MARSHALL MONTEAGLE PLC - Provisional reviewed results for the year ended 30th September 2017 and proposed dividend declaration

Release Date: 21/12/2017 13:58
Code(s): MMP
 
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Provisional reviewed results for the year ended 30th September 2017 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 reviewed results for the year ended 30th September 2017 and proposed dividend declaration

Chairman’s Statement

As an Investment Company, Marshall Monteagle has a broad and diversified range of investments in both listed
international companies, and in trading and property owning subsidiary companies. Our objective is to invest for the long
term to generate reliable profits, cash flow and dividends for our shareholders and thereby achieve capital growth for the
benefit of all our stakeholders. 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 include interests in food processing and logistics.

It was with great sadness that we announced, on 23rd November 2016, the death of Lloyd Marshall. He was a highly
valued member of the management team who brought a wealth of experience, knowledge and common sense to the Group
along with strong principles. Shareholders will recall that following his tragic death, the Board of Directors was
reorganised; Edward Beale, our non-executive chairman was appointed as Group Financial Director and I was appointed
in his place as Non-Executive Chairman with effect from 11th April 2017.

A good deal of our trading profit comes from Southern Africa and neighbouring territories. In recent years we have made
substantial human investment with the intention of diversifying our international trading base, enabling us to represent our
world-wide suppliers in other countries.

We believe that our balance sheet strength gives confidence not only to our suppliers, tenants and customers, but also
importantly, to our staff. The Group’s results could not have been achieved without the hard work of all our employees
and on behalf of the Board, I would like to thank them for their continued contribution and dedication.

We expect the year ahead will bring further uncertainty to global markets and continuing commodity and exchange
volatility risk. However, with our strong capital structure and flexible investments strategy, we face the future with
cautious confidence.

Business Review

The Directors are pleased to report excellent results for the year ended 30th September 2017.

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.

Results of continuing operations
-      Group revenue for the twelve months to 30th September 2017 increased by 41% to US$340,052,000 compared to
       US$241,933,000. Had currencies remained constant sales would have increased by 30%. This significant increase
       in sales volumes in our import and distribution businesses (see below) has resulted in increases in inventories to
       support the additional volumes, increases in accounts receivables and financial liabilities from higher sales and
       purchases in the final quarter and a decrease in cash and cash equivalents to fund the additional working capital
       requirement.
-      Group profit before tax increased by 26% to US$10,401,000 from US$8,276,000. Investment property
       revaluations were lower, US$273,000 compared with US$918,000 the previous year.
-      Headline earnings per share on continuing business increased 448% to 12.6 US cents (2016 – 2.3 US cents) as a
       result of the matters mentioned above.
-      The Directors are proposing a final dividend of 1.9 US cents, (2016 – 1.9 US cents) making a total of 3.7 US cents
       (2016 – 3.7 US cents) for the year. Full details of the dividend will be published on 22 December 2017.
-      Net assets attributable to shareholders increased by 9% from US$67,195,000 (US$1.87 per share) to
       US$73,257,000 (US$2.04 per share) at 30th September 2017, due to successful investment strategies and a
       comparable Rand exchange rate at the reporting dates. US$1.65 of net assets per share – 81% (2016 – 71%) are
       held in Europe, U.S.A. and the Middle East. The remaining assets, equivalent to US$0.39 per share – 19% (2016
       – 29%) are held in South Africa.

Import and Distribution
Our import and distribution businesses in food and household consumer products continue to perform well in a constantly
changing and challenging consumer environment. Multiple retailers continue to apply pressure on their international
supplier base and we are constantly reviewing our supply-chain to ensure that we remain the most cost-effective solution
from factory to shelf. During the twelve-month period under review 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 extremely good progress and we are developing new partnerships
with miners in Southern Africa and end users on an international basis. This has been the main contributor to the increase
in the Group’s turnover in the year. Once again it has been a year of extreme volatility in the minerals space with market
prices moving down to extremely low levels during the first two quarters, climbing significantly throughout the third
quarter and then falling again during the fourth quarter. 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. 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.

