| Wed 21 Dec 2005, 12:00 | | Monteagle - Preliminary unaudited results and divi |
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Monteagle - Preliminary unaudited results 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
Preliminary announcement of unaudited results for the year ended 30th September
2005
INTRODUCTION
Monteagle"s objective is to achieve capital growth and pay 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 South Africa, we have a property portfolio and interests in food production
and processing.
RESULTS
Results for the year have been very impressive with good growth from all
divisions. The highlights are:
- Group revenues up 18% to US$75 million
- Operating profit up 47% to US$4,323,000
- Headline earnings per share (excluding exceptionals) up 85% to US$0.24
- Net assets up 16% to US$37,282,000
- Net assets per share held in Europe, United States of America and Australia up
8% to US$26,781,000, being US$4.25 per share.
IMPORT AND DISTRIBUTION
Our shipping and distribution businesses saw another year of favourable growth
in turnover and volumes of private label food and non-food products, accredited
mainly to organic growth in existing markets - South Africa and Australia.
During the period under review we opened buying offices in Argentina and China,
and an additional sales operation in New Zealand which we are confident will
assist in ensuring continued growth in future years. Our current structure puts
this division in a strong position to ensure we achieve additional economies of
scale with international suppliers. We expect this to assist us in our goal to
be the private label supplier of choice through the effective establishment of
long-term strategic international partnerships with retailers and wholesalers
focussing on customer service.
We import and distribute hand tools, compressors and other DIY household
products into South Africa and Australia. Due to strong branding these
businesses have recorded pleasing growth over the year. In order to advance our
concept of just in time deliveries we have invested large resources to meet our
customers" expectations. We continue to focus on product and range innovations
so as to remain the leading supplier to our customers.
PROPERTY
Our multi-tenanted industrial property in California continues to produce
satisfactory returns; however we have not been successful in finding a second
investment property during the year. As a result of the shortage of reasonably
priced industrial properties in and around the San Diego area, we have decided
as an interim measure, to invest our cash balances in U.S. equities. This
should enable us to achieve a better return on our funds that have been invested
in Treasury Bills during the year. We continue to seek investment properties
capable of generating satisfactory returns. Our properties in South Africa have
performed well as a result of achieving increased rentals.
INVESTMENT PORTFOLIOS
Our diverse portfolio of equities showed some healthy appreciation during the
year. We remain invested in leading companies in the U.S., U.K., Europe and the
Far East. The outlook for 2006 appears to be favourable for equity markets.
FOOD PRODUCTION AND PROCESSING
Conafex Holdings Societe Anonyme ("Conafex") sold its 50% stake in the Cape Town
based Coffee, Tea and Chocolate Company (Pty) Limited, realising a gain before
tax of US$543,000 on its cost in November 2003 of US$1,114,000. In October
2004, US$500,000 was invested to acquire a 26.86% holding in Grassroots Group
(Pty) Limited. The Grassroots Group, based in Cape Town, develops, produces,
markets and sells lifestyle and health products of plant origin in global
markets. Conafex"s share of earnings from Grassroots amounted to US$138,000.
Conafex has an investment of 17.5% in Intertrading Limited, 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. Cape Natural Tea Products (Pty) Limited, the herbal tea
processing and marketing business based in Cape Town, improved its performance
and reported a modest profit for the year. Following the year-end we increased
our investment in the company from 38% to 52% at a cost of US$188,000.
Agricultural operations in Zimbabwe have ceased following the compulsory
acquisition of the estates by the Government and, to date, no compensation has
been forthcoming. The remaining working capital has been invested in assets
that provide a limited hedge against currency devaluation and inflation.
Conafex has now fully provided for all Zimbabwean assets and its regional
headquarters have relocated from Harare to Cape Town.
ASSOCIATED COMPANY
Halogen Holdings Societe Anonyme (formerly Falcon Investment Holdings Societe
Anonyme) continues to seek an established profitable business in the United
Kingdom in which it can re-invest its US$3.7 million cash balances. We value
our investment in Halogen at market value and have therefore made an exceptional
provision against the cost of this investment of US$460,000 (2004: provision
release of US$818,000).
GOLD MINING
The future of the gold mines in Zimbabwe remains dependent on that Government"s
policy for the amount that it pays to compulsorily acquire the gold that we
produce. Our mining interests in Zimbabwe have again not been consolidated as
the ability of these businesses to remit earnings remains uncertain. The value
of our investment has been fully provided for and therefore does not appear in
our accounts.
GROUP PERSONNEL
The continued improvement in our results would not be possible without the hard
work of our employees. We would like to thank all our staff for their
contribution to the satisfactory results for the year.
NET ASSETS
Net assets in hard currencies have increased 8% to US$26,781,000 and other
assets, all in South Africa, have increased 28% to US$10,501,000. These
increases are due to property revaluations, increased investment values and
retained profits.
