Wrap Text
Preliminary results for year ended September 2012
MARSHALL MONTEAGLE PLC
(Incorporated in Jersey. Registered No. 102785)
ISIN JE00B5N88T08
PROVISIONAL ANNOUNCEMENT OF REVIEWED RESULTS FOR THE YEAR ENDED 30TH SEPTEMBER
2012
Introduction
The Directors report mixed results by the Group’s diverse operations and
investments, with asset values appreciating and the consumer environment in the
countries in which the Group operates remaining challenging.
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
Group revenue for the twelve months to 30th September 2012 is up 7% to
US$210,183,000 compared to US$196,391,000. Had currencies remained constant
sales would have increased by 20%. Operating profit is lower at US$8,650,000
from US$10,703,000, a decrease of 19%.
Gain of US$1,090,000 on the date of disposal of equity portfolio owned by South
African subsidiary.
Group profit before tax decreased to US$9,263,000 from US$10,145,000. The
directors are proposing a final dividend of 1.7 US cents, (2011 – 1.60 US cents)
making a total of 3.30 US cents (2011 – 3.10 US cents) for the year.
Net assets attributable to shareholders increased by 8% to US$1.81 per share from
US$1.68 (restated) at 30th September 2011. US$0.75 of net assets per share – 42%
(2011 – 43%) are held in Europe and U.S.A. The remaining assets, equivalent to
US$1.06 per share – 58% (2011 – 57%) are held predominantly in South Africa.
Import and Distribution
Our import and distribution business in food and household consumer products
achieved a similar level of trade during the financial year. 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. Our partnerships with key
producers are paramount to the success of our business and we continue to further
develop our international network. The review of our supply-chain is on-going to
ensure that we provide 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.
Our coffee business performed well with turnover and profits both up on the prior
year. Unfortunately one of the key customers will be roasting their own coffee
from March 2013, but management are looking strategically at ways of substituting
this volume. The business continues to market its products to multiple retailers
and the hospitality sector in South Africa.
Our tool and machinery import and distribution businesses had another tough year
and despite a small increase in turnover, pressure on margins resulted in lower
profits. The company has made a promising start to the new financial year and
management are cautiously optimistic that the business will make a better
contribution to the Group during the year.
Property Portfolio
Rental income from our large multi-tenanted industrial property in San Diego
decreased slightly during the year. The commercial and industrial property market
in Southern California remains challenging, but rents appeared to have stabilised
and our property is currently fully let. We remain a long term holder of this
quality asset.
The Group’s South African commercial and light industrial property portfolio had
another satisfactory year. Vacancy levels remain below national averages and the
value of the portfolio appreciated during the year.
Investment Portfolio
Despite relatively weak corporate earnings, quantitative easing by central banks
provided a boost for equity markets during the year and our portfolio’s
appreciated materially, particularly during the first half of the year. During
March 2012 a decision was taken to dispose of the portfolio owned by our South
African subsidiary which resulted in a gain of US$1,090,000 at the time of
disposal. After paying local taxes and sundry costs, an amount in excess of
US$3,000,000 was distributed to the parent company pending reinvestment. 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.
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 in April 2012 management successfully completed an extension to the company’s
largest pub.
Deferred Tax
The Group has opted for the early adoption of the amendments to IAS12 Income
Taxes. In previous years the provision for deferred tax on investment properties
was on the “value in use” basis. The amendment to IAS12 requires the liability
to be calculated on the basis that the carrying value will be recovered entirely
through sale. We have restated prior year comparatives for the additional
liability of US$1,291,000 arising. In addition, we have early adopted the
amendments to IAS1 Presentation of Financial Statements, from the Annual
Improvements to IFRSs 2009-2011 cycle. This restricts the restatement to the
2011 comparatives.
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 the slow and bumpy global recovery and the failure of US and Euro-zone
policy makers to tackle their fiscal woes, the Board are cautious about the year
ahead. However, our conservative policies and diversity within the Group give us
confidence that we can continue to enhance shareholder value in the long term.
