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Monteagle Holdings Societe Anonyme
(Incorporated in Luxembourg - RC Luxembourg No. B 19600)
Share Code: MTE
ISIN Code: LU0035797272
INTERIM REPORT 2002
MONTEAGLE HOLDINGS S.A.
Registered Office:
6 rue Adolphe Fischer,
L-1520, Luxembourg
TO THE MEMBERS 26 June 2002
We are pleased to be able to report on another satisfactory half year for
our Group. During the last two years your directors have implemented a
substantial change in the internal structure of the Group`s balance sheet
and the location of our assets. Without reducing our financial support or
managerial encouragement to our operations in southern Africa, we have
stripped out all non-essential assets and investments, and redeployed them
into hard currencies. These actions not only proved to be timely, but are
now greatly benefiting our expanding trading businesses both within southern
Africa and internationally.
Turnover for the Group, including our share of associates, has increased to
US$28,620,000 [R325,266,300] for the six months to 31st March 2002, compared
to US$17,511,000 [R140,264,861], mainly because of inflationary increases
affecting our farming and gold mining interests in Zimbabwe. Profit before
tax and exceptional items has increased from US$687,000 [R5,502,938] to
US$2,066,000 [R23,480,090] and this is analysed by activity in note 2.
Earnings per share have increased to US$14.4c [SA163.66c] from US$5.2c
[SA41.7c] last year and are analysed in note 4.
The Group had net assets at market value of US$33,712,000 [R383,136,880]
(US$5.35 [R60.80] per share) at 31st March 2002. This compares to
US$33,281,000 [R299,529,000] (US$5.28 [R47.52] per share) at 30th September
2001, after providing for the final dividend, and US$32,659,000
[R261,601,856] (US$5.18 [R41.49] per share) a year ago. As mentioned above
the mix of these assets has changed and we now have US$17,413,000
[R197,898,745] (US$2.76 [R31.37] per share) outside southern Africa compared
to US$12,719,000 [R101,880,462] (US$2.02 [RR16.18] per share) a year ago.
Our importing, exporting and international trading businesses showed good
growth, and we look forward to a very satisfactory year-end result. We have
broadened the base of the products handled both into and out of southern
Africa and also between other countries. We are now staffed by a young, yet
experienced, and very energetic team.
In California our commercial properties with a gross asset value of
US$8,955,000 [R101,773,575] remained fully occupied and income rose once
again. Since the half year closed, we have refinanced our commercial
building at a reduced interest rate, and we are negotiating the sale of our
office block at about US$500,000 [R5,682,500] above our book value. Should
the transaction be completed, we will consider using the proceeds to acquire
another multi-tenanted commercial building in California. However, the
decline in the South African Rand has reduced the US$ value of the
contribution from our South African properties as shown in note 2.
Of our total assets of US$5.35 [R60.80] per share, less than US$2.15
[R24.43] remain invested in Zimbabwe and shareholders must regard the value
of these assets with caution. The profits generated in Zimbabwe show a
substantial improvement, but this is largely due to a chaotic currency
situation and it is therefore difficult to foresee the outcome for the full
year.
Commercial agriculture in Zimbabwe is very troubled and the uncertainty
surrounding the Government`s policy leaves our management with a hard task.
With a high proportion of our agricultural production destined for export
into hard currency areas, we are to a certain extent protected from rampant
inflation of approximately 120 percent p.a. This situation is not
sustainable, and Zimbabwe`s agricultural production for export, and of food
for local consumption, is diminishing rapidly.
Our gold mining activities have decreased during the six-month period and
sadly we have closed one of the four mines in the group. Losses have also
been made by some of the other mines and the industry as a whole is in a
parlous state. Although the Zimbabwe government introduced a gold price
support scheme, which is adjusted from time to time, revenues are
insufficient to sustain medium term viability of our mines in the face of
ever increasing costs, unless there is a change in government policy.
Special credit must go to all our employees in Zimbabwe for maintaining the
operations of both the agricultural and gold mining business in our Group
and we remain very concerned about the future of Zimbabwe.
After the sale and reorganisation of our general portfolio holdings referred
to above we had, as a group, approximately US$10,000,000 [R113,650,000] to
reinvest. We had invested about 60% of these funds by 31st March 2002 and
intend to use the next six months to continue our investment policy.
Equities are now held across the markets of the United Kingdom, the United
States of America, Switzerland and other European countries. At 31st March
2002 we had a surplus of market value above cost despite a very hesitant
investment climate throughout the world.
The diversity of our operations, our dedicated Group staff and our strong
balance sheet give us confidence for the future.
