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(Incorporated in Luxembourg - RC Luxembourg No. B 19600)
Code: MTE ISIN: LU0035797272
Reviewed Results for the year ended 30th September 2002
INTRODUCTION
Monteagle`s objective is to achieve capital growth over the long term through a
diversified range of investments. The Company holds portfolios of leading
investments in the U.S.A. and Europe and property in the United States. The
group`s import, export and distribution businesses operate internationally, and
in Southern Africa we have investment and property portfolios, and interests in
agriculture and mining.
PRESENTATION OF ACCOUNTS
In view of the lack of clarity in respect of exchange rates pertaining in
Zimbabwe exacerbated by the recently announced foreign exchange regulations, the
directors of our subsidiary, Conafex Holdings S.A. ("Conafex"), and our
associated company, Falcon Investment Holdings S.A. ("Falcon"), have decided not
to consolidate earnings emanating from Zimbabwe or the assets utilised to
generate those earnings. Instead their unaudited financial results include the
income from Zimbabwe received in United States dollars. During the year the
official exchange rate has remained constant at Z$55:US$1 despite inflation in
excess of 100%. However, there is an unofficial parallel market on which
exchange rates have moved from Z$360:US$1 at the start of the year to Z$720:US$1
at the end of the year. We have restated last years group results for meaningful
comparison.
RESULTS
The unaudited profits before exceptional items and tax, excluding Zimbabwe
operations but including income received from Zimbabwe, show an increase of 17%
from US$994,000 [R8,946,000] to US$1,166,000 [R12,289,640]. Headline earnings,
however, have decreased from US 7 c [63.0 SA cents] per share to US 5 c [52.7 SA
cents]] per share, because of increased tax charges incurred in South Africa.
The exceptional profit for this year arises on the sale of one of our investment
properties in California, and from realised profits on our investment portfolio,
reduced by our share of a provision made by Falcon against the carrying value of
its investment in Zimbabwe gold mines.
DISTRIBUTION
Our South African tool and machinery business had a most successful year with
volumes increasing by approximately 35%. The division continues to secure a
greater share of the market through aggressive sourcing and innovative
marketing. The joint venture with our Italian suppliers of air compressors also
prospered, achieving approximately 50% growth in turnover. Both these businesses
enjoyed record profits. Our Australian subsidiary, operating mainly in the hand
tool industry, earned record profits on turnover which increased by
approximately 10%. Our international production and trading operations in
private label food products experienced an extremely good year, reflecting solid
growth in volumes, an increased market share on existing product lines, and a
broader base of products handled. A marketing company, specialising in fast
moving consumer goods, was acquired during the year to complement our existing
business, and a wine division has been formed to market and export private label
wines from South Africa. We are staffed by a young yet experienced and very
energetic team.
PROPERTY
The Group`s commercial properties in San Diego, California, produced an
increased return this year. With US interest rates at a historic low, a
replacement long-term loan was negotiated on one of our properties at
advantageous terms. In August 2002, our other property, an office building, was
sold for US$3,260,000 [R34,360,400], generating a profit of US$389,000
[R4,100,060]. The sale proceeds will be re-invested in a property when a
suitable opportunity occurs. The South African property portfolio generated a
small profit in the year and property values remained constant over the year in
hard currency terms.
INVESTMENT PORTFOLIOS
Throughout the year the climate in the listed investment world remained subdued.
The group has gradually added to its diverse list of quality equities in the
major first world markets; approximately US$1.5 million [R15.8 million] remains
uninvested at the year-end. We are entering our fourth year of falling indices
and it would appear that current market prices are looking conservative on a
long-term view.
FARMING (Conafex)
The agriculture businesses in Zimbabwe suffered relatively little disruption in
the year and produced reasonable crop yields. However profitability and cash
generation has been severely restricted by continuing exchange controls and high
inflation. As a result of the change in accounting policy for our interests in
Zimbabwe we have made exceptional provisions in the unaudited accounts. By
obtaining independent valuations of our estates and assets and converting the
same as parallel exchange rates we have effectively written down the carrying
value of our investments in agriculture.
