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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Pgi Grp | LSE:PGI | London | Ordinary Share | GB0006911696 | ORD 25P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 8.75 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:8045U Plantation & General Investmnts.PLC 19 April 2002 Plantation & General Investments plc Preliminary announcement of results for the year ended 31 December 2001 Extract from the Chairman's Statement The group profit before tax for the year ended 31 December 2001 was £1,060,000, compared with £391,000 in 2000. Almost all this improvement was due to an increase in the hyper-inflation adjustment, itself caused by higher inflation in Zimbabwe. Within the overall result, there was an encouraging increase in plantation profits, despite poor prices for tea, coffee and roses. On their own, lower prices depressed 2001 profits by about £1.6 million compared with what was achieved in 2000. But these effects were offset by (a) improved yields, better quality and cost efficiencies, and (b) exchange rate movement in Zimbabwe running ahead of local cost inflation. The efficiencies are within our control, the real exchange rates are not. The Malawi estates again made the largest contribution to group profits. For several years we have directed our investment and effort to enhancing their yield and quality, which has helped us to withstand lower prices and a strengthening of the Malawi exchange rate during the year. Our Zimbabwe estate, Eastern Highlands, benefited significantly from the movement in the effective exchange rate. In addition, interest costs were lower following the refinancing of borrowings in September 2000, and we also benefited from preferential exporter's rates. Poor economic conditions, social unrest and uncertainty in Zimbabwe make the management of the estate difficult. Negotiations about the listing of parts of the estate under the Zimbabwe Government's land reform programme are still continuing. Khal-Amazi, the group's Zambian rose grower, developed a further 5 hectares of roses during the year. This brings the total area of greenhouses to 15 hectares, and production in high season is now 1 million stems per week. Profits were held back by poor auction prices and the weakness of the Euro for much of the year. In the trading division, losses were due to the start-up costs of our internet-based tea auction, eteatrade. Weekly auctions on the site started in October, and the system has worked well. We are now concentrating on enrolling more producers and buyers, which is the only way to increase turnover and put the company into profit. Among our other businesses, Jacobs Young & Westbury, the supplier of garden furniture, faced difficult market conditions, which reduced its margins. However, the current season has started well, so we expect profits to increase this year. The group's wheelbarrow manufacturer, Chillington Manufacturing, moved to a new site during the last quarter of 2001. The move involved extra costs, but the new factory will improve both production and distribution. The old site has been sold for residential development, subject to planning consents. The programme of disposals continued during the year: a small Indonesian rubber estate, the group's remaining assets in Brazil, and a surplus industrial property in the UK. Total proceeds were £690,000. During the year we restructured the group's borrowings through a rights issue of convertible unsecured loan stock. The proceeds were used to repay the preference shares and loan stock, which were both due for redemption at the end of 2001. About half the group's net debt is now medium term, and not due for repayment until the end of 2006. The current year will again be challenging. Tea prices are soft, and inflation in our operating countries remains high, without (as yet) compensating devaluations. We are also continuing to support the start-up of eteatrade. Management will therefore concentrate on making further improvements in the physical performance of our plantations, to ensure that we benefit when economic conditions improve. The rewards then will be substantial: we estimate that if our current yields and productivity could be combined with the crop prices we obtained in 1997, when I joined the Board, profits would be boosted by some £4 million. Rupert Pennant-Rea 19 April 2002 Review of Activities Tropical agriculture The Group's principal division grows tea, coffee and roses in the Southern African states of Malawi, Zimbabwe and Zambia and tea 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. Despite another deterioration in market conditions, the overall operating profit for the division increased by 22 per cent to £1,753,000. Tea accounted for 80 per cent of the division's turnover. Total production for the year was 16,114 tonnes from a mature area of 6,658 hectares. The yield per hectare rose by 4 per cent year on year. Average tea prices fell by about 10 per cent compared to 2000 and are currently at the low end of the ten year range. As a result of recent factory investment, the proportion of tea which was sold as prime grades increased again during the year and this helped compensate for the market trend in prices. Rose production in Zambia totalled 32.2 million stems and contributed 11 per cent of the division's turnover. During the year a further 5 hectares of new computer controlled greenhouses were constructed and planted bringing the total to 15 hectares. The arabica coffee crop for the year was 651 tonnes, a fall of 206 tonnes on the previous year due to a further reduction in acreage. This, combined with a further fall in coffee