TIDM72PJ
MARSHALL MONTEAGLE HOLDINGS SOCIETE ANONYME
(Incorporated in Luxembourg. R.C. No. B 19600)
ISIN LU0035797272
Registered Office
58 rue Charles
Martel,
18th December 2009 L-2134 Luxembourg
Preliminary announcement of unaudited results for the year ended 30th September
2009
INTRODUCTION
The directors are pleased to report on a resilient performance by the group's
diverse operations and investments, given the extremely volatile markets and
currency movements encountered during the past year.
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 company holds portfolios of leading investments in the
U.K., Europe, U.S.A. and the Far East as well as commercial properties in the
U.S.A and South Africa. The group's shipping and distribution businesses
operate internationally, and in South Africa it has interests in food
production and processing.
RESULTS
* Group revenue is up 7% to US$117,262,000 for the twelve months to 30th
September 2009, compared to US$109,559,000.
* Profit before tax and exceptional items is lower at US$4,606,000 from
US$5,251,000 because of reduced margins, higher losses on currency exchange
and an increase in interest paid.
* Exceptional charge of US$2,986,000 on devaluation of property in
California.
* The directors are proposing to maintain the final dividend of 3.00 US
cents, making a total of 5.00 US cents (2008 - 5.00 US cents) for the year.
* Net assets attributable to shareholders declined by 3% to US$3.17 per share
from US$3.27 at 30th September 2008, reflecting lower investment
valuations. The proportion of assets in Europe and the USA to those held in
South Africa has declined following the acquisition of additional shares in
Merchant & Industrial Properties Limited from 70% to 91% and the stronger
rand. In terms of net assets per share, US$1.42 - 45% (2008 - 63%) is held
in Europe and U.S.A. The remaining assets, equivalent to US$1.75 per share,
- 55% (2008- 37%) are held predominantly in South Africa.
FOOD AND HOUSEHOLD PRODUCTS
Our shipping and distribution business in food and household consumer products
achieved further growth during the year. This division continues to provide
procurement, supply chain and risk management services for multiple retailers,
wholesalers and manufacturers in Southern and Central Africa, Indian Ocean
Islands and Australia and brings the benefits of dedicated producers of quality
raw materials, skilled technologists and first world production facilities to
our customers.
The division continues to operate in an extremely challenging environment with
volatile raw material and currency movements compounded by inconsistent demand
and significant global excess production capacity. It would appear that these
conditions will remain over the next six months and probably throughout the
2010 financial year. The division is well positioned to operate in these market
conditions and continually strives to anticipate our clients' needs and exceed
their expectations.
TOOL AND MACHINERY PRODUCTS
As anticipated, our 50.1% owned tool and machinery import and distribution
businesses had another challenging year with profits declining as a result of
slightly lower sales and disappointing results from certain subsidiaries.
Management have done an excellent job of improving margins by procuring more
aggressively, choosing direct channels to suppliers where possible and cutting
overhead costs.
The tough trading environment in this sector looks set to continue in the short
term, however management is making further improvements to the business to
maintain its position as a preferred supplier to the retail market.
PROPERTY PORTFOLIO
Our large multi-tenanted industrial property in San Diego posted its first
decline in rental income in many years as a result of increased vacancies.
Although the property is situated in one of the most sought after industrial
areas in Southern California the vacancy rate is now as high as 16%. Current
market values have fallen during the past year and it has been necessary to
reflect this by making an exceptional provision of US$2,986,000 in the carrying
value of this asset. Given its location it will be one of first areas to
benefit when industry does pick up and the board has no intention of disposing
of this fine asset.
MERCHANT & INDUSTRIAL PROPERTIES LIMITED ("MERCHANT") (91.4% subsidiary)
The group's commercial properties in South Africa, including those in Durban
and Cape Town held by Merchant Group, produced satisfactory results during the
year. No further investments were made due to a shortage of attractive
properties with suitable yields.
Following the offer to acquire all of the issued shares of Merchant that the
company does not already own, the company received acceptances from all but
8.6% of the shareholders of Merchant. The offer has been extended to 29th
January 2010 and the boards of both companies recommend that remaining Merchant
shareholders take advantage of the opportunity to swap their shares for shares
in the parent company where there is a broader spread of investments.
