| Thu 23 Dec 2004, 9:19 | | Monteagle - Preliminary announcement of unaudited |
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Monteagle - Preliminary announcement of unaudited results for the year ended
30th September 2004 and dividend declaration
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
23rd December 2004
Preliminary announcement of unaudited results for the year ended 30th September
2004 and dividend declaration
INTRODUCTION
Monteagle`s objective is to achieve capital growth and a steadily progressive
dividend over the long term from a diversified range of investments. The
Company holds portfolios of leading investments in the U.S.A., U.K., Europe and
the Far East as well as industrial property in the United States. The Group`s
import, export and distribution businesses operate internationally and, in
Southern Africa, we have a property portfolio and interests in agriculture and
mining.
RESULTS
We are pleased to be able to report a very successful year for our continuing
activities mentioned below. This has enabled us to present a strong and liquid
balance sheet with increases in hard currency net assets despite a full and
final exceptional provision of US$8.5 million against the carrying value of our
Zimbabwean assets. The highlights of the results are:
Group revenues up 72% to US$63 million.
Operating profit up 129% to US$2,944,000.
Exceptional profits of US$1.5 million on investments, compared to US$2.4 million
last year.
Net assets per share up 8.7% to US$5.11 from US$4.70. These net assets are held
in Europe, United States of America and Australia (US$3.93) and South Africa
(US$1.18) and total US$32,166,000.
Dividend increased by 17% to 7 US cents per share from 6 US cents per share.
NET ASSETS
Net assets held in hard currencies have increased, mainly because of
revaluations, retained operating profits and increases in our portfolio values,
and now stand at US$26,335,000 compared to US$20,242,000 last year. After
minority interests, 77% of total net assets relate to assets owned in Europe,
the U.S.A. and Australia. The rest of our net assets are in South Africa, and
as these assets are owned in Luxembourg they are freely transferable. Our
policy is not to hedge our net asset position against fluctuations in exchange
rates and therefore our net asset position will fluctuate as exchange rates move
compared to the US dollar, our reporting currency.
IMPORT AND DISTRIBUTION
Turnover and volumes at our shipping and distribution businesses have increased
significantly through further growth achieved in our core markets, namely South
Africa, Japan and Australia. Our long term policy of building a broad spread of
suppliers and customers remains our objective and we are sourcing products for
our international trade in private label food and non-food businesses from an
even more varied range of countries throughout Europe, the Far East, South
Africa, South America and the Middle East. Our primary focus is to be the
global supplier of choice for private label programs, which is being achieved
through the effective establishment of long-term strategic customer focused
partnerships with retailers and wholesalers on an international basis.
Our tool import and distribution businesses in South Africa and Australia have
achieved major growth in both turnover and volumes and continue to increase
their market share in both countries. The buoyant retail market in South Africa
has been well serviced by us during the year under review and new ranges have
added to our success. Operating margins have been maintained in a highly
competitive market. Price deflation has also meant that a much larger quantity
of product was handled to achieve growth in local currency. Our relocation to
larger and more practical premises allowed this growth to be achieved.
PROPERTY
Our remaining multi-tenanted industrial property in California continues to
produce satisfactory returns. Our search for another investment property in San
Diego is proving to be a challenging task given the current strong investment
demand for industrial property in the region. We hope to find a suitable
property during the current financial year and in the meantime we have an
investment of US$3 million in U.S. Treasury Bills.
Rental income from our South Africa properties increased during the year and the
Group invested in further warehousing which is now fully occupied.
INVESTMENT PORTFOLIOS
The Group`s portfolios of quality equities saw good gains during the year. Our
portfolios are well diversified and we have exposure to the U.S., U.K., Europe
and the Far East markets. Higher oil and energy costs are currently the biggest
threat to world stock markets, but otherwise the outlook seems favourable.
AGRI-BUSINESSES
The results of this division mainly relate to Conafex`s joint venture in a tea
and coffee, packing and distribution business in South Africa, acquired at the
end of August last year. Comparative figures relate largely to Conafex`s
specialist low volume tea packing operations in the UK, whose results continue
to improve.
In October 2004, Conafex acquired, for approximately US$475,000, a 27% stake in
Grassroots Group (Pty.) Ltd, a South African company specialising in the
production of natural plant extracts used for flavourings, fragrances and
complementary medicines.
MINING
Since the year-end, our mining associate, Falcon, has received the final
distribution on liquidation of its Chilean subsidiary and now has cash deposits
of US$4.2 million available for re-investment in an established, profitable,
business in the United Kingdom. The Zimbabwean gold mines owned by Falcon
continue to operate, for the time being, but are totally dependent for survival
on the gold pricing regime managed by the Government of Zimbabwe. We value our
investment in Falcon at market value (which is still below its net cash asset
value), and we have therefore released US$880,000 of the provision against the
cost of our investment in Falcon.
