RNS No 0340c
PLANTATION & GENERAL INVESTMENTS PLC
22 April 1999
PLANTATION & GENERAL INVESTMENTS PLC
Final results for the year to 31st December 1998
Plantation & General Investments Plc, which is focusing its
activities on Tropical Agriculture, reports a recovery in
profit before tax for the year to 31st December 1998 despite
the impact of low tea prices.
* Profit before tax #1,599,000 (1997: loss #1,729,000)
* Increased tax charges and tax provisions restricted
earnings per ordinary share to a profit of 0.2p per
share (1997 : loss 8.0p)
* Net debt greatly reduced from #14,529,000 to #5,931,000
through ongoing disposal programme and successful
capital raising
* Asset revaluation this year resulting in a surplus #5.8
million following substantial exchange losses as a
result of currency devaluations in Indonesia, Zimbabwe
and Malawi in 1997 and 1998
* Good progress on the disposal of assets and
restructuring programme
* Acquisition of Aberfoyle Estates in Zimbabwe in line
with our active strategy of expanding Group's
agricultural investments in Africa
Rupert Pennant-Rea, Chairman, said:
"We have produced a reasonable performance against a
background of weak commodity prices. We have made progress
in focusing the group, strengthening the balance sheet and
improving the efficiency of our businesses."
22nd April, 1999
Enquiries:
Plantation & General 0171 457 2020 (today)
Richard Clothier, Group Chief Executive 0171 236 6135 (thereafter)
Geoffrey Moores, Finance Director
College Hill 0171 457 2020
Mark Garraway
Corinna Dorward
Extract from the Chairman's Statement
I am pleased to reported better results for 1998 compared
with 1997. This is against a background of difficult
conditions in some of the group's markets and poor commodity
prices for most of the year.
For the year, the group's profit before tax amounted to
#1,599,000 (1997 - loss #1,729,000). The geographical
distribution of profits, coupled with a tax provision for an
asset disposal in 1995, resulted in a high tax charge. This
restricted earnings per share to a profit of 0.2 pence (1997
- loss 8.0 pence). A review of the various operations of
the group is on pages 4 and 5.
In my first report to you last year, I outlined your Board's
strategy to restructure the group by selling non-core
activities and expanding in Africa, where we think
acquisitions offer good value. We have made progress on
both fronts.
We sold the group's businesses in Thailand in May 1998, and
in the second half of the year sold two divisions of P&G
Industries in the UK. In Brazil, we combined our separate
factories, and sold the site in Sao Paulo in August 1998.
In total, these sales (and the elimination of associated
borrowings) have reduced group debt by approximately
#3,000,000.
Just after the year-end, we announced that we had bought the
Aberfoyle Estates in Zimbabwe and sold Balangai, a loss
making tea estate in Tanzania. The Aberfoyle tea and coffee
estate is right next door to our Eastern Highlands Estate,
providing the opportunity to achieve efficiencies in the
running of the two plantations.
Last year we also took the opportunity to restructure the
group's finances via a Placing and Open Offer, which raised
new equity of approximately #10 million. The company is
thus well placed to make further acquisitions in Africa, and
your Board is considering several opportunities.
Currency devaluation was a significant feature of 1998.
Against sterling, the exchange rates of Indonesia, Zimbabwe
and Malawi devalued by between 32 and 58 per cent. Since we
believe that at least part of these declines will prove
permanent, we concluded that the value of some group assets,
when translated into sterling at the end of the year, did
not reflect their underlying values, particularly as the
revenues they produce are denominated by US dollars. We
therefore sought a professional revaluation of the assets in
Malawi and Zimbabwe at 31 December 1998, and the new figures
are incorporated in the accounts. The revaluation produced
a surplus of #5,800,000 which as been credited direct to the
group reserves. This only partly offsets exchange losses
which amount to #7.9 million in 1997 and #6.6 million in
1998.
The combination of disposals and new equity transformed the
balance sheet. The ratio of net debt to equity was close to
100 per cent at the end of 1997, but then fell to roughly 25
per cent by 31 December 1998.
Although much has been done, there is much more to do to
secure the strategy we are following. Several non-core
assets are still to be sold. Weak commodity prices have
continued into 1999, and these are holding back profits.
Against this background, the Board has decided not to
recommend an ordinary dividend for the year ended 31
December 1998. However, we remain convinced that our
strategy is on course to bring value to shareholders,
particularly as commodity prices improve.
Rupert Pennant-Rea
22 April, 1999
Review of Activities
Tropical agriculture
This division grows tea, coffee and sisal in the Southern
African states of Malawi, Zimbabwe and Tanzania and rubber
in Indonesia. Overseas Farmers Group is a trading unit
based in London which markets the produce of the group's
agricultural operations and provides support services.
Profit before interest and tax for the division declined to
#3,062,000 from #3,348,000 in 1997.
The main product grown is tea. Total production for the
year was 13,208 tonnes from a mature area of 6,824 hectares.
The yield per hectare fell by 8 per cent from 1997, a result
of a strike in Zimbabwe during the peak season in the first
quarter and a late start to the 1998/99 season in the fourth
quarter. Tea prices weakened considerably after the first
quarter and ended the year as low as they have been during
the last ten years. The average tea price for the year was
35 per cent below last year and since the year end prices
have remained at the low end of the long term range.
