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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 |
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RNS Number:0524R
PGI Group PLC
09 September 2005
PGI Group Plc
Interim Results 2005
Chairman's statement
Group profit before tax from continuing operations for the half year to 30th
June 2005 was #1,218,000, compared with #1,186,000 in the same period last year.
Both the current and comparative figures incorporate the changes to accounting
policies brought about by the adoption of International Accounting Standards.
Details of these changes are set out at the end of this announcement.
In April 2005 we circulated details of a significant new development for the
Group - the acquisition of an 80% interest in Jensen Group, which is involved in
property investment management and development in Russia. At the same time we
welcomed to the Board Steven Wayne, who leads the Jensen operation. Subsequently
we announced that, on the retirement of Richard Clothier, Steven Wayne had been
appointed Group Chief Executive. On June 29th Charles Ryan also joined the
Board, and we welcome his extensive experience in Russia.
Since the acquisition, Jensen Group has continued to manage eight funds that
were established before its acquisition by PGI. These funds had initial capital
contributions totalling US$9.3 million and are invested mainly in properties in
St Petersburg, Jensen also has a contract to manage a 31 hectare property in
Sestroretsk, a suburb of St Petersburg, most of this is unused land, and also
includes two businesses. The contract gives Jensen an annual fee of
approximately US$400,000 for managing Sestroretsk.
Jensen is now preparing to raise a fund of around US$150 million for investment
in property, mainly in the St Petersburg area. Under the current plans, this
fund would pay an annual management fee of two per cent of its initial value to
Jensen, significantly increasing Jensen's contribution to PGI in 2006.
Alongside the acquisition of Jensen, the Group also announced a Rights Issue of
New Ordinary Shares to raise approximately #8.58 million (net of expenses). This
was concluded in June, and the funds have strengthened the Group's finances. The
Balance Sheet at 30th June 2005 shows net borrowings of #8.03 million, down from
#14.01 million at 31st December 2004. Approximately #8 million of the total
borrowings is in the form of Loan Stock convertible at 25p a share. This is due
to be converted or repaid during 2006.
Turning to Group operations, profits from the plantation businesses improved in
the half year to June, despite low rainfall and weak tea prices. However, profit
from the UK operations fell mainly as a result of selling Jacobs Young &
Westbury early in the year.
Eastern Highlands in Zimbabwe recorded the biggest improvement, following
dreadful results in 2004. Despite a decline in tea production, the results
benefited from much more favourable exchange rates, substantially improved tea
quality and a tight control of costs helped by investment in mechanical
harvesting.
The Malawi estates again made the largest contribution to Group profits,
although dry weather produced a 5% fall in the tea crop and tea prices were 7%
lower than in 2004. However, the Group benefited from an increase in the price
of Macadamia nuts.
The scope and size of the Group's Zambian operations were increased
significantly by the acquisition in December 2004 of the assets of the vegetable
and roses business of Agriflora Ltd.
Production from the new units at Khal Amazi, the Group's rose farm in Zambia,
was hampered by storm damage to 5 hectares of greenhouses in December 2004.
However, these have now been rebuilt, so production in the second half of the
year will improve. Khal Amazi is also adding the greenhouses acquired from
Agriflora, and will double its production area to 44 hectares over the next two
years.
At the beginning of 2005 the Group formed a new subsidiary, Chalimbana Fresh
Produce, to develop the assets of the vegetable business acquired from
Agriflora. Production and exports of fresh vegetables began in May 2005, and the
business is now selling to several large UK retailers. Chalimbana should become
profitable during the early part of 2006.
A good contribution was again made by the Indonesian rubber estates, with rubber
prices remaining strong. Chillington Manufacturing, on the other hand, suffered
low sales as a result of the weak demand that has affected the major DIY
retailers.
Prospects for the second half of the year in the agricultural businesses are
always difficult to predict. There is a normal seasonal reduction in crops,
which is currently being exacerbated by very dry weather in southern Africa. The
final result will also depend on tea prices, local inflation and exchange rate
movements.
