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Interim results to 31 March 2015 and dividend declaration
Marshall Monteagle PLC
(Incorporated in Jersey and registered as an external company in South Africa)
Company registration number: 102785
External registration number: 2010/024031/10
JSE share code: MMP
ISIN: JE00B5N88T08
(“Marshall”)
Dear Shareholder,
The Directors report results for the six months to 31st March 2015 and a dividend declaration
Results
- Group revenue increased by 19% to US$124,462,000 compared with the same period last year. In constant
- currency terms sales increased to US$133,350,000 (33%).
- Operating profit increased by 37% to US$5,079,000, and in constant currency terms increased by 46% to
US$5,424,000.
- Headline earnings of 5.91 cents compare to 4.55 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 2015 (2014 – 1.8 cents).
- Net assets per share are US$1.82 (2014 - US$1.86). Net assets per share have increased from the 30th
September 2014 figure of US$1.81 per share; unfavourable exchange rate movements being offset by
increases in operating profits and the value of the investment portfolios.
Import and Distribution
Our import and distribution business in food and household consumer products posted satisfactory results for
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 partnerships in 29 countries. This division continues to further develop its
international network and management remains committed to improving the supply-chain efficiencies for the
benefit of their customers. They also continue to look at opportunities in new markets such as India, China and
the Middle East.
Our Minerals Logistics Business which is focused predominantly on Chrome and Manganese made significant
progress during the first six months and is well positioned to secure increased volumes during the second half
of the year. This division provides fully integrated logistics and shipping services to the Southern African
mining industry. We are committed to partnering with producers who require a professional all in solution from
ex mine production through to delivery to end users on an international basis.
Our tool and machinery import and distribution businesses achieved results that were considerably better than
the first half of 2014 and management are optimistic that they will achieve their budgets for the year. Market
conditions remain challenging with little change in discretionary spending trends.
Property Portfolio
Our large multi-tenanted industrial property in San Diego continues to achieve satisfactory returns. The
commercial and industrial property market in Southern California remains strong and our property continues to
enjoy a low vacancy rate.
The Group’s South African commercial and light industrial property portfolio had a satisfactory six months
despite tough trading conditions experienced by the majority of its tenants.
Investment Portfolio
Our concentrated list of quality international equities performed well during the six months and we made some
additions to existing holdings. The extended period of near zero interest rates and quantitative easing has
inflated this asset class substantially and management remain cautious about the near term.
Halogen Holdings P.L.C. (unlisted associate)
The pub Group has enjoyed a good start to 2015 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$37,442,000, equal
to US$1.04 per share (30th September 2014: US$1.01); the balance of US$27,903,000, equal to US$0.78 per
share, is held in South Africa. Our total net assets, allowing for the proposed dividend, amount to US$1.80 per
share which compares to US$1.79 per share at 30th September 2014.
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 10th July 2015 to shareholders on the register at the close of business on 3rd July 2015.
Dividend Policy
Over the past five years your directors have been able to gradually increase distributions made to shareholders.
A substantial amount of our profits are earned in developing countries whose currencies have depreciated
against an ever strengthening US dollar. The board therefore deem it prudent to endeavour to now maintain and
not increase our dividend for the next few years.
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 interim results and it would appear that the rest of the year will remain at the
same level of trading. As explained above under the dividend paragraph, we must emphasise that geo political
and financial uncertainties remain ever present. The days of low interest or no interest rates would appear to be
ending. Any reversion to normality in the developed world will have an exaggerated effect on currencies of the
developing world in which we operate. Devaluation and inflation stress the necessity for careful management of
our working capital. Our conservative policies must prevail for us to 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 4th June 2015. In order to comply with the requirements of Strate
the relevant details are as follows:
In respect of the normal gross cash dividend of US1.8 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 (18.89611 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 26th June 2015
Shares trade ex dividend Monday 29th June 2015
Record date (date shareholders recorded in books) Friday 3rd July 2015
Pay date Friday 10th July 2015
Shareholders are hereby advised that the exchange rate to be used will be USD 1 = ZAR 12.3504. This has
been calculated as the average of the bid/ask spread at 16.00 (United Kingdom time) being the close of business
on Thursday, 4th June 2015. Consequently the dividend of US 1.8 cents will be equal to 22.23072 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, 29th June and Friday, 3rd July 2015, both dates
inclusive.
