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reviewed results for the year ended 30th September 2015 and proposed dividend declaration
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 2015 and proposed
dividend declaration
Introduction
The Directors report satisfactory results for the year ended 30th September 2015, a year characterised by stiff
currency headwinds and a challenging economic environment.
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 2015 increased by 23% to US$260,595,000
compared to US$212,339,000. Had currencies remained constant sales would have increased by 37%.
- Group profit before tax increased by 27% to US$9,296,000 from US$7,305,000. The increase includes
higher investment property revaluations, US$2,313,000 compared with US$887,000 the previous year.
- Headline earnings per share increased 38% to 8.7 US cents (2014 – 6.3 US cents).
- The directors are proposing a second interim (final) dividend of 1.8 US cents, (2014 – 1.8 US cents) making
a total of 3.6 US cents (2014 – 3.6 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 3% from US$64,971,000 (US$1.81 per share) to
US$62,864,000 (US$1.75per share) at 30th September 2015, due to adverse changes in the exchange rate
between the USD and the ZAR. US$1.00 of net assets per share – 57% (2014 – 55%) are held in Europe,
U.S.A., Middle East and Australia. The remaining assets, equivalent to US$0.75 per share – 43% (2014 –
45%) 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 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.
Our Metals and Minerals business has made extremely good progress during the year developing new
partnerships with miners and end users. Commodity prices have reached a sixteen year low and the
significant reduction in demand from China continues to put downward pressure on metal and mineral prices
making this an extremely challenging business. This division provides fully integrated logistics, finance and
shipping services to the Southern African mining industry and is placing significant focus on chrome and
manganese. We are 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 were lower during the year despite a
modest increase in turnover. Management expect trading conditions in the core business to remain tough in
the near term, but are anticipating an improvement in contribution from the pipe division during 2016.
Property Portfolio
Rental income from our large multi-tenanted industrial property in San Diego increased during the year and
the property continues to enjoy a very low vacancy rate. The commercial and industrial property market in
Southern California remains buoyant and our aim in the medium term is to acquire another asset in the area.
The Group’s South African commercial and light industrial property portfolio had a satisfactory year despite
a struggling local economy, additional capital expenditure requirements and above inflation infrastructure
costs.
Investment Portfolio
Equity markets were subject to volatility during the year, in the most part influenced by the deteriorating
situation in China. Our portfolio performed relatively well under the circumstances and as in prior years our
portfolio turnover remained very low. We continue to hold a concentrated list of quality international equities
that we believe will outperform the market in the long term.
Halogen Holdings Limited (unlisted associate)
Halogen Holdings continues to hold a substantial stake in Heartstone Inns, a developing UK group of country
pubs specialising in quality food. The board of Halogen are in the process of winding up the company and
subsequent to the year end our holding has been replaced by a direct holding in Heartstone Inns Limited
which will be accounted for as an investment.
Post Balance Sheet Events
On 1 September 2015 we announced the disposal of six industrial properties in Durban, South Africa, for an
amount of US$7.5 million. The required bank guarantee in favour of our attorney has been lodged and
completion of the transaction is expected early in the New Year. After deduction of costs and taxes of
approximately US$2.2 million net proceeds are estimated to be US$5.3 million.
Dividend
The directors are proposing a second interim (final) dividend of 1.8 US cents, (2014 – 1.8 US cents) making a
total of 3.6 US cents (2014 – 3.6 US cents) for the year. Details and salient dates of the dividend will be
published in due course.
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 about the upcoming year and expect to see continued volatility in emerging
market economies and currencies. 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
Chairman
D.C. Marshall
Chief Executive
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30th September 2015 2014
Reviewed Audited
US$000 US$000
Profit or Loss:
Group revenue 260,595 212,339
Other income 3,659 2,261
264,254 214,600
Change in inventories of finished goods and work in progress 6,614 5,126
Finished goods, raw materials and consumables (214,738) (168,303)
Employees benefit expense (15,156) (13,019)
Depreciation and amortisation expense (835) (724)
Other expenses (28,489) (28,831)
Share of associated companies’ and joint venture’s results (16) 740
Finance expense (2,338) (2,284)
Profit before tax 9,296 7,305
Taxation (2,630) (2,273)
Profit after tax 6,666 5,032
Profit attributable to owners of the parent 4,819 3,297
Profit attributable to non-controlling interests 1,847 1,735
Basic and fully diluted earnings per share (US cents) 13.4c 9.2c
Other Comprehensive (Expense)/Income :-
Exchange differences on translation into US Dollars of the financial
