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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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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 |
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0 | 0 | N/A | 0 |
RNS Number:8711X Plantation & General Investmnts.PLC 21 April 2004 Plantation & General Investments plc Preliminary announcement of results for the year ended 31 December 2003 Extract from the Chairman's Statement The Group profit before taxation for the year ended 31 December 2003 improved to #364,000, after a loss of #187,000 in 2002. Operating profits, at just over #2 million, were nearly double the previous year's, despite the inclusion of a non recurring charge of #278,000 incurred in appraising a major potential acquisition; and also an increased charge of #210,000 for additional contributions to the Group pension scheme. Interest costs of #1.6m were 25% lower than they were in 2002. The charge for corporation tax increased in line with the higher proportion of oversea profits and there was a further charge for deferred taxation. Group turnover was reduced considerably due to new terms of trading at Jacobs, Young & Westbury, which I have mentioned in previous statements. The Group's net borrowings were reduced by #458,000, to just under #12 million. Approximately #300,000 of this reduction was due to exchange-rate adjustments on foreign currency borrowings. During 2003 the US dollar again depreciated against sterling, and this was coupled with further weakening of the local currencies in countries where the Group operates, particularly Zimbabwe. Taken together, these have reduced the Group's total net assets by #2.8 million. Profits from plantations were particularly good in 2003, and justified the investment we have made over the past five years. They were achieved despite lower prices for tea and coffee. Our Zimbabwean estate, Eastern Highlands, had another difficult year, although its results benefited from the market rate of exchange falling faster than the local rate of inflation. In January 2004 the Zimbabwe Government introduced an auction system for exchanging foreign currency. This produced a rate significantly stronger than the market rate achieved in December 2003. If this exchange rate persists for long, and combined with other new foreign exchange regulations, it will eliminate Eastern Highlands' profits. Khal-Amazi, the Zambian rose farm, increased its production, but its net margin was eroded by an exchange loss on its Euro denominated borrowings. It is currently expanding its greenhouses by 7 hectares, which will bring the total area of cultivated roses to 22 hectares. This will be the Group's largest capital project during 2004, and will increase production in a full year to around 70 million stems. The Group's wheelbarrow manufacturer, Chillington, had another poor year. The disruptive effect of moving to its new site was much greater than envisaged. These difficulties were coupled with the loss of a major customer and steel price increases at the beginning of the year, which cut margins. Significant management changes were made during the year, and the results for the first few months of 2004 are in line with budget. The Group is assessing the transition to International Accounting Standards, which are currently scheduled to take effect from 1 January 2005. Although detailed modifications and disclosures may be needed in several areas, the main impact on the Group accounts is likely to be the incorporation of the pension deficit. Looking ahead, this year's results will again be heavily influenced by weather, commodity prices, exchange rates and inflation. Although tea production in Malawi got off to a slow start, due to late rains, it is now on budget and prices are a little ahead of last year. Meanwhile, margins in Zimbabwe are being materially reduced by the introduction of the new exchange controls and inflation, which is still running at over 500% year on year. Derek Netherton will be leaving the Board at the AGM, and I thank him for his sharp eye and clear mind. Rupert Pennant-Rea 21 April 2004 Review of activities Tropical agriculture The Group's principal division grows tea, roses, macadamia nuts and coffee in the Southern African states of Malawi, Zambia and Zimbabwe, and rubber and tea in Indonesia. Overseas Farmers Group in London markets the produce of the Group's agricultural operations and provides support services. An increasing proportion of tea produced has been sold directly and on forward contracts to leading brands. The overall operating profit for the division increased by 58 per cent to #4,013,000. Tea accounted for 72 per cent of the division's turnover. Total production for the year was 18,871 tonnes of which 1,592 tonnes is made from the purchase of green leaf from smallholders. This is a policy we are actively promoting to support the local community in both Malawi and Zimbabwe. This is the 4th year in succession that yield per hectare has increased and the total tea production through our factories, including the smallholder tea, has increased over this period by 