Wrap Text
Reviewed results for year ended 30 September 2014
Marshall Monteagle PLC
(Incorporated in Jersey)
(Registration number: 102785)
(External registration number: 2010/024031/10)
JSE code: MMP ISIN: JE00B5N88T08
("Marshall Monteagle" or "the Company" or "the Group")
Provisional announcement of reviewed results for the year ended 30th September 2014
Introduction
Despite significant currency headwinds and a challenging consumer environment, the Directors report
satisfactory results for the year ended 30th September 2014.
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.S.A., U.K., Europe 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 2014 increased by 1% to US$212,339,000
compared to US$209,767,000. Had currencies remained constant sales would have increased by 13%.
Operating profit is lower at US$7,016,000 from US$8,315,000, a decrease of 16%.
- Group profit before tax decreased by 32% to US$7,305,000 from US$10,792,000. The decrease reflects
lower investment property revaluations, which in the previous year were US$4,476,000 compared with
US$887,000 in the current year.
- Headline earnings per share increased 14% to 7.3 US cents (2013 – 6.4 US cents).
- The directors are proposing a final dividend of 1.8 US cents, (2013 – 1.8 US cents) making a total of
3.60 US cents (2013 – 3.50 US cents) for the year. Details and salient dates of the dividend will be
published in due course.
- Net assets attributable to shareholders decreased by 1% from US$1.82 per share to US$1.81 at 30th
September 2014. This reflects the substantial decline in the value of the SA Rand against the US dollar
over the year. US$0.99 of net assets per share – 55% (2013 – 53%) are held in Europe, U.S.A. and
Australia. The remaining assets, equivalent to US$0.82 per share – 45% (2013 – 47%) are held in South
Africa.
Import and Distribution
Turnover and profits from our import and distribution businesses in food and household consumer products
increased over the prior year. The consumer environment remains challenging and multiple retailers continue
to apply pressure on their supplier base. These pleasing results were achieved despite volatile raw material
pricing, inconsistent availability of certain product lines and significant currency movements during the year.
This division continues to provide procurement, supply chain and risk management services to multiple
retailers, wholesalers and manufacturers in Southern and Central Africa, South America, the Middle East and
China. We remain committed to working with suppliers of quality raw materials, skilled technologists and
first world production facilities.
During the year we also started a Metals and Minerals business providing fully integrated logistics, finance
and shipping services to the Southern African mining industry. This division is placing significant focus on
Chrome Ore and Manganese Ore and is committed to partnering with producers who require a professional all
encompassing solution from collection ex mine through to delivery to end users on an international basis.
Profits from our tool and machinery import and distribution businesses decreased during the year as a result of
fewer government contracts secured by the pipe division. There have been positive developments in the core
tool and machinery business, particularly the increase in the amount of trade being done with independent
retail customers. Management have also secured distribution rights for certain branded products. Despite very
challenging conditions the business has made a good start to the new financial year.
Property Portfolio
Rental income from our large multi-tenanted industrial property in San Diego was down slightly during the
year due to a small vacancy. The commercial and industrial property market in Southern California has
strengthened lately and demand for quality space in good areas remains high.
The Group's South African commercial and light industrial property portfolio had a satisfactory year despite
higher vacancy levels, rising infrastructure costs and a struggling local economy.
Investment Portfolio
Equities enjoyed another good year with sentiment remaining high and little change in policies adopted by
central banks of the developed world. We continue to hold a concentrated list of quality international equities
that we believe will outperform the market in the long term. Volatility at the start of the new financial year
provided a buying opportunity and we added to many of our holdings.
Halogen Holdings P.L.C. (unlisted associate)
Halogen Holdings continues to hold a substantial stake in Heartstone Inns, a developing UK group of country
pubs specialising in quality food. During November 2014 Heartstone acquired a further two units taking the
total number of pubs it owns and manages to eleven. The Heartstone board are looking at raising further
capital to acquire additional units.
Changes to the Board
There were no changes to the Board during the year under review.
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
The Board remain cautious and are all too aware of the imbalances in the financial system created by years of
loose monetary policy. However, our conservative policies and strong balance sheet give us confidence that
we can continue to enhance shareholder value in the long term.
