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Interim results and 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”)
THE DIRECTORS REPORT THE RESULTS FOR THE SIX MONTHS TO 31ST MARCH 2016 AND A DIVIDEND DECLARATION.
Results
Group revenue decreased by 7% to US$116,254,000 compared with the same period last year. In constant currency terms sales increased by 19% to
US$147,543,000.
Profit before tax increased by 5% to US$4,897,000, and in constant currency terms increased by 28% to US$6,418,000.
Gain of US$2,239,000 on disposal of six South African properties.
Headline earnings of US 0.6 cents per share compared to US 5.9 cents per share in the same period last year, reflecting adverse currency conditions.
An interim dividend of US 1.8 cents per share is to be paid in July 2016 (2015 – US 1.8 cents).
Net assets per share are US$1.80 (2015 – US$1.82). Net assets per share have increased from the 30th September 2015 figure of US$1.75 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 businesses in food and household consumer products continue to perform well despite continued pricing pressure from multiple retailers.
During the first half of the 2016 financial year we experienced extremely volatile currency movements and raw material pricing, but we are well positioned to navigate
these exogenous factors. 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 continues to make good progress and we are developing new partnerships with miners in Southern Africa and end users on an
international basis. During the second half of calendar 2015 we witnessed a total meltdown in commodity prices, specifically metals, minerals and energy products,
placing these commodities at 16 year lows. A major global rebalancing of supply and demand is currently taking place and we anticipate continued volatility
throughout the remainder of 2016. This division provides fully integrated logistics, marketing, finance and shipping services to the Southern African mining industry
and is placing significant focus on chrome and manganese.
Our coffee manufacturing and distribution business managed to grow sales during the first half of the year, but volatile currency movements and pricing issues meant
that margins came under pressure. This business manufactures and distributes coffee to multiple retailers and the hospitality sector in South Africa. It also imports
and distributes raw green beans to small to medium sized roasters in the local market.
Results from our tool and machinery import and distribution businesses were below the first half of 2015, the main reason being lower demand for generators in South
Africa as a result of a stable power grid. The pipe division secured a large contract during the period and is tendering on various future projects.
Property Portfolio
Rental income from our large multi-tenanted industrial property in San Diego was better than the first half of 2015 and the property continues to enjoy a low vacancy
rate. The commercial and industrial property market in Southern California remains strong and we are looking at investing further in the region.
During February 2016 we completed the sale of six properties in Durban, South Africa, for the gross amount of US$6,251,000. The gain on the sale amounted to
US$2,239,000 and the proceeds are earmarked for further property in the US. The Group’s remaining South African commercial and light industrial property portfolio
had a satisfactory six months despite an ailing local economy.
Investment Portfolio (listed)
Equity markets had a volatile six months, but our concentrated list of quality international equities showed healthy appreciation and dividend income was higher than
the first half of 2015. During the period we exited our position in Wal-Mart Stores and added to our Johnson & Johnson and Brown Forman holdings.
Heartstone Inns Limited (unlisted)
The pub group has enjoyed a good start to 2016 with most units performing better than they did at the start of last year. Management are actively looking at acquiring
additional units.
Net Assets
Assets outside Africa, net of non-controlling interests and proposed dividends, stand at US$40,459,000, equal to US$1.13 per share (30th September 2015:
US$1.00); the balance of US$23,588,000, equal to US$0.67 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$1.75 per share at 30th September 2015.
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 8th July 2016 to shareholders on
the register at the close of business on 1st July 2016.
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
Given the relatively high valuations of global equities and the continued volatility in the developing world, the Board remain cautious about the remainder of the year.
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
DIVIDEND DECLARATION
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
2015. In order to comply with the requirements of Strate the relevant details are as follows:
Shareholders are hereby advised that the exchange rate to be used will be USD 1 = ZAR 14.9113. This has been calculated as the average of the bid/ask spread at
16.00 (United Kingdom time) being the close of business on Monday, 6th June 2016.
In respect of the normal gross cash dividend of US1.8 cents (26.84034 South African 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 (22.81429) 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 24th June 2016
Shares trade ex-dividend Monday 27th June 2016
Record date (date shareholders recorded in books) Friday 1st July 2016
Pay date Friday 8th July 2016
No dematerialisation or rematerialisation of share certificates, nor transfer of shares between the registers in Jersey and South Africa will take place between Monday,
27th June and Friday, 1st July 2015, both dates inclusive.