J.M. Robotham, D.C. Marshall
Chairman Chief Executive
Consolidated group profit and loss account
Year ended Half years ended Half years ended Year e
30th 31st March 31st March 30th
September September
2001 2001 2002 2002 2001 2001
Unaudited Unaudited Notes Unaudited Unaudited
SAR000 SAR000 SAR000 US$000 US$000 US$0
376,191 140,265 325,266 Group 28,620 17,511 41,7
Revenue
including
share of
Associates
(142,749) (55,430) (174,861) Less revenue (15,386) (6,920) (15,
of
Associates
233,442 84,835 150,405 Group 2 13,234 10,591 25,9
revenue
(217,395) (80,966) (141,017) Operating (12,408) (10,108) (24,
costs
16,047 3,869 9,388 Operating 826 483 1,78
profit
18,468 2,195 14,263 Share of 1,255 274 2,05
associated
companies`
results
2,853 1,578 1,193 Income from 105 197 317
investments
- dividends
2,646 609 1,273 - interest 112 76 294
40,014 8,251 26,117 2,298 1,030 4,44
(13,446) (2,748) (2,637) Interest (232) (343) (1,4
paid and
similar
charges
26,568 5,503 23,480 Profit on 2,066 687 2,95
ordinary
activities
before
exceptional
items
and taxation
58,050 665 136 Exceptional 3 12 83 6,45
items
84,618 6,168 23,616 Profit 2 2,078 770 9,40
before
taxation
(6,219) (1,851) (6,069) Taxation (534) (231) (691
78,399 4,317 17,547 Profit after 1,544 539 8,71
taxation
(10,143) (1,642) (7,239) Attributable (637) (205) (1,1
to outside
shareholders
68,256 2,675 10,308 PROFIT 907 334 7,58
ATTRIBUTABLE
TO
SHAREHOLDERS
76.5 Dividend per - - 8.5
share (US
- - cents)
SA Cents SA Cents SA Cents
1,083.6 41.7 163.7 Earnings per 4 14.4 5.2 120.
share (US
cents) -
basic
SA Cents SA Cents SA Cents
216.0 34.4 161.4 Headline 14.2 4.3 24.0
earnings per
share (US
cents)
Changes in equity
68,256 2,675 10,308 Net profit for the 907 334 7,584
period
- (304) - Revaluations - (38) -
(2,844) (5,944) (5,876) Exchange differences (517) (742) (316)
(1,953) - - Change in interest in - - (217)
subsidiaries
(4,824) (4,293) (6,092) Dividends (536) (536) (536)
58,635 (7,866) (1,660) Total recognised (146) (982) 6,515
(losses)/profits
226,224 201,342 359,714 Shareholders funds at 31,651 25,136 25,136
start of period
284,859 193,476 358,054 Shareholders funds at 31,505 24,154 31,651
end of period
Consolidated group balance sheet
30th 31st March 31st March 30th
September September
2001 2001 2002 2002 2001
Unaudited Unaudited Unaudited Unaudited
SAR000 SAR000 SAR000 Notes US$000 US$000
Fixed assets
182,097 167,756 228,437 Tangible fixed 20,100 20,943
assets
Investments 6
101,565 82,696 144,347 Listed 12,701 10,324
associates
(Market value
-
US$14,718,000)
25,515 46,234 64,735 Listed - 5,696 5,772
other (Market
value -
US$6,682,000)
4,536 3,637 5,830 Unlisted 513 454
associates
189 304 1,477 Other 130 38
unlisted
313,902 300,627 444,826 39,140 37,531
Current assets
63,594 41,412 86,920 Inventories 7,648 5,170
44,496 32,305 51,449 Debtors 4,527 4,033
72,747 10,910 48,403 Cash 4,259 1,362
180,837 84,627 186,772 16,434 10,565
Current
liabilities
(77,562) (81,022) (99,023) Creditors (8,713) (10,115)
(falling due
within one
year)
103,275 3,605 87,749 Net current 7,721 450
assets
417,177 304,232 532,575 Total assets 46,861 37,981
less current
liabilities
(31,365) (29,653) (37,277) Creditors (3,280) (3,702)
(falling due
after more
than one year)
(23,724) (19,337) (34,925) Provisions for (3,073) (2,414)
liabilities
and deferred
taxation
362,088 255,242 460,373 40,508 31,865
Capital and
reserves
85,050 75,695 107,399 Share capital 9,450 9,450
- 19,312 - Share premium - 2,411
55,197 52,010 72,793 Other reserves 6,405 6,493
144,612 46,459 177,862 Retained 15,650 5,800
earnings
284,859 193,476 358,054 Shareholders` 31,505 24,154
funds
77,229 61,766 102,319 Minority 9,003 7,711
interests
362,088 255,242 460,373 40,508 31,865
304,353 261,602 383,137 Shareholders 5 33,712 32,659
funds
including
listed
investments at
market value
R 48.33 R 41.49 R 60.80 Net assets per 6 $5.35 $5.18
share
Net assets per
share outside
Africa after
providing for
proposed
dividends
R 24.84 R 16.18 R 31.37 6 $2.76 $2.02
Consolidated cash flow statement
Year Half years ended Half years ended Year
ended ended
30th 31st March 31st March 30th
September September
2001 2001 2002 2002 2001
Unaudited Unaudited Unaudited Unaudited
SAR000 SAR000 SAR000 US$000 US$000
Operating
activities
16,218 (873) (6,489) Cash (absorbed (571) (109)
by)/generated from
operating
activities
(8,010) (2,748) (2,637) Interest paid (232) (343)
(5,436) (2,491) (5,535) Taxation paid (487) (311)
