| Wed 21 Dec 2011, 13:41 | | MMP - Marshall Monteagle Plc - Reviewed results for year end 30 September |
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MMP
MMP
MMP - Marshall Monteagle Plc - Reviewed results for year end 30 September
2011
MARSHALL MONTEAGLE PLC
(Incorporated in Jersey Registration No. 102785)
(SA Registration No: 2010/024031/10)
JSE CODE: MMP ISIN: JE00B5N88T08
PROVISIONAL ANNOUNCEMENT OF REVIEWED RESULTS FOR THE YEAR ENDED 30 SEPTEMBER
2011
Introduction
The directors report a satisfactory performance by the Group`s diverse
operations and investments, especially given the deteriorating economic
environment and continued volatility in both equity and currency markets.
Marshall Monteagle`s objective is to achieve capital growth internationally
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 import and distribution businesses
operate internationally and in South Africa it has interests in food
processing and logistics.
Results
The amounts shown as comparatives for 2010 relate to the audited financial
statements of Marshall Monteagle Holdings SA, which was the predecessor of
Marshall Monteagle PLC. The explanatory narrative below is on the same
basis.
- Group revenue for the twelve months to 30th September 2011 is up 20% to
US$196,391,000 compared to US$163,870,000. In constant currency, sales
increased by US$20,717,000 (13%). Operating profit is higher at
US$10,703,000 from US$9,810,000, an increase of 9%.
- Group profit before tax increased to US$10,145,000 from US$7,623,000. The
directors are proposing a final dividend of 1.60 US cents, (2010 - 1.50 US
cents) making a total of 3.10 US cents (2010 - 3.00 US cents) for the year.
- Net assets attributable to shareholders increased by 4% to US$1.71 per
share from US$1.64 at 30th September 2010. US$0.79 of net assets per share -
46% (2010 - 51%) are held in Europe and U.S.A. The remaining assets,
equivalent to US$0.92 per share - 54% (2010 - 49%) are held predominantly in
South Africa.
Import and Distribution
It has been another successful year for our import and distribution business
in food and household consumer products reflecting growth in most areas.
This has been achieved in an extremely challenging economic environment with
volatile raw material pricing, inconsistent availability of certain product
lines and significant currency movements. This division continues to provide
procurement, supply chain and risk management services to multiple retailers,
wholesalers and manufacturers in Southern and Central Africa, Indian Ocean
Islands and Australia. We remain committed to working with suppliers of
quality raw materials, skilled technologists and first world production
facilities, these relationships being paramount to the success of our
business. During the year we made further improvements to our supply-chain
to ensure the most efficient and cost effective channel from factory to shelf
for the benefit of our customers. With the many financial and economic
imbalances currently being experienced internationally we anticipate
continued volatility during the year ahead, but we are well positioned to
operate under these conditions.
This is our first full year of results from our coffee business which was
acquired from our former associate Conafex Holdings S.A. in 2010. The
business markets its products to multiple retailers and the hospitality
sector in South Africa and managed to secure additional contracts during the
year. Management also increased capacity during the second half of the year
by importing a state of the art new roaster from Germany.
Our tool and machinery import and distribution businesses had a particularly
challenging year and profits were down substantially on 2010. Pressure on
discretionary spending in South Africa and the tough trading environment
shows little sign of improving in the near term, but management are
constantly looking at ways of improving business efficiencies including
sourcing more product lines direct from origin.
Property Portfolio
Rental income from our large multi-tenanted industrial property in San Diego
was in line with the previous year. The commercial and industrial property
market in Southern California remains challenging with downward pressure on
rents, but despite our vacancy rate of 12% being high it is in line with
market norms. We remain a long term holder of this quality asset.
The Group`s South African commercial and light industrial property portfolio
has managed to overcome rising input costs and a wavering economy to post
consistent returns. Vacancy levels have been kept below national averages
and the properties have retained or increased their market values.
Investment Portfolio
Concerns over the stability of the financial system and the future of the
Euro-zone have been the main factors behind the continued volatility in
equity markets, particularly in the third quarter of the calendar year.
Despite these factors our portfolio of equities had a satisfactory year when
compared to some of the large losses born by the main European indices. Our
lack of exposure to financial stocks and mining stocks aided our performance
and at certain times during the year we added to some of our holdings that
had, in our opinion, become over-sold. The Group continues to hold a diverse
portfolio of quality equities in first world markets and has a healthy cash
balance for future buying opportunities.
