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MTE
MTE
MTE - Marshall Monteagle Holdings Societe Anonyme - Revised preliminary
announcement of unaudited results for the year ended 30 September 2007 (Headline
Earnings Per Share Adjusted)
Marshall Monteagle Holdings Societe Anonyme
(Formerly Monteagle Holdings Societe Anonyme)
("Monteagle")
(Incorporated in Luxembourg - RC Luxembourg No. B 19600)
Share Code: MTE ISIN Code: LU0035797272
Registered Office
6 rue Adolphe Fischer,
L-1520, Luxembourg
REVISED PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS FOR THE YEAR ENDED 30
SEPTEMBER 2007 (HEADLINE EARNINGS PER SHARE ADJUSTED)
INTRODUCTION
The directors are pleased to be able to report another successful year for the
group`s operating activities, together with further appreciation of the group
income producing properties and also significant market value increases of its
international listed investment portfolio. Marshall Monteagle`s objective is to
achieve capital growth and pay a steadily progressive dividend over the long
term from a diversified range of investments. The group holds portfolios of
leading investments in the U.K., Europe, U.S.A. and the Far East as well as
commercial properties in the U.S.A. and South Africa. The group`s shipping and
distribution businesses operate internationally and in South Africa where it has
interests in food production and processing.
ACQUISITION OF MARSHALLS LIMITED
On 18 April 2007 Marshalls Limited became a 70% subsidiary of the group by way
of an offer of 28 Marshall Monteagle shares for every 100 shares held in
Marshalls Limited. As a result Marshall Monteagle`s shares in issue increased
from 13,440,000 to 16,536,717. The results below include those of Marshalls
from the date of acquisition and reflect the consolidation of these assets at 30
September 2007. Marshalls Limited changed its name to Merchant and Industrial
Properties Limited, now referred to as "Merchant Group". Further mention is
made below, under divisional comments.
RESULTS
- Group revenue is up 15% to US$90,449,000 for the twelve months to 30 September
2007, compared to US$78,859,000.
- Profit before tax and exceptional items is up 14% to US$4,683,000 from
US$4,124,000.
- Earnings per share have increased 146% to US 69.4 cents from US 28.2 cents
last year as a result of surplus on disposal of investments and property
revaluations.
- The directors are proposing a final dividend of US 2.65 cents payable in April
2008, making a total of 4.5cents (2006 4.25 cents) for the year, an increase of
6.3%.
- Net assets attributable to shareholders are up 23% to US$3.72 per share from
US$3.02 at 30 September 2006 of which US$2.38 (64%) are held in Europe and USA.
The remaining assets equivalent to US$1.34 per share (36%) are held in South
Africa.
IMPORT, EXPORT AND DISTRIBUTION
The shipping and distribution business showed further growth during the
financial year. This division continues to distribute private label food and
non-food products to the multiple retailers and wholesalers in South Africa and
Australia and is complemented by dedicated producers of quality raw materials,
skilled technologists, first world production facilities and well managed
shipping, warehousing and distribution systems.
Over the past year of trading this division has experienced significant raw
material price increases, combined with currency volatility and these trading
conditions are expected to continue for the year ahead. The division is well
positioned to operate in these market conditions and continually strives to
anticipate client needs and exceed their expectations.
The period under review reflected a trend towards more competitive trading
conditions with L&G Tools adjusting its strategy on margins. Although margin
targets have been achieved for the current financial year, continuing margin
pressure is to be expected.
L&G has the strategic objective of building on its strengths and seeking
synergies by acquiring majority shareholding in businesses complementary to its
existing business. Two transactions have been concluded which will be effective
on 1 January 2008. The first business is a distributor of pre-packed fixings
and hardware. The second is a welding manufacturer and repair agent producing
high quality inverters, Mig welders and plasma cutters. The acquisition of
these businesses will be funded out of local resources.
PROPERTY PORTFOLIO
Low vacancy rates during the year in California lead to satisfactory returns.
That region remains a robust market and it is intended to increase investment in
Southern California.
