Final Results
M.P. EVANS GROUP PLC
M.P. Evans Group PLC ("MP Evans" or "the Group"), a producer of Indonesian
palm oil and Australian beef cattle, announces unaudited preliminary
results for the year ended 31 December 2008.
Highlights
Financial
* Record profit for the year US$53,596,000 (2007 US$46,630,000)
* Earnings per share (continuing and discontinued operations)
US cents 96.26 (2007 US cents 82.32 cents)
* Final dividend for the year maintained at 5.00 pence (2007 - 5.00
pence) per share - 2.00 pence (2007 - 2.00 pence) interim already
paid
Indonesian palm oil
* Plantation profits 33% higher at US$14,893,000 (2007 US$11,213,000)
* Strategy of developing and planting new Indonesian areas continues
apace; total of 8,500 hectares now planted
* Palm-oil prices surged to record highs in early 2008 before
declining sharply
* Palm-oil prices have recovered strongly in 2009
* Indonesian crops of oil palm fresh fruit bunches ("f.f.b.") higher
than in 2007; similar to 2007 on associates' estates
* Value of biological assets increased markedly, by US$24,226,000
(gross)
Australian beef cattle
* Loss on both Woodlands and associate, NAPCo, as a result of adverse
weather in Australia
* Widespread rainfall in Australia in 2009 has benefited
Woodlands and NAPCo properties
* Australian beef-cattle prices and rural property values have
continued to be relatively stable
* Woodlands now being marketed for sale as a non-core asset
Malaysian property and asset disposals
* Strategy of disposing of Malaysian plantations and real
estate continued successfully in 2008; two estates sold for
a total of US$43,910,000
* Lower profits recorded by associate, Bertam Properties, as a result
of fewer land disposals compared with 2007's exceptionally high
level
Commenting on the results, Richard Robinow, chairman of MP Evans, said:
"Once again, a welcome increase in profits was achieved following both the
record palm-oil prices reached in early 2008 and substantial gains from
property disposals. Although it is unlikely that there will be a return to
these high palm-oil prices for the foreseeable future, the Group is still
achieving a healthy profit margin at current levels. Encouraging progress
has continued to be made in the Group's expansion within the Indonesian
palm-oil and Australian beef-cattle sectors."
Enquiries:
M.P. Evans Group PLC Telephone: 020 7796 4133 on 27 April only.
Thereafter - 01892 516333
Peter Hadsley-Chaplin Joint managing director
Philip Fletcher Joint managing and finance director
Tristan Price Group finance controller
Hudson Sandler Telephone: 020 7796 4133
James White
Hugo Jenkins
Panmure Gordon & Co Telephone: 020 7614 8384
Edward Farmer
An analysts' meeting will be held today at 9:30 a.m. at the offices of
Hudson Sandler, 29 Cloth Fair, London EC1A 7NN.
OVERVIEW OF RESULTS
A record result was achieved for a third consecutive year. Profit for the
year rose to US$53,596,000, compared with US$46,630,000 in 2007 with
earnings per share (continuing and discontinued operations) increasing to
96.26 cents from 82.32 cents. The balance sheet remains strong with
healthy cash reserves of US$56 million at the year end. The increased
profit was largely attributable to a very strongly performing palm-oil
price and exceptional gains related to property disposals. Offsetting
these gains was a reduced profit recorded by Bertam Properties Sdn. Berhad
("Bertam Properties") and, in Australia, a loss for both Woodlands and The
North Australian Pastoral Company Pty Limited ("NAPCo") as a result of
adverse weather.
DIVIDEND
The board recommends a final dividend of 5.00p per share, which, together
with the interim dividend of 2.00p paid in November 2007, makes 7.00p for
the year. The dividend will continue to be paid in Sterling.
STRATEGIC PROGRESS
Indonesia
36,000 hectares of new, environmentally-suitable land have been secured to
date in Indonesia, of which 24,000 are located in East Kalimantan and
12,000 on Bangka Island. Significant progress has been achieved on these
new project areas with some 8,500 hectares in total now planted; 6,000 in
East Kalimantan and 2,500 on Bangka, of which 1,200 have been planted so
far in 2009. It is hoped that a further 3,500 hectares will have been
planted by the end of the year, thereby bringing the total to 12,000. It
is planned to plant a further 6,000 hectares in 2010.
Whilst many other companies are reining back their rate of development as
a result of cash-flow constraints, the Group has the financial means to
proceed with its 2009 and 2010 programmes, as scheduled. The longer-term
development programme will be governed by the extent of funding available
at that time.
Australia
The board is seeking to continue to expand its beef-cattle interests in
Australia. During the year, a further 4.73% of NAPCo was acquired,
increasing the Group's share to the current level of 34.37%. The cost to
date of the Group's investment in NAPCo is approximately A$8.00 per share
which compares favourably with NAPCo's net asset value at the end of 2008
of some A$17.00. Active consideration will be given to further share
acquisitions in NAPCo as and when suitable opportunities present
themselves. Considerable value has been added to the Woodlands
aggregation, comprising four contiguous properties, over the past few
years, particularly in the form of both pasture and infrastructure
development. However, the board has taken the view that it represents a
non-core asset and that the time is now right to capitalise upon this
value and, as a consequence, the process of selling the property has
recently commenced. The Woodlands aggregation was valued two years ago at
A$33.50 million.