J. M. Robotham D.C. Marshall
Chairman Chief Executive
Condensed Consolidated Statement of Comprehensive Income
for the year ended 30th September 2012 2011
Reviewed Restated
US$000 US$000
Comprehensive Income:-
Group revenue 210,183 196,391
Operating costs (201,533 (185,688
) )
Operating profit 8,650 10,703
Share of associated companies’ results (196) (287)
Income from other investments – dividends 518 532
- interest 835 976
Interest paid (2,533) (2,820)
Exchange (losses)/gains (276) 218
Other income 2,265 823
Profit before tax 9,263 10,145
Taxation on ordinary activities (2,671) (2,792)
Profit after tax 6,592 7,353
Profit attributable to members 5,055 5,450
Profit attributable to non-controlling interests 1,537 1,903
Other Comprehensive Income/(Expense):
Exchange differences on translation into US dollars of
the financial statements of foreign entities (1,363) (5,274)
Unrealised gain on revaluation of available for sale 2,502 165
investments
Reclassification of previously recognised (losses)/gains
on disposal of available for sale investments (721) 75
Commercial property fair value adjustments 394 (351)
Total Comprehensive Income 7,404 1,968
Total Comprehensive Income attributable to members 5,908 813
Total Comprehensive Income attributable to non-
controlling interests 1,496 1,155
Basic and fully diluted earnings per share (US cents) 14.1c 15.2c
Condensed Consolidated Statement of Changes in Equity
Retain
Ordinar Share Other ed
y share premiu reserv earnin
capital m es gs Total
US$000 US$000 US$000 US$000 US$000
Year ended 30th September 2011
Balance at start of year as 26,893 4,905 7,468 19,659 58,925
previously reported
(1,211 (1,211
Prior year adjustment - - ) - )
As restated 26,893 4,905 6,257 19,659 57,714
Transactions with shareholders
(1,074 (1,074
Dividends paid - - - ) )
Shares cancelled on re- (26,893 (4,905 - - (31,79
organisation ) ) 8)
Shares issued 8,964 23,606 - - 32,570
Acquired from non-controlling
interests - - (438) 2,307 1,869
(4,717
Total comprehensive income - - ) 5,530 813
Balance at end of year as restated 8,964 23,606 1,102 26,422 60,094
Year ended 30th September 2012
Balance at start of year as 8,964 23,606 2,393 26,422 61,385
previously reported
Prior year adjustment - - (1,291 - (1,291
) )
As restated 8,964 23,606 1,102 26,422 60,094
Transactions with shareholders
(1,148 (1,148
Dividends paid - - - ) )
Total comprehensive income - - 2,323 3,585 5,908
Balance at end of year 8,964 23,606 3,425 28,859 64,854
Condensed Consolidated Statement of Financial Position
at 30th September 2012 2011
Reviewed Restated
US$000 US$000
Assets
Non current assets
Investment property 29,925 29,065
Property, plant and equipment 9,926 9,912
Goodwill 286 525
Deferred taxation 920 412
Investment in associated company 1,679 1,511
Investment in joint venture 173 -
Investments 14,653 16,252
57,562 57,677
Current assets
Inventories 28,249 25,521
Accounts receivable 40,838 30,570
Other financial assets 121 1,341
Tax recoverable 484 294
Cash and bank balances 15,859 14,406
85,551 72,132
Current liabilities
Accounts payable (falling due within one year) (47,519) (42,781)
Other financial liabilities (85) -
Tax payable (225) (599)
Total current liabilities (47,829) (43,380)
Net current assets 37,722 28,752
Total assets less current liabilities 95,284 86,429
Non current liabilities
Accounts payable (falling due after more than one year) (13,811) (11,531)
Deferred taxation (5,761) (4,519)
Net assets 75,712 70,379
Capital and reserves
Called up share capital 8,964 8,964
Share premium account 23,606 23,606
Other reserves 3,425 2,393
Retained earnings 28,859 25,131
Shareholders' funds 64,854 60,094
Non-controlling interests 10,858 10,285
75,712 70,379
Condensed Consolidated Statement of Cash Flow
for the year ended 30th September 2012 2011
Reviewed Audited
US$000 US$000
Operating activities
Operating profit 8,650 10,703
Adjustment
Depreciation 887 715
Net (increase)/decrease in working capital
Increase in inventories (3,026) (1,695)
Increase in debtors (9,345) (4,793)
Increase in creditors 3,923 7,359
Cash generated by operations 1,089 12,289
Interest paid (2,533) (2,820)
Taxation paid (2,503) (2,988)
Cash (outflow)/inflow from operating activities (3,947) 6,481
Investment activities
Purchase of and improvement to tangible non-current (797) (2,023)
assets
Proceeds of disposal of tangible assets 117 116
Acquisition of investments (877) (4,015)
Investment in associate (365) -
Investment in joint venture (173) -
Proceeds of disposal of investments 5,230 3,275
Dividends received 518 532
Interest received 835 976
Cash inflow/(outflow) from investment activities 4,488 (1,139)
Cash inflow before financing 541 5,342
Financing activities
Increase in long term debt 2,281 1,078
Cost of minority interest acquired - (1,439)
Cost of delisting subsidiary (14) -
Dividends paid – Group shareholders (1,148) (1,074)
Dividends paid – non-controlling interests of (923) (817)
subsidiaries
Cash inflow/(outflow) from financing activities 196 (2,252)
Increase in cash and cash equivalents 737 3,090
Cash and cash equivalents at 1st October 11,538 8,587
Effect of foreign exchange rate changes (102) (139)
Cash and cash equivalents at end of year 12,173 11,538
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 Trade in tools, food and household consumer products
distribution primarily 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 costs.