The portfolio of commercial properties in South Africa, including those held by
the Merchant group, produced good returns as a result of higher rental income
and low vacancy rates. Yields available on industrial property in Cape Town and
Durban remained low during the period under review, despite increases in the
cost of borrowing. Consequently management have found it difficult to identify
new properties that offer a reasonable return on investment.
INVESTMENT PORTFOLIO
The diverse portfolio of equities showed most satisfactory capital growth during
the year. The U.S. market had a better year in 2007 but, as with the prior
year, it lagged behind the performance of Europe. The group remains invested in
quality companies in the U.K., Europe, U.S.A. and the Far East. A more
challenging year for equity investors must be expected in the current year as
the liquidity problems in the credit markets work through the world banking
system.
MERCHANT GROUP (70% subsidiary)
As mentioned above, Marshalls Limited became a 70% subsidiary on 18 April 2007
and its name was then changed to Merchant and Industrial Properties Limited.
Both boards of directors are disappointed that not all Marshalls shareholders
took the opportunity to switch in to the parent company shares. The directors
are still convinced that this is the correct course of action as it will also
enable Merchant Group to cancel its listing on the JSE and save costs
accordingly.
CONAFEX HOLDINGS (listed associate)
Conafex Holdings Societe Anonyme is an African focussed agri-resource group
listed in Luxembourg and South Africa. Conafex takes strategic stakes in
businesses focused on horticulture, niche and value-added agriculture. Current
holdings include stakes in a fruit trading business, a cereal bar manufacturer,
an exporter of plant extracts and natural health products and a coffee roasting
business.
HALOGEN HOLDINGS (listed associate)
During the year Halogen Holdings Societe Anonyme, through its U.K. subsidiary
Halogen Holdings P.L.C., invested GBP3 million cash in Heartstone Inns Limited.
Heartstone Inns is the owner and manager of a growing chain of U.K. country pubs
and currently owns four freehold pubs. It will use the funds to finance further
acquisitions. Halogen holds an option to subscribe an additional GBP1 million
before August 2008.
GROUP PERSONNEL
These results could not have been achieved without the hard work of all our
employees and on behalf of shareholders, the directors thank them most sincerely
for their efforts and contribution during the year.
PROSPECTS
The critical mass of the group has improved substantially during the year and
remains well diversified and conservatively invested. The board is confident
that the mix of businesses and investments will enable management to further
enhance shareholder value in the future.
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held on Friday 30 March 2008
at 4.00 p.m. at the registered office of the Company, 6 rue Adolphe Fischer, L-
1520, Luxembourg.
UNAUDITED CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER
2006
2007 Restated
US$000 US$000
Group revenue 90,449 78,859
Operating costs (84,417) (74,021)
Operating profit 6,032 4,838
Share of associated companies` 24 156
results
Income from other investments - 496 380
dividends
- interest 313 189
Interest paid and similar charges (1,889) (1,316)
Realised exchange losses (293) (123)
Profit on ordinary activities 4,683 4,124
before exceptional items and tax
Exceptional items 10,452 2,213
Profit before tax and minority 15,135 6,337
interests
Taxation (2,343) (1,591)
Profit after tax before minority 12,792 4,746
interests
Minority interests (2,566) (1,123)
Profit attributable to 10,226 3,623
shareholders of the Group
Reconciliation of headline
earnings per share
Basic and fully diluted earnings 69.4 c 28.2 c
per share (US cents)
Less exceptional items, net of tax (58.6)c (16.9)c
and minority interests (US cents)
Headline earnings per share (US 10.8 c 11.3 c
cents)
Interim dividend paid (US cents) 1.85c 1.75c
Recommended final dividend (US 2.65c 2.50c
cents)
Total dividends in respect of the 4.50c 4.25c
year
UNAUDITED CONSOLIDATED STATEMENT OF RECOGNISED GAINS AND LOSSES
2006
2007 Restated
US$000 US$000
Exchange differences on 333 (1,432)