MINING (Falcon)
The gold mines in Zimbabwe suffer from both exchange controls and price
controls. In spite of this, the mining companies have been able to continue
operating, but are not able to generate sufficient cash to permit the
exploration necessary to identify further reserves. In order to generate
sufficient cash to cover current costs, higher grade areas are being mined and,
under present circumstances, this has the effect of shortening the effective
life of the mines. Development work is continuing on the iodine deposit in
Chile. An environmental impact assessment has been submitted and negotiations
are in progress with potential joint venture partners who could assist with the
marketing of the iodine and nitrate by-products and who would provide a share of
the funding required to develop the project. The carrying value in the unaudited
accounts of the investment in our associated mining company has been adjusted to
reflect our share of its assets in Zimbabwe and the cost of its investment in
Chile.
GROUP PERSONELL
Your directors wish to record the amazing dedication of all our management and
staff during a challenging year. Whilst in certain areas the economic climate
has been far from helpful and in other areas the political influence has made
business conditions extremely trying. Our teams of people have steadfastly
remained enthusiastic.
DIVIDEND
As feared, the current situation in Southern Africa has affected the income
stream to Luxembourg and as indicated the directors recommend a dividend for the
year of 5 US cents [52.7 SA cents] per share. Our net assets held in hard
currencies have also been affected by the weakness in world stock markets and
now stand at US$16,265,000 [R171,433,100] against US$17,211,000 [R163,899,000]
last year (restated). This equates to US$2.58 [R27.19] per share (2001 - US$2.73
[R24.57] - restated).
Shareholders will appreciate it is impossible to make a meaningful forecast for
our operations in Zimbabwe. Your Directors are optimistic about our other
divisions and trade for the first quarter has been extremely buoyant. Values of
properties and listed investments during the year ahead are likely to be
affected by the strained political tensions worldwide. The conservative nature
of our international listed holdings and the liquidity in our balance sheet has
been maintained.
J. M. Robotham
Chairman
D. C. Marshall
Chief Executive
Notice of Meeting and Declaration of Dividend
NOTICE OF MEETING
The Annual General Meeting will be held on Friday 28th March 2003 at 4.00 p.m.
at the registered office of the Company, 6 rue Adolphe Fischer L-1520
Luxembourg.
A dividend of 5.0 US cents [52.7 SA cents] per share is proposed to be paid on
2nd May 2003 to those shareholders registered at the close of business on 28th
March 2003.
Copies of the annual report and accounts will be posted to shareholders in
February 2003.
Reviewed Consolidated Profit and Loss Account
2001 2001 2002 FOR THE YEAR ENDED 2002 2001 2001
30th SEPTEMBER
Restated Restated
US$000 US$000 US$000 R000 R000 R000
41,799 19,108 21,655 Group revenue 228,244 171,972 376,
including share of
associated
companies
(15,861) (342) (422) Less share of (4,448) (3,078) (142
revenue of
associated
companies
25,938 18,766 21,233 Group revenue 223,796 168,894 233,
(24,155) (18,106) (20,190) Operating costs (212,803) (162,954) (217
1,783 660 1,043 Operating profit 10,993 5,940 16,0
2,052 (99) (72) Share of (759) (891) 18,4
associated
companies results
- 688 541 Income from 5,702 6,192 -
Zimbabwean
investments -
dividends
317 316 140 Income from other 1,476 2,844 2,85
investments -
dividends
294 246 172 -interest 1,813 2,214 2,64
(1,494) (817) (658) Interest paid and (6,935) (7,353) (13,
similar charges
2,952 994 1,166 Profit on ordinary 12,290 8,946 26,5
activities before
exceptional items
and tax
6,450 5,917 467 Exceptional items 4,922 53,253 58,0
9,402 6,911 1,633 Profit before tax 17,212 62,199 84,6
and minority
interests
(691) (364) (514) Tax (5,418) (3,276) (6,2
8,711 6,547 1,119 Profit after tax 11,794 58,923 78,3
before minority
interests
(1,127) (165) (371) Minority interests (3,910) (1,485) (10,
7,584 6,382 748 Profit 7,884 57,438 68,2
attributable to
shareholders of
the Group
US cents US cents US cents SA cents SA cents SA c
120.4 101.3 12.0 Basic and fully 126.5 911.7 1,08
diluted
(loss)/earnings
per share US cents
24.0 7.4 5.0 Headline earnings 52.7 66.6 216.
