| Thu 27 Nov 2003, 9:38 | | CONAFEX HOLDINGS SOCIETE ANONYME - PRELIMINARY UNA |
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CONAFEX HOLDINGS SOCIETE ANONYME - PRELIMINARY UNAUDITED RESULTS FOR THE ELEVEN
MONTH PERIOD ENDED 31ST AUGUST 2003 AND NOTICE OF DIVIDEND DECLARATION
CONAFEX HOLDINGS SOCIETE ANONYME
(Incorporated in Luxembourg - RC Luxembourg No. B 17789)
("Conafex")
JSE CODE: CNX ISIN: LU0011857306
Registered office
6 rue Adolphe Fischer, L-1520,
(PO Box 1361, L-1013)
Luxembourg
PRELIMINARY UNAUDITED RESULTS FOR THE ELEVEN MONTH PERIOD ENDED 31ST AUGUST 2003
AND NOTICE OF DIVIDEND DECLARATION
PROFILE.
Conafex is a pan African agri-resource group listed on the Luxembourg and
Johannesburg stock exchanges and focused on horticulture, niche and value-added
agriculture.
OVERVIEW
- The Group strategy to reduce the dependence on Zimbabwe and broaden the base
through greater regional diversity resulted in the disposal of a wholly-owned
subsidiary Barato Holdings Limited. Barato"s sole asset was a shareholding in
Ariston Holdings Limited, a horticultural company listed on the Zimbabwe Stock
Exchange. A profit of US$1,155,000 was realised from gross proceeds of
US$2,973,000 on the sale of Barato. These funds are being deployed within the
region and, in particular, in South Africa.
- The agricultural season in Zimbabwe was reasonable and, on balance, most
operations reported normal production. However, commodity prices suffered from
an artificially pegged Zimbabwe dollar exchange rate and price controls which
impaired `farm gate" margins in a hyperinflationary environment.
- Cape Natural Tea Products, the herbal tea processing and marketing enterprise
based in Cape Town, suffered from the strengthening South African rand and their
performance was markedly down on the previous year. A high proportion of their
revenue is derived from exports of bulk and branded rooibos and herbal teas to
Europe and Japan. A subsidiary, Honeybush Natural Products (Pty) Limited, had
an excellent year as there is growing consumer recognition of this indigenous
herbal tea, Honeybush, and its health benefits.
- Accord Services, the tea-packing business in the United Kingdom performed
satisfactorily. Accord has developed a new range of exciting packaging
solutions which augurs well for the future. During the period, we acquired a
further 12% of the share capital of Accord, bringing the total interest to 52%.
The investment is accordingly now consolidated as a subsidiary.
FINANCIAL
Profit attributable to shareholders amounted to US$680,000 after exceptional
items (2002 - loss of US$5,754,000). There was an exceptional writedown of
Zimbabwean assets to fair value in 2002 amounting to US$5,873,000. The
exceptional item in 2003 relates mainly to the disposal of Barato mentioned
above.
In accordance with the practice adopted in the previous 2002 financial year,
earnings from Zimbabwe are no longer consolidated and therefore the financial
results include only the United States dollar receipts from Zimbabwe. Recent
exchange control regulations prioritise the use of foreign exchange and coupled
with the high retention of cash needed to fund ongoing operations in a highly
inflationary environment, no dividends were remitted to Conafex during the
financial period from the Zimbabwean businesses.
PROSPECTS
The acquisition of a 17.45% interest in Intertrading Limited for US$754,000,
announced on 4th November 2003, heralds a `new look" Conafex. Intertrading is
an agri-service and marketing company listed on the JSE Securities Exchange
South Africa that procures Southern African fresh fruit, vegetables and
macadamia nuts and markets them internationally via sea and air freight. It
also provides freight forwarding and logistics services for the export of
perishable agricultural products to European markets. In the recent past,
Intertrading has suffered from both the firming South African rand and the
losses incurred by the now discontinued grain trading business. In concert with
Conafex"s European associates, who simultaneously acquired 17.45% of
Intertrading, there will be substantial synergies to be realised through the
shareholding relationship.
Conafex has a call option over a further 7,797,724 Intertrading shares
representing 15.6% of the issued share capital at a strike price of 60 cents
(South African) per share exercisable at any time, but no later than 30th
November 2004 (approximately US$713,000).
Conafex announced on 20th November 2003 that it had recently completed the
acquisition of a 50% interest in the Coffee, Tea and Chocolate Company (Pty)
Limited ("CTC"), a South African company, for US$871,000, effective from 1st
July 2002. We have consolidated our share of the net assets at 30th June 2003
of this joint venture. This investment brings a new and exciting dimension to
Conafex"s planned strategy of adding value to raw agricultural products, mainly
black and herbal teas and coffee, through packaging, branding and marketing to
all the leading supermarket chains in South Africa. CTC benefits from a strong
rand as a high proportion of its raw materials are imported from other African
countries. Conafex"s partners in CTC are a dynamic and competent team of
shareholders/managers. There are substantial benefits to be gained from this
investment through linkages with the other Conafex group operations.
ANNUAL GENERAL MEETING
The Annual General Meeting will take place on Friday 27th February 2004 at 3.30
p.m. at the registered office of the Company, 6 rue Adolphe Fischer L-1520
Luxembourg. Copies of the annual report and accounts will be posted to
shareholders during December 2003
DIVIDEND
A dividend of 3.0 US cents per share for the period ended 31st August 2003 is
recommended to be paid on 2nd April 2004, to those shareholders registered at
close of business on 27th February 2004.