translation of the financial
statements of foreign entities
Group share of fair value 3,201 1,278
adjustments
Group share of revaluations - 1,876
Prior year now reflected as - (1,876)
exceptional items in the Income
Statement
Net gains not recognised in the 3,534 (154)
income statement
Dividend paid for the previous (336) (504)
year
Shares issued 8,051 630
Costs of issue (491) -
Interim dividend declared (249) (235)
Prior years` unclaimed dividends - 10
forfeited
Net profit for the period 10,226 3,623
Total recognised gains and 20,735 3,370
increase in shareholders` funds
Shareholders` funds brought 40,652 37,282
forward
Shareholders` funds carried 61,387 40,652
forward
UNAUDITED CONSOLIDATED BALANCE SHEET
AT 30 SEPTEMBER
2007 2006
US$000 US$000
Assets
Non current assets
Property, plant and equipment 40,549 18,314
Investments 28,400 22,471
68,949 40,785
Current assets
Inventories 18,246 13,111
Accounts receivable 18,613 13,732
Cash and bank balances 7,502 1,979
44,361 28,822
Current liabilities
Accounts payable (falling due (24,398) (18,286)
within one year)
Net current assets 19,963 10,536
Total assets less current 88,912 51,321
liabilities
Non current liabilities
Accounts payable (falling due (11,216) (5,248)
after more than one year)
Deferred taxation (3,032) (129)
74,665 45,944
Capital and reserves
Called up share capital 24,765 20,160
Share premium account 3,377 -
Other reserves 15,600 11,141
Retained earnings 17,645 9,351
Shareholders` funds 61,387 40,652
Minority interests 13,278 5,292
74,665 45,944
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER
2007 2006
US$000 US$000
Operating activities
Cash (absorbed)/generated by
operations (248) 3,069
Interest paid (1,889) (1,316)
Taxation paid (1,520) (1,702)
Net cash (outflow)/inflow from
operating activities (3,657) 51
Investment activities
Purchase of tangible fixed assets (1,345)
(647)
Acquisition of investments (5,369) (7,827)
Cash acquired with subsidiary, net
of costs 689 -
Proceeds on disposal of tangible
fixed assets - 50
Proceeds on disposal of
investments 9,395 3,537
Interest received and other
investment income 809 569
Net cash inflow/(outflow) from
investment activities 4,877 (5,016)
Net cash outflow before financing
1,220 (4,965)
Financing activities
Net increase/(decrease) in long
term debt 3,435 (83)
Dividends paid - group (484) (504)
Net cash outflow from financing
activities 2,951 (587)
Net increase/(decrease) in funds
4,171 (5,552)
Net funds at 1st October (1,045) 4,431
Effect of foreign exchange rate
changes 83 76
Net funds at 30th September 3,209 (1,045)
SEGMENTAL REPORTING
Primary reporting format - business segments
The Group is organised on a worldwide basis into the following main business
segments:
Import and Tool import and non-perishable food imports
distribution to and exports from South Africa; non-
perishable food imports to Japan and
Australia.
Food production and Horticulture, niche and added value
processing agriculture in South Africa through Conafex
Property Investment properties in California and South
Africa.
Other operations Mainly transactions relating to the share
portfolios, profits on disposals of tangible
and intangible fixed assets and local head
office costs.
There are no sales between business segments. Segment assets consist of
property, plant and equipment, inventories and receivables and exclude cash
balances. Segment liabilities are operating liabilities and exclude items such
as taxation and borrowings. Capital expenditure comprises additions to
property, plant and equipment.
Unallocated assets and liabilities are cash balances, taxation and borrowings.
SEGMENTAL ANALYSIS OF RESULTS
2007 2006
US$000 US$000
2007 2006
US$000 US$000
Revenue Result Revenue Result
Restated
Import and distribution 88,141 6,492 73,963 5,681
Property 2,308 635 1,435 375
Food production and
processing - - 3,461 174
Other activities - (579) - (951)
90,449 6,548 78,859 5,279
Share of associates and 24 161
dividend income:
Interest paid and similar (1,889) (1,316)
charges
4,683 4,124
Exceptional items 10,452 2,213
Profit before tax 15,135 6,337
* Revenue of Other activities excludes dividend income and the proceeds of
sales of investments and tangible assets, the profits of which are included in
the result of this segment.