E.J. Beale D.C. Marshall
Chairman Chief Executive
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30th September 2014 2013
Reviewed Audited
US$000 US$000
Profit and Loss:-
Group revenue 212,339 209,767
Operating costs (205,323) (201,452)
Operating profit 7,016 8,315
Share of associated company's and joint venture's results 740 (32)
Income from other investments – dividends 504 460
– interest 555 467
Interest paid (2,284) (2,986)
Exchange losses (135) (350)
Other expense (293) -
Other income 1,202 4,918
Profit before tax 7,305 10,792
Taxation on ordinary activities (2,273) (4,137)
Profit after tax 5,032 6,655
Profit attributable to members 3,297 5,505
Profit attributable to non-controlling interests 1,735 1,150
Other Comprehensive Income/(Expense):
Items that may be reclassified subsequently to profit and loss:-
Exchange differences on translation into US dollars of the financial statements
of foreign entities (4,258) (7,372)
Unrealised gain on revaluation of available for sale investments 1,076 1,913
Reclassification of previously recognised gains on disposal of available for sale
investments (170) (213)
Commercial property fair value adjustments 227 (129)
Total Other Comprehensive Expense (3,125) (5,801)
Total Comprehensive Income 1,907 854
Total Comprehensive Income attributable to members 930 1,697
Total Comprehensive Income/(Expense) attributable to non-controlling
interests 977 (843)
Basic and fully diluted earnings per share (US cents) 9.2c 15.4c
Condensed 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
Year ended 30th September 2013
Balances at start of year 8,964 23,606 3,425 28,859 64,854 10,858 75,712
Transactions with shareholders
Dividends paid - - - (1,219) (1,219) (816) (2,035)
Profit after tax - - 3,195 2,310 5,505 1,150 6,655
Other Comprehensive expense - - (3,808) - (3,808) (1,993) (5,801)
Balances at end of year 8,964 23,606 2,812 29,950 65,332 9,199 74,531
Year ended 30th September 2014
Balances at start of year 8,964 23,606 2,812 29,950 65,332 9,199 74,531
Transactions with shareholders
Dividends paid - - - (1,291) (1,291) (728) (2,019)
Profit after tax - - (550) 3,847 3,297 1,735 5,032
Total comprehensive income/(expense) - - (2,367) - (2,367) (758) (3,125)
Balances at end of year 8,964 23,606 (105) 32,506 64,971 9,448 74,419
Condensed Consolidated Statement of Financial Position
at 30th September 2014 2013
Reviewed Audited
US$000 US$000
Assets
Non-current assets
Investment property 28,374 29,483
Property, plant and equipment 8,763 8,223
Goodwill 220 234
Intangible assets 637 -
Deferred taxation 920 383
Investment in associated companies 2,006 1,501
Investment in joint venture - 278
Investments 19,547 18,104
60,467 58,206
Current assets
Inventories 28,113 26,383
Accounts receivable 37,272 30,039
Other financial assets 326 404
Tax recoverable 169 98
Cash and bank balances 14,438 14,329
80,318 71,253
Non-current assets held for sale - 1,291
Total assets 140,785 130,750
Current liabilities
Accounts payable (falling due within one year) (46,996) (36,392)
Other financial liabilities (310) -
Tax payable (1,591) (1,366)
Total current liabilities (48,897) (37,758)
Net current assets 31,421 34,786
Total assets less current liabilities 91,888 92,992
Non-current liabilities
Accounts payable (falling due after more than one year) (10,872) (12,589)
Deferred taxation (6,597) (5,872)
Net assets 74,419 74,531
Capital and reserves
Called up share capital 8,964 8,964
Share premium account 23,606 23,606
Other reserves (105) 2,227
Other reserves – applicable to non-current asset held for sale - 585
Retained earnings 32,506 29,950
Shareholders' funds 64,971 65,332
Non-controlling interests 9,448 9,199
74,419 74,531
Condensed Consolidated Statement of Cash Flow
for the year ended 30th September 2014 2013
Reviewed Audited
US$000 US$000
Revenue 212,339 209,767
Operating costs (205,323) (201,452)
Operating profit 7,016 8,315
Adjustment
Depreciation 724 652
Movements in working capital
Increase in inventories (3,647) (3,092)
(Increase) /Decrease in debtors (8,792) 4,141
Increase /(Decrease) in creditors 11,919 (2,864)
Cash generated by operations 7,220 7,152
Interest paid (2,284) (2,986)
Taxation paid (1,565) (1,566)
Cash inflow from operating activities 3,371 2,600
Investment activities
Purchase of and improvement to tangible non-current assets (1,315) (1,193)
Proceeds of disposal of tangible assets 36 754
Acquisition of investments (1,659) (3,624)
Proceeds of disposal of investments 1,349 2,352
Acquisition of associated company (77) -
Purchase of intangible assets (310) -
Dividends received 504 460
Interest received 555 467
Cash (outflow) from investment activities (917) (784)
Cash inflow before financing 2,454 1,816
Financing activities
(Decrease) in long term debt (1,707) (249)
Dividends paid – Group shareholders (1,291) (1,219)
Dividends paid – non-controlling interests of subsidiaries (728) (120)
Cash (outflow) from financing activities (3,726) (1,588)
(Decrease)/Increase in cash and cash equivalents (1,272) 228
Cash and cash equivalents at 1st October 12,002 12,173
Effect of foreign exchange rate changes (390) (399)
Cash and cash equivalents at end of year 10,340 12,002
EXPLANATORY NOTES
SEGMENTAL REPORTING
For management purposes the Group is organised on a worldwide basis into the following main business segments:
Import and distribution Trade in tools, food and household consumer products primarily imports to, and
exports from, South Africa.
