TIDMAGTA
RNS Number : 2122Q
Agriterra Ltd
26 February 2016
Agriterra Ltd / Ticker: AGTA / Index: AIM / Sector:
Agriculture
26 February 2016
Agriterra Ltd ('Agriterra' or 'the Group')
Interim Results
Agriterra Limited, the AIM listed pan-African agricultural
company, announces its results for the six months ended 30 November
2015.
Chairman's Statement
The period under review has seen a challenging macro-economic
environment develop across the world, including our regions of
operations, with resource based Sub-Saharan African economies
experiencing sizeable devaluations in their local currencies
against the strengthening US dollar. The devaluation in the
Mozambique Metical in particular has presented both opportunities
and challenges - on the one hand it has both made imports of maize
substitutes (such as rice and wheat) and beef products relatively
more expensive, favouring national producers like us in the
domestic market, while also making our potential exports more price
competitive in international markets; on the other hand, it has
made various inputs into our production processes more expensive,
placing increasing pressure on margins.
This operating environment has shaped our short term strategy in
Mozambique. We are now focussed on aggressively building our market
share in both our maize and beef businesses, with our domestic
products replacing imports wherever possible. Contemporaneously we
are minimising expenditure (in particular non-Metical based) and
restructuring the unprofitable parts of our agricultural portfolio.
Export markets are also becoming more attractive and we are
therefore actively pursuing opportunities for bilateral trade. In
this context, we are working with the government of Mozambique to
obtain all of the necessary documentation and permits required to
export beef into Russia, whilst also exploring the wider
possibilities for the export of food products generally from
Mozambique to Russia. Discussions are underway in Mozambique to
source local products including nuts, fruit, vegetables and fish at
competitive prices. At this stage, there are no formal agreements
in place but all parties have asserted their readiness to engage in
agricultural trade and stressed the importance of continuous
positive cooperation between the Russian Federation and the
Republic of Mozambique.
Notably and as predicted in our full year results announced in
November 2015, our maize business has been the chief revenue
generator and most profitable business line, contributing US$6.03
million in revenue to the Group (H1-2015: US$2.04 million). This
strong performance can be attributed to the favourable sales and
pricing environment. In particular, a smaller harvest and shortage
of maize in southern Africa has put upward pressure on prices and
increased demand for the Group's maize products with 21,000
(H1-2015 6,500) tonnes of maize processed and 14,900 (H1-2015
4,600) tonnes of maize flour sold. As noted above, in addition to
harvest related factors, the exchange rate between the US dollar
and Mozambique Metical has favoured our maize flour sales; with a
weaker Metical, the price of rice and wheat (for pasta) which are
often seen as substitutes to maize flour, have increased
significantly, driving the demand for maize flour. Furthermore, we
have gained a competitive price advantage over some larger
competitors in Southern Mozambique who are reliant on imported
grain, which is less price competitive in the current economic
circumstances, particularly in the Central and Northern parts of
the country. The weak Metical has however also impacted on our
reported US$ sales, which increased by 196% compared to an increase
in Metical terms of over 268%.
Looking towards the next financial year, the "El Niño" weather
phenomenon is expected to have a severe impact on the 2016 harvests
in South Africa, Zimbabwe, Botswana and Zambia, which are all now
suffering from maize shortages. Thankfully the situation in
Mozambique appears more positive, albeit the crop is expected to be
relatively small again. We therefore expect the current favourable
sales and pricing environment to continue until April / May 2017 at
the earliest. The key to maintaining the momentum in our maize
business in the short term will therefore be a successful buying
campaign during 2016. With this in mind we intend to begin our
buying programme as soon as possible once the season opens in April
/ early May to capitalise on the early season lower maize prices
and our maize storage facilities and drying capacity (of around
50,000 tonnes). This will help ensure we have a large maize
inventory at the lowest cost possible, thus placing us in a strong
position to achieve attractive margins for subsequent sales of our
maize flour. Our buying is supported by a bank facility of
approximately US$4.4 million, which we are currently renegotiating
to approximately US$6.0 million. Subject to any further adverse
impact on the maize crop arising from "El Niño", and our ability to
successfully increase our bank facility, we believe that we will be
able to leverage our buying network across the country to secure up
to 45,000 tonnes of maize.
