Plantation & General - Subsids Final Results-Amendmt
April 01 1999 - 7:01AM
UK Regulatory
RNS No 0903X
PLANTATION & GENERAL INVESTMENTS PLC
31 March 1999
The headline for the Plantation & General Investments PLC announcement released
today should read "Subsid's Final Results". The full text shown below remains
unchanged.
----------------------------------------------------------------------------
PLANTATION & GENERAL INVESTMENTS PLC
("Plantation")
The following is the full text of the preliminary announcement of the audited
results for the twelve months ended 31 December 1997 of Eastern Highlands
Plantations Limited, the 77.4 per cent owned subsidiary of Plantation. Eastern
Highlands Plantations Limited is quoted on the Zimbabwe Stock Exchange.
The audited results of the company for the twelve months ended 31st December
1998 with comparisons for 1997 as follows:
1998 1997
Tea produced (MT) 2,943 3,619
Coffee produced (MT) 318 554
CONSOLIDATED PROFIT AND LOSS ACCOUNT
1998 1997
Z$'000's Z$'000's
Turnover
Tea 88,454 65,284
Coffee 19,994 22,277
Other 513 1,434
--------------------------
Total turnover 108,961 88,995
Cost of sales 49,089 38,570
--------------------------
Gross profit 59,872 50,425
Admin distributions & selling expenses 39,584 26,927
--------------------------
Profit before interest and tax 20,288 23,498
Net financing income 15,132 8,106
--------------------------
Profit before taxation 35,420 31,604
Taxation 7,365 7,301
---------------------------
Profit after taxation 28,055 24,303
Dividends
- Interim 4,995 4,128
- Final 9,088 8,256
--------------------------
Retained profit for the year 14,012 11,919
Retained profit at 31 December 1997 36,108 24,189
--------------------------
As previously reported 36,108 24,541
Change in accounting policy 0 (352)
--------------------------
Retained profit at 31 December 1998 50,120 36,108
==========================
Weighted average number of shares in issue 82,603,025 82,560,000
Shares in issue at 31 December 1998 82,605,000 82,560,000
Earnings per share (cents per share) 33.96 29.44
Dividend per share (ZW cents) 17.00 15.00
Dividend cover 2.00 2.00
ABRIDGED BALANCE SHEET
1998 1997
Z$'000's Z$'000's
FUNDS EMPLOYED
Share capital 41,303 41,280
Capital reserves 179,951 17,537
Revenue reserves 50,120 36,108
--------------------------
SHAREHOLDERS' FUNDS 271,374 94,925
Long term loans 8,459 909
Deferred taxation 1,105 4,277
--------------------------
280,938 100,111
==========================
REPRESENTED BY:
Fixed assets 269,179 81,697
Net current assets 11,759 18,414
--------------------------
280,938 100,111
==========================
CHAIRMAN'S STATEMENT
year ended 31st December 1998
The Company operates an integrated tea and coffee estate in the Honde Valley.
Annual earnings increased by 15% to 34 cents per share. The results for the
second half of the year were improved by the devaluation of the Zimbabwe dollar,
which more than offset a poor first half when international tea prices collapsed
and tea production was reduced by a strike.
The dividend has been increased to 17 cents per share (1997 : 15 cents per
share).
Tea
Tea production was 2,900,000 kg's (1997 : 3,500,000 kg's). The March strike
resulted in a loss of 500,000 kg's of tea. Tea prices throughout the year
averaged Zw$23,29 (1997: Zw$ 16,38), though in US dollar terms, the average
price was 48% lower than in 1997. The magnitude of the collapse of the
international tea market in March and April was unusual. We have calculated
that the lost production and the resultant poor quality tea that was produced
cost the Company in excess of Zw$30 million in lost operating profit.
In the last annual report we advised that, as the London Auction was closing we
would transfer our auction offerings to the Mombasa Tea Auction, which is the
main market for all African teas. Though the prices received in the auction
were fair, Mombasa port congestion increased transit times excessively.
Accordingly we had higher stocks than we would have preferred as the market
collapsed in April. Given this logistical problem which is outside our
immediate control, we decided from May onwards to stop offering any teas in the
Mombasa Auction. We now sell all our export teas on a FOB Durban basis
privately. By Decemebr 1998 this policy had enabled us to sell all tea within
21 days of production, as opposed to 48 days in Decemebr 1997.
Coffee
The crop was 318,000 kg's (1997 : 554,000 kg's). This lower crop was produced
from fewer mature hectares as during the year we continued the policy of
replanting the older coffee with improved dwarf varieties so as to maintain a
stand of young vigorous plants. The contribution made from the crop was on
budget, thanks to higher sales prices.
Crest Tea & Coffee (Pvt) Ltd
The Company closed down the Crest tea packing operation during the year. The
intense competition at the lower end of the market has kept packet prices
artificially low on the supermarket shelves and this resulted in unacceptably
low financial returns. The costs associated with this closure, totalling
Zw$1.58m, have been expensed during the year.
Management and Labour
The Company has moved to improve the depth of management on the estates. New
senior positions on the tea and coffee have been successfully filled. In
November the Company instituted a new remuneratiion structure for all its tea
pluckers and these enhanced terms have resulted in more pluckers coming to work
on the estates.
Financial Results
Turnover increased by 22% due to the devaluation of the Zimbabwe dollar. In US$
terms the turnover was lower than last year. The improved marketing of the tea
in the second half of the year resulted in the quantity of tea sold for the full
year being only 2% less than in 1997.
Operating costs increased by 27%, which under the high inflationary environment
is satisfactory. Overheads were 47% up on 1997. This was largely due to the
increase in tea selling expenses associated with the Mombasa port, and the
relative proportions of tea and coffee sold compared with last year.
The Company has recorded all exchange gains on its US dollar receivables as a
reduction of the financing charge. The Company has a policy of financing its
US$ denominated export receivables with local Zimbabwe dollar borrowings and
therefore view any foreign exchange translation gains or losses as a type of
financing charge. The net finance charge showed an income of Zw$15,132.
The profit before tax is 12% up on last year resulting from an increase earnings
per share from 29 to 34 cents per share.
Dividends
The dividends for 1998 total 17 cents per share of which 6 cents have already
been paid. The remaining 11 cents will be paid to shareholders on the register
on 16th April 1999. Cheques will be posted on or about 7th May 1999.
Future Prospects
Tea crops are in line with expectations andn will be higher in the first 6
months of 1999 than the corresponding period last year. Tea prices have
remained at historically very low levels and we do not anticipate much change to
this. Local cost inflation is moving at a faster rate than any compensating
devaluation of the Zimbabwe dollar and therefore our margins are being squeezed.
The coffee crop is looking healthy, and we anticipate better yields than those
achieved last year. New coffee plantings and irrigation development should
achieve higher yields per hectare over the next 5 years.
Over the last year the Company has invested in new capital expenditure on the
Estate of Zw$31,974 million.
This has been spend on increased factory capacity, planting new areas of coffee
and new irrigation schemes. We have worked to create a productive asset that is
insulated against droughts and which, with the relatively higher tea and coffee
yields per hectare, should be profitable, even in periods of very depressed
commodity prices.
NOTE: THE ABOVE STATEMENT IS NOT IN RESPECT OF THE GROUP RESULTS OF PLANTATION
& GENERAL INVESTMENTS PLC
END
FR NFFLFESXNEFN
Pgi Group (LSE:PGI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Pgi Group (LSE:PGI)
Historical Stock Chart
From Jul 2023 to Jul 2024