DIVIDEND
We are pleased to recommend an increased dividend of 8 US cents per share (2004:
7 US cents).
PROSPECTS
Our import and distribution businesses continue to improve, supported by the
collateral provided by our growing international investment portfolios and
property. Conafex is implementing its strategy of diversification into niche
and added value sectors in South Africa and our associate, Halogen, continues to
search for a suitable UK based business in which to invest. The commercial and
financial climate appears favourable in our area of operations. We however
remain cautious in view of the vast trade imbalances in world markets. Coupled
with volatile energy prices and supplies, the scene is set for an interesting
year ahead in spite of which we are confident of producing satisfactory results
for the current year.
J. M. Robotham
Chairman
D.C. Marshall
Chief Executive
21st December 2005
NOTICE OF MEETING AND DECLARATION OF DIVIDEND
The Annual General Meeting will be held on Friday , 31st March 2006 at 4.00 p.m.
at the registered office of the Company, 6 rue Adolphe Fischer L-1520
Luxembourg.
Unaudited Consolidated Profit and Loss Account
FOR THE YEAR ENDED 30th SEPTEMBER 2005 2004
US$000 US$000
Group revenue 75,039 63,700
Operating costs (70,716) (60,756)
Operating profit 4,323 2,944
Share of associated companies" results 129 (1)
Income from Zimbabwean investments
- dividends 7 131
Income from other investments - dividends 343 308
- interest 296 306
Interest paid and similar charges (1,036) (969)
Realised exchange gains 124 139
Profit on ordinary activities before
exceptional items and tax 4,186 2,858
Exceptional items 1,345 1,539
Profit before special provision, tax and
minority interests 5,531 4,397
Provision against investment in Zimbabwe - (8,444)
Profit/(Loss) before tax and minority 5,531 (4,047)
interests
Tax (1,560) (1,168)
Profit/(Loss) after tax before minority 3,971 (5,215)
interests
Minority interests (1,281) 2,261
Profit/(Loss) attributable to shareholders
of the Group 2,690 (2,954)
Basic and fully diluted earnings/(loss) per
share (US cents) 43c (47)c
Exceptional items, less tax and minority
interests (19)c 60c
Headline earnings per share (US cents) 24c 13c
Recommended dividend (US cents) 8c 7c
UNAUDITED CONSOLIDATED STATEMENT OF RECOGNISED GAINS AND LOSSES
Exchange differences on translation of the 442 (237)
financial statements of foreign entities
Group share of fair value adjustments 1,173 3,707
Group share of revaluations 1,189 2,385
Net gains not recognised in the income 2,804 5,855
statement
Dividend paid for the previous year (441) (378)
Prior years" unclaimed dividends forfeited 63 -
Net profit/(loss) for the period 2,690 (2,954)
Total recognised gains and increase in
shareholders" funds 5,116 2,523
Shareholders" funds brought forward 32,166 29,643
Shareholders" funds carried forward 37,282 32,166
UNAUDITED CONSOLIDATED BALANCE SHEET
AT 30th SEPTEMBER 2005 2004
US$000 US$000
Assets
Non current assets
Property, plant and equipment 15,994 14,244
Investments 16,494 14,115
Intangibles - trade marks - 296
32,488 28,655
Current assets
Inventories 13,255 9,841
Accounts receivable 12,987 13,231
Cash and bank balances 8,009 7,857
34,251 30,929
Current liabilities
Accounts payable (falling due within one (17,747) (17,628)
year)
Net current assets 16,504 13,301
Total assets less current liabilities 48,992 41,956
Non current liabilities
Accounts payable (falling due after more (5,366) (5,116)
than one year)
Deferred taxation (73) 155
43,553 36,995
Capital and reserves
Called up share capital 9,450 9,450
Other reserves 14,317 11,567
Retained earnings 13,515 11,149
Shareholders" funds 37,282 32,166
Minority interests 6,271 4,829
43,553 36,995
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30th SEPTEMBER 2005 2004
US$000 US$000
Operating activities
Cash (absorbed)/generated by operations (650) 636
Interest paid (1,036) (969)
Taxation paid (1,199) (807)
Net cash outflow from operating activities (2,885) (1,140)
Investment activities
Purchase of tangible fixed assets (604) (2,149)
Acquisition of investments (4,323) (3,085)
Proceeds on disposal of investment in joint
venture 1,820 -
Disposal of tangible fixed assets 101 1,254
Disposal of investments 4,959 3,243
Interest received and other investment
income 727 614
Dividends received from Zimbabwean
investments 7 131
Net cash inflow from investment activities 2,687 8
Net cash outflow before financing (198) (1,132)
Financing activities
Net increase in long term debt 250 90
Dividend paid - group (441) (378)
- minority shareholders (2) (22)
Net cash from financing activities (193) (310)
Net decrease in funds (391) (1,442)
Net funds at 1st October 4,957 6,314
Effect of foreign exchange rate changes (135) 85
Net funds at 30th September 4,431 4,957
SEGMENTAL REPORTING
Primary reporting format - business segments
The Group is organised on a worldwide basis into the following main business
segments:
Import and distribution
Tool import and non-perishable food exports in South Africa and exports to Japan
and Australia.