2,772 (6,112) (14,661) Net cash (1,290) (763)
(outflow)/inflow
from operating
activities
Investment
activities
(3,951) (1,266) (3,228) Net purchase of (284) (158)
tangible fixed
assets
(30,645) (1,682) (36,993) Purchase of (3,255) (210)
investments
125,514 6,208 - Disposal of - 775
investments
5,499 2,195 2,455 Interest received 216 274
and other
investment income
2,673 537 4,080 Dividends received 359 67
from associates
99,090 5,992 (33,686) Net cash (2,964) 748
(outflow)/inflow
from investment
activities
101,862 (120) (48,347) Net cash (4,254) (15)
(outflow)/inflow
before financing
Financing
activities
(2,205) (369) (807) Net decrease in (71) (46)
long term financing
(5,490) - - Foreign exchange - -
cost of
subsidiary`s
dividend
(4,824) - - Dividend paid - - -
group
(1,530) (64) - - minority - (8)
shareholders
(14,049) (433) (807) Net cash outflow (71) (54)
from financing
activities
87,813 (553) (49,154) Net (4,325) (69)
(decrease)/increase
in cash
(24,750) (22,028) 83,965 Net funds/(debt) at 7,388 (2,750)
start of period
3,429 1,434 (4,694) Effect of foreign (413) 179
exchange rates
66,492 (21,147) 30,117 Net funds/(debt) at 2,650 (2,640)
end of period
Offices:
United Kingdom: South Africa:
25 City Road, 11 Sunbury Park,
London, EC1Y 1BQ La Lucia 4051,
Durban
Transfer agents:
Europe South Africa
C.I. Registrars Limited Computershare Investor Services Limited
Cresta House, Alma Street, 11 Diagonal Street
Luton, Bedfordshire, Johannesburg 2001
LU1 2PU, U.K. (P.O. Box 1053, Johannesburg, 2000
Notes to the interim statement
1. The results and the cash flow statement for the half-year ended 31st
March 2002 are unaudited and have been prepared on the basis of accounting
policies adopted in the accounts for the year ended 30th September 2001 and
comply with International Accounting Standards except as set out in note 8
and Luxembourg law in all material respects. The results for the year to
30th September 2001 are an abridged version of the Group`s full accounts for
that year which have been filed with the relevant authorities.
2. The segmental analysis of turnover and operating profit is as follows:
Half years ended 31st March Year ended 30th
September
2002 2001 2001
US$000 US$000 US$000
Revenue Result Revenue Result Revenue Result
Analysed by
activity:-
Import/distribution 7,691 524 7,323 415 16,874 1,064
Property 675 255 761 272 1,499 567
Agriculture 2,969 183 1,540 7 5,100 309
Gold mining 1,899 137 967 140 2,215 432
Other - (37) - (78) 250 22
13,234 1,062 10,591 756 25,938 2,394
Share of associated
companies results:-
Agriculture 9,603 1,443 4,487 451 10,027 2,482
Gold mining 5,783 (188) 2,433 (177) 5,834 (430)
Group revenue 28,620 17,511 41,799
including
associates
Interest paid (251) (343) (1,494)
Profit before 2,066 687 2,952
exceptional items
Exceptional items 12 83 6,450
Profit before tax 2,078 770 9,402
Half years ended 31st March Year ended 30th
2001 2001 2002
SAR000 SAR000 SAR000
Result Revenue Result Revenue Result Revenue
Analysed by
activity:-
Import/distribution 9,576 151,866 3,324 58,658 5,955 87,408
Property 5,103 13,491 2,179 6,096 2,898 7,671
Agriculture 2,781 45,900 56 12,335 2,080 33,743
Gold mining 3,888 19,935 1,121 7,746 1,557 21,582
Other 198 2,250 (625) - (420) -
21,546 233,442 6,055 84,835 12,070 150,404
Share of associated
companies results:-
Agriculture 22,338 90,243 3,613 35,941 16,400 109,138
Gold mining (3,870) 52,506 (1,418) 19,489 (2,137) 65,724
Group revenue 376,191 140,265 325,266
including
associates
Interest paid (13,446) (2,747) (2,853)
Profit before 26,568 5,503 23,480
exceptional items
Exceptional items 58,050 665 136
Profit before tax 84,618 6,168 23,616
The results of our agriculture and gold mining operations in Zimbabwe
continue to be translated at the official rate of exchange for the Zimbabwe
dollar, which has remained unchanged over the period at an unrealistic rate
of to Z$55:US$1. There is a parallel rate of exchange for the Zimbabwe
dollar which has diverged considerably from the official rate and now stands
in excess of Z$650:US$1. Income from agriculture and mining was earned at
effective average exchange rates of approximately Z$220:US$1 and Z$150:US$1
respectively for the period under review. Comparable rates for the same
period last year were approximately Z$80:US$1 and Z$55:US$1. With local
inflation running in excess of 100% p.a. the existence of a fixed exchange
rate distorts the true growth in the results of these operations.