prices, reduced the receipts from coffee by about 38 per cent to £460,000. The removal of dryland coffee plantings will in future confine our coffee production to Zimbabwe. In Malawi the coffee area is being converted to macadamia nuts. The total area under these trees is now 595 hectares and they will come into production progressively over the next ten years. The production from the Indonesian rubber estates rose by 38 per cent to 1,899 tonnes as more of the plantation came into production. Rubber prices fell to the lowest level for several decades and the crop contributed 4 per cent of the plantations' turnover. A significant factor affecting the profitability of plantations is labour use and, by improved practices, we have increased productivity on all but one plantation. Over the last two years, labour productivity has increased by 18 per cent. Trading The new venture, eteatrade, began regular auctions in October 2001. The objective of the service is to provide producers with a wider market for their teas and packers with a more efficient way of sourcing the teas they need. Both the auction system and the fulfilment processes have worked reliably since the launch. The international tea trade is now well aware of the service and in the coming year, the task will be to overcome resistance to change and to encourage greater use of it. Jacobs Young & Westbury, the UK importer of furniture and leisure products, mainly for the garden, suffered a reduction in operating profits due to retailer price pressure. This has been addressed and improvements to trading terms are expected to result in a much better outcome in 2002. Manufacturing Chillington Manufacturing, the UK's largest wheelbarrow maker, embarked on two major projects, a move to a more suitable site and the development of a new product. As a result, despite increased sales, profits were reduced. The new site is now operational and will permit a much improved service to retailers with more efficient production and a better stockholding. The new product has already contributed significantly to sales in the first quarter of 2002. At Nicholl & Wood, the previous year's work to restore the business to profitability resulted in a small profit and further progress is expected in the current year. Investment Of the reported £3.2 million capital expenditure, the four major projects accounted for £2.3 million. These were the expansion of Khal-Amazi in Zambia, the first phase of the Bloomfield tea factory improvement in Malawi and the developments at Chillington Manufacturing and eteatrade. Outlook The market prices for each of the commodities we produce have recently been at long term lows. This is exacerbated by high cost inflation and, at least in the early months of the year, inadequate devaluation of local currencies. In this environment, we will manage cash flow carefully, constrain capital expenditure and continue to concentrate on improving the performance of our operations by developing better management processes. Richard Clothier Chief Executive 19 April 2002 Enquiries: Richard Clothier, Chief Executive Geoff Moores, Finance Director 020 7246 0207 Consolidated profit & loss account for the year ended 31 December 2001 Continuing Operations 2001 2000 Notes £000 £000 Turnover 42,644 40,820 -------- -------- Cost of sales (31,894) (31,074) -------- -------- Gross profit 10,750 9,746 Operating expenses (9,922) (8,607) Exceptional item: Impairment of fixed assets (200) - -------- -------- Operating profit 628 1,139 Share of result of associated undertaking - (15) Profit/(loss) on disposal or closure of 480 (28) operations Profit on disposal of investments 17 34 -------- -------- Profit before interest 1,125 1,130 Interest (2,297) (2,339) Monetary working capital hyper-inflation 2,232 1,600 adjustment -------- -------- Profit before taxation 1,060 391 Taxation 1 (127) (309) -------- -------- Profit after taxation 933 82 Minority interests 13 (11) -------- -------- Profit for the year 946 71 Dividends (non-equity) (81) (171) -------- -------- Amount transferred to/(from) reserves 865 (100) ==== ==== Pence Pence Profit/(loss) per ordinary share Basic 1.7 (0.2) Dividends per ordinary share 2 - - Balance sheets at 31 December 2001 Group Company 2001 2000 2001 2000 Fixed assets £000 £000 £000 £000 Intangible assets 435 490 - - Tangible assets 29,754 28,092 20 36 Investments 75 126 35,938 35,532 --------- -------- -------- -------- 30,264 28,708 35,958 35,568 --------- -------- -------- -------- Current assets Stocks 8,050 7,526 - - Debtors 5,012 6,623 38 225 Cash at bank and in hand 507 843 1,150 634 --------- -------- -------- -------- 13,569 14,992 1,188 859 --------- -------- -------- -------- Creditors: amounts falling due within one year Debt finance (including amounts relating to convertible (7,503) (11,852) (1,908) (6,535) debt in 2000) Other (8,543) (8,631) (1,441) (1,436) --------- -------- -------- -------- (16,046) (20,483) (3,349) (7,971) --------- -------- -------- -------- Net current liabilities (2,477) (5,491) (2,161) (7,112) --------- -------- -------- -------- Total assets less current liabilities 27,787 23,217 33,797 28,456 --------- -------- -------- -------- Creditors: amounts falling due after more than one year Debt finance (including amounts relating to (9,116) (1,262) (7,801) (63) convertible debt in 2001) Other (289) (867) (241) (249) --------- -------- --------- -------- (9,405) (2,129) (8,042) (312) Provisions for liabilities and charges (15) (15) - - --------- -------- --------- -------- Net assets 18,367 21,073 25,755 28,144 --------- -------- --------- -------- Capital and reserves Called up share capital 12,946 14,751 12,946 