During the year under review our Tool & Machinery import and distribution business completed the disposal of their non-
profitable subsidiary as well as the restructuring of the industrial compressor division. Trading conditions remain
challenging, however after the restructuring the company has returned to profit. We are well placed to increase our
profitability in 2018.

Investment Portfolio

Our investment portfolios continue to perform well. We continue to hold a concentrated list of quality listed international
equities that we believe will outperform the market in the long term. These listed investments had a market value at the
year-end of US$25,369,000 (2016 – US$23,169,000).

Property Portfolio

Last year the Group disposed of a number of properties in South Africa representing about 30% of our total investment
property portfolio by value. Following the completion of the delayed sale on one property which completed on 1st
November 2016, the property portfolio has been stable this year and the remaining properties have continued to perform
well.

Dividend

The directors are proposing a final dividend of 1.9 US cents, (2016 – 1.9 US cents) making a total of 3.7 US cents (2016
– 3.7 US cents) for the year. Full details of the dividend will be published on 22 December 2017. The salient dates are as
follows:

Last day to trade                                                      Tuesday 9 January 2018
Shares trade ex dividend                                               Wednesday 10 January 2018
Record date                                                            Friday 12 January 2018
Pay date                                                               Monday 22 January 2018

No dematerialisation or rematerialisation of share certificates, nor transfer of shares between the registers in Jersey and
South Africa will take place between Wednesday 10 January 2018 and Friday 12 January 2018, both dates inclusive.

By order of the Board
City Group P.L.C
Company Secretary
21 December 2017

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the year ended 30th September                                                                  2017                2016
                                                                                               Reviewed              Audited
Continuing operations                                                                            US$000               US$000
Profit or Loss
Group revenue                                                                        1           340,052             241,933
Other income                                                                         2             3,269               5,588
                                                                                                 343,321             247,521
Increase/(Decrease) in inventories of finished goods and work in progress                          4,938              (4,220)
Purchases of finished goods, raw materials and consumables                                      (283,940)           (187,762)
Employee benefit expenses                                                                        (16,221)            (14,259)
Depreciation expenses                                                                               (927)             (744)
Other expenses                                                                        3          (34,490)          (29,789)
Share of associated companies results                                                                 36                31
Finance expense                                                                                   (2,316)           (2,502)
Profit before tax                                                                                 10,401             8,276
Taxation                                                                                          (2,902)           (2,992)
Profit for the year on continuing operations                                                       7,499             5,284

Discontinued operations
Loss after tax of discontinued operations                                                               -              (304)
Loss on disposal of discontinued operations                                                             -              (474)
Profit for the year                                                                   1             7,499             4,506

Profit attributable to owners of the parent                                                         4,985             3,153
Profit attributable to non-controlling interests                                                    2,514             1,353

Basic and fully diluted earnings per share (US cents)                                 4             13.9c                8.8c

Other Comprehensive 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                                                                       453              (369)
Reclassification of previously recognised exchange losses on disposal of
Australian operations                                                                                   -               157
Unrealised gain on revaluation of available for sale investments                                    2,093             3,185
Less applicable tax                                                                                  (223)             (365)
Reclassification of previously recognised profits on disposal of available
for sale investments                                                                                  (89)              (40)
Total of items that may be reclassified                                                             2,234             2,568

Items that will not be reclassified subsequently to profit and loss: -
  Commercial property fair value adjustments                                                         510               236
  Less applicable tax                                                                                (85)             (114)
                                                                                                     425               122

Total Other Comprehensive Income                                                                   2,659              2,690
Total Comprehensive Income                                                                        10,158              7,196

Total Comprehensive Income attributable to owners of the parent                                     7,388             5,618
Total Comprehensive Income attributable to non-controlling interests                                2,770             1,578