statements of foreign entities (7,441) (4,258)
Unrealised (loss)/gain on revaluation of available for sale (414) 1,076
investments, net of applicable tax
Reclassification of previously recognised profits on disposal of
available for sale investments (149) (170)
Total of items that may be reclassified (8,004) (3,352)
Items that will not be reclassified subsequently to profit and loss :-
Commercial property fair value adjustments, net of applicable tax 322 227
Share of associated company’s other comprehensive income 444 -
766 227
Total Other Comprehensive Expense (7,238) (3,125)
Total Comprehensive (Expense)/Income (572) 1,907
Total Comprehensive (Expense)/Income attributable to owners
(816) 930
of the parent
Total Comprehensive Income attributable to non-controlling
interests 244 977
Condensed Consolidated Statement of Changes in Equity
Non- Group
Ordinary share Share Other Retained Total controlling
capital premium reserves earnings Shareholders interests Total
US$000 US$000 US$000 US$000 US$000 US$000 US$000
th
Year ended 30 September 2014
Profit after tax - - (550) 3,847 3,297 1,735 5,032
Other comprehensive expense - - (2,367) - (2,367) (758) (3,125)
Total Comprehensive Income - - (2,917) 3,847 930 977 1,907
Transactions with shareholders
Dividends paid - - - (1,291) (1,291) (728) (2,019)
Balances at start of year 8,964 23,606 2,812 29,950 65,332 9,199 74,531
Balances at end of year 8,964 23,606 (105) 32,506 64,971 9,448 74,419
Year ended 30th September 2015
Profit after tax - - 4,879 (60) 4,819 1,847 6,666
Other Comprehensive expense (5,635) - (5,635) (1,603) (7,238)
Total Comprehensive Income - - (756) (60) (816) 244 (572)
Transactions with shareholders
Dividends paid - - - (1,291) (1,291) (1,116) (2,407)
Balances at start of year 8,964 23,606 (105) 32,506 64,971 9,448 74,419
Balances at end of year 8,964 23,606 (861) 31,155 62,864 8,576 71,440
Condensed Consolidated Statement of Financial Position
at 30th September 2015 2014
Reviewed Audited
US$000 US$000
Assets
Non current assets
Investment property 27,472 28,374
Property, plant and equipment 8,919 8,763
Goodwill 179 220
Intangible assets 521 637
Deferred taxation 1,140 920
Investment in associated companies 2,383 2,006
Investments 20,042 19,547
60,656 60,467
Current assets
Inventories 28,859 28,113
Accounts receivable 38,641 37,272
Other financial assets 187 326
Tax recoverable 158 169
Cash and bank balances 18,644 14,438
86,489 80,318
Total assets 147,145 140,785
Current liabilities
Financial liabilities falling due within one year (55,807) (47,306)
Tax payable (1,903) (1,591)
Total current liabilities (57,710) (48,897)
Net current assets 28,779 31,421
Total assets less current liabilities
89,435 91,888
Non current liabilities
Financial liabilities falling due after more than one year (11,671) (10,872)
Deferred taxation (6,324) (6,597)
(17,995) (17,469)
Net assets
71,440 74,419
Capital and reserves
Called up share capital 8,964 8,964
Share premium account 23,606 23,606
Other reserves (861) (105)
Retained earnings 31,155 32,506
Shareholders' funds 62,864 64,971
Non-controlling interests
8,576 9,448
71,440 74,419
Condensed Consolidated Statement of Cash Flow
for the year ended 30th September 2015 2014
Reviewed Audited
US$000 US$000
Revenue 260,595 212,339
Operating, other costs and finance expense (251,299) (205,034)
Profit before tax 9,296 7,305
Adjustments
Depreciation and amortisation 835 724
Share of associates and joint ventures 16 (740)
Finance expense 2,338 2,284
Other income (3,659) (2,261)
Other expense – loss on tangible assets 2 7
Other expense - impairment 246 286
9,074 7,605
Changes in working capital
Increase in inventories (5,800) (3,512)
(Increase) in debtors (6,966) (8,792)
Increase in creditors 11,606 11,919
Cash generated by operations 7,914 7,220
Finance expense (2,338) (2,284)
Taxation paid (1,544) (1,565)
Cash inflow from operating activities 4,032 3,371
Investment activities
Purchase of and improvements to tangible non-current assets (2,705) (1,315)
Proceeds of disposal of tangible assets 84 36
Acquisition of investments (2,088) (1,659)
Acquisition of associated company - (77)
Purchase of intangible assets - (310)
Proceeds of disposal of investments 1,165 1,349
Dividends received 519 504
Interest received 712 555
Cash outflow from investment activities (2,313) (917)
Cash inflow before financing 1,719 2,454
Financing activities
Increase/(Decrease) in long term debt 1,153 (1,707)
Dividends paid - Group shareholders (1,291) (1,291)
Dividends paid - non-controlling interests of subsidiaries (1,116) (728)
Cash outflow from financing activities (1,254) (3,726)
Increase/(Decrease) in cash and cash equivalents 465 (1,272)
Cash and cash equivalents at 1st October 10,340 12,002
Effect of foreign exchange rate changes (737) (390)
Cash and cash equivalents at 30th September 10,068 10,340
EXPLANATORY NOTES
SEGMENTAL REPORTING
For management purposes the Group is organised on a worldwide basis into the following main business segments
grouped by similar businesses and services:
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
Excluded from the segmental Mainly transactions relating to the share portfolios, profits on disposals of tangible
analysis are other activities and intangible non-current assets local head office costs, and interest.
There are no sales between business segments and businesses carrying out similar trade and services are grouped in the
same 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 investments, holding company assets and liabilities, cash balances, taxation and borrowings. Capital expenditure
comprises additions to property, plant and equipment.