Due to the consistently seasonal nature of tropical agriculture, it is
relatively easy to judge the performance of the Group at the half year; whereas
the end of the calendar year occurs just as crops start getting into full
production, so the outlook is inevitably uncertain. For this reason, the Board
will from now on consider declaring a dividend only at the half year, and has
decided to announce a dividend of 0.25p. This is the first dividend since 1996,
and reflects the improvement in the Group's financial condition and prospects.
R Pennant-Rea
9 September 2005
PGI Group Plc
Summarised consolidated income statement
Six Six
months months
ended ended Year ended
30 June 30 June 31 December
2005 2004 2004
(Restated) (Restated)
Note #'000 #'000 #'000
Revenue 2 13,314 13,107 22,263
--------- ------- --------
Profit from operations 2,046 2,434 1,637
Finance costs (879) (966) (1,824)
--------- ------- --------
Profit/(loss) after finance costs 1,167 1,468 (187)
Monetary working capital
hyper-inflation 51 59 46
adjustment --------- ------- --------
Profit/(loss) before tax 2 1,218 1,527 (141)
Taxation 5 (398) (991) (1,238)
--------- ------- --------
Profit/(loss) for the period 820 536 (1,379)
--------- ------- --------
Attributable to:
Equitable holders of the parent 681 269 (1,633)
--------- ------- --------
Minority interests 139 267 254
--------- ------- --------
820 536 (1,379)
--------- ------- --------
pence pence pence
Earnings/(loss) per ordinary share 6
Basic 0.98 0.44 (2.65)
Diluted 0.97 - -
--------- ------- --------
Dividend per ordinary share 7 0.25 - -
--------- ------- --------
Summarised consolidated balance sheet
As at As at As at
30 June 30 June 31 December
2005 2004 2004
Note (Restated) (Restated)
#'000 #'000 #'000
Non-current assets
Intangible assets 3 2,431 297 270
Biological assets 4 17,241 15,480 15,033
Tangible assets 8,138 7,390 7,280
Investments 46 45 329
-------- -------- --------
27,856 23,212 22,912
-------- -------- --------
Current assets
Inventories 2,738 2,343 2,823
Trade and other receivables 3,243 3,649 1,993
Cash and short-term deposits 2,548 413 803
-------- -------- --------
8,529 6,405 5,619
-------- -------- --------
Current liabilities:
Debt finance (1,591) (3,787) (5,507)
Other payables (3,707) (4,594) (4,426)
-------- -------- --------
(5,298) (8,381) (9,933)
-------- -------- --------
Net current assets/(liabilities) 3,231 (1,976) (4,314)
-------- -------- --------
Total assets less current liabilities 31,087 21,236 18,598
Non-current liabilities:
Debt finance (8,992) (9,311) (9,311)
Other payables (348) (273) (335)
Provision for liabilities and charges (863) (761) (885)
Retirement benefit liabilities (4,839) (4,433) (4,627)
-------- -------- --------
Net assets 16,045 6,458 3,440
======== ======== ========
Equity
Share capital 24,257 12,948 12,950
Reserves (9,386) (7,383) (10,383)
-------- -------- --------
14,871 5,565 2,567
Minority interests 1,174 893 873
-------- -------- --------
Total equity 16,045 6,458 3,440
======== ======== ========
Consolidated statement of recognised income and
expense
Six Six
months months
ended ended Year ended
30 June 30 June 31 December
2005 2004 2004
(Restated) (Restated)
#'000 #'000 #'000
Profit/(loss) for the period 681 269 (1,633)
Monetary working capital
hyper-inflation adjustments (51) (59) (46)
Revaluation surplus/(deficit) net of
minority interests 1,356 (44) (699)
Exchange differences (412) (262) (591)
Actuarial loss (net) of
defined benefits
pension scheme (177) (53) (179)
Recognition of
share options 25 - -
-------- ------- --------