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.
2012 2011
Segmental analysis of results US$000 US$000
Revenue Result Revenue Result
Import and distribution 205,641 7,913 191,548 9,240
Property 4,526 1,664 4,833 1,730
Other activities * 16 150 10 1,460
210,183 9,727 196,391 12,430
Share of associates (196) (287)
Interest paid and similar charges (2,533) (2,821)
6,998 9,322
Other income 2,265 823
Profit before tax 9,263 10,145
* 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.
Asset Liabilit Net Capital Depreciat
s ies assets/ expendit ion
(liabili ure charge
ties)
US$00 US$000 US$000 US$000 US$000
0
Segmental analysis of net assets 30th September 2012
Import and distribution 76,58 (46,143 30,446 673 679
9 )
Property 33,68 (1,240) 32,445 124 194
5
Associate – Other 1,679 - 1,679 - -
Other activities (including 15,27
investments) 5 (223) 15,052 - -
Unallocated (including cash, 15,88 (19,795
tax and debt) 5 ) (3,910) - 14
Consolidated total 143,1 (67,401 75,712 797 887
13 )
Segmental analysis of net assets 30th September 2011 (restated)
Import and distribution 64,37 (37,900 26,479 1,887 651
9 )
Property 32,06 (984) 31,082 136 50
6
Associate - Other 1,510 - 1,510 - -
Other activities (including 16,64
investments) 3 (1,078) 15,565 - 14
Unallocated (including cash, 15,21 (19,468
tax and debt) 1 ) (4,257) - -
Consolidated total 129,8 (59,430 70,379 2,023 715
09 )
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.
2012 2011
Group Total Capital Group Total Capital
revenue Net expendit Revenue net expendit
assets ure assets ure
US$000 US$000 US$000 US$000 US$000 US$000
Europe 37,099 20,740 - 31,939 16,779 -
Australia 2,353 3,790 29 2,483 3,724 105
United States 951 6,384 - 1,011 7,145 -
Total outside
South Africa 40,403 30,914 29 35,433 27,648 105
South Africa 169,780 44,798 768 160,958 42,731 1,918
210,183 75,712 797 196,391 70,379 2,023
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 the framework,
concepts and the measurement and recognition requirements of International
Financial Reporting Standards, applicable legal and regulatory requirements
of The Companies (Jersey) Law, 1991, the AC 500 Standards, the listing
requirements of the JSE Limited and contains the information required by
IAS34 Interim Financial Reporting. With the exception of the early adoption
of the amendments to IAS12, and the amendments to IAS1 Presentation of
Financial Statements, 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 2011.
2. Group capital expenditure in the year was US$797,000 (2011 – US$2,023,000).
There were no capital expenditure commitments at 30th September 2012 (2011
– nil).
3. Loans and overdrafts of US$3,686,000 (2011 - US$2,868,000) 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 (2011 – 35,857,512).
Reconciliation between basic and headline earnings per 2012 2011
share
US$000 US$000
Restated
Basic earnings per share 5,055 5,450
Adjusted for:
Investment property valuations (1,214) (918)
Reclassification of previously recognised
profits/(losses0 on disposal of available for sale
investments 721 (75)
Add back loss on disposal of non-current tangible assets - 113
Headline earnings 4,562 4,570
Headline earnings per share (US cents) 12.7c 12.7c
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 the framework, concepts and the
measurement and recognition requirements of International Financial Reporting
Standards, the Companies (Jersey) Law, 1991 and contains the information required
by IAS34 Interim Financial Reporting. The audited annual report will be mailed
to shareholders in early 2013.
Johannesburg
20 December 2012
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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