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Interim results for the six months to 31 March 2019 and a dividend declaration
Marshall Monteagle PLC
(Incorporated in Jersey)
(Registration number: 102785)
(External registration number: 2010/024031/10)
JSE Code: MMP ISIN: JE00B5N88T08
(“the Company”” or “the Group”)
Interim results for the six months to 31 March 2019 and a dividend declaration
Dear Shareholder,
The Directors report the results for the six months to 31 March 2019 and a dividend declaration.
Results
• Group revenue increased by 11% to US$216,676,000 compared with the same period last year. In
constant currency terms revenue increased by 16% to US$226,157,000.
• Profit before tax decreased by 12% to US$5,771,000 compared to the restated profit before tax of
US$6,594,000 (see Note 1 on page 9), and in constant currency terms decreased by 8% to US$6,052,000.
• Headline earnings of US6.9 cents per share were 0.4% higher when compared with restated US6.4 cents
per share in the same period last year.
• Basic earnings per share of US6.9 cents per share were 0.9% higher when compared with restated US6.3
cents per share in the same period last year.
• An interim dividend of US1.9 cents per share will be paid in June 2019 (2018 – US1.9 cents).
• Net assets per share are US$2.28 (2018 – US$2.17). Net assets per share have increased slightly from the
30 September 2018 figure of US$2.25 per share.
The Group has investments in import and distribution businesses, investment properties and equities. These are
reported on separately below.
Import and Distribution
Our Import and Distribution businesses in food and household consumer products continue to perform well in
a very challenging global retail market and we continue to constantly review our shipping and supply-chain to
ensure that we remain the most cost effective solution from factory to shelf. During the six month period under
review we achieved a pleasing increase in turnover and product volumes shipped. Currency and raw material
markets remain volatile and we expect these market conditions to continue throughout the remainder of this
year and potentially into the new year. These factors and increased competition have constrained profitability
in the period and are expected to impact on returns for the rest of the year. These businesses provide
procurement, supply chain and risk management services to multiple retailers, wholesalers and manufacturers
throughout Southern and Central Africa and South America. 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. During the six months under
review the producer and end-user markets we trade in have come back into a reasonable balance and we have
achieved a pleasing increase in turnover and volumes shipped. This division provides fully integrated marketing,
logistics, finance and shipping services to the Southern African mining industry. 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.
We own 50% of the logistics business supporting these operations. During the period board changes at this
subsidiary have resulted in it now being accounted for as an associate.
The political and economic environment in South Africa has made trading conditions in our Coffee business more
volatile, with consumers being increasingly cash conscious. We have managed to increase sales by freezing
prices, however, exchange rate and coffee price volatility continue to put pressure on margins.
Our Tool & Machinery business continues to improve. A pleasing increase in sales of 8% was achieved, despite
a reduction in consumer spending coupled with a lack of business confidence, which has negatively impacted
our target market. Our growth has been achieved by expanding our offering to our key customers.
The Group continues to fund the additional working capital requirements of these growing trading businesses
from its cash resources.
Property Portfolio
Rental income from our large multi-tenanted industrial property in San Diego has continued to grow and the
property remains fully let. The market for the purchase of commercial and industrial property in Southern
California remains highly competitive and speculative. We have suspended our proactive search to invest further
in similar property in the region until the speculative market subsides to a more affordable level.
The Group’s South African commercial and light industrial property portfolio has achieved a decent return in an
adverse economic climate. The Group is maintaining its focus on administrative and operating efficiencies as
the demand for premises continues to be flat.
Investment Portfolio
Stock markets were little changed over the period, but adverse exchange rate variances have led to a small fall
in the value of our investment portfolio.
Net Assets
Our total net assets amount to US$2.28 per share, which compares with US$2.25 per share at 30 September
2018. Assets outside Africa, net of non-controlling interests and proposed dividends, stand at US$66,488,000,
equal to US$1.85 per share (30 September 2018: US$1.79); the balance of US$15,146,000, equal to US$0.43 per
share, is held in South Africa.
Interim Dividend
We are pleased to announce that the Company is to pay an interim dividend of US1.9 cents per share. The
dividend is payable on 28 June 2019 to shareholders on the register at the close of business on 21 June 2019.