Total recognised
income and expense for
the period 1,422 (149) (3,148)
======== ======= ========
Consolidated statement of changes in equity
Six Six
months months
ended ended Year ended
30 June 30 June 31 December
2005 2004 2004
(Restated) (Restated)
#'000 #'000 #'000
Equity at beginning of period
As previously reported 7,095 9,974 9,974
-------- ------- --------
Prior period adjustments:
Restatement of inventories of produce
to net realisable value 148 198 198
Deficit on UK Pension Plan (3,669) (3,456) (3,456)
Pension liabilities of Indonesian (409) (427) (427)
subsidiaries
Reversal of discounting of deferred tax (223) (168) (168)
liability
Potential tax due on property (375) (407) (407)
revaluations
-------- ------- --------
(4,528) (4,260) (4,260)
-------- ------- --------
As restated 2.567 5,714 5,714
Total
recognised
income and
expense for
the period 1,422 (140) (3,148)
Issue of new ordinary shares (net of
expenses):
Acquisition of Jensen Group 2,300 - -
Rights issue 8,582 - -
Other - - 1
-------- ------- --------
Equity at end
of period 14,871 5,565 2,567
======== ======= ========
Consolidated cash flow statement
Six Six
months months
ended ended Year ended
30 June 30 June 31 December
2005 2004 2004
(Restated) (Restated)
#'000 #'000 #'000
Cash flow from operating activities
Profit from operations 2,046 2,434 1,637
Adjustment for:
Depreciation 670 456 923
Disposal of tangible fixed assets (16) 41 (72)
Disposal of minority interest - - 30
Amortisation of goodwill - 28 55
Additional retirement benefit costs (99) (106) (142)
Share options 25 - -
Oversea tax paid (359) (164) (361)
-------- ------- --------
Operating profit before changes in working 2,267 2,689 2,070
capital
Decrease/(increase) in inventories 76 81 (573)
Increase in trade and other receivables (1,250) (1,851) (187)
(Decrease)/increase in liabilities (714) 254 280
Exchange difference on working capital (346) 3 (159)
-------- ------- --------
Cash generated from operations 33 1,176 1,431
Finance costs (763) (843) (1,576)
-------- ------- --------
Net cash from operating activities (730) 333 (145)
-------- ------- --------
Cash flows from investing activities
Capital expenditure (2,478) (965) (1,833)
Disposal of tangible assets 798 9 131
Acquisition of subsidiary (2,426) - -
Additions to investments - - (287)
Dividends and other payments to minority - (113) (23)
interests (net) -------- ------- --------
Net cash from investing activities (4,106) (1,069) (2,012)
-------- ------- --------
Cash flows from financing activities
Issue of shares (net of expenses) 10,882 - 1
(Payment)/receipt of loans and finance (3,696) 62 2,989
lease liabilities -------- ------- --------
Net cash from financing activities 7,186 62 2,990
-------- ------- --------
Net increase/(decrease) in cash and cash 2,350 (674) 833
equivalents
Cash and cash equivalents at beginning of (622) (1,478) (1,478)
period
Effects of exchange rate changes on cash 73 (2) 23
and cash equivalents -------- ------- --------
Cash and cash equivalents at end of 1,801 (2,154) (622)
period -------- ------- --------
Analysis of net debt
Cash 2,548 413 803
Overdrafts (747) (2,567) (1,425)
-------- ------- --------
Cash and cash equivalents 1,801 (2,154) (622)
Debt due within one year (817) (1,132) (4,016)
Debt due after one year (8,942) (9,218) (9,242)
Finance leases (77) (181) (135)
-------- ------- --------
Total (8,035) (12,685) (14,015)
-------- ------- --------
Notes to the interim statements
1. Basis of preparation of interim financial statements and adoption of
International Accounting Standards.