35 per cent. Average market prices for tea were 7 per cent lower than 2002 and this is at the low end of the ten-year range. This was partly offset by improvements in tea quality achieved in Malawi. Rose production in Zambia increased by 9 per cent and shipments exceeded 50 million stems. Prices improved with the strengthening Euro and the contribution to the division's turnover increased to 17 per cent. The production from the Indonesian rubber estates rose by 1 per cent to 2,386 tonnes as the plantations continued to mature. Rubber prices, having fallen to the lowest level for several decades, increased throughout the year and the average price achieved represented a 40 per cent increase over 2002. The crop contributed 7 per cent of this division's turnover. Macadamia nut production in Malawi will rise steadily over the next 10 years as trees come to maturity, the total delivered was 322 tonnes of nut in shell. The arabica coffee crop, now only grown in Zimbabwe, increased to 320 tonnes. The largest cost category of plantations is labour use and by improved practices and increasing mechanisation, we have increased productivity throughout the group. Over the last three years, yield per labour unit has increased by 25 per cent. Trading Jacobs Young & Westbury, the importer of garden furniture and leisure products, was substantially affected by the change in terms of trading reported last year. The major customer, Homebase, has unilaterally moved us to an agency basis and this has substantially reduced profits in 2003. However, this also significantly reduced capital employed. Work to develop new business is under way and the company has begun to supply other major UK retailers. Manufacturing Chillington Manufacturing, the UK's largest wheelbarrow maker, moved the operation to a new site in 2002 to allow greater operating efficiency. Complications which arose in the process of the move resulted in severe losses which continued in 2003. The manufacturing process and the management and control systems have been completely overhauled and modernised. New senior management has been recruited and the business is now operating efficiently. The loss of a major customer last year and recent steel price increases will require some time to overcome, but the business is expected to show substantial improvements in 2004. Investment The major project of 2003 has been the re-development of the Bloomfield tea factory in Malawi. Total capital expenditure in the year was #1.3 million (previous year #0.9 million) the majority of which was replacement of machinery and vehicles on the plantations. Outlook Management in Zimbabwe continues to be severely hampered by the political instability and periodic deficiencies in supplies. The run up to the forthcoming elections could cause further disruption, but the major issue at the start of the year is the new exchange control regulation and local inflation. Tea prices have started the year better than last year and the price of rubber is holding up well. Macadamia nut and coffee prices are also up. Roses have started the year very much as the previous year. While the exchange rate is likely to render Eastern Highlands Plantations unprofitable this year, there should be a significant recovery at Chillington. Richard Clothier Chief Executive 21 April 2004 Consolidated profit & loss account for the year ended 31 December 2003 CONTINUING OPERATIONS 2003 2002 Notes #000 #000 Turnover 22,913 47,219 -------- -------- Cost of sales (14,242) (37,211) -------- -------- Gross profit 8,671 10,008 Operating expenses (6,651) (8,926) -------- -------- Operating profit 2,020 1,082 Profit on disposal or closure of operations - 199 Profit on disposal of properties - 774 Profit on disposal of investments - 7 -------- -------- Profit before interest 2,020 2,062 Interest (1,591) (2,110) -------- -------- Profit/(loss) after interest 429 (48) Monetary working capital hyper-inflation (65) (139) adjustment -------- -------- Profit/(loss) before taxation 364 (187) Taxation 1 (680) (265) -------- -------- Loss after taxation (316) (452) Minority interests 44 145 -------- -------- Loss for the year and amount transferred from reserves (272) (307) ==== ==== Pence Pence Loss per ordinary share (Basic) (0.5) (0.6) Dividends per ordinary share 2 - - Balance sheets at 31 December 2003 Group Company 2003 2002 2003 2002 #000 #000 #000 #000 Fixed assets Intangible assets 325 380 - - Tangible assets 22,819 25,173 30 39 Investments 45 50 33,616 34,415 --------- -------- -------- -------- 23,189 25,603 33,646 34,454 --------- -------- -------- -------- Current assets Stocks 2,200 2,918 - - Debtors 1,806 2,701 44 111 Cash at bank and in hand 399 741 2,274 1,934 --------- -------- -------- -------- 4,405 6,360 2,318 2,045 --------- -------- -------- -------- Creditors: amounts falling due within one year (2,874) (2,618) (576) (484) Debt finance Other (3,866) (3,976) (1,324) (1,334) --------- -------- -------- -------- (6,740) (6,594) (1,900) (1,818) --------- -------- -------- -------- Net current (liabilities)/assets (2,335) (234) 418 227 --------- -------- -------- -------- Total assets less current liabilities 