Condensed Consolidated Statement of Changes in Equity

                                       Called up                                                    Total          Non-
                                           share          Share       Other      Retained   Shareholders’    controlling         Group
                                         capital       premium     reserves      earnings        interests     interests          Total

                                         US$000        US$000      US$000        US$000          US$000        US$000           US$000
Year ended 30th September 2016
Profit after tax                                   -          -     (4,323)        7,476           3,153         1,353           4,506
Other Comprehensive Income                         -          -      2,465             -           2,465           225           2,690
Total Comprehensive Income                         -          -     (1,858)        7,476           5,618         1,578           7,196
Transactions with shareholders
Disposal of interests                              -          -             -          -               -          (633)           (633)
Dividends paid                                     -          -             -     (1,287)         (1,287)       (1,519)         (2,806)


Balances at start of year                  8,964        23,606           (861)    31,155          62,864         8,576          71,440
Balances at end of year                   8,964       23,606      (2,719)    37,344          67,195    8,002       75,197




Year ended 30th September 2017
Profit after tax                               -            -       (457)     5,442           4,985     2,514        7,499
Other Comprehensive Income                     -            -      2,403              -       2,403      256         2,659

Total Comprehensive Income                     -            -      1,946      5,442           7,388     2,770       10,158
Transactions with shareholders
Disposal of interests                          -            -            -        -               -         -            -
Dividends paid                                 -            -            -   (1,326)         (1,326)   (1,732)      (3,058)



Balances at start of year                 8,964       23,606      (2,719)    37,344          67,195     8,002       75,197

Balances at end of year                   8,964       23,606        (773)    41,460          73,257     9,040       82,297

Condensed Consolidated Statement of Financial Position

at 30th September                                                                             2017               2016
                                                                                          Reviewed             Audited
                                                                                           US$000              US$000

Assets
Non-current assets
Investment property                                                                         20,923             20,460
Property, plant and equipment                                                               10,397              9,237
Goodwill                                                                                       183                180
Intangible assets                                                                              717                523
Deferred taxation                                                                            2,293              1,559
Investment in associated companies                                                             187                185
Investments                                                                  5              27,994             25,382
                                                                                            62,694             57,526
Current assets
Inventories                                                                                 29,162          24,051
Accounts receivable                                                          7              56,589          41,697
Other financial assets                                                                         495             326
Tax recoverable                                                                                 68             359
Cash and cash equivalents                                                    9              21,177          30,916
                                                                                           107,491          97,349
Investment property held for sale                                            6                   -           1,189
Total assets                                                                               170,185         156,064

Current liabilities
Financial liabilities                                                                      (65,885)         (59,546)
Other financial liabilities                                                                   (146)            (848)
Financial liabilities secured on the investment property held for sale       7                   -             (251)
Tax payable                                                                                 (2,065)          (1,777)
                                                                                           (68,096)         (62,422)
Net current assets                                                                          39,395             36,116
Total assets less current liabilities                                                      102,089             93,642

Non-current liabilities
Financial liabilities                                                        7             (13,571)         (12,351)
Deferred taxation                                                                           (6,221)          (6,094)
Net assets                                                                                  82,297           75,197
Capital and reserves
Called up share capital                                                                      8,964            8,964
Share premium account                                                                       23,606           23,606
Other reserves                                                                                (773)           (2,719)
Retained earnings                                                                           41,460            37,344
Equity attributable to owners of the parent                                                 73,257            67,195
Non-controlling interests                                                                    9,040             8,002
Total equity                                                                                82,297            75,197