Property Investment properties in U.S.A. and South Africa.
Investments in associated Companies involved in marketing and running country pubs.
companies
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.
2014 2013
Segmental analysis of results US$000 US$000
Revenue Result Revenue Result
Import and distribution 208,275 6,681 205,490 7,636
Property 4,064 1,665 4,265 1,966
Share of company's and joint venture's results - 740 - (32)
Other activities * - (406) 12 (710)
212,339 8,680 209,767 8,860
Interest paid and similar charges (2,284) (2,986)
6,396 5,874
Other expense (293) -
Other income 1,202 4,918
Profit before tax 7,305 10,792
* 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.
Assets Liabilities Net assets/ Capital Depreciation
(liabilities) expenditure charge
US$000 US$000 US$000 US$000 US$000
Segmental analysis of net assets 30th September 2014
Import and distribution 71,574 (39,948) 31,626 1,197 692
Property 30,542 (1,114) 29,428 118 32
Associate – Other 1,855 - 1,855 - -
Other activities (including investments) 21,286 (2,304) 18,982 - -
Unallocated (including cash, tax and debt) 15,528 (23,000) (7,472) - -
Consolidated total 140,785 (66,366) 74,419 1,315 724
Segmental analysis of net assets 30th September 2013
Import and distribution 63,297 (30,910) 32,387 1,058 593
Property 32,924 (1,120) 31,803 135 46
Associate – Other 1,501 - 1,501 - -
Other activities (including investments) 18,218 (611) 17,608 - -
Unallocated (including cash, tax and debt) 14,810 (23,578) (8,768) - 13
Consolidated total 130,750 (56,219) 74,531 1,193 652
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.
2014 2013
Group Total Capital Group Total Capital
Revenue Net assets expenditure Revenue net assets expenditure
US$000 US$000 US$000 US$000 US$000 US$000
Europe 30,506 24,555 - 30,510 24,084 -
Australia 1,526 2,588 26 1,815 3,069 8
United States 1,055 9,778 118 1,032 8,973 129
Total outside South Africa 33,087 36,921 144 33,357 36,126 137
South Africa 179,252 37,498 1,171 176,410 38,405 1,056
212,339 74,419 1,315 209,767 74,531 1,193
Total assets (before non-controlling interests) and capital expenditure are shown by the geographical area in which the
assets are located.
The categories of financial instruments used by the Company are:
2014 2013
US$000 US$000
Financial assets
Available for sale
investments * 19,547 18,104
At fair value through profit and loss
Other financial assets - deferred finance lease income 174 281
- derivative foreign exchange financial instrument 152 123
Loans and accounts receivable
Trade and other receivables 37,272 30,039
Cash at bank 14,438 14,329
Financial liabilities
Loans and accounts payable
Trade and other payables - due within one year 42,898 33,368
- borrowings due after more than one year 10,872 12,570
- derivative financial instruments due after more
than one year - 19
Bank overdrafts 4,098 2,328
At fair value through profit and loss
Other financial liabilities 310 -
* Listed investments, other financial assets and other financial liabilities
are Classified as Level 1 in terms of the fair value hierarchy in IFRS 7.
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 SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and the Financial Reporting Pronouncements as issued by the Financial Reporting Council, the Listing
Requirements of the JSE Limited and contains the information required by IAS 34 Interim Financial Reporting. The
following new and revised Standards and Interpretations have been adopted in this provisional announcement. IFRSs
10, 12, 13 and amended IAS 1, IFRSs 7, 19, 27 and 32. The accounting policies applied in this provisional
announcement are consistent with those adopted and disclosed in the Group's annual report for the year ended 30th
September 2013.
2. Group capital expenditure in the year was US$1,315,000 (2013 – US$1,193,000). There were no capital expenditure
commitments at 30th September 2014 (2013 – nil).
3. Overdrafts of US$4,098,000 (2013 - US$2,328,000) 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 (2013 – 35,857,512).
Reconciliation between basic and headline earnings per share 2014 2013
US$000 US$000
Basic earnings per share 3,297 5,505
Adjusted for, net of applicable tax:
Investment property revaluations (695) (3,359)
Reclassification of previously recognised gains on disposal of available for sale
investments 170 213
Gain on bargain purchase of joint venture, net of tax (168) -
Loss/(Profit) on disposal of non-current tangible assets 7 (53)
Headline earnings 2,611 2,306
Headline earnings per share (US cents) 7.3c 6.4c
Review Report
This provisional report for the year ended 30 September 2014 was prepared under the supervision of the Finance Director, Mr
L H Marshall and has been reviewed by the Company's auditor, Saffery Champness. The review opinion is available for
inspection at 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, the listing requirements
of the JSE Limited and contains the information required by IAS 34 Interim Financial Reporting. The audited annual
report will be mailed to shareholders in early 2015.
19 December 2014
Johannesburg
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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