Prospects
We have had a good start to the year, however headwinds are continuing to increase, and we expect the second
half to be even more difficult. We are invested in businesses with good management teams, supported by the
Group’s strong balance sheet. While the short term outlook is as ever unclear, we are confident that we can
continue to grow shareholder value over the long term.
A.R.C. Barclay
Chairman
D.C. Marshall
Chief Executive
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 Thursday 30 May 2019. 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 14.6888. 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 30 May 2019.
In respect of the normal gross cash dividend of US1.9 cents (27.90872 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 at close of business on Friday 21 June 2019. All other shareholders are
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exempt. The gross dividend is for the six-month period ended 31 March 2019 and will be paid on Friday 28 June
2019.
• The dividend has been declared from income reserves, which funds are sourced from the Jersey holding
company’s main bank account in Switzerland.
• The dividend withholding tax rate is 20% resulting in a net dividend of US1.52 cents (22.32698 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 Tuesday 18 June 2019
Shares trade ex-dividend Wednesday 19 June 2019
Record date (date shareholders recorded in books) Friday 21 June 2019
Pay date Friday 28 June 2019
No dematerialisation or rematerialisation of share certificates, nor transfer of shares between the registers in
Jersey and South Africa will take place between Wednesday 19 June 2019 and Friday 21 June 2019, both dates
inclusive.
Contacts and Addresses
Registered Office
2rd Floor, Gaspe House
66-72 Esplanade
St Helier
Jersey, JE1 1GH
South Africa
11 Sunbury Park, La Lucia Ridge Office Estate,
La Lucia, 4051
(PO Box 4126, The Square 4021)
Tel: +27 31 566 7600
Company Secretary
City Group P.L.C.
1 Ely Place
London, EC1N 6RY
Tel: +44 20 7796 9060
E-mail: monteagle@city-group.com
Consolidated Statement of Total Comprehensive Income
Half Years Ended Year Ended
31 March 30 September
Restated Restated
2019 2018 2018
Notes Unaudited Unaudited Audited
US$000 US$000 US$000
Continuing operations
Group revenue 2 216,676 194,637 417,199
Other income 3a 1,075 1,611 5,813)
217,751 196,248 423,012
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Change in inventories of finished goods and work in progress (7,304) (2,436) 3,996
Finished goods, raw materials and consumables (164,119) (151,849) (339,121)
Employee benefit expense (10,007) (8,967) (20,608)
Depreciation and amortisation expense (505) (558) (1,147)
Other expenses 3b (28,965) (24,746) (47,986)
Share of associated companies and joint venture’s results 27 40 51
Finance Expense (1,107) (1,138) (2,174)
Profit before taxation 2 5,771 6,594 16,023
Taxation (1,713) (2,731) (3,093)
Profit after taxation 4,058 3,863) 12,930)
Profit attributable to owners of the parent 2,487 2,260 9,723
Profit attributable to non-controlling interests 1,571 1,603 3,207
Basic and fully diluted earnings per share (US cents) 4 6.9c 6.3c 27.1c
Other Comprehensive (Expense)/Income:
Items that will not be reclassified subsequently to profit and
loss:
Commercial property fair value adjustments - - 395
Less applicable tax - - (104)
- -) 291)
Items that may be reclassified subsequently to profit and
loss:
Exchange differences on translation into US dollars of the
financial statements of foreign entities (807) 4,461 (1,881)
Total Other Comprehensive Income (807) 4,461) (1,590)
Profit After Tax 4,058 3,901 12,930
Total Comprehensive Income 3,251 8,324 11,340
Total Comprehensive Income attributable to owners of the
parent 1,900 5,389 8,640
Total Comprehensive Income attributable to non-
controlling interests 1,351 2,935 2,700
Interim dividend per share (US cents) 1.9c 1.9c 1.9c
Final dividend per share (US cents) - - 1.9c
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Consolidated Statement of Changes in Equity
Ordinary Total Non-
Share Share Other Retained Shareholders’ Controlling Group
Capital Premium Reserves Earnings Interests Interests Total
Half year ended 31 March 2018 US$000 US$000 US$000 US$000 US$000 US$000 US$000
Profit after taxation - - (38) 2,298 2,260 1,603 3,863
Other Comprehensive Income - - 1,781) 1,348) 3,129) 1,332) 4,461)
Total Comprehensive Income - - 1,743) 3,646) 5,389) 2,935) 8,324)
Balances at start of period 8,964 23,606 (773) 41,460 73,257 9,040 82,297
Transactions with shareholders
Dividends paid - - -) (681) (681) (1,008) (1,689)