The interim statements for the six months ended 30 June 2005 and 30 June
2004 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 2004 modified by the adoption of International
Financial Reporting and Accounting Standards, as promulgated by the
International Accounting Standards Board. The comparative figures for the
year ended 31 December 2004 are an extract from the full accounts for the
year and have also been modified by the adoption of International Financial
Reporting and Accounting Standards. These modifications have not been
audited. The unmodified accounts on which the auditors have made a report
under Section 235 of the Companies Act 1985 have been filed with the
Registrar of Companies. The audit report was qualified on a technical issue
concerning directors' valuations of oversea plantations, factories and
ancillary property and did not contain a statement under Section 237(2) or
(3) of the Companies Act.
Effective 1 January 2005, the Group has adopted International Accounting
Standards which differ in a number of respects to UK accounting principles
previously adopted by the Group. These differences have resulted in certain
accounting adjustments to the previously reported financial statements for
the periods ended 30 June 2004 and 31 December 2004. These adjustments are
fully identified in the supplementary information attached to these
accounts. A summary of the nature of the adjustments made are:
(i) Reclassification of biological assets (see Note 4)
(ii) Restatement of inventories of produce to net realisable value
(iii) Recording of the deficit on the Company's UK Pension Plan
(iv) Recording of the unfunded pension liabilities of the Group's
Indonesian subsidiaries.
(v) Reversal of the discounting of the Group's deferred tax liability
(vi) Recording of the potential tax due on the revaluation of properties
The effect of the above changes on the previously reported profits after
taxation, for the six months ended 30 June 2004 and year ended 31 December
2004 are as follows:
Six Year
months ended
ended 31
30 June December
2004 2004
#'000 #'000
Profit/(loss) after taxation:
As previously reported 444 (1,189)
------- --------
Restatement of produce inventories
to net realisable 18 (24)
Additional costs of UK
Pension Plan (17) (34)
Provision for unfunded Indonesian
pension liabilities - (64)
Reversal of the discounting
of deferred tax 91 (68)
------- --------
92 (190)
------- --------
As restated 536 (1,379)
------- --------
2. Segmental analysis
Six Six
months months
ended ended Year ended
30 June 30 June 31 December
2005 2004 2004
(Restated) (Restated)
#'000 #'000 #'000
Revenue
Continuing operations:
Tropical agriculture 10,125 8,815 15,516
Manufacturing 3,142 2,827 4,714
Property investment management 47 - -
------- ------- --------
13,314 11,642 20,230
Discontinued operations:
Trading - 1,465 2,033
------- ------- --------
13,314 13,107 22,263
------- ------- --------
Profit before taxation
Continuing operations:
Tropical agriculture 2,633 2,581 2,886
Manufacturing (81) (67) (484)
Property investment management 29 - -
Central costs net of sundry (535) (421) (982)
income
Finance costs (including monetary
working
capital hyper-inflation (828) (907) (1,778)
adjustment)
------- ------- --------
1,218 1,186 (358)
Discontinued operations:
Trading - 341 217
------- ------- --------
1,218 1,527 (141)
------- ------- --------
3. Intangible assets
As at As at As at
30 June 30 June 31 December
2005 2004 2004
#'000 #'000 #'000
Goodwill arising on the acquisition of:
Jensen Group 2,161 - -
Khal Amazi Ltd 270 297 270
------- ------- --------
2,431 297 270
------- ------- --------
Under the UK GAAP, goodwill is amortised over its expected useful economic
life, whereas under International Accounting Standards goodwill is
considered to have an indefinite life and is not amortised, but is tested
for impairment annually. As a result of this change the company has ceased
amortising the goodwill arising on the acquisition of Khal Amazi Ltd from 1
January 2005 and will assess any impairment to it and that of Jensen Group
at 31 December 2005.