14,751 Share premium account 11,348 11,375 11,348 11,375 Capital redemption reserve 250 250 250 250 Revaluation reserves 2,527 2,402 - - Profit and loss account (10,397) (9,467) 1,211 1,768 --------- -------- --------- -------- Shareholders' funds Equity 16,674 17,506 25,755 26,339 Non-equity - 1,805 - 1,805 --------- -------- --------- -------- 16,674 19,311 25,755 28,144 Minority interest --------- -------- --------- -------- Equity 746 798 - - Non-equity 947 964 - - --------- -------- --------- -------- 1,693 1,762 - - --------- -------- --------- -------- 18,367 21,073 25,755 28,144 Consolidated cash flow statement for the year ended 31 December 2001 2001 2000 £000 £000 Cash flow from operating activities 3,162 4,745 Returns on investments and servicing of finance (2,527) (2,525) Taxation - UK corporation tax paid - (44) Taxation - Overseas tax paid (375) (272) Capital expenditure and financial investment (2,679) (56) Disposals 750 464 -------- -------- Cash flow before financing (1,669) 2,312 Financing -------- -------- Issue of new convertible loan stock (net of expenses) 7,755 - Redemption of preference shares (1,805) - Redemption of convertible loan stock (4,677) - Loan (net of repayments) 568 895 Capital elements of finance lease rentals payable (309) (257) -------- -------- Total financing 1,532 638 -------- -------- (Decrease)/increase in cash in the year (137) 2,950 -------- -------- Reconciliation of net cash flow to movement in net debt (Decrease)/increase in cash in the year (137) 2,950 Cash inflow from increase in debt (3,646) (895) Cash outflow from reduction in finance lease liabilities 309 257 -------- -------- Change in net debt resulting from cash flows (3,474) 2,312 New finance leases (313) (320) Exchange translation differences (54) 875 -------- -------- Movement in net debt in the year (3,841) 2,867 Net debt 1 January (12,271) (15,138) -------- -------- Net debt 31 December (16,112) (12,271) -------- -------- Reconciliation of operating profit to operating cash flow Operating profit 628 1,139 Depreciation 1,515 1,153 Amortisation of goodwill 55 55 Impairment of fixed assets 200 - Working capital (increase)/decrease Stocks (524) 1,109 Debtors 1,611 1,475 Creditors (322) 363 Translation difference on working capital (66) (174) Working capital derived from disposal of 282 (142) subsidiary undertakings and divisions Disposal of tangible fixed assets (217) (233) -------- -------- 3,162 4,745 ==== ==== Statement of total recognised gains & losses for the year ended 31 December 2001 2001 2000 £000 £000 Profit for the year 946 71 Monetary working capital hyper-inflation adjustment (2,232) (1,600) Revaluation (deficit)/surplus net of minority interests (526) 5,754 Exchange differences 1,061 (4,413) -------- -------- Total recognised losses for the year (751) (188) -------- -------- Statement of movement in shareholders' funds for the year ended 31 December 2001 2001 2000 £000 £000 Recognised losses for the year (751) (188) Dividends (81) (171) Additional costs: purchase of own shares in prior years - (44) Redemption of preference shares (1,805) - -------- -------- Net reduction in shareholders' funds (2,637) (403) Shareholders' funds at beginning of year 19,311 19,714 -------- -------- Shareholders' funds at the end of year 16,674 19,311 ===== ===== Segmental analysis - Profit before taxation 2001 2000 £000 £000 By activity: restated Tropical agriculture 1,753 1,440 Trading (544) 264 Manufacturing 426 81 Central costs net of sundry income (807) (661) Interest (net of monetary working capital hyper-inflation adjustment) (65) (739) Profit on disposal of operations and investments 497 6 Impairment of fixed assets (200) - -------- -------- 1,060 391 ===== ===== NOTES 1. Taxation 2001 2000 £000 £000 UK corporation tax: Current tax on income for the period 258 406 Double taxation relief (258) (406) -------- -------- - - -------- -------- Foreign tax: Current tax on income for the period 109 308 Adjustment in respect of prior periods 18 - Group's share of associated company's taxation - 1 -------- -------- 127 309 -------- -------- Tax on profit on ordinary activities 127 309 ===== ===== 2. Dividend No final dividend is proposed in 2001 (2000: nil). 3. Accounts The preliminary announcement has been prepared on the basis of the accounting policies as set out in the most recently published set of annual accounts. The financial information set out above does not constitute the company's statutory accounts for the years ended 31 December 2001 or 2000 but is derived from those accounts. Statutory accounts for 2000 have been delivered to the Registrar of Companies, whereas those for 2001 which have been agreed with Company's Auditors will be delivered following the Company's Annual General Meeting. The Auditors have reported on the 2000 accounts; their report was qualified for the same matter as mentioned below, but did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. The report of the auditors on the 2001 accounts will be qualified. Plantations and related assets have been included in the balance sheet at valuations determined by the directors and not by qualified valuers as the directors believe reliable full valuations as required by FRS15 cannot be obtained. Thus there were no satisfactory audit procedures which could be adopted in order that the auditors could confirm that these properties were valued at their depreciated replacement cost at the balance sheet date and the audit report will be qualified, in respect of this point alone, accordingly. This information is provided by RNS The company news service from the London Stock Exchange
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