Balances at end of period 8,964 23,606 970) 44,425) 77,965) 10,967) 88,932)
Half year ended 31 March 2019
)
Profit after taxation - - (274) 2,761 2,487 1,571 4,058
Other Comprehensive Income - - (408) (179) (587) (220) (807)
Total Comprehensive Income - - (682) 2,582 1,900 1,351 3,251
Balances at start of period 8,964 23,606 52) 47,912) 80,534) 10,419) 90,953)
Transactions with shareholders
Reclassification of subsidiary to associate - - - - - (918) (918)
Dividends paid - - -) (681) (681) (1,711) (2,392)
Balances at end of period 8,964 23,606 (630) 49,813 81,753 9,141 90,894
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Consolidated Statement of Financial Position
31 March 30 September
2019 2018 2018
Unaudited Unaudited Audited
US$000 US$000 US$000
Non-current assets
Investment property 23,372 22,268 23,565
Property, plant and equipment 10,382 12,557 11,524
Goodwill - 209 175
Intangible assets 523 817 668
Deferred taxation 1,342 2,173 1,901
Associates 865 236 192
General portfolio – (note 5) 31,019 31,258) 31,292
67,503 69,518 69,317
Current assets
Inventories 25,873 30,505 29,409
Trade and other receivables 72,800 73,580 68,696
Cash 15,829 19,932) 18,482)
114,502 124,017 116,587
Total assets 182,005 193,135 185,904
Current liabilities
Trade and other payables (70,841) (82,760) (73,304)
Net current assets 43,661 41,257) 43,283)
Total assets less current liabilities 111,164 110,775) 112,600)
Non-current liabilities
Accounts payable (13,557) (15,312) (14,903)
Deferred taxation (6,713) (6,531) (6,744)
Total non-current liabilities (20,270) (21,843) (21,647)
Net assets 90,894 88,932) 90,953)
Capital and reserves
Called up share capital 8,964 8,964 8,964
Share premium account 23,606 23,606 23,606
Other reserves (630) 970 52
Retained earnings 49,813 44,425) 47,912)
Equity attributable to owners of the parent 81,753 77,965 80,534
Non-controlling interests 9,141 10,967) 10,419)
90,894 88,932) 90,953)
Net assets per share US$ (note 6) 2.28 2.17 2.25
Consolidated Statement of Cash Flow
31 March 30 September
2019 2018 2018
Unaudited Unaudited Audited
US$000 US$000 US$000
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31 March 30 September
Profit for the period 4,058 3,901 13,218
Adjusted for:
Taxation 1,713 2,745 2,957
Depreciation 505 558 1,147
Share of associates (27) (40) (51)
Finance expense 1,107 1,138 2,174
Other income (729) (1,611) (5,434)
Other expense –fair value adjustments and losses on disposal 572 504 1,633
Changes in working capital:
Decrease in inventories 2,991 2,699 (1,575)
(Increase) in debtors (12,270) (10,021) (13,054)
Increase in creditors 5,578 894) 2,055
3,498 767 3,070
Interest paid (1,107) (1,138) (2,174)
Taxation paid (811) (1,202) (3,670)
Net cash inflow/(outflow) from operating activities 1,580 (1,573) (2,774)
Investment activities
Purchase of, and improvements to, tangible non-current assets (1,018) (1,350) (2,311)
Proceeds of disposal of tangible assets 8 6 87
Purchase of software (11) - (55)
Acquisition of investments - (3,853) (5,686)
Net proceeds of disposal of subsidiary 60 - -
Proceeds on disposal of investments - 759 2,145
Reclassification of subsidiary to associate (783) - -
Dividends received 343 271 853
Interest received 135 416) 1,067
Net cash outflow from investment activities (1,266) (3,751) (3,900)
Cash inflow/(outflow)before financing 314 (5,324) (6,674)
Financing activities
Drawdown of long-term loans 632 1,428 1,273
Repayment of long term loans (58) (63) (182)
Dividends paid – group shareholders (681) (681) (1,363)
Dividends paid – non-controlling interests of subsidiaries (948) (1,008) (1,321)
Cash outflow from financing activities (1,055) (324) (1,593)
Net decrease in funds (741) (5,648) (8,267)
Net funds at start of period 5,911 14,337 14,337
Effect of foreign exchange rates (22) (1,021) (159)
Net cash and cash equivalents at end of period 5,148 7,668) 5,911)
Notes to the interim statement
1. The results and the cash flow statement for the half-year ended 31 March 2019 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
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Council. They have been prepared on the basis of accounting policies that will be adopted in the accounts
for the year ended 30 September 2019, which are the same as those for the prior year, except that adoption
of IFRS9 has changed how unrealised profits on revaluation of certain investments have been accounted
for. They are now included within profit before tax, whereas previously they were included in other
comprehensive income. Prior year comparatives have been restated on a comparable basis.