In addition to a defined marketing and buying strategy, our
secondary aim during the period has been to cut costs and improve
efficiencies across the maize business. An important outcome of
this has been an improvement in milling yields, and optimisation of
milling schedules. This has enabled us to reduce our labour
requirements and related ancillary expenditures. Further actions in
this vein are currently underway and we expect these to contribute
positively in H2-FY2016 and FY2017.
Our beef division also continues to grow as a revenue generator
- delivering a 26% increase in revenue to US$3.35 million (2014:
US$2.66 million). In Metical terms the increase was more
significant at 65%. Our retail operations continue to perform
encouragingly, with the key revenue generating aspects of this
business - being the feedlot, abattoir and butcheries - all
contributing strong revenues and generating net positive cash
flows. A primary factor underpinning this continued development has
been the expansion of our retail units/butcheries, with six units
now operational in Chimoio, Tete, Nampula, Beira and Manica. As
previously reported, Northern Mozambique, particularly the cities
of Pemba and Nacala, have been prioritised for expansion; we are
however cognisant of the significant role the oil price has on the
development of the region, which relies heavily on the advancement
of the LNG industry. Whilst we continue to assess the growth
potential in the North, we now believe the capital city of Maputo
represents a more exciting development opportunity in the short
term - we have started to service some orders from Maputo and hope
to continue to develop this market where our product is ever more
price competitive against imported beef (mainly coming from South
Africa). In reaction to current demand we have also identified an
opportunity to expand our retail presence in Nampula via a second
retail unit which will open in March 2016.
At the other end of the business in Mozambique, we are assessing
opportunities to generate positive cash flows from our farms, which
comprise 20,350 hectares of ranches in total. The farms, which
require continual ongoing investment and maintenance, in addition
to the larger capital investments associated with irrigation and
expanding the herd size, remain a loss-making component of the
business. In the current economic environment, the Board is
assessing opportunities to restructure the ranches or redeploy the
acreage. We will announce further updates regarding this in due
course.
As mentioned above, we are also exploring international
agricultural trading opportunities, with a particular focus on
Russia. There is huge opportunity in bilateral trade between the
Republic of Mozambique and the Russian Federation as a result of
Mozambique's preferential trading status with Russia. We are
committed to being at the forefront of this market as Mozambican
imports into Russia benefit from a 0% import duty compared to
higher tariffs imposed on many other exporting countries. In
addition, as a result of sanctions imposed by the Russian
Federation against beef and other agriculture imports from, amongst
others, the US, Canada and the European Union, there is a
substantial opportunity for the Group to develop a large market for
its beef and other agricultural products.
Our cocoa business, which comprises a 3,200 hectare landholding
in the south-east of Sierra Leone, together with much of the
critical infrastructure required to develop a large plantation
(including roads, offices and a state-of-the-art irrigated
nursery), remains on care and maintenance following the serious
outbreak of Ebola in Sierra Leone. Sierra Leone was declared
Ebola-free in November 2015, which was a great achievement for the
country and all those involved in the fight against the virus. At
that time, we entered into of a trading agreement with a leading
global company focused on natural, organic and specialty foods
which although successful to a degree has not achieved the volumes
or revenues hoped for, in part due to the new cases of Ebola which
were reported in January 2016. With this in mind our priority
remains on the welfare of our employees and so we continue to
monitor developments in-country and assess opportunities to
crystallise our investment in the plantation and associated
infrastructure. Whilst this process continues, we are taking care
to minimise all expenditure in the region and have dramatically
reduced spending on this business.
I believe we are now becoming a more efficient and streamlined
business, consolidating our operations and cementing a stable base
to generate positive cash flows from our businesses. I hope to
report favourably on our ongoing cost reduction programmes in our
full year results.