Condensed Consolidated Statement of Cashflow

For the year ended 30th September                                   2017      2016
                                                                Reviewed    Audited
                                                                 US$000     US$000
Operating activities
Profit for the year                                                7,499      4,506
Adjustments
Taxation                                                           2,902      2,992
Loss on disposal of discontinued operations                            -        474
Depreciation                                                         927        753
Share of associated companies’ results                               (36)       (31)
Finance expense                                                    2,316      2,502
Other income                                                      (3,269)    (5,588)
Other expense – fair value adjustments and losses on disposal        893        343
                                                                  11,232      5,951
Changes in working capital
(Increase)/decrease in inventories                                (4,675)     3,770
(Increase)/decrease in receivables                               (14,492)     3,612
Increase/(decrease) in payables                                    8,171     (3,688)
Cash generated by operations                                         236      9,645

Finance expense                                                   (2,316)    (2,502)
Taxation paid                                                     (2,943)    (3,904)
Cash (outflow)/inflow from operating activities                   (5,023)     3,239

Investing activities
Purchase of and improvements to tangible non-current assets       (1,626)    (2,241)
Proceeds of disposal of tangible assets                            1,452      9,737
Purchase of software                                                (190)         -
Acquisition of investments                                          (839)      (613)
Proceeds of disposal of investments                                  280        446
Cashflow on disposal of discontinued operations                        -        (62)
Dividends received                                                   693        556
Interest received                                                    869      1,004
Cash inflow from investing activities                                639      8,827

Cash (outflow)/inflow before financing                            (4,384)    12,066

Financing activities
Drawdown of new long-term loans                                    1,238      6,300
Repayment of long term loans                                         (56)    (5,098)
Dividends paid to Group shareholders                              (1,326)    (1,287)
Dividends paid to non-controlling interests of subsidiaries       (1,732)    (1,518)
Cash outflow from financing activities                            (1,876)    (1,603)

(Decrease)/Increase in cash and cash equivalents                  (6,260)    10,463

Cash and cash equivalents at 1st October                          20,544     10,068
Effect of foreign exchange rate changes                               53         13
Cash and cash equivalents at 30th September (see note 9)          14,337     20,544
EXPLANATORY NOTES

1) 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 merchandising.
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.


                                                                      2017                             2016
                                                                              Profit/                          Profit/
                                                             Revenue          (Loss)          Revenue          (Loss)
Segmental analysis of results                                 US$000         US$000           US$000          US$000
Import and distribution *                                     337,256           11,022         238,869           5,858
Property                                                        2,796              421           3,064             871
Investments in associated companies                                 -               36               -              31
Continuing operations                                         340,052           11,479         241,933           6,760
Discontinued operations
Import and distribution - Australia                                 -                -             526            (308)
Property - Australia                                                -                -               -              (5)
                                                              340,052           11,479         242,459           6,447

Loss on disposal                                                                     -                            (474)
Other expenses                                                                  (2,031)                         (1,572)
Other income                                                                     3,269                           5,590
Finance expense                                                                 (2,316)                         (2,502)
Taxation                                                                        (2,902)                         (2,983)
Profit for the year                                                              7,499                           4,506

* Includes sales to the Group’s major customers representing 10% or more of Group revenue:
                                                                                                2017             2016
                                                                                              US$000           US$000

   Customer A                                                                                 143,623          130,144
   Customer B                                                                                  38,878           26,761

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.

                                                 Assets     Liabilities      Net assets         Capital       Depreciation
                                                                                            expenditure            charge
                                              US$000          US$000           US$000          US$000             US$000
Segmental analysis of net assets 30th September 2017
Import and distribution                        97,812         (60,690)          37,122            1,583             (921)
Property                                       21,611            (623)          20,988                2                (6)
Investment in associated companies                187               -              187                -                 -
Unallocated (including cash, tax and debt)     50,575         (26,575)          24,000                -                 -
Consolidated total                            170,185         (87,888)          82,297            1,585             (927)
Segmental analysis of net assets 30th September 2016
Import and distribution                         73,467         (47,800)           25,667            1,874               755
Property                                        23,450          (1,094)           22,356              367                 8
Investment in associated companies                 185               -               185                -                 -
Unallocated (including cash, tax and debt)      58,962         (31,973)           26,989                -                 -
Continuing operations                          156,064         (80,867)           75,197            2,241               763