This change in accounting policy has no effect on the Statement of Financial Position.
The interim statement complies with International Financial Reporting Standards and JSE listing
requirements. The results for the year to 30 September 2018 are an abridged version of the Group’s full
accounts for that year, which have been filed with the relevant authorities, restated as disclosed above.
These results were prepared under the supervision of Edward Beale, The Group’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 31 March Year ended 30
2018 September 2018
2019 US$000 US$000
US$000 Restated Restated
Revenue Result Revenue Result Revenue Result
Analysed by activity: -
Import/distribution 215,220 6,361 193,053 6,867 414,085 14,693
Property 1,456 437 1,584 496 3,114 966
Share of associated
companies and joint
venture results - 27 - 40) - 51
216,676 6,825 194,637 7,403 417,199 15,710
Unallocated expense (1,022) (1,282) (3,377)
Other Income 1,075 1,611 5,864
Interest paid (1,107) (1,138) (2,174)
Profit before tax 5,771 6,594) 16,023)
Notes to the interim statement (continued)
3. The other income and expense on continuing operations arises from the following:
31 March 31 March 30 September
2019 2018 2018
US$000 US$000 US$000
a. Other income
Investment property revaluations - - 3,202
Gain on disposal of non-current tangible assets - - 13
Recovery of impairment on commercial property - - 10
Dividend income 343 251 819
Interest and other income 526 467 1,437
Exchange gains 165 665 100
Profit on disposal of investments 41 227 232
1,075 1,611 5,813
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31 March 31 March 30 September
2019 2018 2018
Restated Restated
US$000 US$000 US$000
b. Other expense
Loss on disposal of investments - - (324)
Fair value adjustments on available for sale investments (274) (52) (152)
Loss on disposal on non-current tangible assets (1) (19) (33)
Exchange losses (298) (485) (1,232)
Administration and other expenses (28,392) (24,190) (46,245)
(28,965) (24,746) (47,986)
4. Basic earnings per share are based on results attributable to members and on 35,857,512 shares in issue
(2018 – 35,857,512). A reconciliation of basic and headline earnings is shown below.
31 March 31 March 30 September
2018 2018
2019 Restated Restated
US$000 US$000 US$000
Reconciliation between basic and headline earnings
Basic earnings 2,487 2,260 9,723
Adjusted for:
Investment property gain on disposal/revaluations - - (2,323)
Recovery of impairment of non-current asset - - (10)
Fair value adjustment to available for sale investments - - 85
Loss/(profit) on disposal of non-current tangible assets 1 19) 20
Headline earnings 2,488 2,279) 7,495
Earnings per share
Basic earnings per share (US cents) 6.9 6.3 27.1
Headline earnings per share (US cents) 6.9 6.4 20.9
Notes to the interim statement (continued)
5. A geographical analysis of the General Portfolio of investments is as follows:
31 March 31 March 30 September
2019 2018 2018
US$000 US$000 US$000
United States of America 10,626 10,513 10,745
United Kingdom 6,825 8,401 6,772
Europe, excluding the U.K. 4,813 5,201 4,712
Switzerland 2,515 2,486 2,695
Japan 1,536 1,686 1,557
26,315 28,287 26,481
Treasury bills USA 2,000 - 2,000
Unlisted – UK 2,704 2,971 2,811
31,019 31,258 31,292
6. Net assets per share are based on equity attributable to owners of the Company.
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7. There was capital expenditure of US$649,000 during the period (2018 – US$1,350,000). There was no
contracted or outstanding authorised capital expenditure at the reporting date.
United Kingdom
3 June 2019
Sponsor: Sasfin Capital (a member of the Sasfin Group)
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