Investment to improve our efficiency and tea quality
continued with improvements to our Sayama and Nchima
factories in Malawi and Zindi in Zimbabwe, further
replanting and improved irrigation.
The arabica coffee crop for the year of 956 tonnes was also
a reduction on the 1997 production of 1,062 tonnes. The
yield per hectare in Malawi improved but in Zimbabwe
increased replanting contributed to a temporary reduction in
yields. The greater attention being given to the appearance
of the coffee from improved sorting resulted in good price
premiums being achieved.
The rubber plantations in Indonesia yielded 1,198 tonnes, a
70 per cent increase as the maturing trees come into
production. Rubber prices were 22 per cent below last year.
The total sisal crop of 2,490 tonnes, all of which is grown
in Tanzania, was an increase on 1997 but remains a
relatively poor crop as a result of the exceptionally wet
weather which affected both years.
Since the year end, the disposal of the uneconomic Balangai
tea estate in Tanzania and the acquisition of the Aberfoyle
estate (renamed Honde Valley Plantations since acquisition)
in Zimbabwe represents a significant improvement in the
portfolio. Balangai was too small to achieve low unit costs
and too remote to give it the necessary attention. Honde
Valley Plantations on the other hand adjoins Eastern
Highlands Plantations in the Honde Valley and the two
together make up 2,151 hectares of tea and coffee. This
offers great opportunity for increased efficiency though
better management and through investment to take advantage
of scale, keeping unit costs relatively low.
Trading and manufacturing
This section, as a result of the disposal of loss-making
operations, achieved a profit before interest and tax of
#1,280,000 compared with #702,000 in 1997.
Jacobs Young & Westbury are UK importers of furniture and
leisure products, mainly hardwood garden furniture. During
the year the company has increased its product range and
increased its number of customers with the result that sales
have increased by 10 per cent. A new system for
distribution has been established and prospects for further
growth in 1999 are good.
The two Brazilian had tool manufactures, Acotupy and Tarza
have been merged onto one site at Raul Soares in the state
of Minas Gerias and the proceeds of the disposal of surplus
property in Sao Paulo has substantially reduced debt. The
business, again made an operating loss in 1998 but, as a
result of the reorganisation, the operation is trading
profitably in 1999.
Chillington Manufacturing, the UK's largest manufacturer of
wheelbarrows, has been for sale but the bids received have
not reflected the potential of the business and new
management has been installed to improve the performance.
Sales during 1998 declined by 3 per cent.
Nicholl & Wood, the producer of steel shelving for the DIY
market under the Zamba brand, has continued to suffer from
the loss of its export business into Europe, a result of the
relative strength of sterling. Other manufacturing
operations include G E Adams & Co and Greengate Holdings,
which are currently the subject of negotiations for possible
disposal, and WM Chalke and Golden Arrow Marine which were
sold during the year.
Richard J. Clothier
Group Chief Executive
22nd April, 1999
Consolidated Profit & Loss Account
for the year ended 31 December 1998
CONTINUING OPERATIONS
1998 1997
#000 #000
Turnover 42,830 51,026
Cost of sales (29,107) (36,679)
Gross profit 13,723 14,347
Operating expenses (9,945) (10,886)
Operating profit 3,778 3,461
Share of results of associated 40 (236)
undertakings
Profit/(loss) on disposal or closure 70 (17)
of operations
Profit on disposal of investment in - 240
associated undertakings
Provision for diminution in value of (100) (2,617)
assets to be disposed of
Profit before interest 3,788 831
Interest (2,189) (2,560)
Profit/(loss) before taxation 1,599 (1,729)
Taxation (935) (630)
Profit/(loss) after taxation 664 (2,359)
Minority interests (402) (132)
Profit/(loss) for the year 262 (2,491)
Dividends (non-equity) (174) (174)
Amount transferred to/(from) reserves 88 (2,665)
Pence Pence
Profit/(loss) per ordinary share
Basic 0.2 (8.0)
Dividends per ordinary share - -
Balance Sheets
at 31 December 1998
GROUP COMPANY
1998 1997 1998 1997
#000 #000 #000 #000
Fixed assets
Tangible assets 29,189 29,775 68 38
Investments 466 558 28,920 29,340
29,655 30,333 28,988 29,378
Current assets
Stocks 7,846 9,573 - -
Debtors 7,197 8,990 767 896
Cash at bank and in 3,734 794 6,257 1
hand
18,777 19,357 7,024 897
Creditors: amounts
falling due within one
year
Debt finance (including(3,969) (7,901) (2,009) (3,284)
amounts relating to
convertible debt)
Other (9,004) (13,543) (1,223) (1,737)
(12,973) (21,444) (3,232) (5,021)
Net current 5,804 (2,087) 3,792 (4,124)
assets/(liabilities)
