Interim Results

MONTEAGLE HOLDINGS SOCIETE ANONYME (Incorporated in Luxembourg. RC Number B19600) Registered Office: 6 rue Adolphe Fischer, L-1520, Luxembourg 24th June 2004 Dear Shareholder, We are pleased to be able to report a successful half year and continuing significant growth in our import, export and distribution businesses, while income from our investment portfolios in the form of dividends and interest also increased. Results • Group revenue is up 83% to US$30,656,000 for the six months to 31st March 2004, compared to US$16,752,000, mainly because of a substantial increase in the volumes handled by our import, export and distribution businesses. • Profit before interest, tax and exceptional items is up 217% to US$1,662,000 from US$525,000. • Interest charges have increased 29% to US$387,000 reflecting increased funding costs for these higher volumes of business. • Headline Earnings per share for this half year have increased to US 11c compared to US 6c for the second half of last year and a loss in the first half of last year of US$ 1c. • Earnings per share have increased 62% to US 21c from US 13c last year. • Net assets attributable to shareholders are up 9% to US$5.08 from US$4.64 at 30th September of which US$3.27 are held outside Africa. Import, Export & Distribution As noted above, turnover and volumes have increased significantly over the last year as a result of our long term policy of building a broad spread of suppliers and customers on an international basis. We are now sourcing product for our international trade in private label food and non-food businesses from an even more varied range of countries throughout Europe, the Far East, Southern Africa and South America. These products are being sold in an equally wide ranging number of countries including Australia, Japan, South Africa, the United Kingdom and the United States of America. The tool import and distribution businesses in South Africa and Australia have continued to reflect solid growth in both turnover and volumes during the first six months and prospects for the second half of the financial year look positive with a number of new product ranges being launched during this period. Property Portfolio Our remaining multi-tenanted property in California is fully let and producing satisfactory returns. The property market in California is buoyant and we continue to search for another suitable property capable of generating the required yield. In the meantime we have an investment of US$2.9 million in US Treasury bills. Rental income from South Africa improved in US dollar terms and the Group has recently invested in increased warehouse capacity in Durban financed by a fixed interest rate, 10 year, reducing mortgage in SA Rands. Investment Portfolio` The Group's diverse portfolio of equities achieved good gains during the past six months and dividend income increased. We remain invested in quality equities in the major first world markets. While the outlook currently looks favourable, higher oil and energy costs may have a tempering effect in the year ahead. Food Production and Processing Our subsidiary, Conafex Holdings Société Anonyme ('Conafex') made two significant and strategic acquisitions in South Africa during the period under review. On 19th November 2003, a 50% stake was acquired in Coffee, Tea and Chocolate Company (Pty) Limited ('CTC'), based in Cape Town. CTC is a well established and dynamic business that adds value to primary agricultural produce, mainly black and herbal teas and coffee, through packaging, branding and marketing into leading supermarkets in South Africa. CTC is benefiting from the strength of the SA Rand as much of its raw material is imported from the rest of Africa. On 4th November 2003, Conafex acquired a 17.5% stake in Intertrading Limited, a company listed on the JSE Securities Exchange South Africa. Intertrading procures a range of fresh South African agricultural produce that it markets internationally, and also provides freight forwarding and logistic services for the export of perishable cargo from South Africa. In concert with Conafex, Katopé International Société Anonyme simultaneously acquired 17.5% of Intertrading. Katopé is European based and is a specialist in the production, packaging, export, logistics, distribution and marketing of tropical, exotic fruit and citrus to global markets. We expect synergies to flow from this strategic alliance with Katopé. Intertrading has declared a dividend for its year ended 29th February 2004 and Conafex expects to receive a dividend of R87,250 in July. The farming activities in Zimbabwe are under review and the outlook there remains grim. Mining We have a 49.9% interest in Falcon Investment Holdings Société Anonyme ('Falcon') whose