ZIMBABWE
Our agricultural and mining interests in Zimbabwe have again not been
consolidated as the ability of these businesses to remit earnings remains
uncertain. Dividend income from Zimbabwe amounted to US$131,000 in the year,
(2003: US$53,000) and, following the exceptional provision mentioned above,
these investments have been provided against in full.
GROUP PERSONNEL
The continued improvement in our results would not be possible without the hard
work of our employees, the majority of whom are based in southern Africa, and we
would like to thank all of them for their efforts during the year. We
particularly thank our employees working in agriculture and gold mining in
Zimbabwe who are working under exceptionally difficult circumstances.
DIVIDEND
In view of the favourable results and the ongoing trends of our recurring
businesses, your Directors are pleased to recommend an increased dividend for
the year of 7 US cents per share (2003: 6 US cents).
PROSPECTS
The Group`s focus is now on its import and distribution businesses, supported by
investments in property and international listed portfolios. Our subsidiary
Conafex is diversifying its investments into niche and value added sectors in
South Africa and this should be earnings and value enhancing over the medium
term. Our associate Falcon continues to search for a suitable business in which
to re-invest its cash in the United Kingdom. Continuing activities, since the
year end, give us cause for optimism and we expect the six months to 31st March
2005 will once again show increased turnover, rentals and dividend income.
J. M. Robotham
Chairman
D. C. Marshall
Chief Executive
NOTICE OF MEETING AND DECLARATION OF DIVIDEND
The Annual General Meeting will be held on Thursday 24th March 2005 at 4.00 p.m.
at the registered office of the Company, 6 rue Adolphe Fischer L-1520
Luxembourg.
Last day to trade cum div Thursday, 10 March
Shares trade ex dividend on the South African
stock exchange Friday, 11 March
Shares trade ex dividend on the Luxembourg
stock exchange Friday 11 March
Record date Friday 18 March
Pay Date Friday 23 April
Currency conversion date,noon on Wednesday 2 March
No dematerialisation nor rematerialisation of share certificates on the South
African Register may take place, nor transfer of shares between the registers in
Luxembourg and South Africa may take place, between Friday 11 March 2005 and
Friday 18 March 2005, both days inclusive.
Copies of the annual report and accounts will be posted to shareholders in
February 2005.
Unaudited Consolidated Profit and Loss Account
2004 2003
US$000 US$000
Group revenue 63,700 37,046
Operating costs (60,756) (35,762)
Operating profit 2,944 1,284
Share of associated companies results (1) (8)
Income from Zimbabwean investments - dividends 131 53
Income from other investments - dividends 308 256
- interest 306 160
Interest paid and similar charges (969) (534)
Exchange 139 (22)
Profit on ordinary activities before exceptional 2,858 1,189
items and tax
Exceptional items, excluding provision against 1,539 2,451
investment in Zimbabwe
Profit before special provision, tax and minority 4,397 3,640
interests
Provision against investment in Zimbabwe (8,444) -
(Loss)/Profit before tax and minority interests (4,047) 3,640
Tax (1,168) (1,316)
(Loss)/Profit after tax before minority interests (5,215) 2,324
Minority interests 2,261 (743)
(Loss)/Profit attributable to shareholders of the (2,954) 1,581
Group
Reconciliation of headline earnings per share
Basic and fully diluted (loss)/earnings per share (47)c 25 c
(US cents)
Less exceptional items, net of tax and minority 60 c (20)c
interests (US cents)
Headline earnings per share (US cents) 13c 5 c
Proposed dividend (US cents) 7.0c 6.0c
Unaudited Consolidated Statement of Recognised Gains and Losses
Exchange differences on translation of the (289) 944
financial statements of foreign entities
Group share of investment fair value adjustments 3,771 1,102
Group share of property revaluations 2,373 158
Net profit not recognised in the income statement 5,855 2,204
Dividend paid for the previous year (378) (315)
Net (loss)/profit for the period (2,954) 1,581
Total recognised profit and increase in 2,523 3,470
shareholders` funds
Shareholders` funds brought forward 29,643 26,173
Shareholders` funds carried forward 32,166 29,643
Unaudited Consolidated Balance Sheet
2004 2003
US$000 US$000
Assets
Non current assets
Property, plant and equipment 14,244 10,798
Investments 14,115 17,514
Intangibles 296 269
28,655 28,581
Current assets
Inventories 9,841 7,264
Accounts receivable 13,231 10,839
Cash and bank balances 7,857 7,710
30,929 25,813
Current liabilities
Accounts payable (falling due within one year) (17,628) (12,946)
Net current assets 13,301 12,867
Total assets less current liabilities 42,956 41,448
Non current liabilities
Accounts payable (falling due after more than one (5,116) (4,890)
year)
Deferred taxation 155 102
36,995 36,660
Capital and reserves
Called up share capital 9,450 9,450
Other reserves 11,349 8,056
Retained earnings 11,367 12,137
Shareholders` funds 32,166 29,643
Minority interests 4,829 7,017
36,995 36,660
Unaudited Consolidated Cash Flow Statement
2004 2003
US$000 US$000
Operating activities
Cash generated by operations 636 959
Interest paid (969) (534)
Taxation paid (807) (694)
Net cash outflow from operating activities (1,140) (269)
Investment activities
Purchase of tangible fixed assets (2,149) (388)
Acquisition of investments (3,085) (1,106)
Investment in joint venture - (871)
Disposal of tangible fixed assets 1,254 12
Disposal of investments 3,243 3,478
Interest received and other investment income 614 416
Dividends received from Zimbabwean investments 131 53
Net cash (outflow)/inflow from investment 8 1,594
activities
Net cash (outflow)/inflow before financing (1,132) 1,325
Financing activities
Net increase in long term debt 90 977
Dividend paid - group (378) (315)
- minority shareholders (22) (28)
Net cash inflow from financing activities (310) 634
Net (decrease)/increase in funds (1,442) 1,959
Net funds at 1st October 6,314 4,531
Effect of foreign exchange rate changes 85 (176)
Net funds at 30th September 4,957 6,314
Notes:
1.As described in the Chairman`s Review, the earnings, assets and liabilities of
Zimbabwean subsidiaries and associated companies have not been consolidated.