Consolidated Statement of Total Comprehensive Income
Half years ended Year Ended
31st March
September 30
2016 2015 2015
Note Unaudited Unaudited Audited
s
US$000 US$000 US$000
Group revenue 2 116,254 124,462 260,595
Other income 3 2,970 491 3,659
119,224 124,953 264,254
Change in inventories of finished goods and work in (3,699) 1,835 6,614
progress
Finished goods, raw materials and consumables (92,908) (100,266) (214,738)
Employee benefit expense (6,361) (7,901) (15,156)
Depreciation and amortisation expense (404) (359) (835)
Other expenses 3 (10,448) (12,692) (28,489)
Share of associated companies and joint venture’s results 19 (25) (16)
Finance expense (526) (879) (2,338)
Profit before taxation 2 4,897 4,666 9,296
Taxation (1,935) (1,218) (2,630)
Profit after taxation 2,962 3,448 6,666
Profit attributable to owners of the parent 2,433 2,268 4,819
Profit attributable to non-controlling interests 529 1,180 1,847
Basic and fully diluted earnings per share (US cents) 4 6.8c 6.3c 13.4c
Other Comprehensive (Expense)/Income:
Items that may be reclassified subsequently to profit and
loss:
Exchange differences on translation into US dollars of the
financial statements of foreign entities (2,179) (2,954) (7,441)
Unrealised gain on revaluation of available for sale 1,764 1,123 (414)
investments
Reclassification of previously recognised profits on 19 (149) (149)
disposal of available for sale investments
(396) (1,980) (8,004)
Items that will not be reclassified subsequently to profit
and loss:
Commercial property fair value adjustments, net of
applicable tax - - 322
Share of associated companies and joint venture’s results - - 444
- - 766
Total Other Comprehensive Income (396) (1,980) (7,238)
Total Comprehensive Income 2,566 1,468 (572)
Consolidated Statement of Total Comprehensive Income (continued)
Total Comprehensive Income attributable to owners of the
2,225 1,028 (816)
parent
Total Comprehensive Income attributable to non-controlling 341 440 244
interests
Interim dividend per share (US cents) 1.8c 1.8c 1.8c
Final dividend per share (US cents) - - 1.8c
Reconciliation between basic and headline earnings
Basic earnings 4 2,433 2,268 4,819
Adjusted for:
Investment property gain on disposal/revaluations (2,265) - (1,812)
Impairment of non-current asset - - 246
Reclassification of previously recognised gains on disposal of
available for sale investments 19 (149) (149)
Loss on disposal of non-current tangible assets 18 - 2
Headline earnings 205 2,119 3,106
Consolidated Statement of Changes in Equity
Ordinary Non-
Share Share Other Retained Total Controlling Group
Capital Premium Reserves Earnings shareholders Interests Total
Half year ended 31st March 2015 US$000 US$000 US$000 US$000 US$000 US$000 US$000
Profit after taxation - - - 2,268 2,268 1,180 3,448
Other Comprehensive Income - - (24) (1,216) (1,240) (740) (1,980)
Total Comprehensive Income - - (24) 1,052 1,028 440 1,468
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)
Balances at end of period 8,964 23,606 (129) 32,904 65,345 9,888 75,233
Half year ended 31st March 2016
Profit after taxation - - - 2,433 2,433 529 2,962
Other Comprehensive Income - - 667 (631) 36 (432) (396)
Total Comprehensive Income -- - 667 1,802 2,469 97 2,566
Transfer – release of fair value - - (3,079) 3,079 - - -
Balances at start of period 8,964 23,606 (861) 31,155 62,864 8,576 71,440
Transactions with shareholders
Dividends paid - - - (643) (643) (68) (711)
Balances at end of period 8,964 23,606 (3,273) 35,393 64,690 8,605 73,295
Consolidated Statement of Financial Position
th
31st March 30 September
2016 2015 2015
Unaudited Unaudited Audited
31st March 30th September
US$000 US$000 US$000
Non-current assets
Investment property 22,131 27,210 27,472
Property, plant and equipment 9,321 8,808 8,919
Goodwill 169 205 179
Intangible assets 490 594 521
Deferred taxation 1,119 869 1,140
Investments
Associates 181 2,331 2,383
General portfolio – (note 5) 24,065 21,416 20,042
57,476 61,433 60,656
Current assets
Inventories 23,494 27,618 28,859
Trade and other receivables 45,874 39,773 38,986
Cash 21,445 19,300 18,644
90,813 86,691 86,489
Total assets 148,289 148,124 147,145
Current liabilities
Trade and other payables (57,058) (54,959) (57,710)
Total current liabilities (57,058) (54,959) (57,710)
Net current assets 33,755 31,732 28,779
Total assets less current liabilities 91,231 93,165 89,435
Non-current liabilities
Accounts payable (12,396) (11,349) (11,671)
Deferred taxation (5,540) (6,583) (6,324)
31st March 30th September
Total non-current assets (17,936) 17,932 (17,995)
73,295 75,233 71,440
Capital and reserves
Called up share capital 8,964 8,964 8,964