per share US cents
8.5 8.5 5.0 Proposed dividend 52.7 76.5 76.5
- US cents
Reviewed Consolidated Statement of Changes in Equity
Exchange
differences on
translation of the
financial
statements of
foreign entities
(316) (227) 246 2,593 (2,043) (2,8
(217) - - Change in interest - - (1,9
in subsidiaries
- - (5,012) Group share of (52,826) - -
deficit on
revaluation of
fixed assets
(533) (227) (4,766) Net loss not (50,233) (2,043) (4,7
recognised in the
income statement
(536) (536) (536) Dividend paid for (5,650) (4,824) (4,8
the previous year
7,584 6,382 748 Net profit for the 7,884 57,438 68,2
period
6,515 5,619 (4,554) Total recognised (47,999) 50,571 58,6
profits and
increase in
shareholders`
funds
25,136 25,108 30,727 Shareholders` 323,862 225,972 226,
funds brought
forward
31,651 30,727 26,173 Shareholders` 275,863 276,543 284,
funds carried
forward
Reviewed Consolidated Balance Sheet
2001 2001 2002 AT 30th SEPTEMBER 2002 2001 2001
Restated Restated
US$000 US$000 US$000 R000 R000 R000
Assets
Non current
assets
20,233 11,143 9,245 Property, plant 97,442 100,287 182,
and equipment
14,645 20,434 16,943 Investments 178,579 183,906 131,
34,878 31,577 26,188 276,021 284,193 313,
Current assets
7,066 4,197 4,299 Inventories 45,312 37,773 63,5
4,944 4,636 5,715 Accounts 60,236 41,724 44,4
receivable
8,083 7,935 5,022 Cash and bank 52,932 71,415 72,7
balances
20,093 16,768 15,036 158,480 150,912 180,
Current
liabilities
(8,618) (6,525) (6,177) Accounts payable (65,105) (58,725) (77,
(falling due
within one year)
11,475 10,243 8,859 Net current 93,375 92,187 103,
assets
46,353 41,820 35,047 Total assets less 369,396 376,380 417,
current
liabilities
Non current
liabilities
(3,485) (3,485) (3,487) Accounts payable (36,753) (31,365) (31,
(falling due
after more than
one year)
(2,636) (27) 117 Deferred taxation 1,233 (243) (23,
40,232 38,308 31,677 333,876 344,772 362,
Capital and
reserves
9,450 9,450 9,450 Called up share 99,603 85,050 85,0
capital
6,133 9,675 6,268 Other reserves 66,065 87,075 55,1
16,068 11,602 10,455 Retained earnings 110,196 104,418 144,
31,651 30,727 26,173 Shareholders` 275,864 276,543 284,
funds
8,581 7,581 5,504 Minority 58,012 68,229 77,2
interests
40,232 38,308 31,677 333,876 344,772 362,
Reviewed Consolidated Cash Flow Statement
2001 2001 2002 FOR THE YEAR 2002 2001 2001
ENDED 30th
SEPTEMBER
Restated Restated
US$000 US$000 US$000 R000 R000 R000
Operating
activities
1,802 2,331 (741) Cash (absorbed (7,810) 20,979 16,2
by)/ generated
from operations
(890) (817) (658) Interest paid (6,935) (7,353) (8,0
(604) (598) (451) Taxation paid (4,754) (5,382) (5,4
308 9,160 (1,850) Net cash (19,499) 8,244 2,77
(outflow)/inflow
from operating
activities
Investment
activities
(458) (354) (285) Purchase of (3,004) (3,186) (4,1
tangible fixed
assets
19 - 3,287 Disposal of 34,645 - 171
tangible fixed
assets
(3,405) (3,703) (7,290) Acquisition of (76,837) (33,327) (30,
investments
13,946 12,814 2,966 Disposal of 31,262 115,326 125,
investments
611 562 312 Interest received 3,288 5,058 5,49
and other
investment income
297 688 541 Dividends 5,702 6,192 2,67
received from
Zimbabwean
subsidiaries and
associated
companies
11,010 10,007 (469) Net cash inflow (4,944) 90,063 99,0
from investment
activities
11,318 10,923 (2,319) Net cash inflow (24,443) 98,307 101,
before financing
Financing
activities
(245) (245) 3 Net 32 (2,205) (2,2
increase/(decreas
e)in long term
debt
(610) - - Foreign exchange - - (5,4
cost of
subsidiary`s
dividend