subsidiary in Chile, having sold its iodine project, is in the process of being liquidated Once the necessary tax and exchange control formalities have been completed the remaining funds will be returned to Europe. Falcon is seeking to re-invest these proceeds in an established profitable business in a hard currency area. The fortunes of our mines in Zimbabwe continue to fluctuate widely depending on changes in the Government's policy for the amount that it pays to compulsorily acquire the gold that we produce. Zimbabwe As in previous periods, the Group does not consolidate the results of its Zimbabwean operations, bringing into account only dividend income received in Luxembourg. There have been no such remittances during the half year. Our thanks continue to go to our staff for maintaining operations under severe economic and political circumstances. We particularly wish to send our condolences to the family of Graham Parsons, a long term contributor to the Group's operations, after his sudden death in May this year. Net Assets Group net assets have increased substantially. They now stand at US$5.08 per share (US$31,977,000 at market value, net of minority interests and proposed dividends), compared to US$4.64 per share (US$29,643,000) at 30th September 2003, and US$4.40 per share (US$27,720,000) a year ago. Net assets outside Africa now stand at US$20,958,000 which equates to US$3.27 per share compared to US$2.88 per share (ex-dividend) at September 2003. Prospects It is pleasing to see the success of our investment in import, export and distribution businesses, and the progress being made by Conafex and Falcon to broaden the base and diversity of their investments. The Group, on current trends, is on course for its trading results for the second half to be very satisfactory. J.M. Robotham, D.C. Marshall Chairman Chief Executive Consolidated group profit and loss account Half years ended Year ended 31st March 30th September 2004 2003 2003 Notes Unaudited Unaudited Audited US$000 US$000 US$000 Group revenue 2 30,656 16,752 37,046 Operating costs (29,483) (16,304) (35,762) ________ ________ ________ Operating profit 1,173 448 1,284 Share of associated companies' results 86 (140) (8 ) Income from Zimbabwean investments - - 20 53 dividends Income from investments - dividends 289 134 256 - interest 114 63 160 1,662 525 1,745 ________ ________ ________ Interest paid and similar charges (387) (300) (534 ) Realised exchange gains/(losses) 218 (4) (22) ________ ________ ________ Profit on ordinary activities before 1,493 221 1,189 exceptional items and taxation Exceptional items 3 640 1,294 2,451 ________ ________ ________ Profit before taxation 2,133 1,515 3,640 Taxation (422) (157) (1,316 ) ________ ________ ________ Profit after taxation 2 1,711 1,358 2,324 Attributable to outside shareholders (418) (526) (743 ) ________ ________ ________ PROFIT ATTRIBUTABLE TO SHAREHOLDERS 1,293 832 1,581 ________ ________ ________ Dividend per share (US cents) - - 6 .0c Earnings per share (US cents) - basic 4 21c 13c 25 c Headline earnings per share (US cents) 11c (1)c 5c Reconciliation of headline earnings per share Basic earnings per share (US cents) 21 c 13 c 25 c Less exceptional items, net of tax and minority (10)c (14)c (20)c interests (US cents) Headline earnings/(loss) per share (US 11 c (1)c 5 c cents) Changes in equity Net profit for the period 1,293 832 1,581 Exchange differences 618 21 944 Group share of unrealised gains on investments and 809 1,009 1,260 property revaluations Dividend approved (378) (31 5) (315 ) ________ ________ ________ Total recognised profits 2,342 1,547 3,470 Shareholders' funds at start of period 29,643 26,173 26,173 ________ ________ ________ Shareholders' funds at end of period 31,985 27,720 29,643 ________ ________ ________ Consolidated group balance sheet 31st March 30th September 2004 2003 2003 Unaudited Unaudited Audited US$000 US$000 US$000 Fixed assets Tangible fixed assets 11,855 9,932 10,798 Investments Listed associates 1,769 3,828 1,338 Listed - other 8,600 7,094 6,970 Unconsolidated subsidiary 8,444 8,444 8,444 Unlisted associates 1,172 348 360 Other unlisted 402 - 402 Intangibles - trade marks 295 - 269 ________ ________ ________ 32,537 29,646 28,581 ________ ________ ________ Current assets Inventories 7,903 5,338 7,264 Debtors 12,594 4,946 10,839 Cash 7,226 4,315 7,710 ________ ________ ________ 27,723 14,599 25,813 Current liabilities Creditors (falling due within one year) (14,406) (6,773) (12,946) ________ ________ ________ Net current assets 13,317 7,826 12,867 ________ ________ ________ Total assets less current liabilities 45,854 37,472 41,448 Creditors (falling due after more than one year) (6,214) (3,736) (4,890) Provisions for liabilities and deferred taxation 