INVESTMENT PORTFOLIO
The extreme volatility in equity markets continued into 2009 and the low point
in March 2009 saw first world markets close to 60% off levels reached in 2007.
Since then there has been a marked shift in sentiment and risk appetite and
markets have recovered accordingly, however for the year to 30 September 2009
there was still a decline of roughly 10% in the U.S. benchmark S&P 500 index.
The group continues to hold a diverse portfolio of quality companies in first
world markets and has substantial liquidity to take advantage of any future
buying opportunities.
CONAFEX HOLDINGS SOCIETE ANONYME (unlisted associate)
Conafex Holdings is a South African group that takes strategic stakes in
businesses focused in the value-added agric-food sector. Current holdings
include stakes in a JSE listed fruit and vegetable trading and logistics
business; a health products business; an herbal tea exporter and a coffee
roasting business. Conafex is in a consolidation phase and intends disposing of
investments not deemed core, to focus on those enterprises that have
demonstrated growth potential. The company delisted from both the Luxembourg
Stock Exchange and the JSE on 9th April 2009 in order to conserve its limited
funds.
HALOGEN HOLDINGS SOCIETE ANONYME (unlisted associate)
Halogen Holdings owns 78% of the total issued share capital of Heartstone Inns,
a developing UK group of country pubs specialising in quality food. Heartstone
acquired the Bun Penny in Leigh on Solent in the year and now owns the freehold
of five pubs, which it manages, and it is looking to acquire additional pubs
through an associated tax efficient investment company which has already
acquired the Boatman in Guildford.
The shareholders of Halogen Holdings have put the Luxembourg holding company
into voluntary liquidation as part of a restructuring designed to save running
costs. The liquidation should be completed by the end of 2009, and will result
in us swapping Halogen Holding Société Anonyme shares for shares in the new
holding company Halogen Holdings P.L.C.
GROUP PERSONNEL
These results could not have been achieved without the hard work of all our
employees and, on behalf of all shareholders, the directors thank them most
sincerely for their efforts and contribution during the year.
PROSPECTS
While there is evidence that certain first world economies are coming out of
recession the board are cautious about the year ahead, a year which might see
pressure on certain raw material prices and continued volatility in currency
and equity markets.
Our conservative policies and strong balance sheet give us confidence that we
can enhance shareholder value in the long term.
POSTING OF ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING
The annual report will be mailed to shareholders on or before [26th ]February
2010 and the Annual General Meeting of the Company will be held on Friday 26th
March 2010 at 4.00 p.m. at the registered office of the Company, 58 rue Charles
Martel, L-1361, Luxembourg.
Unaudited Consolidated Income Statement
for the year ended 30th September 2009 2008
US$000 US$000
Group revenue 117,262 109,559
Operating costs (110,392) (102,736)
------------ ------------
Operating profit 6,870 6,823
Share of associated companies' results (271) (461)
Income from other investments - dividends 350 525
- interest 596 527
Interest paid and similar charges (2,259) (1,845)
Realised exchange losses (680) (318)
------------ ------------
Profit on ordinary activities before exceptional items 4,606 5,251
and tax
Exceptional items (3,455) 1,214
------------ ------------
Profit before tax and minority interests 1,151 6,465
Taxation on ordinary activities before exceptionals (1,423) (1,660)
------------ ------------
(Loss)/Profit after tax before minority interests (272) 4,805
Minority interests (1,169) (1,623)
------------ ------------
(Loss)/Profit attributable to shareholders of the Group (1,441) 3,182
======= =======
Reconciliation of headline earnings per share
Basic and fully diluted (loss)/earnings per share (US (8.3)c 19.2 c
cents)
Less exceptional items, net of tax and minority 20.1 c (5.2)c
interests (US cents)
------------ ------------
Headline earnings per share (US cents) 11.8 c 14.0 c
------------ ------------
Interim dividend paid (US cents) 2.00 c 2.00 c
Recommended final dividend (US cents) 3.00 c 3.00 c
------------ ------------