(536) (536) (536) Dividend paid - (5,649) (4,824) (4,8
group
(170) (170) (112) - minority (1,180) (1,530) (1,5
shareholders
(1,561) (951) (645) Net cash outflow (6,797) (8,559) (14,
from financing
activities
9,757 9,972 (2,964) Net decrease in (31,240) 89,748 87,8
debt
(2,750) (2,836) 7,495 Net funds at 1st 78,997 (25,524) (24,
October
381 359 - Effect of foreign - 3,231 3,42
exchange rate
changes
7,388 7,495 4,531 Net funds/(debt) 47,757 67,455 66,4
at 30th September
Notes:
1. As described in the Chairman`s Review, the earnings, assets and liabilities
of Zimbabwe subsidiary companies have not been consolidated. Investments have
been reflected in accordance with IAS 39. The 2001 comparatives have been
restated. The results for the year ended 30th September 2002 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 2001. The
2001 comparatives prior to restatement do not comply with the requirements of
IAS 29 (Financial reporting in Hyperinflationary Economies). Otherwise the
financial statements comply with International Accounting Standards and
Luxembourg law in all material respects. The results, which have been reviewed
by the Company`s auditors, AGN-Horsburgh & Co., are unaudited. The auditors
report, which is unqualified, is available for nispection at the company`s
registered office.
2. Group capital expenditure in the year was US$285,000 (2001 - US$458,000);
there were no capital expenditure commitments at 30th September 2002 (2001 - US$
nil).
3. Bank loans and overdrafts of US$491,000 (2001: US$75,000) 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 distribution businesses in South Africa
and Australia, and a non-perishable food import business internationally and in
South Africa.
Property investment properties in California and South Africa.
Farming commercial agriculture and horticulture interests in Zimbabwe held
through Conafex and our associated company, Ariston.
Gold and iodine 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. An iodine development has been established in Chile.
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.
2002 2001
Restated
Segmental
analysis of
results
Revenue Revenue Result Result Revenu Revenue Result Result
e
US$1000 R1000 US$1000 R1000 US$100 R1000 US$100 R1000
0 0
Import and 19,342 203,865 2,221 23,409 16,874 151,866 1,064 9,576
distribution
Property 1,519 16,010 191 2,013 1,499 13,491 (22) (198)
Farming 192 2,024 (26) (274) 143 1,287 210 1,890
Gold mining - 57 601 - 74 666
Other, 180 1,897 (443) (4,669) 250 2,250 6,433 57,897
including
investments
21,233 223,796 2,000 21,080 18,766 168,894 7,759 69,831
Share of
associates
Farming 422 4,448 229 2,414 342 3,078 101 909
Gold mining - - (389) (4,100) - - (132) (1,188)
Interest paid (674) (7,104) (817) (7,353)
and other
charges
Profit before 21,655 228,244 1,166 12,290 19,108 171,972 6,911 62,199
tax
Segmental analysis of results 2001
Revenue Revenue Result Result
US$1000 R1000 US$1000 R1000
Import and 16,874 151,866 1,064 9,576
distribution
Property 1,499 13,491 (22) (198)
Farming 5,100 45,900 309 2,781
Gold mining 2,215 19,935 432 3,888
Other 250 2,250 7,061 63,549
25,938 233,442 8,844 79,596
Share of revenue and
results of
associated companies
Farming 10,027 90,243 2,482 22,338
Gold mining 5,834 52,506 (430) (3,870)
41,799 376,191
Interest paid and (1,494) (13,446)
other charges
Profit before tax 9,402 84,618
* Other revenue excludes dividend income and the proceeds of sales of
investments, the profits of which are included in the result of this segment.
