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Conafex Holdings Societe Anonyme - Company Announcement
Conafex Holdings Societe Anonyme
(Incorporated in Luxembourg - RC Luxembourg No. B 17789)
Share Code: CNX ISIN Code: LU001187306
("Conafex")
19 June 2002
CHAIRMAN`S INTERIM REVIEW
Profile
Conafex is a Pan-African agri-resource group focused on floriculture,
horticulture, plantation crops and niche agriculture of which a high
proportion of the produce is exported to Europe. Conafex was reorganised in
1995 to take advantage of opportunities presented by the well-publicised
"African Renaissance".
Currently, most of the Group`s operations are located in Zimbabwe.
Financial
The majority of Conafex`s profits are generated in Zimbabwe Dollars. The
official exchange rate has been fixed at an unrealistic rate of Z$55:US$1
which has caused the emergence of a variety of informal rates of exchange.
These financial statements are translated at the official rate of exchange,
as there is currently no reliable alternative. As a guide however, the most
commonly referred to informal rate, the `parallel blend rate`, was
reasonably stable at approximately Z$220/US$1 during the period under review
(last year Z$80:US$1).
Profit before tax and exceptional items converted at the official exchange
rate amounted to US$1,643,000 (last year US$494,000) with profit
attributable to shareholders of US$1,198,000 (last year US$ 251,000). Our
Zimbabwe listed associate, Ariston Holdings, delivered a strong performance
with some 88% of its turnover now exported to hard currency destinations.
Operations
- A serious mid-season drought throughout Zimbabwe adversely effected
production of most rain-fed crops.
- Agricultural enterprises with irrigation, particularly flowers, benefited
from the dry spell and quality and prices were excellent.
- Overall, ordinary black tea volumes and prices are down on the previous
year, but the contribution from the two decaffeinated tea plants will
partially compensate.
- United States dollar prices paid for virginia tobacco have started on a
firm note. Settlement however is effected in Zimbabwe dollars at an
unrealistic fixed exchange rate. Unless there is an adjustment to this
`fictitious` exchange rate, the viability of the whole industry will be
seriously impaired. Tobacco yields suffered from the drought.
- Food crop production is lower than usual but prices have responded to the
shortages and should compensate.
- The contribution from poultry, deciduous fruit, macadamia nuts and
trading has improved significantly.
- Coffee production is up and the downward world price trend appears to
have stabilised.
- Operations were not significantly affected by the political upheavals in
Zimbabwe.
- Herbal tea processing and marketing in South Africa have been adversely
affected by raw material shortages caused by an earlier drought in the Cape
Province.
- The performance of our tea-packing associate, Accord Services in the
United Kingdom has suffered from the downturn in tourism caused by the
terror attacks in the United States.
Prospects
Although none of the Group`s operations have been prejudiced to date by the
controversial land resettlement policy initiated by the Government of
Zimbabwe, some Group properties have been listed for compulsory acquisition.
Most do not meet the criteria for land resettlement and as such
representations have been made to the relevant Authorities for delisting.
The outturn for the year will largely depend on the interplay of prices and
exchange rates in Zimbabwe in the second half of the financial year.
Conafex continues to seek opportunities to broaden its regional and product
base and lessen its dependency on Zimbabwe. The strategic focus remains on
export related and value-added agricultural products.
Dividend
No interim dividend is recommended by your directors because of the
seasonality of the Group`s operations and the dependency on remittance of
profits from Zimbabwe.