Merchant & Industrial Properties ("Merchant")
During the year the Company acquired, by way of a scheme of arrangement, all
the remaining shares in Merchant held by minority shareholders. The scheme
was approved unanimously at the scheme meeting held on 6 September 2011 and
the Company is now the owner of the entire issued share capital of Merchant.
As at the commencement of trading on 22 November 2011, the listing of
Merchant shares on the Johannesburg Stock Exchange was terminated.
Halogen Holdings P.L.C. (unlisted associate)
Halogen Holdings owns 78% of the total issued share capital of Heartstone
Inns, a developing UK group of country pubs specialising in quality food.
Heartstone currently owns and manages five rural pubs. It also manages a
further four pubs which are held by a separate investment company which is
looking at acquiring further units. Despite the losses incurred to date,
Heartstone is cash positive and management are currently working on an
extension to one of the most profitable units.
Group Personnel
These results could not have been achieved without the hard work of all our
employees and the Board thank them most sincerely for their efforts and
contribution during the year.
Prospects
Given that the U.S.A. and Europe are both dealing with unprecedented debt
problems and the financial markets continue to demonstrate extreme
volatility, the Board is cautious about the year ahead. However, we believe
the diversity within the Group and our strong balance sheet will enable us to
enhance shareholder value in the long term.
J. M. Robotham
Chairman
D.C. Marshall
Chief Executive
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 September 2011 2010
Review Audite
ed d
US$000 US$000
Comprehensive Income:-
Group revenue 196,39 163,87
1 0
Operating costs (185,6 (154,0
88) 60)
Operating profit 10,703 9,810
Share of associated companies` results (287) (285)
Income from other investments - dividends 532 397
- interest 976 670
Interest paid (2,820 (2,461
) )
Exchange gains/(losses) 218 (181)
Other income/(expense) 823 (327)
Profit before tax 10,145 7,623
Taxation on ordinary activities (2,712 (2,678
) )
Profit after tax 7,433 4,945
Profit attributable to members 5,530 2,933
Profit attributable to non-controlling interests 1,903 2,012
Other Comprehensive Income/(Expense):
Exchange differences on translation into US (4,526 33
dollars of the financial statements of foreign )
entities
Unrealised gain on revaluation of available for 165 177
sale investments
Reclassification of previously recognised losses 75 (89)
on disposal of available for sale investments
Commercial property fair value adjustments (351) 122
Total Comprehensive Income 2,796 5,188
Total Comprehensive Income attributable to 893 3,176
members
Total Comprehensive Income attributable to non- 1,903 2,012
controlling interests
Basic and fully diluted earnings per share (US 15.4c 8.2 c
cents)
Headline earnings per share (US cents) 15.5c 8.8 c
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordin Share Other Retai Total
ary premi reser ned
share um ves earni
capit ngs
al
US$00 US$00 US$00 US$00 US$00
0 0 0 0 0
Year ended 30 September 2010:
Balances at start of year 26,67 4,710 7,332 17,69 56,40
3 0 5
Total comprehensive income - - 84 3,092 3,176
attributable to members
Dividends paid - - - (1,07 (1,07
1) 1)
Shares issued 220 195 - - 415
Legal reserve appropriation - - 52 (52) -
Balances at end of year 26,89 4,905 7,468 19,65 58,92
3 9 5
Year ended 30 September 2011
Balances at start of year 26,89 4,905 7,468 19,65 58,92
3 9 5
Total comprehensive income - - (4,63 5,530 893
attributable to members 7)
Transactions with
shareholders
Dividends paid - - - (1,07 (1,07
4) 4)
Shares cancelled on re- (26,8 (4,90 - - (31,7
organisation 93) 5) 98)
Shares issued 8,964 23,60 - - 32,57
6 0
Acquired from non-controlling - - (438) 2,307 1,869
interests
Balances at end of year 8,964 23,60 2,393 26,42 61,38
6 2 5
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 September 2011 2010
Review Audite
ed d
US$000 US$000
Assets
Non current assets
Investment property 29,065 30,824
Property, plant and equipment 9,912 10,813
Goodwill 525 -
Investment in associated company 1,511 1,797
Investments 16,252 15,583
57,265 59,017
Current assets
Inventories 25,521 26,393
Accounts receivable 32,205 30,922
Cash and bank balances 14,406 11,379
72,132 68,694
Current liabilities