Total assets less 35,459 28,246 32,780 25,254
current liabilities
Creditors: amounts
falling due after
more than one year
Debt finance
(including amounts (5,696) (7,422) (4,776) (6,785)
relating to
convertible debt)
Other (391) (433) (167) (171)
(6,087) (7,855) (4,943) (6,956)
Provisions for (140) (256) - -
liabilities and
charges
Net assets 29,232 20,135 27,837 18,298
Capital and reserves
Called up share 14,776 9,855 14,776 9,855
capital
Share premium account 11,375 6,290 11,375 6,290
Capital redemption 225 225 225 225
reserve
Revaluation reserves 3,832 3,042 - -
Other reserves - 5,681 - -
Profit and loss (4,019) (8,252) 1,461 1,928
account
Shareholders' funds
Equity 24,359 15,011 26,007 16,468
Non-equity 1,830 1,830 1,830 1,830
26,189 16,841 27,837 18,298
Minority interest
Equity 2,390 2,430 - -
Non-equity 653 864 - -
3,043 3,294 - -
29,232 20,135 27,837 18,298
Consolidated Cash Flow Statement
for the year ended 31 December 1998
1998 1997
#'000 #'000
Cash flow from operating 3,935 4,841
activities
Returns on investments and (2,669) (2,916)
servicing finance
Taxation - UK corporation tax paid (67) (71)
Overseas tax paid (464) (595)
Capital expenditure and financial (1,646) (2,328)
investment
Acquisitions and disposals 1,897 1,607
Equity dividends paid - (640)
Cash flow before use of liquid 986 (102)
resources and financing
Management of liquid resources - 688
Financing - Issue of shares 10,006 43
Loan repayments (2,787) (1,082)
Capital elements of finance lease (257) (153)
rentals payable
(Decrease)/Increase in other (2,546) 264
financing
Total financing 4,416 (928)
Increase/(decrease) in cash in the 5,402 (342)
year
Reconciliation of net cash flow to
movement in net debt
Increase/(decrease) in cash in the 5,402 (342)
year
Cash outflow from reduction in net 2,787 1,082
debt
Cash outflow from reduction in 257 153
finance lease liabilities
Cash inflow from reduction in - (688)
liquid resources
Change in net debt resulting from 8,446 205
cash flows
New finance leases (155) (252)
Translation differences 307 1,336
Movement in net debt in the year 8,598 1,289
Net debt 1 January (14,529) (15,818)
Net debt 31 December (5,931) (14,529)
Statement of Total Recognised Gains & Losses
for the year ended 31 December 1998
1998 1998
#000 #000
Profit/(loss) for the year 262 (2,491)
Unrealised surplus/(deficit) on
revaluation of properties less 5,789 (2,281)
minority interest of #593,000
Exchange differences (6,608) (7,937)
Share of prior year adjustment of - (115)
associated company
Total recognised losses for the year (557) (12,824)
Statement of Movement in Shareholders' Funds
for the year ended 31 December 1998
1998 1997
#000 #000
Recognised losses for the year (557) (12,824)
Dividends (174) (174)
Discount less goodwill on 73 896
acquisitions/disposals
New shares issued 10,006 43
Net increase/(reduction) in 9,348 (12,059)
shareholders' funds
Shareholders' funds at beginning of 16,841 28,900
year
Shareholders' funds at the end of year 26,189 16,841
Segmental analysis Profit/(loss) before taxation
1997
1998 (Restated)
#'000 #'000
By activity:
Continuing:
Tropical Agriculture 3,062 3,348
Trading 502 546
Manufacturing 778 156
Central costs net of sundry income (454) (281)
Interest (2,189) (2,560)
Exceptional items - (331)
Provision for diminution in value of (100) (2,617)
assets to be disposed of
1,599 (1,739)
Discontinued:
Property and investment - (19)
Langdons Foods plc - 29
- 10
1,599 (1,729)
Foreign currency
The foreign exchange rates used in translating the accounts
of the principal oversea subsidiary undertakings were as
follows (local currency to #1):
Country Currency 1998 1997
Brazil Cruzeiro real 2.01 1.84
Indonesia Rupiah 13,226.80 9,041.21
Malawi Kwacha 75.05 31.68
Tanzania Tanzanian 1,124.82 1,017.81
shilling
Uganda Ugandan 2,264.37 1,867.47
shilling
Zimbabwe Zimbabwe 61.92 30.36
dollar
NOTES
1. Taxation
1998 1997
#000 #000
Advance corporation tax written off 24 51
Deferred taxation (23) (27)
Tax on franked investment income - 2
Oversea taxation 876 696
Prior year adjustment 56 (80)
Group's share of associated 2 (12)
companies taxation
935 630
2. Dividend
No final ordinary dividend is proposed for payment in
1998 (1997: nil).
Non Statutory Accounts
The financial information set out above does not
constitute the company's statutory accounts for the years
ended 31 December 1998 or 1997 but is derived from those
accounts. Statutory accounts for 1997 have been
delivered to the Registrar of Companies, whereas those
for 1998 which have been agreed with Company's Auditors,
will be delivered following the Company's Annual General
Meeting. The Auditors have reported on the 1997
accounts; their report was unqualified and did not
contain a statement under Section 237(2) or (3) of the
Companies Act 1985.
END
FR SEMFUFUUUFEL
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