4. Biological Assets
International Accounting Standard 41-Agriculture requires that biological
assets should be valued at their fair value less point-of-sale costs. The
Group's main biological assets comprise tea, coffee and rose bushes, rubber
and macadamia trees. There are no market-determined prices or values for
these assets and in such case the Standard requires that the enterprise
uses the present value of long term expected net cash flows from the asset
discounted at a current market-determined pre-tax rate in determining fair
values. The directors have made fair value calculations on this basis but
consider that such valuations can only be an approximation of fair values
at best. They have compared such fair value calculations with the carrying
value of biological assets in the Group financial statements and believe
that biological assets are fairly stated. Because the estimates are based
on long term assumptions, the directors do not propose to make any
adjustments to the carrying values of biological assets for short-term
fluctuations and unless such valuations show that biological assets are
substantially over or understated.
5. Taxation
Six Six Year
months months ended
ended ended 31
30 June 30 June December
2005 2004 2004
(Restated) (Restated)
#'000 #'000 #'000
UK Corporation tax (after double - - -
taxation relief)
Foreign tax - Current taxation 479 616 723
- Deferred taxation 15 71 209
- Prior year adjustment (96) 304 306
-------- -------- --------
398 991 1,238
======== ======== ========
6. Earnings/(loss) per ordinary share
a) Basic
Basic earnings per ordinary share for the six months ended 30 June
2005 is calculated on a weighted average of 69,454,363 shares. The
earnings/(loss) per share for the six months ended 30 June 2004 and
year ended 31 December 2004 have been calculated using weighted
averages of 61,632,345 shares and 61,636,529 shares respectively,
restated for the rights issue in June 2005.
b) Diluted
Diluted earnings per ordinary share for the six months ended 30 June
2005 is calculated on a weighted average of 69,924,552 shares which
assumes the exercise of certain options. There is no dilution of
earnings (loss) per share for the six months ended 30 June 2004 and
year ended 31 December 2004. The conversion of loan stock would
increase earnings per share and therefore cannot be reported.
7. Dividend
The Board has declared an interim dividend for 2005 of 0.25p per share to
be paid on 28 October 2005 to shareholders on the register on 30 September
2005.
Adjustments to previously reported financial statements as a result of the
adoption of International Accounting and Reporting Standards
Summarised consolidated Income Statement
Six months ended 30 June 2004 Year ended 31 December 2004
As Adjust- As As Adjust- As
previously ments restated previously ments restated
reported reported
#'000 #'000 #'000 #'000 #'000 #'000
Revenue 13,107 13,107 22,263 22,263
------- ------ ------- -------
Profit from
operations 2,266 ii 62 2,434 1,504 ii (9) 1,637
iii 106 iii 214
iv (72)
Finance (843) iii (123) (966) (1,576) iii (248) (1,824)
costs ------- ------ ------- -------
Profit/(loss)
after finance
costs 1,423 1,468 (72) (187)
Monetary
working
capital
hyper-inflatio
n adjustment 59 59 46 46
------- ------ ------- -------
Profit/(loss)
before tax 1,482 1,527 (26) (141)
Taxation (1,038) ii (44) (991) (1,163) ii (15) (1,238)
v 91 iv 8
v (68)
------- ------ ------- -------
Profit/(loss)
after tax 444 536 (1,189) (1,379)
Minority
interests (258) ii (9) (267) (244) ii (26) (254)
iv 16
------- ---- ------- ------ --- ------- ---- ------ -------
Profit/(loss)
for the period 186 83 269 (1,433) (200) (1,633)
------- ---- ------- ------ --- ------- ---- ------ -------
Consolidated statement of recognised income
and expense
Profit/(loss)
for the period 186 ii 9 269 (1,433) ii (50) (1,633)
iii (17) iii (34)
v 91 iv (48)
v (68)
Monetary
working
capital
hyper-inflatio
n adjustments (59) (59) (46) (46)
Revaluation
deficit (net
of minority
interests) (44) (44) (699) (699)
Exchange
differences (339) iv 52 (262) (702) iv 66 (591)
v 11 v 13
vi 14 vi 32
Actuarial loss
(net) of
defined
benefits
pension scheme iii (53) (53) iii (179) (179)
------- ---- ------- ------ --- ------- ---- ------ -------
Total
recognised
income and
expense for
the period (256) 107 (149) (2,880) (268) (3,148)
======= ==== ======= ====== === ======= ==== ====== =======
Consolidated
statement of
changes in
equity
Equity at
beginning of
period
As previously
reported 9,974 5,714 9,974 5,714
Prior period
adjustments ii 198 ii 198
iii (3,456) iii (3,456)
iv (427) iv (427)
v (168) v (168)
vi (407) vi (407)
Total
recognised
income and
expense (256) 107 (149) (2,880) (268) (3,148)
Issue of new
ordinary
shares (net of
expenses) - - 1 1
------- ---- ------- ------ --- ------- ---- ------ -------
Equity at end
of period 9,718 (4,153) 5,565 7,095 (4,528) 2,567
======= ==== ======= ====== === ======= ==== ====== =======
Note: The description of the adjustments is contained in Note 1 to the
financial statements.