Consolidated Statement of Total Comprehensive Income
Half years ended Year ended
31st March 30th September
2015 2014 2014
Notes Unaudited Unaudited Audited
US$000 US$000 US$000
Group revenue 2 124,462 104,331 212,339
Operating costs (119,383) (100,627) (205,323)
Operating profit 5,079 3,704 7,016
Share of associated company’s and joint venture results (25) 206 740
Income from investments - dividends 200 164 504
- interest 127 99 555
Interest paid (879) (992) (2,284)
Exchange gains/(losses) 56 44 (135)
Other expense - (2) (293)
Other income 3 108 313 1,202
Profit before taxation 2 4,666 3,536 7,305
Taxation (1,218) (1,109) (2,273)
Profit after taxation 3,448 2,427 5,032
Profit attributable to owners of the parent 2,268 1,800 3,297
Profit attributable to non-controlling interests 1,180 627 1,735
Exchange differences on translation into US dollars of the (2,954) (1,423) (4,258)
financial statements of foreign entities
Commercial property revaluations - - 227
Unrealised gain on revaluation of available for sale investments 1,123 1,298 1,076
Reclassification of previously recognised profits on disposal of
available for sale investments (149) (170) (170)
Total Other Comprehensive Income (1,980) (295) (3,125)
Total Comprehensive Income 1,468 2,132 1,907
Total Comprehensive Income attributable to owners of the
parent 1,028 1,915 930
Total Comprehensive Income attributable to non-
controlling interests 440 217 977
Interim dividend per share (US cents) 1.8c 1.8c 1.8c
Recommended final dividend (US cents) - - 1.8c
Reconciliation between basic and headline earnings
Basic earnings 4 2,268 1,800 3,297
Adjusted for :
Investment property revaluations - - (695)
Gain on bargain purchase of joint venture - - (168)
Reclassification of previously recognised gains on disposal of (149) (170) (170)
available for sale investments
Loss/(Profit) on disposal of non-current tangible assets - 2 7
Headline earnings 4 2,119 1,632 2,271
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 2014 8,964 23,606 2,812 29,950 65,332 9,199 74,531
Balances at start of period
Transactions with shareholders - - - (664) (664) (482) (1,146)
Dividends paid - - (2,608) 2,608 -
Total comprehensive 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
Half year ended 31st March 2015
Balances at start of period 8,964 23,606 (105) 32,506 64,971 9,448 74,419
Transactions with shareholders
Dividends paid - - - (654) (654) - (654)
Total comprehensive (expense)/income - - (24) 1,052 1,028 440 1,468
Balances at end of period 8,964 23,606 (129) 32,904 65,345 9,888 75,233
Consolidated Statement of Financial Position
31st March 30th September
2015 2014 2014
Unaudited Unaudited Audited
US$000 US$000 US$000
Non-current assets
Investment property 27,210 28,750 28,374
Property, plant and equipment 8,808 8,381 8,763
Goodwill 205 224 220
Intangible assets 594 - 637
Deferred taxation 869 302 920
Investments
Associates 2,331 1,520 2,006
Joint venture - 453 -
General portfolio – (note 5) 21,416 19,853 19,547
61,433 59,483 60,467
Current assets
Inventories 27,618 28,218 28,113
Trade and other receivables 39,773 35,352 37,767
Cash 19,300 14,392 14,438
86,691 77,962 80,318
Total assets 148,124 137,445 140,785
Current liabilities
Trade and other payables (54,959) (43,492) (48,897)
Total current liabilities (54,959) (43,492) (48,897)
Net current assets 31,732 34,470 31,421
Total assets less current liabilities 93,165 93,953 91,888
Non-current liabilities
Accounts payable (11,349) (12,556) (10,872)
Deferred taxation (6,583) (5,880) (6,597)
75,233 75,517 74,419
Capital and reserves
Called up share capital 8,964 8,964 8,964
Share premium account 23,606 23,606 23,606
Other reserves (129) 360 (105)
Retained earnings 32,904 33,653 32,506
Equity attributable to owners of the parent 65,345 66,583 64,971
Non-controlling interests 9,888 8,934 9,448
75,233 75,517 74,419
Net assets per share US$ (note 6) 1.82 1.86 1.81
Consolidated Statement of Cash Flow
Half years ended Year ended
31st March 30th September
2015 2014 2014
Unaudited Unaudited Audited
US$000 US$000 US$000