M W BURRELL
Chairman
CONSOLIDATED PROFIT AND LOSS Half years ended Year ended
ACCOUNT
31st March 30th
September
2002 2001 2001
Unaudited Unaudited
US$000 US$000 US$000
Notes
GROUP REVENUE including share 12,552 6,064 15,126
of associates
Less revenue of associates (9,603) (4,487) (10,027)
Revenue 2,949 1,577 5,099
Operating costs (2,766) (1,570) (4,791)
Operating Profit 183 7 308
Share of associated companies 2 1,443 451 2,482
results
Income from investments - 1 1 1
dividends
Interest receivable 17 46 54
Interest paid and similar 3 (1) (11) (771)
charges
Profit on ordinary activities 1,643 494 2,074
before exceptional items and
tax
Exceptional items - (32) 580
Profit before tax 1,643 462 2,654
Taxation on ordinary activities (449) (202) (550)
Profit after tax 1,194 260 2,104
Minority Interests 4 (9) (1)
PROFIT ATTRIBUTABLE TO 1,198 251 2,103
SHAREHOLDERS
Dividend per share (US cents) - - 1.5c
Earnings per share (US cents) 4 10.4c 2.2c 18.3c
Headline earnings per share (US 4 10.4c 2.5c 13.3c
cents)
STATEMENT OF CHANGES IN EQUITY
Net profit for the period 1,198 251 2,103
Exchange differences - (456) (409)
Increase/(Reduction) in interest 26 - (42)
in associate
Total recognised profits and 1,224 (205) 1,652
increase in shareholders` funds
Shareholders` funds at start of 18,375 16,723 16,723
period
Shareholders` funds at end of 19,599 16,518 18,375
period
Directors: M.W. Burrell (Chairman), C. Barrow (non-executive), D.C. Marshall
(non-executive), W.H. Marshall (executive), The Hon C.A. Pearson (non-
executive)
Chief Executive Officer: C.P. Jousse
GROUP OFFICES
Zimbabwe (Regional HQ)
215 Fife Avenue/10th Street,
(P.O. Box 2733),
Harare
South Africa
11 Sunbury Park,
La Lucia Ridge
Office Estate
La Lucia 4051, Durban
United Kingdom
25 City Road,
London, EC1Y 1BQ
Luxembourg
6 rue Adolphe Fischer
L-1520, Luxembourg
TRANSFER AGENTS
Europe South Africa
C.I. REGISTRARS LIMITED COMPUTERSHARE INVESTOR SERVICES LIMITED
Cresta House, Alma Street, 11 Diagonal Street,
Luton, Bedfordshire, LU1 2PU Johannesburg 2001
United Kingdom (P.O. Box 1053, Johannesburg 2000)
CONSOLIDATED GROUP BALANCE 31st March 30th
SHEET September
2002 2001 2001
Unaudited Unaudited
Notes US$000 US$000 US$000
Fixed assets
Tangible fixed assets 6 8,905 8,822 8,815
Investments 2 12,592 9,880 10,915
21,497 18,702 19,730
Current assets
Inventories 3,634 1,478 2,796
Debtors 436 194 654
Cash 289 333 560
4,359 2,005 4,010
Current liabilities
Creditors (falling due (2,752) (1,302) (2,299)
within one year)
Net current assets 1,607 703 1,711
Total assets less current 23,104 19,405 21,441
liabilities
Creditors (falling due after (100) (98) (100)
more than one year)
Provisions for liabilities
and charges
Deferred taxation (2,983) (2,331) (2,540)
20,021 16,976 18,801
Capital and reserves
Share capital 16,744 16,744 16,744
Other reserves (4,264) (3,471) (4,290)
Retained earnings 7,119 3,245 5,921
Assets attributable to 19,599 16,518 18,375
shareholders
Minority interests 422 458 426
20,021 16,976 18,801
CONSOLIDATED CASH FLOW Half years ended Year ended
STATEMENT
31st March 30th
September
2002 2001 2001
Unaudited Unaudited
US$000 US$000 US$000
Operating activities
Cash (utilised in)/generated (938) 386 190
by operations
Interest paid (76) (11) (161)
Taxation paid (67) (150) (159)
Net cash (outflow)/inflow (1,081) 225 (130)
from operating activities
Investment activities
Net purchase of tangible (146) (36) (80)
assets
Purchase of investments (560) (201) (478)
Disposal of investments - - 1,197
Increase in amounts due by - - (62)
associated companies
Interest received and other 18 47 55
investment income
Dividends received from 360 67 297
associates
Net cash (outflow)/inflow (328) (123) 929
from investment activities
Net cash (outflow)/inflow (1,409) 102 799
before financing
Financing activities
Net increase in long term - - 100
debts
Foreign exchange cost of - - (610)
subsidiary`s dividend
Net cash outflow from - - (510)
financing activities
Net (decrease)/increase in (1,409) 102 289
cash
Net cash at start of period 323 19 19
Effect of foreign exchange - 15 15
rate changes
Net (debt)/cash at end of (1,086) 136 323
period
NOTES
1. The results and the cash flow statement for the half year ended 31st
March 2002 and the balance sheet as at that date, which are unaudited, have
been prepared on the basis of accounting policies adopted for the year to
30th September 2001, and comply with International Accounting Standards in
all respects, except as set out in note 7, and with Luxembourg legal
requirements except for the revaluation of certain fixed assets
The investments in the associated companies are at cost plus share of post-
acquisition retained earnings.
3. Interest and other crop costs are charged to the cost of crops and
brought to account when such crops are sold.
4. Earnings per share are based on the net profit attributable to members
and the 11,484,127 shares in issue.
5 No segmental analysis is presented because substantially all of the
operations and assets used in generating the revenue relate to farming
activities in Zimbabwe
6. Capital expenditure during the period was US$146,000. There were no
material capital expenditure commitments as at 31st March 2002.
7. Hyperinflation
Lime many Zimbabwe companies, the Group has 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 year. 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.
19 June 2002
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 19/06/2002 07:00:02 AM Produced by the SENS Department
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