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Interim results for the period ended 31 March 2014 and dividend declaration
Marshall Monteagle PL
(Incorporated in Jersey Registration No. 102785)
(SA Registration No: 2010/024031/10)
JSE CODE: MMP ISIN: JE00B5N88T08
(“Marshall”)
Registered Office:
3rd Floor, 37 Esplanade,
St. Helier, Jersey, JE2 3QA
Channel Islands
9th June 2014
Dear Shareholder,
The Directors report results for the six months to 31st March 2014 and dividend declaration.
Results
- Group revenue decreased by 5% to US$104,331,000 compared with the same period last year. In constant
currency terms sales increased to US$121,225,000 (10%).
- Operating profit increased by 2% to US$3,704,000, but in constant currency terms increased by 18% to
US$4,287,000.
- Headline earnings of 5.5 cents compared to 4.5 cents in the same period last year, reflecting efficiencies
achieved by Group operations.
- An interim dividend of 1.8 cents is to be paid in July (2013 – 1.7 cents).
- Net assets per share US$1.86 (2013 - US$1.80). Net assets per share have increased from the 30th
September 2013 figure of US$1.82 per share; unfavourable exchange rate movements being offset by
substantial increases in value of the investment portfolios and operating profits.
Import and Distribution
Our import and distribution business in food and household consumer products achieved a similar level of trade
to the first six months of last year. The economic environment remains challenging with volatile raw material
pricing, inconsistent availability of certain raw materials and significant currency movements. This division
provides procurement, supply chain and risk management services to multiple retailers, wholesalers and
manufacturers in Southern and Central Africa, Indian Ocean Islands and Australia. The business remains
committed to working with dedicated producers of quality raw materials, skilled technologists and first world
production facilities and now has well established partnerships with over 200 production facilities in 29
countries. These partnerships with key producers are paramount to the success of the business and this division
continues to further develop its international network. Management remain committed to making improvements
to the supply-chain for the benefit of their customers. They also continue to look at opportunities in new
markets such as India and the Middle East.
As expected our coffee business roasted less coffee than during the first six months of last year, but
management are confident that the company is well placed to capitalise on future opportunities following the
recent investment in the business. The business markets its products to multiple retailers and the hospitality
sector in South Africa.
Our tool and machinery import and distribution businesses posted profits that were down on the same period
last year, the main reason being that the ductile iron water pipe division had a slower start to the year. Market
conditions remain very challenging, but management are looking at initiatives that they believe will lead to
better market penetration and sustainable growth.
Property Portfolio
Rental income from our large multi-tenanted industrial property in San Diego increased slightly during the
period. The commercial and industrial property market in Southern California is showing further signs of
strengthening and our property continues to enjoy a very low vacancy rate.
The Group’s South African commercial and light industrial property portfolio has managed a steady return in
adverse conditions due to an increased focus on operating efficiencies and rental opportunities.
Investment Portfolio
Our concentrated list of quality international equities performed well during the six months and we made some
additions to existing holdings following the takeover of one of our investments during the period. We are more
cautious about the remainder of the financial year, but intend to make further additions when opportunities
arise.
Halogen Holdings P.L.C. (unlisted associate)
The recently merged pub Group has enjoyed a good start to 2014 with most units performing better than they
did at the start of last year. Heartstone Inns is now comprised of nine quality pubs and management have plans
to raise further capital to acquire additional units.
Net Assets
Assets outside Africa, net of non-controlling interests and proposed dividends, stand at US$36,140,000, equal
to US$1.01 per share (30th September 2013: US$0.95); the balance of US$29,796,000, equal to US$0.83 per
share, is held in South Africa. Our total net assets, allowing for the proposed dividend, amount to US$1.84 per
share which compares to US$1.80 per share at 30th September 2013.
Interim dividend
We are pleased to announce that the Company is to pay an interim dividend of US 1.8 cents per share. The
dividend is payable on 11th July 2014 to shareholders on the register at the close of business on 27th June 2014.
Group Staff
Once again we would like to thank all our employees for their hard work and we appreciate their efforts and the
contribution that they have made during the period.
Prospects
The Board are pleased with these results, particularly in light of the challenging trading conditions and global
economic uncertainty. Our conservative policies and diversity within the Group give us confidence that we can
continue to enhance shareholder value in the long term.
E.J. Beale D.C. Marshall
Chairman Chief Executive
Details of interim dividend
Shareholders on the South African register will receive their dividend in South African Rand converted from
US dollars at the closing rate of exchange on 6th June 2014. In order to comply with the requirements of Strate
the relevant details are as follows
In respect of the normal gross cash dividend of 1.8 US cents, and in terms of the new South African Tax Act,
the following dividend tax ruling only applies to those shareholders who are registered on the South African
register, all other shareholders are exempt
- the dividend has been declared from income reserves
- the dividend withholding tax rate is 15% resulting in a net dividend of US1.53 cents (16.16139 South
African cents) per share to those shareholders who are not exempt from the dividend withholding tax.