Accounts payable (falling due within one year) (43,38 (43,25
0) 9)
Net current assets 28,752 25,435
Total assets less current liabilities 86,017 84,452
Non current liabilities
Accounts payable (falling due after more than (11,53 (10,45
one year) 1) 3)
Deferred taxation (2,816 (3,258
) )
Net assets 71,670 70,741
Capital and reserves
Called up share capital 8,964 26,893
Share premium account 23,606 4,905
Other reserves 2,393 7,468
Retained earnings 26,422 19,659
Shareholders` funds 61,385 58,925
Non-controlling interests 10,285 11,816
71,670 70,741
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
for the year ended 30 September 2011 2010
Review Audite
ed d
US$000 US$000
Operating activities
Operating profit 10,703 9,810
Adjustment
Depreciation 341 467
Net (increase)/decrease in working capital
Increase in inventories (1,695 (4,752
) )
Increase in debtors (4,332 (8,922
) )
Increase in creditors 7,359 9,495
Cash generated by operations 12,376 6,098
Dividends received 532 397
Interest received 976 670
Exchange gains/(losses) 218 (181)
Interest paid (2,820 (2,461
) )
Taxation paid (3,417 (1,760
) )
Net cash inflow from operating activities 7,865 2,763
Investment activities
Purchase of tangible non-current assets (2,023 (1,116
) )
Acquisition of investments (3,891 (2,898
) )
Proceeds of disposal of tangible assets 116 508
Proceeds of disposal of investments 3,275 2,371
Cost of minority interests acquired (1,439 -
)
Net proceeds of disposal of associate less - 292
subsidiaries acquired
Net cash (outflow) from investment activities (3,962 (843)
)
Net cash inflow before financing 3,903 1,920
Financing activities
Net increase/(decrease) in long term debt 1,078 (1,113
)
Cost of new shares issued to acquire minority - (6)
interests
Dividends paid - Group (1,074 (1,071
) )
Dividends paid - non-controlling interests (817) (932)
Net cash (outflow) from financing activities (813) (3,122
)
Net increase/(decrease) in cash and cash 3,090 (1,202
equivalents )
Cash and cash equivalents at beginning of year 8,587 9,445
Effect of foreign exchange rate changes (139) 344
Cash and cash equivalents at end of year 11,538 8,587
SEGMENTAL REPORTING
Primary reporting format - business segments
For management purposes the Group is organised on a worldwide basis into the
following main business segments:
Import and distribution:
Sale of tool imports and non-perishable food imports to, and exports from,
South Africa
Property:
Investment properties in U.S.A. and South Africa
Other activities:
Mainly transactions relating to the share portfolios, profits on disposals of
tangible and intangible non-current assets and local head office cost
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. Unallocated assets and liabilities are cash
balances, taxation and borrowings. Capital expenditure comprises additions to
property, plant and equipment.
2011 2010
Segmental analysis of results US$000 US$000
Reven Resul Reven Resul
ue t ue t
Import and distribution 191,5 9,240 159,4 9,363
48 47
Property 4,833 1,730 4,354 1,608
Other activities * 10 1,460 69 (275)
12,43
0
196,3 163,8 10,69
91 70 6
Share of associates (287) (285)
Interest paid and similar (2,82 (2,46
charges 1) 1)
9,322 7,950
Other income/(expense) 823 (327)
Profit before tax 10,14 7,623
5
*Revenue of "Other activities" excludes dividend income and the proceeds of
sales of investments and tangible assets, the profits of which are included
in other income/expense.
Asse Liabi Net Capita Depreci
ts litie assets l ation
s / expend charge
(liabi iture
lities
)
US$0 US$00 US$000 US$000 US$000
00 0
Segmental analysis of net assets 30 September 2011
Import and distribution 64,3 (37,9 26,479 1,887 651
79 00)
Property 32,0 (984) 31,082 136 50
66
Associate - Other 1,51 - 1,510 - -
0
Other activities 16,6 (1,07 15,565 - 14
(including investments) 43 8)
Unallocated (including 14,6 (17,6 (2,966 - -
cash, tax and debt) 99 65) )
Consolidated total 129, (57,6 71,670 2,023 715
297 27)
Segmental analysis of net assets 30th September 2010
Import and distribution 64,0 (35,2 28,768 541 401
28 60)
Property 34,3 (890) 33,466 575 52
56
Associate - Other 1,79 - 1,797 - -
7
Other activities 15,9 (740) 15,189 - 14
(including investments) 29
Unallocated (including 11,6 (20,0 (8,479 - -
cash, tax and debt) 01 80) )
Consolidated total 127, (56,9 70,741 1,116 467
711 70)
Secondary reporting format - geographical segments
The Group operates in the following geographic areas.