3. The exceptional items arise from the surplus on disposal of investments
and tangible fixed assets.
30th 31st 31st 30th
September March March September
2001 2001 2002 2002 2001 2001
SAR000 SAR000 SAR000 US$000 US$000 US$000
63,324 833 - Surplus on disposal - 104 7,036
of listed and
unlisted
investments
27 (256) - (Deficit)/Surplus - (32) 3
on disposals of
tangible fixed
assets
- 88 136 Share of associated 12 11 -
company`s surplus
on disposal of
fixed assets
(5,301) - - Investment - - (589)
provisions
58,050 665 136 Exceptional items - 12 83 6,450
net income
4. Earnings per share are based on profits attributable to members and on
the average of 6,300,000 shares in issue during the period, allowing for the
shares held in Treasury. Headline earnings per share exclude extraordinary
items after tax.
The source of these earnings is analysed geographically as follows:
30th 31st 31st 30th
September March March September
2001 2001 2002 2002 2001 2001
SAcents SAcents SAcents USc USc USc
145 22 114 Zimbabwe 10.0 2.8 16.1
14 (6) 19 South Africa 1.7 (0.8) 1.5
58 18 28 Other including 2.5 2.3 6.4
central costs
217 34 161 Headline earnings 14.2 4.3 24.0
per share
868 7 2 Exceptional gains 0.2 0.9 96.4
1,085 41 163 Total earnings per 14.4 5.2 120.4
share
5. Net assets
30th 31st 31st 30th
September March March September
2001 2001 2002 2002 2001 2001
SAR000 SAR000 SAR000 US$000 US$000 US$000
131,805 132,872 216,390 Investments at 19,040 16,588 14,645
book value
160,830 207,622 250,519 Listed 22,043 25,920 17,870
investments at
market value and
other investments
at cost
29,025 74,750 34,129 Net unrealised 3,003 9,332 3,225
profits on
investments
(before tax)
(9,531) (6,624) (9,046) Minority share of (796) (827) (1,059)
excess
284,859 193,476 358,054 Shareholders` 31,505 24,154 31,651
funds
304,353 261,602 383,137 Net assets 33,712 32,659 33,817
attributable to
shareholders
6. Net assets per share are based on Shareholders` funds plus net
unrealised profits on investments (before tax) divided by the number of
shares in issue at the period end.
7. Net capital expenditure during the period was US$284,000 [R3,227,660].
There was US$237,000 [R2,693,505] of authorised capital expenditure, but
none was contracted at 31st March 2002.
8. Our Zimbabwe subsidiaries have not complied with IAS 29, Financial
Reporting in Hyperinflationary Economies. All expenditure in Zimbabwe is
subjected to a stringent cost/benefit analysis and the additional costs
arising from the preparation and audit of restated accounts incorporating
hyperinflation adjustments cannot be justified.
In normal circumstances the exchange rates of countries suffering high
levels of inflation depreciate to reflect inflation levels. However, the
Government of Zimbabwe has ensured that the official Zimbabwe dollar
exchange rate has remained relatively unchanged over the period.
Consequently, we are unable to determine the full impact of any changes to
the financial statements that would be required to adjust for the effects of
hyperinflation. It is estimated that the only significant impact on the
Group balance sheet would be to reverse prior year translation differences,
which have reduced Zimbabwe fixed assets at the balance sheet dates, and to
reduce unrealised exchange losses by a corresponding amount.
Sponsor
PricewaterhouseCoopers Corporate Finance
Date: 26/06/2002 07:20:00 AM Produced by the SENS Department
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