Financial results
(MORE TO FOLLOW) Dow Jones Newswires
February 26, 2016 02:00 ET (07:00 GMT)
The Group's loss for the period from continuing operations was
$2.80 million, a 38% decrease compared to the loss from continuing
operations of $4.57 million in the 6 month period ended 30 November
2014 ('H1-FY2015'). The decrease principally reflects the strong
performance of the Grain division which, for the factors discussed
above, returned a net profit of $0.30 million on sales of $6.03
million, compared to a net loss of $1.32 million on sales of $2.04
million in H1-FY2015.
The Beef division also performed well in terms of sales growth,
with a 26% increase in revenue from $2.66 million in H1-FY2015 to
$3.35 million in H1-FY2016. The Beef division's net result was
comparable to H1-FY2015, at a loss of $1.51 million compared to a
loss of $1.35 million. The loss includes depreciation of $0.49
million (H1-FY2015: $0.57 million). Adjusted for depreciation, the
loss principally reflects the cost of maintaining the Group's
20,350 hectares of ranches which are not yet producing an economic
return. The Beef division's retail, abattoir and feedlot operations
continue to contribute a positive cash flow to the division which
mitigates in part the costs of operating the ranches.
For the reasons outlined above, the Cocoa division's assets were
substantially in care and maintenance during the period, with
expenditure curtailed to a minimum wherever possible. The Cocoa
division returned a net loss of $0.56 million (H1-FY2015: $0.60
million), principally reflecting the cessation of capitalisation of
expenditure at the plantation pending a decision to recommence
development activities.
In terms of the Group's balance sheet, net assets are reported
at $21.03 million compared to $29.84 million at 31 May 2015. The
decrease reflects in part the loss in the period of $2.80 million,
and also a significant non-cash loss of $5.97 million from the
retranslation of the net assets of our Mozambique and Sierra Leone
subsidiary companies. This translation loss arises due to the
sizeable devaluations that both the Mozambique Metical and the
Sierra Leone Leone have suffered in the period against the US
Dollar.
PH Edmonds
Chairman
26 February 2016
FOR FURTHER INFORMATION PLEASE VISIT WWW.AGRITERRA-LTD.COM OR
CONTACT:
Andrew Groves Agriterra Ltd Tel: +44 (0) 20 7408 9200
David Foreman Cantor Fitzgerald Europe Tel: +44 (0) 20 7894 7000
Michael Reynolds Cantor Fitzgerald Europe Tel: +44 (0) 20 7894 7000
John Beaumont Peat & Co. Tel: +44 (0) 20 3540 1723
Susie Geliher St Brides Partners Ltd Tel: +44 (0) 20 7236 1177
Charlotte Heap St Brides Partners Ltd Tel: +44 (0) 20 7236 1177
CONSOLIDATED INCOME STATEMENT
6 months 6 months 12 months
ended 30 ended 30 ended 31
November November May
2015 2014 2015
Unaudited Unaudited Audited
(Re-presented
- note 3.2)
Note $000 $000 $000
CONTINUING OPERATIONS
Revenue 9,548 4,941 11,787
Cost of sales (7,991) (4,421) (10,662)
----------- -------------- ----------
Gross profit 1,557 520 1,125
Increase in value of biological
assets 624 288 1,910
Operating expenses (4,411) (4,847) (10,643)
Impairment of current and non-current
assets - - (6,791)
Other income 83 10 33
Profit on disposal of property,
plant and equipment 39 - 76
Operating loss (2,108) (4,029) (14,290)
Investment revenues 6 8 19
Other gains and losses 5 (311) (158) (849)
Finance costs 6 (366) (364) (683)
Loss before taxation (2,779) (4,543) (15,803)
Taxation (23) (3) (81)
----------- -------------- ----------
Loss for the period from continuing
operations 4 (2,802) (4,546) (15,884)
DISCONTINUED OPERATIONS
Profit for the period from discontinued
operations 7 - 5,485 2,497
(Loss) / profit the period attributable
to owners of the Company (2,802) 939 (13,387)
=========== ============== ==========
(LOSS) / EARNINGS PER SHARE
Basic and diluted loss per share
from continuing operations (0.26) (0.43) (1.50)
============== ============== ==============
Basic and diluted (loss) / earnings
per share from continuing and discontinued
operations (0.26) 0.09 (1.26)
============== ============== ==============
No. No. No.