115 113 102 ________ ________ ________ 39,755 33,849 36,660 ======== ======== ======== Capital and reserves Share capital 9,450 9,450 9,450 Other reserves 9,475 7,044 8,056 Retained earnings 13,052 11,226 12,137 ________ ________ ________ Shareholders' funds 31,977 27,720 29,643 Minority interests 7,778 6,129 7,017 ________ ________ ________ 39,755 33,849 36,660 ======== ======== ======== Consolidated cash flow statement Half years ended Year ended 31st March 30th September 2004 2003 2003 Unaudited Unaudited Audited US$000 US$000 US$000 Operating activities Cash generated from operating activities 207 199 959 Interest paid (387) (304) (534 ) Taxation paid (103) (298) (694 ) ________ ________ ________ Net cash outflow from operating activities (283) (403) (269 ) ________ ________ ________ Investment activities Purchase of tangible fixed assets (2,462) - (388 ) Purchase of investments (1,674) (577) (1,106 ) Investment in joint venture - - (871) Disposal of tangible fixed assets 1,298 26 12 Disposal of investments 427 72 3,478 Interest received and other investment income 403 197 416 Dividends received from Zimbabwe investments - 20 53 ________ ________ ________ Net cash( outflow)/inflow from investment (2,008) (262) 1,594 activities ________ ________ ________ Net cash (outflow)/inflow before financing (2,291) (665) 1,325 ________ ________ ________ Financing activities Net increase/(decrease ) in long term debt 1,279 (33) 977 Dividend paid - group - - (315 ) - minority shareholders (5) - (28 ) ________ ________ ________ Net cash inflow/(outflow) from financing 1,274 (33) 634 activities ________ ________ ________ Net decrease/(increase) in funds (1,017) (698) 1,959 Net funds at start of period 6,314 4,531 4,531 Effect of foreign exchange rates 128 (9) (176) ________ ________ ________ Net funds at end of period 5,425 3,824 6,314 ________ ________ ________ Offices: United Kingdom: South Africa: 25 City Road, 11 Sunbury Park, London, EC1Y 1BQ Durban, La Lucia 4051, Transfer agents: Europe South Africa CapitaRegistrars Computershare Investor Services 2004 (Pty) Limited The Registry, 34 Beckenham Road , 70 Marshall S treet Beckenham, Kent , Johannesburg 2001 BR3 4TU , U.K. (P.O. Box 6 1051 , Marshalltown , 2107) Notes to the interim statement 1. The results and the cash flow statement for the half-year ended 31st March 2004 are unaudited and have been prepared on the basis of accounting policies adopted in the accounts for the year ended 30th September 2003 and comply with International Accounting Standards and Luxembourg law. The results for the year to 30th September 2003 are an abridged version of the Group's full accounts for that year which have been filed with the relevant authorities. 2. The segmental analysis of revenue and operating profit is as follows: - Half years ended 31st March Year ended 30th September 2004 2003 2003 US$000 US$000 US$000 Revenue Result Revenue Result Revenue Result Analysed by activity:- Import/distribution 28,303 1,739 15,854 849 34,962 2,065 Property 512 164 555 44 1,107 181 Food production and 1,580 197 198 (187) 738 (356) processing Mining - dividend income - - - 20 - 53 Other 261 409 145 1,232 239 1,337 ________ ________ ________ ________ ________ ________ 30,656 2,509 16,752 1,958 37,046 3,280 ________ ________ ________ Share of associated companies results:- Food production and 11 (22) 11 processing Mining - (118) 883 Group revenue including associates Interest paid (387) (303) (534 ) ________ ________ ________ Profit before tax 2,133 1,515 3,640 ________ ________ ________ 3. The exceptional items arise from the surplus on disposal of investments and tangible fixed assets. 31st March 30th September 2004 2003 2003 US$000 US$000 US$000 Surplus on disposal of listed and unlisted 208 1,165 1,053 investments Surplus on disposals of tangible fixed assets 65 - 6 Release of/(charge for) provisions against 367 (264) - investments Share of associated company's exceptional item, - 393 1,392 less provision ________ ________ ________ Exceptional items - net income 640 1,294 2,451 ________ ________ ________ 4. Earnings per share are based on profits attributable to members and on the average of 6,300,000 shares in issue during the period, allowing for the shares held in Treasury which were cancelled on 14th April 2004. Headline earnings per share exclude extraordinary items after tax. 5. Net assets per share are based on Shareholders' funds after allowance for proposed dividends, divided by the number of shares in issue of 6,300,000 at the period end. 6. There was capital expenditure of US$2,462,000 during the period (2003 - nil). There was no contracted, nor outstanding authorised capital expenditure at the balance sheet date. END

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