Europe
Location of part of the Group`s import and distribution business, the non-
trading parent company and most of the Group`s investment portfolio.
Australia
Location for part of the Group`s import and distribution business.
United States
Part of the Group`s property portfolio and some of the Group`s investment
portfolio are located here.
South Africa
Location of the bulk of the Group`s import and distribution business and part
of the Group`s property portfolio.
2011 2010
Group Total Capita Group Total Capita
l l
reven Net expend reven net expend
ue asset iture ue asset iture
s s
US$00 US$00 US$000 US$00 US$00 US$000
0 0 0 0
Europe 31,93 16,77 - 37,70 19,26 -
9 9 2 8
Australia 2,483 3,724 105 2,222 3,716 -
United States 1,011 9,486 - 1,000 9,002 -
Total outside 35,43 29,98 105 40,92 31,98 -
South Africa 3 9 4 6
South Africa 160,9 41,68 1,918 122,9 38,75 1,116
58 1 46 5
196,3 71,67 2,023 163,8 70,74 1,116
91 0 70 1
Total assets (before non-controlling interests) and capital expenditure are
shown by the geographical area in which the assets are located.
Notes:
1. This provisional report has been prepared in accordance with IAS 34
Interim Financial Reporting, applicable legal and regulatory requirements of
The Companies (Jersey) Law, 1991, the AC 500 Standards and the listing
requirements of the JSE Limited. The accounting policies applied in this
provisional report are consistent with those adopted and disclosed in the
Group`s annual report for the year ended 30 September 2010.
The amounts shown as comparatives for 2010 relate to the audited financial
statements of Marshall Monteagle Holdings SA, which was the predecessor of
Marshall Monteagle PLC.
2. Group capital expenditure in the year was US$2,023,000 (2010 -
US$1,128,000). There were no capital expenditure commitments at 30th
September 2011 (2010 - nil).
3. Bank loans and overdrafts of US$2,868,000 (2010 - US$2,792,000) are
included in current liabilities. Group long-term finance is secured on
various properties and bears interest at 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
shares in issue 35,857,512 (2010 - adjusted for re-organisation).
5. Details of the re-organisation of the Group were set out in the Circular
to shareholders of Marshall Monteagle Holdings S.A. ("MMH") on 26th January
2011. Notice was given in the Circular of Extraordinary General Meetings to
be held in February, at which MMH shareholders approved the liquidation of
the company and the issue to shareholders of two shares in Marshall Monteagle
PLC ("MMPLC") for each share held in MMH.
6. A Group subsidiary, Monteagle Consumer Group Limited ("Consumer Group"),
acquired a 50.1% stake in a logistics business on 1st December 2010 and the
assets and liabilities of the business acquired were transferred into a new
South African registered subsidiary, Monteagle Logistics Limited
("Logistics"). The interests of Consumer Group and Logistics are held
through Marshall Monteagle Southern Holding 2 Limited. The cost of the
acquisition, all of which was for Goodwill, was met by way of a payment of
R4,000,000 (US$525,000) to the vendor.
Reconciliation between basic and headline US$000 US$000
earnings per share
Basic earnings per share 5,530 2,933
Adjusted for:
Reclassification of previously recognised losses (75) 89
on disposal of available for sale investments
Loss on disposal of non-current tangible assets 113 135
Headline earnings 5,565 3,157
Review Report
This provisional report has been reviewed by the Company`s auditor, Saffery
Champness. The review opinion from the auditor is available for inspection
from the registered office of the Company. The review opinion confirms that
nothing has come to the auditor`s attention that might cause them to believe
that the provisional financial statements in the provisional report were not
prepared, in all material respects, in accordance with IAS34 Interim
Financial Information, and in accordance with the Companies (Jersey) Law,
1991. The audited annual report will be mailed to shareholders in early
2012.
Johannesburg
21 December 2011
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Date: 21/12/2011 13:41:03 Produced by the JSE SENS Department.
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