Weighted average number of shares
outstanding for the purposes of
calculating basic and diluted loss
per share from continuing operations,
and basic and diluted (loss) / earnings
from continuing and discontinued
operations 1,061,818,478 1,061,818,478 1,061,818,478
============== ============== ==============
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months 6 months 12 months
ended 30 ended 30 ended 31
November November May
2015 2014 2015
Unaudited Unaudited Audited
$000 $000 $000
(Loss) / profit for the period (2,802) 939 (13,387)
Items that may be reclassified subsequently
to profit or loss:
Foreign exchange translation differences (5,967) (1,319) (4,435)
----------- ----------- ----------
Other comprehensive income for the
period (5,967) (1,319) (4,435)
----------- ----------- ----------
Total comprehensive income for the
year attributable to owners of the
Company (8,769) (380) (17,822)
=========== =========== ==========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 November 30 November 31 May
2015 2014 2015
Unaudited Unaudited Audited
Note $000 $000 $000
Non-current assets
Goodwill - 572 -
Property, plant and equipment 13,854 35,068 19,746
Interests in associates 4 4 4
Investments in quoted companies 8 65 1,067 376
Biological assets 1,724 2,689 2,246
------------
15,647 39,400 22,372
------------ ------------ ----------
Current assets
Biological assets 1,106 1,010 1,019
Inventories 3,836 6,298 2,892
Trade and other receivables 1,392 1,133 1,594
Cash and cash equivalents 5,387 8,852 6,421
11,721 17,293 11,926
------------ ------------ ----------
Total assets 27,368 56,693 34,298
------------ ------------ ----------
Current liabilities
(MORE TO FOLLOW) Dow Jones Newswires
February 26, 2016 02:00 ET (07:00 GMT)
Borrowings 9 4,228 5,202 3,079
Trade and other payables 1,018 1,294 1,377
5,246 6,496 4,456
------------ ------------ ----------
Net current assets 6,475 10,797 7,470
------------ ------------ ----------
Non-current liabilities
Borrowings 9 1,091 - -
------------ ------------ ----------
Total liabilities 6,337 6,496 4,456
------------ ------------ ----------
Net assets 21,031 50,197 29,842
============ ============ ==========
Share capital 10 1,960 1,960 1,960
Share premium 148,622 148,622 148,622
Shares to be issued - 2,940 -
Share based payments reserve 1,872 1,887 1,914
Translation reserve (14,210) (5,127) (8,243)
Accumulated losses (117,213) (100,085) (114,411)
------------ ------------ ----------
Equity attributable to equity holders of the parent 21,031 50,197 29,842
============ ============ ==========
The unaudited condensed consolidated financial statements of
Agriterra Limited for the 6 months ended 30 November 2015 were
approved by the Board of Directors and authorised for issue on 26
February 2016. Signed on behalf of the Board of Directors:
P H Edmonds
Chairman
CONSOLIDATED CASH FLOW STATEMENT
6 months
6 months ended 30 ended 30 12 months ended
November November 31 May
2015 2014 2015
Unaudited Unaudited Audited
(Re-presented - note 3
$000 $000 $000
Loss before tax for the period from continuing
operations (2,779) (4,543) (15,803)
Adjustments for:
Depreciation 871 1,013 2,211
Profit on disposal of property, plant and
equipment (39) - (76)
Share based payment (credit) / expense (42) 28 55
Foreign exchange (gain) / loss (8) 159 177
Increase in value of biological assets (624) (288) (1,910)
Finance costs 366 364 683
Investment revenues (6) (8) (19)
Decrease in fair value of quoted investments 311 158 849
Impairment of current and non-current assets - - 6,791
Operating cash flows before movements in working
capital (1,950) (3,117) (7,042)
(Increase) / decrease in inventories (2,192) (16) 1,158
Increase in trade and other receivables (41) (1,670) (848)
Decrease in trade and other payables (180) (861) (719)
Net decrease in biological assets held for
slaughter purposes 55 677 2,281
------------------ ----------------------- ----------------
Net cash used in operating activities by
continuing operations (4,308) (4,987) (5,170)
Corporation tax paid (23) (9) (9)
Finance costs (366) (364) (683)