Share premium account 23,606 23,606 23,606
Other reserves (3,273) (129) (861)
Retained earnings 35,393 32,904 31,155
Equity attributable to owners of the parent 64,690 65,345 62,864
Non-controlling interests 8,605 9,888 8,576
73,295 75,233 71,440
Net assets per share US$ (note 6) 1.80 1.82 1.75
Consolidated Statement of Cash Flow
31st March 30th September
2016 2015 2015
Unaudited Unaudited Audited
US$000 US$000 US$000
Revenue 116,254 124,462 260,595
Operating, other costs and finance expense (111,357) (119,796) (251,299)
Profit before tax 4,897 4,666 9,296
Adjusted for:
Depreciation 404 418 835
Share of associates (19) 25 16
Finance expense 526 879 2,338
31st March 30th September
Other income (2,970) (491) (3,659)
Other expense – loss on tangible assets - - 2
Other expense – impairment - - 246
Changes in working capital:
Decrease/(Increase) in inventories 3,918 (1,442) (5,800)
Increase in debtors (6,450) (3,747) (6,966)
(Decrease)/Increase in creditors (820) 8,267 11,606
(514) 8,575 7,914
Interest paid (526) (879) (2,338)
Taxation paid 264 (763) (1,544)
Net cash (outflow)/inflow from operating activities (776) 6,933 4,032
Investment activities
Purchase of, and improvements to, tangible non-current (1,076) (1,185) (2,705)
assets
Proceeds of disposal of tangible assets 6,465 61 84
Acquisition of investments (599) (1,886) (2,088)
Proceeds on disposal of investments 421 808 1,165
Dividends received 215 200 519
Interest received 273 127 712
Net cash inflow/(outflow) from investment activities 5,699 (1,875) (2,313)
Cash inflow before financing 4,923 5,058 1,719
Financing activities
Net increase/(decrease) in long term debt 1,164 611 1,153
Dividends paid – Group shareholders (643) (645) (1,291)
Dividends paid – non-controlling interests of subsidiaries (68) - (1,116)
Cash inflow/(outflow) from financing activities 453 (34) (1,254)
31st March 30th September
Net increase in funds 5,376 5,024 465
Net funds at start of period 10,068 10,340 10,340
Effect of foreign exchange rates 653 (195) (737)
Net cash and cash equivalents at end of period 16,097 15,169 10,068
Notes to the interim statement
1. The results and the cash flow statement for the half-year ended 31st March 2016 are unaudited and comply with IAS 34 – Interim Financial Reporting as well as
the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting
Standards Council. They have been prepared on the basis of accounting policies adopted in the accounts for the year ended 30th September 2015. They comply
with International Financial Reporting Standards and JSE listing requirements. The results for the year to 30th September 2015 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
2016 2015 September 2015
US$000 US$000 US$000
Revenue Result Revenue Result Revenue Result
Analysed by activity:-
Import/distribution 111,412 2,383 122,582 4,830 256,646 8,057
Property 1,569 700 1,880 765 3,949 1,601
Share of associated companies
and joint venture results 19 - (25) - (16)
112,981 3,102 124,462 5,570 260,595 9,642
Unallocated costs (649) (516) (1,667)
Other Income 2,970 491 3,659
Interest paid (526) (879) (2,338)
Profit before tax 4,897 4,666 9,296
3. The other expense and income arises from the following:
31st March
30th September
2016 2015 2015
US$000 US$000 US$000
Other income
Investment property revaluations - - 2,313
Realised profit on disposal of investment property 2,239 - -
Fair value adjustments on derivative instruments - - 1
Dividend income 215 200 519
Interest income 273 127 712
Exchange gains 229 56 9
Profit on disposal of investments 14 108 105
2,970 491 3,659
Other expense
Impairment of plant - - (246)
Loss on disposal on non-current tangible assets (18) - (2)
Re-organisation costs (37) - -
Administration and other expenses (10,393) (12,692) (28,241)
(10,448) (12,962) (28,489)
4. Basic earnings per share are based on results attributable to members and on 35,857,512 shares in issue (2015 – 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:
31st March 31st March 30th September
2016 2015 2015
US$000 US$000 US$000
United States of America 8,505 8,125 7,510
United Kingdom 5,019 4,652 4,773
Europe, excluding the U.K. 4,597 4,803 4,238
Switzerland 2,513 2,604 2,327
Japan 1,394 1,232 1,194
22,028 21,416 20,042
Unlisted – UK 2,037 - -
24,065 21,416 20,042
6. Net assets per share are based on equity attributable to owners of the Company.
7. There was capital expenditure of US$1,076,000 during the period (2015 – US$1,185,000). There was no contracted or outstanding authorised capital
expenditure at the reporting date.
9 June 2016
United Kingdom
Sponsor: Sasfin Capital (a division of Sasfin Bank Limited)
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