Discontinued operations:
Import and distribution                                -              -                 -                -                 9
Property                                               -              -                 -                -                 5


Consolidated total                             156,064         (80,867)           75,197            2,241               777


Secondary Reporting Format – Geographical Segments


The Group operates in the following geographic areas.
Europe          Location for part of the Group’s import and distribution business, the non-trading parent company and
                most of the Group's investment portfolio.
Australia         Previously location for part of the Group's import and distribution business (sold Aug 2016).
Middle East       Location for part of the Group’s import and distribution business.
United States     Location for part of the Group's property portfolio and some of the Group’s investment portfolio.
South Africa      Location for the bulk of the Group's import and distribution business and part of the Group’s property
                  portfolio.


                                                               Group                                           Non-Current
                                                              revenue            Assets         Liabilities          assets
    Segmental analysis at 30th September 2017                 US$000            US$000            US$000           US$000
    Europe                                                     66,246            52,526           (21,164)             135
    Middle East                                                 2,857               934              (434)                6
    United States                                               1,176            26,801           (10,448)          11,290
    Total outside South Africa                                 70,279            80,261           (32,046)          11,431
    South Africa                                              269,773            89,924           (55,842)          20,976
    Total                                                     340,052           170,185           (87,888)          32,407

                                                                Group                                             Non-Current
                                                              revenue            Assets         Liabilities            assets
    Segmental analysis at 30th September 2016                 US$000            US$000            US$000             US$000
    Europe                                                     30,779            50,290          (22,517)                 81
    Middle East                                                 1,526               779             (275)                   2
    United States                                               1,187            26,470          (10,484)             11,501
    Total outside South Africa                                 33,492            77,539          (33,276)             11,584
    South Africa                                              208,441            78,525          (47,591)             19,001
    Total continuing operations                               241,933           156,064          (80,867)             30,585
    Australia                                                     526                 -                   -                 -
    Total                                                     242,459           156,064          (80,867)             30,585


Assets and liabilities (before non-controlling interests) are shown by the geographical area in which the assets are located.
Non-current assets exclude financial instruments and deferred tax.

2) OTHER INCOME
                                                                                               2017                2016
                                                                                             US$000             US$000
       Investment property revaluations                                                          494               1,002
       Gain on disposal of investment property                                                    -               2,300
       Gain on disposal of non-current tangible assets                                            25                  24
       Recovery of impairment on non-current asset                                                37                  20
       Fair value adjustments on forward foreign exchange contracts                               64                   1
       Dividend income                                                                           657                 556
       Interest income                                                                           869               1,004
     Other income                                                                                472                  68
     Exchange gains                                                                              255                 590
     Profit on disposal of investments                                                           396                  23
     Total income – continuing operations                                                      3,269               5,588
     Other income – discontinued operations                                                        -                   2
                                                                                               3,269               5,590

3) OTHER EXPENSES
                                                                                                2017                2016
                                                                                             US$000              US$000
      Investment property revaluation                                                           (221)                (84)
      Loss on disposal of investments                                                              -                 (18)
      Fair value adjustments on tangible assets and listed investments                             -                 (36)
      Fair value adjustment on unlisted investment                                                 -                (200)
      Loss on disposal of non-current tangible assets                                            (18)                 (5)
      Fair value adjustments and losses on disposal                                             (239)               (343)
      Exchange losses                                                                           (654)                 (5)
      Administration and other expenses                                                      (33,597)            (29,441)
                                                                                             (34,490)            (29,789)


                                                                                            2017             2016
                                                                                          US$000           US$000
       Administration and other expenses include: -
       Operating lease costs
        Premises                                                                            2,162            1,322
        Plant, equipment and vehicles                                                         108               40
       Auditors’ fees of the Company and its subsidiaries
        Audit related                                                                         402               465
        Other                                                                                   3                 3