Total dividends in respect of the year 5.00 c 5.00 c
------------ ------------
Unaudited Consolidated Statement of Recognised Gains and Losses
2009 2008
US$000 US$000
Exchange differences on translation of the financial 2,432 (4,833)
statements of foreign entities
Group share of fair value adjustments (1,142) (5,510)
Group share of commercial property revaluations 57 (43)
------------ ------------
Net (losses)/gains not recognised in the income 1,347 (10,386)
statement
Dividend paid for the previous year (496) (438)
Dividends forfeit 89 -
Shares issued 3,171 -
Interim dividend paid (353) (331)
Net (loss)/profit for the period (1,441) 3,182
------------ ------------
Total recognised (losses)/gains and (decrease)/increase 2,317 (7,973)
in shareholders' funds
Shareholders' funds brought forward 54,088 62,061
------------ ------------
Shareholders' funds carried forward 56,405 54,088
======= =======
Unaudited Consolidated Balance Sheet
at 30th September 2009 2008
US$000 US$000
Assets
Non current assets
Property, plant and equipment 38,740 37,914
Investments 17,480 21,863
------------ ------------
56,220 59,777
Current assets ------------ ------------
Inventories 22,837 20,705
Investment held for resale - 182
Accounts receivable 22,633 18,957
Cash and bank balances 11,347 9,523
------------ ------------
56,817 49,367
Current liabilities
Accounts payable (falling due within one year) (32,222) (28,426)
------------ ------------
Net current assets 24,595 20,941
------------ ------------
Total assets less current liabilities 80,815 80,718
Non current liabilities
Accounts payable (falling due after more than one year) (11,566) (11,077)
Deferred taxation (2,632) (2,324)
------------ ------------
66,617 67,317
======= =======
Capital and reserves
Called up share capital 26,673 24,805
Share premium account 4,710 3,407
Other reserves 7,332 9,555
Retained earnings 17,690 16,321
------------ ------------
Shareholders' funds 56,405 54,088
Minority interests 10,212 13,229
------------ ------------
66,617 67,317
======= =======
Net Assets per Share at market values 2009 2008
US$ US$
Europe, U.S.A. and other 1.46 2.07
South Africa 1.71 1.20
------------ ------------
3.17 3.27
======= =======
Unaudited Consolidated Cash Flow Statement
for the year ended 30th September 2009 2008
US$000 US$000
Operating activities
Cash generated by operations 3,338 8,032
Interest paid (2,259) (1,845)
Taxation paid (807) (2,014)
------------ ------------
Net cash inflow from operating activities 272 4,173
------------ ------------
Investment activities
Purchase of tangible fixed assets (1,108) (1,614)
Acquisition of investments (444) (4,367)
Proceeds of disposal of tangible fixed assets 329 842
Proceeds of disposal of investments 3,108 5,126
Interest received and other investment income 946 1,052
------------ ------------
Net cash inflow from investment activities 2,831 1,039
------------ ------------
Net cash inflow before financing 3,103 5,212
------------ ------------
Financing activities
Net increase/(decrease) in long term debt 489 (139)
New shares issued, net of costs 3,022 -
Less minority interests acquired (3,172) -
Dividends paid - group (849) (1,018)
Dividends paid -minorities (593) (102)
------------ ------------
Net cash (outflow) from financing activities (1,103) (1,259)
------------ ------------
Net increase in funds 2,000 3,953
Net funds/(debt) at 1st October 7,094 3,209
Effect of foreign exchange rate changes 351 (68)
------------ ------------
Net funds at 30th September 9,445 7,094
======= =======
SEGMENTAL REPORTING
Primary reporting format - business segments
The Group is organised on a worldwide basis into the following main business
segments:
Import and distribution Tool import and non-perishable food imports to and
exports from South Africa; non-perishable food imports
to Japan and Australia.
Food production and Horticulture, niche and added value agriculture in
processing South Africa through Conafex
Property Investment properties in California and South Africa.
Other activities Mainly transactions relating to the share portfolios,
profits on disposals of tangible and intangible fixed
assets and local head office costs.
There are no sales between business 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. Capital expenditure comprises additions to
property, plant and equipment.
Unallocated assets and liabilities are cash balances, taxation and borrowings.
