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
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