Revenue 124,462 104,331 212,339
Operating costs (119,383) (100,627) (205,323)
Operating activities
Operating profit 5,079 3,704 7,016
Adjusted for:
Depreciation 418 408 724
Changes in working capital:
(Increase)/Decrease in inventories (1,442) (523) (3,647)
(Decrease)/Increase in debtors (3,747) (1,807) (8,792)
(Decrease)/Increase in creditors 8,267 (618) 11,919
Cash generated by operations 8,575 1,164 7,220
Interest paid (879) (898) (2,284)
Taxation paid (763) (691) (1,565)
Net cash (outflow)/inflow from operating activities 6,933 (425) 3,371
Investment activities
Purchase of, and improvements to, tangible non-current assets (1,185) (923) (1,315)
Proceeds of disposal of tangible assets 61 1,546 36
Acquisition of investments (1,886) (1,520) (1,659)
Acquisition of associated company - - (77)
Purchase of intangible assets - - (310)
Proceeds on disposal of investments 808 1,210 1,349
Dividends received 200 164 504
Interest received 127 99 555
Net cash inflow/(outflow) from investment activities (1,875) 576 (917)
Cash inflow before financing 5,058 151 2,454
Financing activities
Net increase/(decrease) in long term debt 611 129 (1,707)
Dividends paid - Group shareholders (645) (664) (1,291)
Dividends paid - non-controlling interests of subsidiaries - (482) (728)
Cash (outflow) from financing activities (34) (1,017) (3,726)
Net (decrease)/increase in funds 5,024 (866) (1,272)
Net funds at start of period 10,340 12,002 12,002
Effect of foreign exchange rates (195) (197) (390)
Net cash and cash equivalents at end of period 15,169 10,939 10,340
Notes to the interim statement
1. The results and the cash flow statement for the half-year ended 31st March 2015 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 2014. They comply with International Financial Reporting Standards and
JSE listing requirements. The results for the year to 30th September 2014 are an abridged version of the Group's full
accounts for that year, which have been filed with the relevant authorities.
These results were prepared under the supervision of Lloyd Marshall, the Company’s finance director.
Any reference to the future financial performance of the Group has not been reviewed or reported on by the Group’s
auditors.
2. The segmental analysis of revenue and operating profit is as follows:
Half years ended 31st March Year ended 30th
2015 2014 September 2014
US$000 US$000 US$000
Revenue Result Revenue Result Revenue Result
Analysed by activity:-
Import/distribution 122,582 4,830 102,223 3,499 208,275 6,681
Property 1,880 765 2,108 853 4,064 1,665
Share of associated company’s and
joint venture results - (25) - 206 - 740
Other - (133) - (341) - (406)
124,462 5,437 104,331 4,217 212,339 8,680
Interest paid (879) (992) (2,284)
4,558 3,225 6,396
Other net income/expense (note 3) 108 311 909
Profit before tax 4,666 3,536 7,305
3. The other expense and income arises from the following.
31st March 30th September
2015 2014 2014
Other expense US$000 US$000 US$000
Impairment of Investment - - (286)
Loss on disposal of non-current tangible assets - (2) (7)
- (2) (293)
Other income
Investment property revaluations - - 887
Profit on disposal of investments 108 310 309
Fair value adjustments on derivative instruments - 3 6
108 313 1,202
Net income 108 311 909
4. Basic earnings per share are based on results attributable to members and on 35,857,512 shares in issue (2014 -
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 4,652 4,577 4,684
United States of America 8,125 6,996 7,080
Europe, excluding the U.K. 4,803 4,228 4,085
Switzerland 2,604 2,692 2,571
Japan 1,232 1,074 1,127
21,416 19,567 19,547
Unlisted – Europe and other - 286 -
21,416 19,853 19,547
6. Net assets per share are based on equity attributable to owners of the Company.
7. There was capital expenditure of US$1,185,000 during the period (2014 - US$923,000). There was no contracted or
outstanding authorised capital expenditure at the reporting date.
Sponsor: Sasfin Capital (a division of Sasfin Bank Limited)
9 June 2015
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