Interest received 6 8 19
Net cash used in operating activities by
continuing operations (4,691) (5,352) (5,843)
------------------ ----------------------- ----------------
Net cash from operating activities by
discontinued operations - 5,546 5,627
------------------ ----------------------- ----------------
Net (cash used by) / from operating activities (4,691) 194 (216)
------------------ ----------------------- ----------------
Cash flows from investing activities
Proceeds from disposal of property, plant and
equipment 248 7 291
Acquisition of property, plant and equipment (312) (912) (1,555)
Net cash used in investing activities by
continuing operations (64) (905) (1,264)
------------------ ----------------------- ----------------
Net cash from investing activities in
discontinued operations - - -
------------------ ----------------------- ----------------
Net cash used in investing activities (64) (905) (1,264)
------------------ ----------------------- ----------------
Cash flow from financing activities
Net draw down of overdraft 2,463 2,973 1,376
Drawdown of loans 1,480 - -
Repayment of loans - - (200)
Net cash from financing activities from
continuing operations 3,943 2,973 1,176
------------------ ----------------------- ----------------
Net cash used in financing activities from
discontinued operations - (200) -
------------------ ----------------------- ----------------
Net cash from financing activities 3,943 2,773 1,176
------------------ ----------------------- ----------------
Net (decrease) / increase in cash and cash
equivalents (812) 2,062 (304)
Effect of exchange rates on cash and cash
equivalents including discontinued operations (222) (204) (269)
------------------ ----------------------- ----------------
Cash and cash equivalents at beginning of period 6,421 6,994 6,994
------------------ ----------------------- ----------------
Cash and cash equivalents at end of period 5,387 8,852 6,421
================== ======================= ================
1. GENERAL INFORMATION
Agriterra Limited ('Agriterra' or the 'Company') and its
subsidiaries (together the 'Group') is focussed on the agricultural
sector in Africa. Agriterra is a non-cellular company limited by
shares incorporated and domiciled in Guernsey, Channel Islands. The
address of its registered office is Richmond House, St Julians
Avenue, St Peter Port, Guernsey GY1 1GZ.
(MORE TO FOLLOW) Dow Jones Newswires
February 26, 2016 02:00 ET (07:00 GMT)
The Company's Ordinary Shares are quoted on the AIM Market of
the London Stock Exchange ('AIM').
The unaudited condensed consolidated financial statements have
been prepared in US Dollars ('US$' or '$') as this is the currency
of the primary economic environment in which the Group
operates.
2. BASIS OF PREPARATION
The condensed consolidated financial statements of the Group for
the 6 months ended 30 November 2015 (the 'H1-FY2016 financial
statements'), which are unaudited and have not been reviewed by the
Company's auditor, have been prepared in accordance with the
International Financial Reporting Standards ('IFRS'), as adopted by
the European Union, accounting policies adopted by the Group and
set out in the annual report for the year ended 31 May 2015
(available at www.agriterra-ltd.com). The Group does not anticipate
any significant change in these accounting policies for the year
ended 31 May 2016. References to 'IFRS' hereafter should be
construed as references to IFRSs as adopted by the EU.
This interim report has been prepared to comply with the
requirements of the AIM Rules of the London Stock Exchange (the
'AIM Rules'). In preparing this report, the Group has adopted the
guidance in the AIM Rules for interim accounts which do not require
that the interim condensed consolidated financial statements are
prepared in accordance with IAS 34, 'Interim financial reporting'.
While the financial figures included in this report have been
computed in accordance with IFRSs applicable to interim periods,
this report does not contain sufficient information to constitute
an interim financial report as that term is defined in IFRSs.