Investments have been reflected in accordance with IAS 39. These preliminary
results for the year ended 30th September 2004 and the balance sheet at that
date, which are unaudited, have otherwise been prepared on the basis of
accounting policies adopted for the year ended 30th September 2003.
2.Group capital expenditure in the year was US$2,149,000 (2003 - US$388,000).
There were no capital expenditure commitments at 30th September 2004 (2003 -
nil).
3.-Bank loans and overdrafts of US$2,900,000 (2003 - US$1,396,000) are included
in current liabilities. Group long-term finance is secured on various local
properties and bears interest at local commercial rates.
Segmental Reporting
Primary reporting format - business segments
The Group is organised on a worldwide basis into four main business segments:
Import and distribution
tool import and non-perishable food exports in South Africa and exports to Japan
and Australia.
Agri-business
horticulture, niche and added value agriculture in South Africa and Zimbabwe
held through Conafex.
Mining
three gold mines in Zimbabwe. One is owned 33.33% by the Group and 66.67% by
our associated company, Falcon, and two are owned by Falcon through its 57.1%
subsidiary, Falcon Gold Zimbabwe Limited.
Property
investment properties in California and South Africa.
Other operations of the Group mainly comprise transactions relating to the share
portfolios, profits on disposals of tangible and intangible fixed assets and
local head office costs.
There are no sales or other transactions 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
2004 2003
US$000 US$000
Revenue Result Revenue Result
Import and distribution 58,191 3,878 34,962 2,065
Property 1,197 212 1,107 181
Agri-business 3,976 (176) 738 (356)
Other operations 336 * 501 239 * 1,337
63,700 4,415 37,046 3,227
Income from Zimbabwean 131 53
investment
Share of associates and
dividend income
Agri-business (26) 11
Mining 846 883
Interest paid and similar (969) (534)
charges
4,397 3,640
Exceptional provision against
Zimbabwean investment (8,444) -
(Loss)/Profit before tax (4,047) 3,640
* Other revenue 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 - 2004
Assets Liabili- Net Capital Depre-
ties assets/ Expendi- ciation
(liabili- ture charge
ties)
US$000 US$000 US$000 US$000 US$000
Import/distribution 21,931 12,338 9,593 362 181
Property 12,579 167 12,412 1,731 48
Agri-business - Group 3,688 1,525 2,163 56 26
- Associates 259 - 259 - -
Gold mining - 2,156 - 2,156 - -
Associates
Other 8,724 664 8,060 - 8
Unallocated * 10,402 8,050 2,352 - -
Consolidated total 59,739 22,744 36,995 2,149 263
Import and 16,690 8,877 7,813 309 113
distribution
Consolidated analysis of net assets - 2003
Property 10,016 424 9,592 56 12
Agri-business - Group 10,581 1,540 9,041 23 31
- Associates 360 - 360 - -
Gold mining 1,338 - 1,338 - -
-Associates
Other 7,654 330 7,324 - 8
Unallocated * 7,857 6,665 1,192 - -
Consolidated total 54,496 17,836 36,660 388 164
2004 2003
US$000 US$000
Group Total Capital Group Total Capital
Revenue Net Expen- Revenue Net Expen-
Assets diture Assets diture
US$000 US$000 US$000 US$000 US$000 US$000
Australia 2,912 1,713 19 2,241 1,197 -
United 919 9,231 91 884 7,430 56
States
Jersey 14,097 6,419 - 9,986 4,190 -
Other 1,073 8,972 56 738 7,425 23
countries
Total 18,001 26,335 166 13,849 20,242 79
outside
Africa
South Africa 44,699 10,660 1,983 23,197 7,958 309
Zimbabwe - - - - 8,460 -
63,700 36,995 2,149 37,046 36,660 388
* Unallocated assets and liabilities are cash balances taxation and borrowings.
Date: 23/12/2004 09:00:33 AM
Produced by the JSE SENS Department