2015 2014
US$000 US$000
Segmental analysis of results Revenue Result Revenue Result
Import and distribution * 256,646 8,057 208,275 6,681
Property 3,949 1,601 4,064 1,665
Share of associated companies and joint venture’s results - (16) - 740
260,595 9,642 212,339 9,086
Other Expense (1,667) (1,758)
Other Income 3,659 2,261
Interest paid (2,338) (2,284)
Profit before tax 9,296 7,305
- Includes sales to the Group’s major customers representing 10% or more of Group revenue:
2015 2014
Company A 133,074 103,464
Company B 37,598 29,702
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 2015
Import and distribution 73,825 (47,728) 26,097 2,440 823
Property 29,333 (964) 28,369 265 12
Investment in associated companies 2,230 - 2,230 - -
Unallocated (including cash, tax and debt) 41,757 (27,013) 14,744 - -
Consolidated total 147,145 (75,705) 71,440 2,705 835
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
Investment in associated companies 1,855 - 1,855 - -
Unallocated (including cash, tax and debt) 36,814 (25,304) 11,510 - -
Consolidated total 140,785 (66,366) 74,419 1,315 724
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.
Middle East
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.
2015 2014
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 36,867 22,421 - 30,506 24,555 -
Australia 1,472 1,682 1 1,526 2,588 26
Middle East 4,829 591 - - - -
United States 1,139 10,821 223 1,055 9,778 118
Total outside South Africa 44,307 35,515 224 33,087 36,921 144
South Africa 216,288 35,925 2,481 179,252 37,498 1,171
260,595 71,440 2,705 212,339 74,419 1,315
Total assets (before non-controlling interests) and capital expenditure are shown by the geographical area in which the
assets are located.
2015 2014
Other income US$000 US$000
Investment property revaluations 2,313 887
Fair value adjustments on derivative instruments 1 6
Dividend income 519 504
Interest income 712 555
Exchange gains 9 -
Profit on disposal of investments 105 309
Total income 3,659 2,261
EARNINGS PER SHARE 2015 2014
Basic earnings per share 13.4c 9.2c
Headline earnings per share 8.7c 6.3c
Reconciliation between basic and headline earnings per share US$000 US$000
Basic earnings 4,819 3,297
Adjusted for:
Investment property revaluations, net of tax effect (1,812) (695)
Gain on bargain purchase of joint venture, net of tax - (168)
Impairment of non-current assets 246 -
Reclassification of previously recognised gains on disposal of available for sale
investments (149) (170)
Loss on disposal of non-current tangible assets 2 7
Headline earnings 3,106 2,271
FINANCIAL INSTRUMENTS
The categories of financial instruments used by the Company are:
2015 2014
US$000 US$000
Financial assets
Available for sale
Investments 20,042 19,547
At fair value through profit & loss
Deferred finance lease income 52 174
Contract foreign exchange financial instrument 135 152
Loans and accounts receivable
Accounts receivable 38,641 37,272
Cash at bank 18,644 14,438
Financial liabilities
Loans and accounts payable
Trade and other payables - due within one year 46,938 42,898
- borrowings due after more than one year 11,671 10,872
At fair value through profit & loss
- contract financial instruments due after more
than one year - 10
Bank overdrafts 8,576 4,098
Other financial liabilities 293 310
Fair Value hierarchy
IFRS13 requires disclosure of fair value measurements under the following hierarchy:
Listed prices (unadjusted) in active markets for identical assets or liabilities – Level 1
Inputs other than listed prices included within Level 1 that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from prices) – Level 2
Inputs for the asset or liability that are not based on observable market data (that is unobservable inputs) – Level 3
The level of fair value hierarchy within the asset or liability is categorised is determined on the basis of the lower
input that is significant to the fair value measurement. Financial assets and liabilities are classified in their entirety
into one of the three levels.
Listed investments are stated at fair value based on listed prices and are considered Level 1 financial instruments.
Foreign exchange contracts are considered Level 2 financial instruments. Fair value is determined by market value
quotes received from independent financial institutions.
Accounts receivable and accounts payable due within one year are carried at amortised cost which approximates to
their fair values at the year-end.
The carrying value of bank loans payable in more than one year approximates to their fair values. This is due to
the loans all attracting market related interest rates, and thus the effect of discounting (using a market rate interest
rate) when applying the effective interest rate method would result in no real difference between the fair value
determined and the carrying value of the bank loans.
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 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 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 2014.
2. Group capital expenditure in the year was US$2,704,000 (2014 – US$1,315,000). There were no capital expenditure
commitments at 30th September 2015 (2014 – nil).
3. Overdrafts of US$8,576,000 (2014 - US$4,098,000) 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 (2014 – 35,857,512).
Responsibility Statement
The directors take full responsibility for the preparation of the provisional report and the financial information has been
correctly extracted from the underlying annual financial statements.
Review Report
This provisional report for the year ended 30 September 2015 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 SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee of South Africa and the Financial Reporting Pronouncements as issued by the Financial
Reporting Council, 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 2016.
23 December 2015
Johannesburg
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Date: 23/12/2015 01:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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