Segmental analysis of net
assets
30th September Assets Liabili Net Net Capital Expe Depreciatio
2002 -ties assets/ assets -nditure n charge
(liabili- /
ties) (liabi
li
-ties)
US$000 US$000 US$000 R1000 US$000 US$000
Import and 8,470 5,271 3,199 33,717 171 54
distribution
Property 11,208 327 10,881 114,68 114 34
6
Farming - Group 8,570 432 8,138 85,775 - -
- Associated 2,339 - 2,339 24,653 - -
companies
Gold mining - - - - - - -
Group
- Associated 125 - 125 1,318 - -
company
Other 3,286 1 3,285 34,624 - 8
Unallocated * 7,282 3,572 3,710 39,103 - -
Consolidated 41,280 9,603 31,677 333,87 285 96
total 6
Segmental analysis of net
assets
30th September Assets Liabili Net Net Capital Depreciatio
2001 - Restated ties assets/ assets Expenditure n charge
(liabili /
ties) (liabi
lities
)
US$000 US$000 US$000 R1000 US$000 US$000
Import/distribut 8,168 4,809 3,359 30,231 29 59
ion
Property 11,645 266 11,379 102,41 215 -
1
Farming - Group 10,859 427 10,432 93,888 - -
- Associated 5,502 - 5,502 49,518 - -
companies
Gold mining - - - - - - -
Group
- Associated 514 514 4,626 -
company
Other 3,772 658 3,114 28,026 53 28
Unallocated * 7,885 3,877 4,008 36,072 - -
Consolidated 48,345 10,037 38,308 344,77 297 87
total 2
Segmental analysis of net
assets
30th September Assets Liabili Net Net Capital Depreciatio
2001 ties assets/ assets Expenditure n charge
(liabili /
ties) (liabi
lities
)
US$000 US$000 US$000 R1000 US$000 US$000
Import/distributio 8,168 4,809 3,359 30,231 29 59
n
Property 11,645 266 11,379 102,41 215 -
1
Farming - Group 12,180 1,793 10,387 93,483 124 137
- Associates 10,989 - 10,989 98,901 - -
Gold mining - 316 366 -50 -450 37 73
Group
- Associates 296 - 296 2,664 - -
Other 3,327 658 2,669 24,021 53 28
Unallocated * 8,050 6,847 1,203 10,827 - -
Consolidated total 54,971 14,739 40,232 362,08 458 297
8
* Unallocated assets and liabilities are cash balances, taxation and
borrowings
2002 2001
Restated
US$000 US$000
Group Group Total Capital Group Group Total Capital
Revenu Revenu Net Expendit Revenue Revenue Net Expenditu
e e assets ure assets e
US$000 R1000 US$000 US$000 US$000 R1000 US$000 US$000
South 17,769 187,28 4,925 118 15,689 141,201 3,908 159
Africa 5
Zimbabwe - - 10,487 - - - 17,189 -
Australi 1,890 19,921 775 53 1660 14,940 623 29
a
United 1,334 14,060 7,313 114 1,274 11,466 7,428 56
States
Jersey - - 4,635 - - - 5,545 -
Luxembou 240 2,530 3,542 - 143 1,287 3,615 53
rg
21,233 223,79 31,677 285 18,766 168,894 38,308 297
6
2001
Group Group Total Capital
Revenue Reven Net assets Expenditure
ue
US$000 R1000 US$000 US$000
South 15,689 141,2 3,908 159
Africa 01
Zimbabwe 7,315 65,83 19,113 161
5
Australia 1,660 14,94 623 29
0
United 1,274 11,46 7,428 56
States 6
Jersey - - 5,545 -
Luxembour - - 3,615 53
g
25,938 233,4 40,232 458
42
Sponsor: The Janus Corporation (Pty) Ltd
Date: 27/12/2002 08:30:00 AM Produced by the JSE SENS Department
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