The issued number of shares at the declaration date is 35,857,512. The Company’s Jersey tax number is
CH4513.
Salient dates for dividend
Last day to trade Friday 27th June 2014
Shares trade ex dividend Monday 30th June 2014
Record date (date shareholders recorded in books) Friday 4th July 2014
Pay date Friday 11th July 2014
Shareholders are hereby advised that the exchange rate to be used will be USD 1 = ZAR 10.5630. This has
been calculated as the average of the bid/ask spread at 16.00 (United Kingdom time) being the close of business
on 6th June 2014. Consequently the dividend of US 1.8 cents will be equal to 19.0134 South African cents.
No dematerialisation or rematerialisation of share certificates, nor transfer of shares between the registers in
Jersey and South Africa will take place between Monday 30th June and Friday 4th July 2014, both dates
inclusive.
Consolidated Statement of Total Comprehensive Income
Half years ended Year ended
31st March 30th September
2014 2013 2013
Notes Unaudited Unaudited Audited
US$000 US$000 US$000
Group revenue 2 104,331 109,975 209,767
Operating costs (100,627) (106,348) (201,452)
Operating profit 3,704 3,627 8,315
Share of associated company’s and joint venture results 206 (92) (32)
Income from investments - dividends 164 221 460
- interest 99 60 467
Interest paid (992) (898) (2,986)
Exchange gains/(losses) 44 115 (350)
Other income 3 311 40 4,918
Profit before taxation 2 3,536 3,073 10,792
Taxation (1,109) (814) (4,137)
Profit after taxation 2,427 2,259 6,655
Profit attributable to owners of the parent 1,800 1,535 5,505
Profit attributable to non-controlling interests 627 724 1,150
Exchange differences on translation into US dollars of the (1,423) (3,967) (7,372)
financial statements of foreign entities
Commercial property revaluations - - (129)
Unrealised gain on revaluation of available for sale investments 1,298 2,004 1,913
Reclassification of previously recognised profits on disposal of
available for sale investments (170) (86) (213)
Total Other Comprehensive Income (295) (2,049) (5,801)
Total Comprehensive Income 2,132 210 854
Total Comprehensive Income attributable to owners of the
parent 1,915 369 1,697
Total Comprehensive Income attributable to non-
controlling interests 217 (159) (843)
Interim dividend per share (US cents) 1.8c 1.7c 1.7c
Recommended final dividend (US cents) - - 1.8c
Reconciliation between basic and headline earnings
Basic earnings 4 1,800 1,535 5,505
Adjusted for :
Investment property revaluations - - (3,359)
Reclassification of previously recognised gains on disposal of
available for sale investments 170 86 213
Loss/(Profit) on disposal of non-current tangible assets 2 - (53)
Headline earnings 4 1,972 1,621 2,306
Consolidated Statement of Changes in Equity
_________________________________________________________________________________
Ordinary Non-
share Share Other Retained Total Controlling Group
capital Premium reserves earnings shareholders Interests total
US$000 US$000 US$000 US$000 US$000 US$000 US$000
Half year ended 31st March 2013
Balances at start of period 8,964 23,606 3,425 28,859 64,854 10,858 75,712
Transactions with shareholders
Dividends paid - - - (610) (610) (327) (937)
Total comprehensive income - - (1,166) 1,535 369 (159) 210
Balances at end of period 8,964 23,606 2,259 29,784 64,613 10,372 74,985
Half year ended 31st March 2014
Balances at start of period 8,964 23,606 2,812 29,950 65,332 9,199 74,531
Transactions with shareholders
Dividends paid - - - (664) (664) (482) (1,146)
Transfer – release of fair value - - (2,608) 2,608 -
Total comprehensive (expense)/income - - 156 1,759 1,915 217 2,132
Balances at end of period 8,964 23,606 360 33,653 66,583 8,934 75,517
Consolidated Statement of Financial Position
31st March 30th September
2014 2013 2013
Unaudited Unaudited Audited
US$000 US$000 US$000
Non-current assets
Investment property 28,750 27,896 29,483
Property, plant and equipment 8,381 8,988 8,223
Goodwill 224 257 234
Deferred taxation 302 612 383
Investments
Associate 1,520 1,587 1,501
Joint venture 453 156 278
General portfolio – (note 5) 19,853 16,759 18,104
59,483 56,255 58,206
Current assets
Inventories 28,218 25,538 26,383
Accounts receivable 34,704 39,146 30,039
Other financial assets 28 258 404
Tax recoverable 620 665 98
Cash 14,392 19,930 14,329
77,962 85,537 71,253
Non-current assets held for resale - - 1,291
Total assets 137,445 141,792 130,750
Current liabilities
Accounts payable (41,561) (47,384) (36,392)
Tax payable (1,931) (447) (1,366)
Total current liabilities (43,492) (47,831) (37,758)
Net current assets 34,470 37,706 34,786