SEGMENTAL ANALYSIS OF NET ASSETS 30TH SEPTEMBER 2007
Assets Liabilit- Net assets Capital Deprecia-
ies / (liabil- expend- tion
ities) iture charge
US$000 US$000 US$000 US$000 US$000
Import and
distribution 40,534 (19,649) 20,885 212 188
Property 36,498 (873) 35,625 435 50
Listed
associate
- Food
productiom 1,530 - 1,530 - -
Listed
associate
- Other 1,388 - 1,388 - -
Other
activities
(including
investments) 20,918 (1,093) 19,825 - 9
Unallocated 12,442 (17,030) (4,588) - -
(including
cash, tax and
debt)
Consolidated
total 113,310 (38,645) 74,665 647 247
SEGMENTAL ANALYSIS OF NET ASSETS 30 SEPTEMBER 2006
Import and
distribution 27,722 13,678 14,044 821 158
Property 14,814 585 14,229 306 16
Listed
associate
- Food
production 1,253 - 1,253 - -
Listed
associate
- Other 1,286 - 1,286 - -
Other
activities
(including
investments) 20,145 643 19,502 218 8
Unallocated 4,387 8,757 (4,370) - -
(including
cash, tax
and debt)
Consolidated
total 69,607 23,663 45,944 1,345 182
SECONDARY REPORTING FORMAT - GEOGRAPHICAL SEGMENTS
The Group operates in the following countries or states:
Luxembourg
The non-trading location of the parent company, including part of the Group
investment portfolio.
South Africa
Location of the bulk of the Group`s import and distribution business and part of
the Group`s property portfolio.
Australia
Location for part of the Group`s import and distribution business.
United States
Part of the Group`s property portfolio is located there.
Jersey
Location of part of the Group`s import and distribution business and part of the
Group`s investment portfolio.
2007 2006
Group Total Capital Group Total Capital
Revenue net Expendit- revenue net Expendit-
assets ure assets ure
US$000 US$000 US$000 US$000 US$000 US$000
Australia 3,006 3,933 117 2,992 2,568 239
United States 1,060 13,107 36 1,089 13,021 94
Jersey 19,810 10,365 - 20,189 8,370 -
Other 458 13,370 - 458 5,896 -
countries
Total outside 24,334 40,775 153 24,728 29,855 333
Africa
South Africa 66,115 33,890 494 54,131 16,089 794
90,449 74,665 647 78,859 45,944 1,127
Total assets and capital expenditure are shown by the geographical area in which
the assets are located.
EXCEPTIONAL ITEMS
2007 2006
US$000 US$000
Income
Surplus on disposal of investments 4,237 1,405
Release of investment provision 576 136
Negative goodwill written off 1,471 -
Property revaluations 4,541 2,325
Total income 10,825 3,866
Charges
Costs relating to share bonus issue and EBT - (925)
Provision against associate - (719)
Mortgage redemption fee (286) -
Loss on disposal of tangible fixed assets (87) (9)
Exceptional items - net income 10,452 2,213
Notes:
1. These preliminary results for the year ended 30 September 2007 and the
balance sheet at that date, which are unaudited, comply with International
Financial Reporting Standards and have been prepared on the basis of accounting
policies adopted for the year ended 30 September 2006.
2. Group capital expenditure in the year was US$647,000 (2006 - US$1,127,000).
There were no capital expenditure commitments at 30 September 2007 (2006 - nil).
3. Bank loans and overdrafts of US$4,293,000 (2006 - US$3,025,000) are
included in current liabilities. Group long-term finance is secured on various
local properties and bears interest at local commercial rates.
4. Earnings per share and headline earnings per share are based on the result
attributable to shareholders of the Company and on the weighted average of
14,726,758 shares in issue (2006 - 12,845,000).
Date: 27/12/2007 08:00:01 Produced by the JSE SENS Department.
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