Interim Results
September 07 2000 - 3:02AM
UK Regulatory
RNS Number:5556Q
Plantation & General Investmnts.PLC
7 September 2000
PLANTATION & GENERAL INVESTMENTS PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30th JUNE 2000
Plantation & General Investments plc the tropical agriculture
group, announces interim results for the six months to 30th
June 2000.
. Difficult conditions, particularly for Eastern Highlands
Plantations, lead to lower operating profits of #1.8m (1999
#2.1m) despite improvement in tea prices.
. Interest charges up to #1.5m (1999: #1.0m).
. Disposal of non-core manufacturing businesses; Acotupy in
Brazil and an associate in Malawi.
. Investment for expansion of rose growing operations in
Zambia and internet tea trading system.
. Outlook for the second half dependent on improvement in
coffee prices and economic conditions in Zimbabwe.
Chairman's Statement
The first six months' trading in 2000 reflected the difficult
operating conditions, particularly in Zimbabwe, which I
referred to in my latest annual statement.
The group's operating profits for the six months ended 30th
June 2000 fell to #1,786,000 compared with #2,103,000 in the
six months ended 30th June 1999. Interest costs were also
significantly higher at #1,522,000, compared with #1,031,000
to June 1999, because of much higher interest rates in
Zimbabwe.
In line with current accounting standards, we have again made
an adjustment for the effect of hyperinflation on the results
from Zimbabwe and Malawi. Although this has served to
mitigate the impact of inflation on the results from
operations in those countries, it does not enhance the
company's net assets or cash flows. In effect it is reversed
for balance sheet purposes by an equal and opposite adjustment
through reserves.
Eastern Highlands experienced particularly difficult
conditions and reported a significant loss for the half year
before the inflation adjustment. Along with many other
farming operations, a section of the estate has recently been
gazetted; an objection will be lodged. Inflation and interest
rates in Zimbabwe have been running at over 60 per cent per
annum and the recent devaluation which occurred after the
period has only partly relieved the pressure on margins there.
In contrast, our operations in Malawi (the Lujeri and Nchima
Estates) reported improved profits and continue to perform
well.
Average tea prices throughout the group improved by about 10%
compared with the same period last year, and the total tea
crop increased by 11% to 9,500 tonnes. However, coffee prices
are currently at their lowest levels for seven years.
Although some of the crop has been sold forward at prices
above current spot rates, the depressed state of the coffee
market will inevitably harm the results for the second half.
Chillington Manufacturing, the group's UK wheelbarrow
manufacturer, has been able to produce significantly better
results. Opportunities for the further development of this
business are currently being considered. The programme of
selling non core activities has continued with the disposal,
earlier in the year, of a substantial part of the Acotupy
business in Brazil and the assets of the group's hoe
manufacturing associate company in Malawi. More recently, we
have sold one of the group's UK investment properties.
New investment has primarily been in two areas. In Zambia,
following the increase in rose growing capacity at the end of
1999, we are planning to plant a further five hectares, which
will increase total volume to about 35 million stems per
annum. The new venture to build an Internet based tea trading
system is also taking shape, with the first phase due to go
live by the end of the year.
Consolidated profit & loss
account
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2000 1999 1999
(Restated)
(Unaudited)(Unaudited) (Audited)
Notes #'000 #'000 #'000
Turnover 25,948 25,673 41,431
Operating profit/loss 1,786 2,103 (1,853)
Share of results of associated (26) (15) (12)
undertaking
Loss on disposal or closure of (44) (47) (47)
operations
Profit/(loss) on disposal of 34 - (80)
investments
Profit/(loss) before interest 1,750 2,041 (1,992)
Interest (1,522) (1,031) (2,207)
Monetary working capital hyper- 1,099 156 652
inflation adjustment
Profit/(loss) before taxation 1,327 1,166 (3,547)
Taxation 2 (309) (370) (265)
Profit/(loss) after taxation 1,018 796 (3,812)
Minority interests 4 (129) 212
Profit/(loss) for the period 1,022 667 (3,600)
Dividends - (non-equity) (86) (86) (172)
Amount transferred to/(from) 936 581 (3,772)
reserves
(Restated)
Earnings/(loss) per ordinary share 3
Basic 1.8p 1.1p (7.3)p
Notes to the interim statements
1. Basis of preparation of financial statements
The results for the six months ended 30 June, 2000 are unaudited. They have
been prepared on accounting bases and policies consistent with those used in
the Annual Report and Accounts for the year ended 31 December 1999 except in
implementing FRS 15 as disclosed in the last paragraph to this note. The
comparative figures for the year ended 31 December 1999 are an extract from
the full accounts for the year which have been filed with the Registrar of
Companies and on which the auditors made a report under Section 235 of the
Companies Act 1985 - such report was unqualified and did not contain a
statement under Section 237(2) or (3) of the Companies Act. The comparative
figures for the six months ended 30 June 1999 and earnings per ordinary share
have been restated to include monetary hyper-inflation adjustments.
Plantations, factories and ancillary properties located overseas are stated at
directors' valuation based mainly on the US dollar values of these assets at
31 December 1999 as these valuations are believed to remain current.
Previously these assets were stated at local currency cost or valuation
translated at the period-end exchange rate. Had this new method of valuation
not been adopted at 30 June 2000, and no other external or internal valuations
included, then the group fixed assets and reserves would have been
approximately #2.2 million less than the amounts now reported. This increase
is primarily due to the strengthening of the US dollar against both Sterling
and the Malawi Kwacha since 31st December 1999.
2. Taxation
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2000 1999 1999
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Deferred taxation - - (122)
Overseas taxation 308 370 387
Share of associated undertaking 1 - -
taxation
309 370 265
3. Earnings/(loss) per ordinary share
Basic earnings per ordinary share for the six months ended 30 June 2000 is
calculated on a weighted average of 51,782,636 ordinary shares (six months
ended 30 June 1999 and year ended 31 December 1999 51,782,636 ordinary
shares).
4. Copies of the Interim Statement will be sent to all shareholders and
holders of the loan stock and are available at the Company's office at 81
Carter Lane, London EC4V 5EP.
Enquiries:
Plantation & General Tel: 020 7246 0206
Geoffrey Moores, Finance Director
College Hill Tel: 020 7457 2020
Corinna Dorward
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