The financial information contained in this report also does not
constitute statutory accounts under the Companies (Guernsey) Law
2008, as amended. The financial information for the year ended 31
May 2015 is based on the statutory accounts for the period then
ended. The auditors reported on those accounts. Their report was
unqualified and did not include any statements of emphasis of
matter.
The H1-FY2016 financial statements have been prepared in
accordance with the IFRS principles applicable to a going concern,
which contemplate the realisation of assets and liquidation of
liabilities during the normal course of operations. Having carried
out a going concern review in preparing the H1-FY2016 financial
statements, the Directors have concluded that there is a reasonable
basis to adopt the going concern principle.
3. REPRESENTATIONS
3.1 Representations to the Consolidated cash flow statement
In the 6 month period ended 30 November 2014, and consistent
with preceding financial periods, the Group presented all cash
flows for the purchase, sale, slaughter or disposal by other means
of its cattle within a single line in the Consolidated cash flow
statement entitled 'Increase in biological assets', a component of
'Cash flows from investing activities'. This reflected the fact
that, historically, a significant portion of the Group's cash flows
for the purchase of animals related to the purchase of the breeding
herd.
During H1-FY2016 and in the financial year ended 31 May 2015,
the Group did not purchase cattle to increase its breeding herd -
all cattle purchases were for slaughter herd animals, generally
being animals taken directly into the feedlot. Cash flows of this
nature are more appropriately reflected within cash flows from
operating activities. Accordingly and with effect from the
financial year ended 31 May 2015, the Group altered its
presentation for the purchase of slaughter herd animals, which are
now included within the line item of the Consolidated cash flow
statement entitled 'Net decrease / (increase) in biological assets
held for slaughter purchases', within 'Net cash used in operating
activities'. The comparative for the 6 month period ended 30
November 2014 of $677,000 inflow has been reclassified from cash
flows from investing activities resulting in a decrease in 'Net
cash used in operating activities by continuing operations' and
'Net cash used in operating activities' by $677,000 and a
corresponding increase in 'Net cash used in investing activities by
continuing operations' and 'Net cash used in investing activities'.
The representation has no effect on net cash flows for the 6 month
period ended 30 November 2014, nor any effect on the Consolidated
income statement or on the Consolidated statement of financial
position.
3.2 Representations to the Consolidated income statement
In the 6 month period ended 30 November 2014, the Group reported
$241,000 within 'Other income' earned on the rental of certain of
the Cocoa division's assets in aid of the relief effort against the
Ebola crisis in Sierra Leone. The classification reflected the
ancillary nature, at that time, of this income to the overall Cocoa
division. During the second half of the financial year ended 31 May
2015, further income of $663,000 was recorded on such rentals and,
with the restriction in other activities within the Cocoa division
due to the Ebola outbreak in Sierra Leone, these rental activities
became the principal revenue generating activity of the division in
the period. Accordingly, the total income of $904,000 earned on the
rental of these assets during FY2015 was reported within revenue
for the Group during the 12 month period ended 31 May 2015. The
corresponding amount of $241,000 for the 6 month period ended 30
November 2014 has therefore been reclassified from 'Other income'
to 'Revenue'. The reclassification has no net effect on the result
reported for the period then ended.
4. SEGMENT INFORMATION
The Directors consider that the Group's operating activities
comprise the segments of Grain, Beef and Cocoa, all undertaken in
Africa. In addition, the Group has certain other unallocated
expenditure, assets and liabilities, either located in Africa or
held as support for the Africa operations.