4) EARNINGS PER SHARE
                                                                                            2017                 2016
       Basic earnings per share                                                             13.9c                 8.8c
       Basic (loss) per share on discontinued operations                                        -                (1.7)c
       Basic earnings per share on continuing operations                                    13.9c                10.5c
       Headline earnings per share                                                          12.6c                 1.9c
       Headline earnings per share on continuing operations                                 12.6c                 2.3c
       Headline (loss) per share on discontinued operations                                     -                 (0.4)c


       Reconciliation of basic earnings on continuing operations                         US$000           US$000
       Basic earnings on continuing and discontinued operations                             4,985            3,153
       Share of losses of discontinuing operations                                              -              152
       Loss on disposal of discontinuing operations                                             -              474
       Basic earnings on continuing operations                                              4,985            3,779

Earnings per share and headline earnings per share are based on the result attributable to shareholders of the
Group and on the weighted average of shares in issue of 35,857,512 (2016 – 35,857,512). There are no dilutive
equity instruments in issue.


                                                                                            2017                 2016
        Reconciliation between basic and headline earnings per share                       US$000              US$000

       Basic earnings on continuing and discontinued operations                               4,985             3,153
       Adjusted for:
        Gain on disposal of investment property, net of tax effect of US$88,000
        (2016 – US$46,000)                                                                       (88)           (2,346)
        Investment property revaluation, net of tax effect of US$7,000
        (2016 – US$196,000)                                                                      (229)            (722)
        Loss on disposal of Australian operations, including recycled exchange losses
        of US$157,000                                                                               -              474
        Recovery of impairment of non-current assets                                              (37)             (20)
        Reclassification of previously recognised gains on disposal of available for
        sale investments                                                                          (89)             (40)
        Effect of change in rate of tax                                                             -              185
        Net profit on disposal of non-current tangible assets                                      (7)             (19)
         Headline earnings                                                                      4,535              665


                                                                                                2017              2016
         Reconciliation between basic and headline earnings per share on                      US$000           US$000
               continuing operations
         Basic earnings on continuing operations                                                                 3,779
                                                                                                4,985
        Adjusted for:
        Gain on disposal of investment property, net of tax of US$88,000
        (2016-US$46,000)                                                                          (88)          (2,346)
        Investment property revaluation, net of tax effect of US$7,000
        (2016 - US$196,000)                                                                      (229)            (722)
        Recovery of impairment of non-current assets                                              (37)             (20)
        Reclassification of previously recognised gains on disposal of available for
        sale investments                                                                          (89)             (40)
        Effect of change in rate of tax                                                             -              185
        Net profit on disposal of non-current tangible assets                                      (7)             (19)
         Headline earnings – continuing operations                                               4,535              817

5) INVESTMENTS

       Investments include listed investments with a fair value of US$25,369,000 (2016 – US$23,169,000) and the
       unlisted investment in Heartstone Inns Ltd with a fair value of US$2,625,000 (2016 – US$ 2,213,000). The value
       of the investment in Heartstone Inns Ltd on acquisition was US$2,413,000 and the increase in fair value in the year
       of US$412,000 (2016 – decrease US$200,000) has been included in Other comprehensive income.

       The unlisted investment in Heartstone is carried at fair value which is calculated based on the net asset value per
       share at 30th September 2017 of US$1.78 less a discount of 10% to take into account the illiquidity of this holding
       in a private company. The net asset value at 30th September 2017 is based upon management accounts but has been
       adjusted to reflect an increase in respect of the fair value of property plant and equipment, which is supported by
       an independent professional valuation. A change in the discount to net asset value by 12% would change the fair
       value by US$315,000. The Group owns 1,641,309 Ordinary Shares in Heartstone representing 11.9% of its issued
       diluted share capital.