Food production and processing
Horticulture, niche and added value agriculture in South Africa and United
Kingdom through Conafex.
Property
Investment properties in California and South Africa.
Other operations
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.
2005 2004
Segmental analysis of results US$000 US$000
Revenue Result Revenue Result
Import and distribution 71,138 5,450 58,191 3,878
Property 1,389 301 1,197 212
Food production and processing 2,274 122 3,976 196
Other activities * 238 1,018 * 336 129
75,039 6,891 63,700 4,415
Income from Zimbabwean 7 131
investment
Share of associates and dividend
income
Food production and processing 212 (26)
Other activities (83) 28
Interest paid and similar
charges (1,036) (969)
5,991 3,579
Exceptional provision against
Zimbabwean Investment - (8,444)
Provision (charged)/released (460) 818
against associate
Profit before tax 5,531 (4,047)
*Revenue of Other activities 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.
Assets Liabili- Net Capital Deprecia-
ties assets/ expend- tion
(liability-iture charge
ies)
US$000 US$000 US$000 US$000 US$000
Segmental analysis of net assets 30th September 2005
Import 26,647 12,602 14,045 478 235
Property 13,594 177 13,417 123 55
Food production
and processing
- Group 1,685 458 1,227 2 39
- Associates 974 - 974 - -
Listed associate 1,610 - 1,610 - -
Other activities
(including
investments) 12,178 1,046 11,132 - 8
Unallocated
(including cash, 10,051 8,903 1,148 - -
tax and debt)
Consolidated total 66,739 23,186 43,553 603 337
Segmental analysis of net assets 30th September 2004
Import and 21,931 12,338 9,593 362 181
distribution
Property 12,579 167 12,412 1,731 48
Food production
and processing 3,688 1,525 2,163 56 26
- Group
- Associates 259 - 259 - -
Listed associate 2,156 - 2,156 - -
Other activities
(including
investments) 8,724 664 8,060 - 8
Unallocated
(including cash,
tax and debt) 10,402 8,050 2,352 - -
Consolidated total 59,739 22,744 36,995 2,149 263
Secondary reporting format - geographical segments
The Group operates in the following countries or states.
Luxembourg
The non-trading location of the parent company, including part of the Group
investment portfolio.
South Africa
Location of the bulk of the Group"s import and distribution business, tea
packing operations and property portfolio.
Australia
Location for part of the Group"s import and distribution business.
United States Part of the Group"s property portfolio is located there.
Jersey
Location of part of the Group"s import and distribution business and part of the
Group investment portfolio.
2005 2004
Group Total Capital Group Total Capital
Revenue Net Expenditure Revenue Net Expenditure
Assets Assets
US$000 US$000 US$000 US$000 US$000 US$000
Australia 3,085 2,321 133 2,912 1,713 19
United States 1,048 9,301 70 919 9,231 91
Jersey 17,290 7,008 - 14,097 6,419 -
Other 1,072 10,358 2 1,073 8,972 56
countries
Total outside 22,496 28,988 205 19,001 26,335 166
Africa
South Africa 52,544 14,565 398 44,699 10,660 1,983
75,039 43,553 603 63,700 36,995 2,149
Total assets and capital expenditure are shown by the geographical area in which
the assets are located.
EXCEPTIONAL ITEMS 2005 2004
US$000 US$000
Income
Surplus on disposal of investments 1,805 625
Surplus on disposal of tangible fixed assets - 28
Release of provision against investments - 818
Negative goodwill written off - 65
Share of associate"s exceptional items - 3
Total income 1,805 1,539
Charges
Provision against subsidiary/associate (460) -
Exceptional items - net income 1,345 1,539
Exceptional provision against investment in - (8,444)
Zimbabwe
Notes:
1. These preliminary results for the year ended 30th September 2005 and the
balance sheet at that date, which are unaudited, have been prepared on the basis
of accounting policies adopted for the year ended 30th September 2004.
2. Group capital expenditure in the year was US$603,000 (2004 - US$2,149,000).
There were no capital expenditure commitments at 30th September 2005 (2004 -
nil).
3. Bank loans and overdrafts of US$3,578,000 (2004 - US$2,900,000) are included
in current liabilities. Group long-term finance is secured on various local
properties and bears interest at local commercial rates.
Date: 21/12/2005 12:00:32 PM Produced by the JSE SENS Department