20,854 25,369 34,064 34,681 --------- -------- -------- -------- Creditors: amounts falling due after more than one year Debt finance (including amounts relating to (9,494) (10,550) (8,418) (9,069) convertible debt ) Other (346) (354) (300) (295) --------- -------- --------- -------- (9,840) (10,904) (8,718) (9,364) Provisions for liabilities and charges (147) (229) - - --------- -------- --------- -------- Net assets 10,867 14,236 25,346 25,317 Capital and reserves Called up share capital 12,948 12,948 12,948 12,948 Share premium account 11,248 11,297 11,248 11,297 Capital redemption reserve 250 250 250 250 Revaluation reserves 781 970 - - Profit and loss account (15,253) (12,496) 900 822 --------- -------- --------- -------- Shareholders' funds-Equity 9,974 12,969 25,346 25,317 Minority interest - - - Equity 286 491 - - Non-equity 607 776 - - --------- -------- --------- -------- 893 1,267 - - --------- -------- --------- -------- 10,867 14,236 25,346 25,317 Consolidated cash flow statement for the year ended 31 December 2003 2003 2002 #000 #000 Cash flow from operating activities 3,114 3,504 Returns on investments and servicing of finance (1,695) (2,172) Taxation - Oversea tax paid (39) (110) Capital expenditure and financial investment (1,219) 187 Disposals - 821 -------- -------- Cash flow before financing 161 2,230 Financing -------- -------- Issue of shares (net of expenses) - 1 Loans (net of repayments) (634) 60 Capital elements of finance lease rentals payable (138) (219) -------- -------- Total financing (772) (158) -------- -------- (Decrease)/increase in cash in the year (611) 2,072 -------- -------- Reconciliation of net cash flow to movement in net debt (Decrease)/increase in cash in the year (611) 2,072 Cash outflow/(inflow) from increase in debt 634 (60) Cash outflow from reduction in finance lease liabilities 138 219 -------- -------- Change in net debt resulting from cash flows 161 2,231 New finance leases (13) (248) Exchange translation differences 310 1,680 Net borrowing disposed with divisions - 22 -------- -------- Movement in net debt in the year 458 3,685 Net debt 1 January (12,427) (16,112) -------- -------- Net debt 31 December (11,969) (12,427) -------- -------- Reconciliation of operating profit to operating cash flow Operating profit 2,020 1,082 Depreciation 881 1,558 Amortisation of goodwill 55 55 Working capital (increase)/decrease Stocks 718 5,132 Debtors 895 2,311 Creditors (452) (4,380) Exchange translation difference on working capital (980) (1,209) Working capital derived from disposal of - (1,004) subsidiary undertakings and divisions Disposal of tangible fixed assets (23) (41) -------- -------- 3,114 3,504 ==== ==== Statement of total recognised gains & losses for the year ended 31 December 2003 2003 2002 #000 #000 Loss for the year (272) (307) Monetary working capital hyper-inflation adjustment 65 139 Revaluation (deficit)/surplus net of minority interests (558) 2,835 Exchange differences (2,230) (6,072) -------- -------- Total recognised losses for the year (2,995) (3,405) -------- -------- Statement of movement in shareholders' funds for the year ended 31 December 2003 2003 2002 #000 #000 Recognised losses for the year (2,995) (3,405) Reversal of capital reserve - (251) Issue of new shares (net of expenses) - 1 -------- -------- Net reduction in shareholders' funds (2,995) (3,655) Shareholders' funds at beginning of year 12,969 16,624 -------- -------- Shareholders' funds at the end of year 9,974 12,969 ===== ===== Segmental analysis - profit/(loss) before taxation 2003 2002 #000 #000 By activity: Tropical agriculture 4,013 2,541 Trading 159 39 Manufacturing (968) (691) Central costs net of sundry income (1,184) (807) Interest (including monetary working capital hyper-inflation adjustment) (1,656) (2,249) Profit on disposal of operations properties and investments - 980 -------- -------- 364 (187) ===== ===== NOTES 1. Taxation 2003 2002 #000 #000 UK corporation tax: Current tax on income for the period 66 49 Double taxation relief (66) (49) -------- -------- - - -------- -------- Foreign tax: Current tax on income for the period 598 26 Adjustment in respect of prior periods - 37 Other (51) 9 -------- -------- 547 72 -------- -------- Deferred taxation: Origination and reversal of timing differences 118 211 Utilisation of tax losses - 168 Lower rates on oversea earnings (16) (33) Decrease/(increase) in discount 31 (152) Adjustment in respect of prior periods - (1) -------- -------- 133 193 -------- -------- Tax on profit on ordinary activities 680 265 ===== ===== 2. Dividend No final dividend is proposed in 2003 (2002: 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 2003 or 2002 but is derived from those accounts. Statutory accounts for 2002 have been delivered to the Registrar of Companies, whereas those for 2003 which have been agreed with Company's Auditors will be delivered following the Company's Annual General Meeting. The Auditors have reported on the 2002 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 2003 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 END FR SEDFAFSLSEEL
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