The following is an analysis of the Group's revenue and results
by operating segment:
6 months ended 30 November Grain Beef Cocoa Unallo-cated Elimina-tions Total
2015 - Unaudited
$000 $000 $000 $000 $000 $000
------ -------- ------ ------------- -------------- --------
Revenue
External sales(2) 6,032 3,345 171 - - 9,548
Inter-segment sales(1) 333 - - - (333) -
------ -------- ------ ------------- -------------- --------
6,365 3,345 171 - (333) 9,548
------ -------- ------ ------------- -------------- --------
Segment results
- Operating profit / (loss) 605 (1,427) (558) (728) - (2,108)
- Interest (expense) /
income (303) (63) - 6 - (360)
- Other gains and losses - - - (311) - (311)
Profit / (loss) before
tax 302 (1,490) (558) (1,033) - (2,779)
------ -------- ------ ------------- -------------- --------
Income tax (4) (19) - - - (23)
------ -------- ------ ------------- -------------- --------
Profit / (loss) for the
period from continuing
operations 298 (1,509) (558) (1,033) - (2,802)
====== ======== ====== ============= ============== ========
6 months ended 30 Grain Beef Cocoa Unallo-cated Discon-tinued(3) Elimina-tions Total
November 2014 -
Unaudited
(Re-presented -
note
3.2)
$000 $000 $000 $000 $000 $000 $000
-------- -------- ------ ------------- ----------------- -------------- --------
Revenue
External
sales(2) 2,043 2,657 241 - - - 4,941
Inter-segment
sales(1) 263 - - - - (263) -
-------- -------- ------ ------------- ----------------- -------------- --------
2,306 2,657 241 - - (263) 4,941
-------- -------- ------ ------------- ----------------- -------------- --------
Segment results
- Operating loss (962) (1,344) (606) (1,288) 171 - (4,029)
- Interest
(expense)
/ income (362) 1 - 5 - - (356)
- Other gains and
losses - - - (158) - - (158)
-------- -------- ------ ------------- ----------------- -------------- --------
Loss before tax (1,324) (1,343) (606) (1,441) 171 - (4,543)
-------- -------- ------ ------------- ----------------- -------------- --------
Income tax - (3) - - - - (3)
-------- -------- ------ ------------- ----------------- -------------- --------
Loss for the
period
from continuing
operations (1,324) (1,346) (606) (1,441) 171 - (4,546)
======== ======== ====== ============= ================= ============== ========
12 months ended Grain Beef Cocoa Unallo-cated Discon-tinued(3) Elimina-tions Total
30
May 2015 -
Audited
(MORE TO FOLLOW) Dow Jones Newswires
February 26, 2016 02:00 ET (07:00 GMT)
$000 $000 $000 $000 $000 $000 $000
-------- -------- -------- ------------- ----------------- -------------- ---------
Revenue
External
sales(2) 5,517 5,366 904 - - - 11,787
Inter-segment
sales(1) 524 - - - - (524) -
-------- -------- -------- ------------- ----------------- -------------- ---------
6,041 5,366 904 - - (524) 11,787
-------- -------- -------- ------------- ----------------- -------------- ---------
Segment results
- Operating
loss (2,128) (2,317) (7,853) (2,166) 174 - (14,290)
- Interest
(expense)
/ income (680) 2 - 14 - - (664)
- Other gains
and
losses - - - (849) - - (849)
Loss before tax (2,808) (2,315) (7,853) (3,001) 174 - (15,803)
-------- -------- -------- ------------- ----------------- -------------- ---------
Income tax (78) (3) - - - - (81)
-------- -------- -------- ------------- ----------------- -------------- ---------
Loss for the
period
from
continuing
operations (2,886) (2,318) (7,853) (3,001) 174 - (15,884)
======== ======== ======== ============= ================= ============== =========
(1) Inter-segment sales are charged at prevailing market prices.
(2) Revenue represents sales to external customers and is recorded
in the country of domicile of the group company making the
sale. Sales from the Grain and Beef divisions are principally
for supply to the Mozambican market. Sales from the Cocoa division
were supplied to the Sierra Leone market.
(3) Amounts reclassified to discontinued operations in the periods
ended 30 November 2014 and 31 May 2015 relate to the Cocoa
segment - refer to note 7.2.