Summarised consolidated balance sheets
At 30th June 2004 At 31st December 2004
As Adjust- As As Adjust- As
previously ments restated previously ments restated
reported reported
#'000 #'000 #'000 #'000 #'000 #'000
Non - current
assets
Intangible
assets 297 297 270 270
Biological
assets - i 15,480 15,480 - i 15,033 15,033
Tangible
assets 22,864 i (15,474) 7,390 22,133 i (14,853) 7,280
Investments 45 45 329 329
------- ------ ------- ------
23,206 23,212 22,732 22,912
------- ------ ------- ------
Current
assets
Inventories 2,057 i (6) 2,343 2,782 i (180) 2,823
ii 292 ii 221
Trade and
other
receivables 3,657 iii (8) 3,649 1,993 1,993
Cash and
short-term
deposits 413 413 803 803
------- ------ ------- ------
6,127 6,405 5,578 5,619
------- ------ ------- ------
Current
liabilities
Debt (3,787) (3,787) (5,507) (5,507)
finance
Other (4,594) (4,594) (4,426) (4,426)
payables ------- ------ ------- ------
(8,381) (8,381) (9,933) (9,933)
------- ------ ------- ------
Net current
liabilities (2,254) (1,976) (4,355) (4,314)
------- ------ ------- ------
Total assets
less current
liabilities 20,952 21,236 18,377 18,598
------- ------ ------- ------
Non - current
liabilities
Debt (9,311) (9,311) (9,311) (9,311)
finance
Other
payables (619) iii 346 (273) (673) iii 338 (335)
------- ------ ------- ------
(9,930) (9,584) (9,984) (9,646)
------- ------ ------- ------
Provisions
for
liabilities (248) ii (83) (761) (269) ii (54) (885)
and charges
iv 29 iv 36
v (66) v (223)
vi (393) vi (375)
Retirement
benefit
liabilities iii (3,864) (4,433) iii (4,007) (4,627)
iv (569) iv (620)
------- ------ ------- ------
Net assets 10,774 6,458 8,124 3,440
======= ====== ======= ======
Equity
Share 12,948 12,948 12,950 12,950
capital
Reserves (3,230) ii 207 (7,383) (5,855) ii 148 (10,383)
iii (3,526) iii (3,669)
iv (375) iv (409)
v (66) v (223)
vi (393) vi (375)
------- ------ ------- ------
9,718 5,565 7,095 2,567
------- ------ ------- ------
Minority
interests 1,056 ii 2 893 1,029 ii 19 873
iv (165) iv (175)
------- ------ ------- ------
Total 10,774 6,458 8,124 3,440
equity ======= ====== ======= ======
Note: The description of the adjustments is contained in Note 1 to the financial
statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UUUGWBUPAGBR
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