1 020 000
(2006: R688 000). The effective tax charge reflects a rate of 52% and is
primarily due to STC paid on dividends declared (18%) and the cost of
the corporate transaction (5%).
The demand for leased light industrial properties is expected to
continue and result in increases in both market rentals and property
values. The recent increases in the prime interest rate do not appear to
have had any effect on selling prices and it is still proving difficult
for the group to acquire additional properties at suitable yields.
Available cash and bank facilities in place for future expansion
approximates R14 000 000. In the current period one additional property
was acquired and one was sold resulting in a net decrease in gross
lettable area of 7 422 m. The Group also disposed of a vacant property
for a nominal amount.
The group`s permanent portfolio of shares in listed investments held
overseas reflects a market value in South African currency of R28 829
000 as at 30 June 2007 compared to R25 783 000 as at 31 December 2006.
In Sterling terms dividend income on the portfolio has increased by 17%
on the comparable period reported on.
Marshalls became a 70% subsidiary of Marshall Monteagle Societe Anonyme
("Monteagle") on 18 April 2007 as a result of the offer made by
Monteagle to acquire all the issued shares that it did not already own.
The directors of both groups were disappointed that not all Marshalls`
shareholders saw the benefit of switching to the parent company shares
and benefiting from the enlarged and diversified international group.
Further administrative changes are envisaged in the near future; these
include the proposal to change Marshalls` name to that of Merchant &
Industrial Properties Limited and to bring the group`s year end in line
with that of Monteagle resulting in the year end changing to 30
September.
This report has been prepared in compliance with International Financial
Reporting Standards and complies with IAS 34 Interim Financial
Reporting. Except for the revaluation of investment properties, the same
accounting policies were used as those applied in the annual financial
statements for the year ended 31 December 2006 in which these policies
are fully described.
Due to the proposed change of the year end to that of 30 September and
the declaration of the ordinary dividend of 7.0 cents per share and
special dividend of 12.0 cents per share during this calendar year, no
dividend is proposed for this interim period reported on.
24 August 2007
BY ORDER OF THE BOARD
DC Marshall, PN Lonsdale (Directors)
Sponsor
Imara Corporate Finance South Africa (Pty) Ltd
Date: 24/08/2007 07:10:01 Produced by the JSE SENS Department.
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