2009 2008
Segmental analysis of results US$000 US$000
Revenue Result Revenue Result
Import and distribution 113,426 6,127 105,503 6,510
Property 3,453 1,305 3,955 1,291
Other activities 383 (296) 101 (244)
----------- ----------- ----------- -----------
117,262 7,136 109,559 7,557
======= =======
Share of associates (271) (461)
Interest paid and similar charges (2,259) (1,845)
----------- -----------
4,606 5,251
Exceptional items (3,455) 1,214
----------- -----------
Profit before tax 1,151 6,465
======= =======
* Revenue of "Other activities" excludes dividend income and the proceeds of
sales of investments and tangible assets. Profits on sales of investments and
tangible assets are included in exceptional items.
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 2009
Import and distribution 51,354 (28,819) 22,535 929 333
Property 31,814 (811) 31,003 179 56
Associate - Food 1,567 - 1,567 - -
production
Associate - Other 2,105 - 2,105 - -
Other activities 14,661 (77) 14,584 - 16
(including investments)
Unallocated (including 11,537 (16,714) (5,177) - -
cash, tax and debt)
----------- ----------- ----------- ----------- -----------
Consolidated total 113,038 (46,421) 66,617 1,108 405
======= ======= ======= ======= =======
Segmental analysis of net assets 30th September 2008
Import and distribution 42,654 (24,399) 18,255 694 321
Property 32,955 (600) 32,355 842 57
Listed associate - Food 1,860 - 1,860 - -
production
Listed associate - Other 1,994 - 1,994 - -
Other activities 19,948 (412) 19,536 78 6
(including investments)
Unallocated (including 9,733 (16,416) (6,683) - -
cash, tax and debt)
----------- ----------- ----------- ----------- -----------
Consolidated total 109,144 (41,827) 67,317 1,614 384
======= ======= ======= ======= =======
Secondary reporting format - geographical segments
The Group operates in the following countries or states.
Luxembourg The non-trading location of the parent company where part of the
Group investment portfolio is located.
South Africa Location of the bulk of the Group's import and distribution
business and part of the Group's property portfolio.
Australia Location for part of the Group's import and distribution business.
United States Part of the Group's property and investment portfolios are
located here.
Jersey Location of part of the Group's import and distribution business and
part of the Group's investment portfolio.
2009 2008
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
Australia 2,145 3,469 40 3,158 3,606 8
United States 1,032 8,415 91 1,068 12,565 17
Jersey 32,607 7,627 - 28,089 8,664 -
Luxembourg - 7,455 - - 11,362 78
----------- ----------- ----------- ----------- ----------- -----------
Total outside 35,784 26,966 131 32,315 36,197 103
Africa
South Africa 81,478 39,651 977 77,244 31,120 1,511
----------- ----------- ----------- ----------- ----------- -----------
117,262 66,617 1,108 109,559 67,317 1,614
======= ======= ======= ======= ======= =======
Total assets and capital expenditure are shown by the geographical area in
which the assets are located.
EXCEPTIONAL ITEMS 2009 2008
US$000 US$000
Income
Surplus on disposal of investments - 325
Surplus on disposal of non-current tangible assets - 555
Release of investment provisions 89 295
Property revaluations - 39
----------- -----------
Total income 89 1,214
Charges
Property revaluations (2,986) -
Fair value adjustments on financial assets (161) -
Loss on disposal of non-current tangible assets (3) -
Costs of acquisition (150) -
Loss on disposal of investments (244) -
----------- -----------
Exceptional items - net (charges)/income (3,455) 1,214
======= =======
Notes:
1. These preliminary results for the year ended 30th September 2009 and the
balance sheet at that date comply with International Financial Reporting
Standards and have been prepared on the basis of accounting policies
adopted for the year ended 30th September 2008.
2. Group capital expenditure in the year was US$1,108,000 (2008 -
US$1,614,000). There were no capital expenditure commitments at 30th
September 2009 (2008 - nil).
3. Bank loans and overdrafts of US$1,902,000 (2008 - US$2,429,000) are
included in current liabilities. Group long-term finance is secured on
various local properties and bears interest at local 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
17,320,428 shares in issue (2008 - 16,536,717).
1
END
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