RNS Number:5666E
Dimension Resources Ld
1 June 2001
FOR IMMEDIATE RELEASE
Dimension Resources Limited ("Dimension" or "the Company")
Preliminary Results for the period ended 31 December 2000
CHAIRMAN'S STATEMENT
The year 2000 has been one of slow but steady improvement in the Company's
prospects, despite the increased deficit shown in the Profit and Loss account.
This increase results partly from the cost of opening two new quarries, but
primarily from translation differences on loans between sterling and the South
African Rand.
The Company has always intended the major part of its revenue to come from
sales of stone in block form. To that end, the Company's wholly owned
subsidiary, Natural Stone Industries (Pty) Limited, has negotiated a
distributorship agreement with C J Petrow (Pty) Limited, a leading South
African industrial minerals company. This agreement gives C J Petrow the
exclusive right to distribute "Cape Red" and "Cape Autumn" granites produced
by NSI from its Zwartmodder quarries near Pofadder, in the Northern Cape
Province of South Africa. The contract is intended to be for an initial period
of five years, subject to periodic price reviews. Sales under this contract
commenced in March 2001, prior to the signature of the agreement. It is
envisaged that similar agreements relating to the Group's other granite
deposits as well as the travertine quarry, situated near Douglas, will be
signed in due course.
Previously Dimension had contracted to sell all its production of red granite
from its Zwartmodder quarry to a customer in Taiwan, Yu Long Enterprises Co.
Ltd. Disputes have arisen in connection with this contract, centred round the
colour of the bulk material, and, although initial sales were made, no
substantial sales have followed. Under these unsatisfactory circumstances
Dimension has given notice to cancel this contract, and has commenced selling
the material to C J Petrow.
Following the problems with the Taiwan contract, the quarry plant was moved to
a previously undeveloped granite deposit now named "Cape Autumn". A production
face has been opened at this deposit and a stock of blocks established. The
material is being supplied under the C J Petrow contract as described above.
The Directors believe that its "Cape Rainbow" granite deposit is unique in
colour, and considerable interest has been expressed by potential customers.
Permission to exploit this deposit, which is situated on an adjacent property,
was negotiated with the owners early in 2000. However, mining permission has
only recently been signed by the relevant Minister, allowing the Group to plan
the opening of the quarry. Production is expected in the second half of the
current year.
The Group's travertine quarry near Douglas in the Northern Cape Province has
also now been opened. This was due to be completed during the second half of
2000. In the event, the contractors employed by the Group suffered financial
difficulties, and did not comply with their contract. The Group therefore took
over the work, but this delayed the schedule. The first quarry face produced
blocks in mid March 2001. These were satisfactory both in terms of stone
quality and colour, but on the advice of the Group's quarry master a decision
has been made to re-enter the deposit at a different point to maximise long
term production. This is currently being done.
A contract has been signed with a leading Italian stone company, Antolini
Luigi & C. S.p.A., for the supply of Bowenite in block form from the quarry
near Steinkopf. The first blocks have been supplied for market testing.
Volumes will not be large, but Bowenite is a high value material, and the
contract is expected to contribute to the current year's results.
Dimension is also keen on expanding its portfolio of stone deposits. Attempts
to obtain a marble deposit in the area of the Vredendal processing plant are
being pursued, but have not proved successful to date, primarily due to
environmental problems. However, the directors expect to obtain the rights to
quarry a sandstone deposit as and when the landowner's legal title is
clarified.
The processing plant at Vredendal has been operating at a very low level of
activity both in 2000 and so far this year, with production mainly being
confined to tombstones for the local market. One advantage of the opening of
the travertine quarry is that the factory will be able to process this
material into tiles and strips for sale in conjunction with block sales, so
that a substantial increase in activity is expected in the second half of the
current year.
The placing of ordinary shares to raise #1 million in the second quarter of
2000 brought about a near doubling in the number of shareholders to almost
900. Since that time the directors have noted with concern the sharp reduction
in the share price. To help to counter this it is intended to issue trading
updates four times each year rather than half yearly. The Directors are also
investigating the possibility of re-domiciling the Company into the United
Kingdom, as it is felt that the inability to trade the Ordinary Shares through
Crest, due to the Bermudan domicile, severely restricts liquidity.
No dividend is proposed for the year ended 31 December 2000. The annual
general meeting for 2001 will be held at Grant Thornton House, Melton Street,
London NW1 2EP on Monday 2 July 2001.
Finally may I draw attention to changes in the management of the Group. Steven
Taylor, who has been responsible for negotiating the agreement with C J
Petrow, has now been appointed Group Managing Director. Vincent Panaia, his
predecessor, stood down in order to pursue other interests, but remains a
non-executive director. A strengthening of the board in line with the
increased activity levels is believed to be appropriate, and the Company hopes
to be able to make an announcement of new Directors prior to the Annual
General Meeting.
Brian Moritz
Chairman
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2000
2000 1999
# #
Turnover 98,391 119,243
Cost of sales 64,364 206,611
Gross profit (loss) 34,027 (87,368)
Administrative expenses (871,200) (364,747)
Operating loss (837,173) (452,115)
Interest receivable and similar income 28,099 4,725
Interest payable and similar charges (4,216) (175)
Amortisation of stone deposits - -
Net loss before taxation (813,290) (447,565)
Taxation - -
Net loss for the year (813,290) (447,565)
Earnings per share (pence) (1.00) (0.71)
Weighted average number of shares in issue 81,242,498 62,700,830
BALANCE SHEET AS AT 31 DECEMBER 2000
2000 1999
# #
ASSETS
Non-current assets 16,148,747 16,194,502
Tangible assets 1,743,773 1,794,409
Stone deposits 14,306,101 14,334,101
Pre-production costs 50,496 65,992
Investments 48,377 -
Current assets 637,321 225,513
Inventories 245,493 149,480
Debtors 55,596 33,024
Cash at bank and in hand 336,232 43,009
Total assets 16,786,068 16,420,015
EQUITY AND LIABILITIES
Shareholders' funds 16,542,840 16,248,217
Called up share capital 6,478,000 6,295,083
Share premium account 11,577,857 10,712,531
Profit and loss account (1,513,017) (759,397)
Long-term liabilities 100,323 1,923
Discount on acquisition of subsidiary - 402
Foreign currency translation reserve 80,371 11,426
Creditors: amounts falling due within
one year 62,534 158,047
Creditors 61,829 157,644
Provisions 705 403
Total equity and liabilities 16,786,068 16,420,015
NOTES
1. Basis of preparation
The financial information herein does not constitute statutory accounts. The
financial information has been extracted from the Company's 2000 statutory
financial statements upon which the auditors opinion is unqualified. The
accounts have been prepared in accordance with applicable accounting standards
and under the historical cost convention.
Copies of the annual report will be posted to shareholders shortly.
2. Reconciliation of movements in shareholders' funds
# #
Loss for the year (813,290) (447,565)
Receipts from the issue of shares 1,048,243 28,000
Elimination of accumulated loss at acquisition 67,215 123,463
Net increase (decrease) in shareholders' funds 302,168 (296,102)
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