The attention of shareholders is drawn to the following dates in relation to the
dividend:
Last day to trade cum dividend Friday, 20 February 2004
Date on which shares commence trading
ex-dividend in South Africa Monday, 23 February 2004
Record date Friday 27 February 2004
Pay date Friday 2 April 2004
Currency conversion date Friday 13 February 2004
No dematerialisation or rematerialisation of share certificates on the South
African Register, nor may transfer of shares between the registers in Luxembourg
and South Africa take place between Monday 23 February 2004 and Friday 27
February 2004, both days inclusive.
MARK BURRELL
Chairman
27th November 2003
Preliminary Unaudited Consolidated Profit and Loss Account
FOR THE PERIOD 11 months Year ended
ended 30th
31st August September
2003 2002
US$000 US$000
Group revenue including share of Associates 1,238 614
Less share of revenue of Associates (500) (422)
Revenue 738 192
Operating costs (1,094) (473)
Operating loss (356) (281)
Share of associated companies" results 11 38
Income from investment in Zimbabwe subsidiary - 293
- dividend
Income from investment in Zimbabwe associate - - 191
dividend
Interest receivable 1 4
Interest paid and similar charges (2) (8)
(Loss)/Profit on ordinary activities before (346) 237
exceptional items and tax
Exceptional items 1,040 (5,873)
Profit/(Loss) before tax and minority 694 (5,636)
interests
Taxation on ordinary activities (10) (118)
Profit/(Loss) after tax before minority 684 (5,754)
interests
Minority interests (4) -
Profit/(Loss) attributable to shareholders of 680 (5,754)
the Group
Earnings/(Loss) per share (US cents) 13c (106)c
Headline (loss)/earnings per share (US cents) (7)c 2c
Preliminary Unaudited Consolidated Statement of Recognised Gains and Losses
FOR THE PERIOD 11 months Year ended
ended 30th
31st August September
2003 2002
US$000 US$000
Exchange differences on translation of the
financial statements of foreign entities 49 (7)
Net loss not recognised in the income 49 (7)
statement
Net profit/(loss) for the period 680 (5,754)
Total recognised profit/(loss) and change in 729 (5,761)
shareholders" funds
Opening shareholders" funds 11,019 16,780
Closing shareholders" funds 11,748 11,019
Preliminary Unaudited Consolidated Balance Sheet
AT 31st 30th
August September
2003 2002
US$000 US$000
Assets
Non current assets
Property, plant & equipment 109 -
Negative goodwill (58) -
Intangibles 269 -
Investments 9,000 10,783
9,320 10,783
Current assets
Inventories 502 -
Accounts receivable 1,071 126
Cash and bank balances 2,642 643
4,215 769
Current liabilities
Accounts payable falling due within one year (1,552) (433)
Net current assets 2,663 336
Total assets less current liabilities 11,983 11,119
Non current liabilities
Accounts payable falling due after more than (100) (100)
one year
11,883 11,019
Capital and reserves
Called up share capital 8,130 16,743
Other reserves 2,609 36
Retained earnings 1,009 (5,760)
Shareholders" funds 11,748 11,019
Minority interests 135 -
11,883 11,019
Preliminary Unaudited Consolidated Cash Flow Statement
FOR THE PERIOD 11 Year
months
ended ended 30th
31st
August September
2003 2002
US$000 US$000
Cash Flows from Operating Activities
Cash utilised by operations (29) (287)
Interest paid (2) (8)
Taxation paid (5) (109)
Net cash outflow from operating activities (36) (404)
Investment activities
Purchase of tangible assets (23) -
Purchase of investments (180) -
Disposal of tangible assets 39 -
Investment in joint venture (871) -
Acquisition of minority interest (16) -
Disposal of investments 2,952 2
Dividends received from Zimbabwe subsidiary - 293
Interest received and other investment income 1 4
Dividends received from associates - 191
Net cash inflow from investment activities 1,902 490
Net cash inflow before financing 1,866 86
Net increase in funds 1,866 86
Net funds at start of period 643 555
Effect of foreign exchange rate changes 1 2
Net funds at end of period 2,510 643
Notes:
1.As described in the Chairman"s Review, the earnings, assets and liabilities of
Zimbabwe subsidiaries and associated companies have not been consolidated.
Investments have been reflected in accordance with IAS 39. The results for the
year ended 30th September 2002 and the balance sheet at that date, which are
unaudited, have been prepared on the basis of accounting policies adopted for
the period ended 30th September 2002. 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.
2.Capital expenditure during the year was US$23,000. At 30th September 2003,
there were no outstanding capital commitments (2002 -US$nil).
3.Earnings per share are based on the results attributable to shareholders and
the average number of shares in issue during the year - 5,420,152 (2002 -
5,420,152). The comparative has been restated, following shareholder approval at
the Annual General Meeting on 28 March 2003, that the share capital be
consolidated on the basis of one new share of US$1-50 each for every 2,11875
shares of no par value previously held. Transfers of US$2,573,000 and
US$6,040,000 were made from share capital to Special and Retained Earnings
respectively.
4. The Zimbabwean subsidiary, Zimcor Limited, is a subject of compulsory
acquisition orders made by the Government of Zimbabwe on two of its farms. These
orders have been contested by Zimcor Limited with support of diplomatic
institutions. Given the precedent of the de-listing of Highbury Estate and
Dedsi, owned by a separate subsidiary company, in the previous year, the
Directors consider there is a reasonable prospect for the de-listing of the
properties. If these compulsory acquisitions proceed without adequate
compensation, land and improvements up to a value of US$4,200,000, which are
included in the valuation of the investment in the subsidiary, could be
permanently impaired. The outcome of the action cannot be determined at this
point in time and, consequently, no provision against such loss has been made.
Sponsor
Imara Corporate Finance South Africa (Pty) Ltd