The segment items included within continuing operations in the
consolidated income statement for the year are as follows:
6 months ended 30 November Grain Beef Cocoa Unallo-cated Discon-tinued Elimina-tions Total
2015 - Unaudited
$000 $000 $000 $000 $000 $000 $000
------ ----- ------ ------------- -------------- -------------- ------
Depreciation 128 491 229 23 - - 871
====== ===== ====== ============= ============== ============== ======
6 months ended 30 November Grain Beef Cocoa Unallo-cated Discon-tinued Elimina-tions Total
2014 - Unaudited
$000 $000 $000 $000 $000 $000 $000
------ ----- ------ ------------- -------------- -------------- ------
Depreciation 186 571 235 82 (61) - 1,013
====== ===== ====== ============= ============== ============== ======
12 months ended 30 May Grain Beef Cocoa Unallo-cated Discon-tinued Elimina-tions Total
2015 - Audited
$000 $000 $000 $000 $000 $000 $000
------ ------ ------ ------------- -------------- -------------- ------
Depreciation 386 1,122 628 136 (61) - 2,211
Impairment of assets - - 6,791 - - - 6,791
====== ====== ====== ============= ============== ============== ======
5. OTHER GAINS AND LOSSES
6 months ended 30 6 months 12 months ended 31 May
November ended 30 2015
2015 November Audited
Unaudited 2014
Unaudited
$000 $000 $000
Decrease in fair value of quoted investments 311 158 849
================== =========== =======================
6. FINANCE COSTS
6 months ended 30 6 months 12 months ended 31 May
November ended 30 2015
2015 November Audited
Unaudited 2014
Unaudited
$000 $000 $000
Interest expense:
Bank borrowings 366 364 683
================== =========== =======================
7. DISCONTINUED OPERATIONS
The profit after tax arising on discontinued operations during
the period is analysed by business operation as follows:
6 months ended 30 November 6 months 12 months ended 31
2015 ended 30 May
November 2015
2014
Unaudited Unaudited Audited
$000 $000 $000
Oil and gas activities - 5,659 5,740
Cocoa trading activities - (174) (174)
Palm activities - - (3,069)
--------------------------- ---------- -------------------
Net profit after tax attributable to discontinued
operations - 5,485 2,497
=========================== ========== ===================
7.1. Oil and gas
On 6 January 2009, the Shareholders approved the adoption of the
investing strategy to acquire or invest in businesses or projects
operating in the agricultural and associated civil engineering
industries in Southern Africa. At the same time the Group suspended
all exploration activities and reduced expenditure to the minimum
required in order to retain exploration licenses and extract
potential value for Shareholders. Consequently the oil and gas
activities were reclassified as a discontinued operation.
During the year ended 31 May 2014 the Group initiated formal
arbitration proceedings to recover the compensation assessed by the
National Petroleum Commission as being due to the Company for works
undertaken by the Company in the Republic of South Sudan and
acknowledged as being due by the Ministry of Petroleum and Mining
of the Republic of South Sudan in April 2012. This matter was
resolved in the 6 month period ended 30 November 2014 through the
payment to the Company of GBP3,412,000 (being $5,659,000) in cash
which was recognised within discontinued operations. A further net
credit of $81,000 was recorded in the second half of the financial
year ended 31 May 2015 with respect to the re-imbursement of
expenditure incurred in pursuing this claim.
No amounts were recorded in the current period with respect to
the discontinued oil and gas activities.
7.2. Cocoa trading
Due to the serious and well-publicised Ebola outbreak and the
associated precautionary restrictions on travelling in Sierra
Leone, accompanied by the ongoing losses suffered by the Cocoa
trading operations, the Group ceased its Cocoa trading operations
in Sierra Leone in the 6 month period ended 30 November 2014. The
Cocoa trading operation was focussed primarily on building a
presence in-country and providing a market entry point for buyers
as a precursor to the establishment of the Group's own plantation,
and the implementation of programmes involving the upgrading of
local growers plant quality through plant distribution.
The Cocoa trading operations represented a significant component
of a business segment of the Group and accordingly, as required by
IFRS 5, 'Non-current Assets Held for Sale and Discontinued
Operations', the results of the Cocoa trading operations are
presented as discontinued operations within the consolidated income
statement. Cash flows pertaining to the Cocoa trading operations
are presented in the Consolidated cash flow statement along with
all cash flows relating to discontinued operations.
No amounts were recorded in the current period with respect to
the discontinued Cocoa trading activities.
7.3. Palm activities
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