Total assets less current liabilities 93,953 93,961 92,992
Non-current liabilities
Accounts payable (12,556) (13,646) (12,589)
Deferred taxation (5,880) (5,330) (5,872)
75,517 74,985 74,531
Capital and reserves
Called up share capital 8,964 8,964 8,964
Share premium account 23,606 23,606 23,606
Other reserves 360 2,259 2,227
Other reserves relevant to non-current asset held for resale - - 585
Retained earnings 33,653 29,784 29,950
Equity attributable to owners of the parent 66,583 64,613 65,332
Non-controlling interests 8,934 10,372 9,199
75,517 74,985 74,531
Net assets per share US$ (note 6) 1.86 1.80 1.82
Consolidated Statement of Cash Flow
Half years ended Year ended
31st March 30th September
2014 2013 2013
Unaudited Unaudited Audited
US$000 US$000 US$000
Revenue 104,331 109,975 209,767
Operating costs (100,627) (106,348) (201,452)
Operating activities
Operating profit 3,704 3,627 8,315
Adjusted for:
Depreciation 408 444 652
Changes in working capital:
(Increase)/Decrease in inventories (523) 37 (3,092)
(Decrease)/Increase in debtors (1,807) (1,632) 4,141
(Decrease)/Increase in creditors (618) 3,877 (2,864)
Cash generated by operations 1,164 6,353 7,152
Interest paid (898) (898) (2,986)
Taxation paid (691) (691) (1,566)
Net cash (outflow)/inflow from operating activities (425) 4,764 2,600
Investment activities
Purchase of, and improvements to, tangible non-current assets (923) (353) (1,193)
Proceeds of disposal of tangible assets 1,546 - 754
Acquisition of investments (1,520) (713) (3,624)
Proceeds on disposal of investments 1,210 554 2,352
Dividends received 164 221 460
Interest received 99 60 467
Net cash inflow/(outflow) from investment activities 576 (231) (784)
Cash inflow before financing 151 4,533 1,816
Financing activities
Net increase/(decrease) in long term debt 129 373 (249)
Dividends paid - Group shareholders (664) (610) (1,219)
Dividends paid - non-controlling interests of subsidiaries (482) (327) (120)
Cash (outflow) from financing activities (1,017) (564) (1,588)
Net (decrease)/increase in funds (866) 3,969 228
Net funds at start of period 12,002 12,173 12,173
Effect of foreign exchange rates (197) (143) (399)
Net cash and cash equivalents at end of period 10,939 15,999 12,002
Notes to the interim statement
1. The results and the cash flow statement for the half-year ended 31st March 2014 are unaudited and comply with IAS
34 - Interim Financial Reporting. They have been prepared on the basis of accounting policies adopted in the
accounts for the year ended 30th September 2013. They comply with International Financial Reporting Standards and
JSE listing requirements. The results for the year to 30th September 2013 are an abridged version of the Group's full
accounts for that year, which have been filed with the relevant authorities.
2. The segmental analysis of revenue and operating profit is as follows:
Half years ended 31st March Year ended 30th
2014 2013 September 2013
US$000 US$000 US$000
Revenue Result Revenue Result Revenue Result
Analysed by activity:-
Import/distribution 102,223 3,499 107,658 3,317 205,490 7,636
Property 2,108 853 2,301 905 4,265 1,966
Other - (341) 16 (199) 12 (710)
104,331 4,011 109,975 4,023 209,767 8,892
Share of associated company’s and
joint venture results 206 (92) (32)
Interest paid (992) (898) (2,986)
3,225 3,033 5,874
Other income (note 3) 311 40 4,918
Profit before tax 3,536 3,073 10,792
3. The other income arises from the following.
31st March 30th September
2014 2013 2013
US$000 US$000 US$000
Investment property revaluations - - 4,476
Profit on disposal of investments 310 28 329
Fair value adjustments on derivative instruments 3 12 26
(Loss)/Gain on disposal of non-current tangible assets (2) - 87
Other income 311 40 4,918
4. Basic earnings per share are based on results attributable to members and on 35,857,512 shares in issue (2013 -
35,857,512). A reconciliation of basic and headline earnings is shown above.
5. A geographical analysis of the General Portfolio of investments is as follows:-
United Kingdom 4,577 3,965 4,295
United States of America 6,996 4,820 5,988
Europe, excluding the U.K. 4,228 4,216 3,993
Switzerland 2,692 2,408 2,450
Japan 1,074 1,064 1,092
19,567 16,473 17,818
Unlisted – Europe and other 286 286 286
19,853 16,759 18,104
6. Net assets per share are based on equity attributable to owners of the Company.
7. There was capital expenditure of US$923,000 during the period (2013 - US$353,000). There was no contracted or
outstanding authorised capital expenditure at the reporting date.
Johannesburg
9 June 2014
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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