6) NON-CURRENT ASSETS HELD FOR SALE

       On 1 November 2016, an investment property in Cape Town, South Africa, was disposed of for US$1,208,000
       which was settled in cash. The property was valued at US$1,189,000 and post-tax profit attributable, accounted for
       in the year ended September 2017, was US$46,000.

7) FINANCIAL INSTRUMENTS

The categories of financial instruments used by the Group are:
                                                                                   Level in        2017             2016
                                                                                 Fair Value      US$000           US$000
                                                                                  hierarchy
       Financial assets
       Available for sale carried at fair value
        Investments – listed                                                           1          25,369           23,169
        Investments – unlisted                                                         3           2,625            2,213
      At fair value through profit or loss
       Forward foreign exchange contracts in Other financial assets                     2               301            70

      Loans and accounts receivable at amortised cost
       Accounts receivable                                                             n/a           56,589            41,697
       Accrued operating lease income on properties in Other financial
       assets                                                                          n/a              194               256
       Cash at bank in Cash and cash equivalents                                       n/a           20,323            30,916
       Money market funds in Cash and cash equivalents                                 n/a              854                 -


      Financial liabilities
      At amortised cost
       Trade and other payables - current – in Current financial liabilities           n/a           59,045            49,174
       Trade and other payables - non-current                                          n/a           13,571            12,351
       Bank overdrafts in Current financial liabilities                                n/a            6,840            10,372
       Capitalised lease obligations in Other financial liabilities                    n/a               92               109
       Financial liabilities secured on the investment property held for sale          n/a                -               251


      At fair value through profit or loss
       Forward foreign exchange contracts in Other financial liabilities                2                 54              739


      The fair value of forward foreign exchange contracts 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.

8) SECURED LIABILITIES

      Overdrafts of US$6,841,000 (2016 - US$10,372,000) are included in current liabilities. Group long-term financial
      liabilities are secured on various properties and bear interest at commercial rates.


9) CASH AND CASH EQUIVALENTS

                                                              2016          Exchange           Cash Flow                 2017
                                                                           movements           movement
                                                           US$000            US$000              US$000               US$000
    Cash at bank and in hand                                30,916                74             (10,667)              20,323
    Money market funds                                           -                 -                 854                  854
                                                            30,916                74              (9,813)              21,177
    Bank overdrafts                                        (10,372)              (21)              3,553               (6,840)
                                                            20,544                53              (6,260)              14,337

10) OPERATING LEASE COMMITMENTS
During the year, Monteagle Logistics Ltd has entered into a commercial property lease of a warehouse situated in Sydney
Road, Durban. The lease term is 10 years and two months, with a non-cancellable period no earlier than 5 years. The
remaining term of the lease is 115 months, with an annual escalation of 7.5%.
Future minimum rentals payable under the operating lease as at 30 September 2017 are as follows:
Rentals payable                                                                                                      US$000
Within one year                                                                                                        1,385
Two to five years                                                                                                      6,661
More than five years                                                                                                  10,398
                                                                                                                      18,444

11) BASIS OF PREPARATION
This provisional report has been prepared in accordance with the framework, concepts and the measurement and
recognition requirements of International Financial Reporting Standards, the Financial Reporting Pronouncements as
issued by the Financial Reporting Standards Council, the Listings Requirements of the JSE Limited, the financial
reporting guides issued by the Accounting Practices Committee of the South African Institute of Chartered Accountants
(the “SAICA Financial Reporting Guides”) 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 2016.

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 2017 was prepared under the supervision of the Financial
Director, Mr E.J. Beale, and has been reviewed by the Company's auditor, Saffery Champness, who expressed an
unmodified review conclusion thereon. The review opinion is available for inspection at the registered office of the
Company. The audited annual report will be mailed to shareholders in early 2018.

21 December 2017
United Kingom

Sponsor
Sasfin Capital (a member of the Sasfin Group)

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