Malaysia
The sales of the last of the Group's significant-sized Malaysian estates,
Perhentian Tinggi and Sungei Kruit, were completed in 2008 for a total
consideration of US$43.91 million. Since the start of the divestment
programme in 2005, a total of some US$100 million has been realised,
leaving assets with an estimated value of some US$50 million still to be
sold. The sale of these assets has funded, and will continue to fund, the
Group's expansion within the oil-palm sector of Indonesia and the beef-
cattle sector of Australia.
PALM-OIL ACTIVITIES AND MARKET
The early part of 2008 saw the palm-oil market climb to unprecedented
heights. In March, an all-time high of approximately US$1,400 per tonne
(Rotterdam c.i.f.) was touched. Although this resulted partly from
genuine, fundamental demand for vegetable oils worldwide, most notably
from China and India, it also arose from a strong element of speculative
buying. The surge in the price of petroleum, and thereby biofuel, added
to the buying interest, despite the fact that only a tiny proportion of
palm oil (currently around 3%) is used for biofuel. The very robust prices
of both vegetable and mineral oils could not, however, be sustained and
palm oil eased back during the rest of the year to some US$525 per tonne
by the year end. Nonetheless, the average price recorded during the year,
of US$941 per tonne, was substantially higher than the 2007 average of
US$781 per tonne and, indeed, than the 20-year average of US$486 per
tonne.
CROPS AND PRODUCTION
2008 2007
Tonnes Tonnes
Crops - oil-palm f.f.b. - Indonesia* 144,700 129,900
------- -------
- Malaysia - continuing operations 2,100 1,600
- discontinued operations 14,800 31,000
------- -------
- total 16,900 32,600
------- -------
- total 161,600 162,500
======= =======
Indonesia - production - crude palm oil 22,300 19,500
- palm kernels 6,100 5,400
======= =======
% %
Indonesia - extraction rate - crude palm oil 21.06 20.42
- palm kernels 5.79 5.68
======= =======
* Including Simpang Kiri Estate's 38,700 tonnes (2007 - 34,900 tonnes)
which were sold to a third party
The Group's crops of oil-palm f.f.b. were 11% higher than in 2007 on its
majority-held Indonesian estates and similar to 2007 for its Indonesian
associates. The welcome recovery resulted both from an increase in yields
from the younger areas and from a general upturn in the yield cycle. It
was also attributable to the resolution of the workers' strike on three of
the Group's estates which had impacted negatively on yields in 2007.
The gross profit arising from the Indonesian plantation activities
amounted to US$14,893,000 in 2008, compared with US$11,213,000 in 2007.
ASSOCIATED-COMPANY ESTATES
Crops and production from the estates owned by PT Agro Muko (31.53%), PT
Kerasaan Indonesia (38.00%) and Bertam Properties (40.00%) were as
follows:-
2008 2007
Tonnes Tonnes
F.f.b. crops - Indonesia
- PT Agro Muko - own 300,600 293,900
- outgrowers 13,500 5,100
- PT Kerasaan Indonesia 49,800 53,300
------- -------
363,900 352,300
------- -------
F.f.b. crops - Malaysia
- Bertam Properties 4,800 8,600
------- -------
- total 368,700 360,900
======= =======
Production (PT Agro Muko) - crude palm oil 68,000 65,500
- palm kernels 15,400 14,600
======= =======
% %
Extraction rate (PT Agro Muko) - crude palm oil 21.66 21.92
- palm kernels 4.90 4.87
======= =======
The various divisions owned by PT Agro Muko are now virtually fully
planted although there are some small areas being infilled. Replanting of
the older areas of both oil palm and rubber has begun with a view to
concentrating the rubber areas around the factory and allocating inland
areas, where rainfall is higher, to oil-palm replanting. At the end of
2008, 17,350 hectares were under oil palm and 2,050 under rubber.
Kerasaan Estate's crop was some 7% lower than in 2007 as the yield pattern
of the older plantings declines. An upturn is hoped for in 2009 as the
younger areas mature.
AUSTRALIAN BEEF-CATTLE ACTIVITIES AND MARKET
In the very early part of the year, Australian prices for grass-fed,
lighter-weight cattle, such as those produced by Woodlands, increased
markedly following welcome rainfall in central and southern Queensland.
The rainfall improved the pasture conditions and enabled more cattle to be
run on the property. Seasonal conditions then deteriorated and the ensuing
prolonged dry spell resulted in relatively poor cattle weight gains.
Prices, in turn, softened accordingly. Despite the better start to the
season and the early promise of a good wheat crop, the outturn proved to
be disappointing. Costs of fertiliser and transportation were
substantially higher than expected following the sharp hike in the mineral
-oil price. Furthermore, the wheat crop was adversely affected by rainfall
at the time of harvest which diminished its value. As a consequence, a
gross loss of US$975,000 was recorded on Woodlands, compared with a loss
of US$580,000 in 2007.
Prices for grain-finished, heavier cattle, such as those produced by
NAPCo, were largely buoyant during the year, trading around the upper end
of the last five years' range. Prices were, however, much lower for
younger, weaner cattle and for cows. In view of the unseasonally dry
conditions on many of the NAPCo properties, management took swift action
and sold some 35,000 of these ahead of time. Prices for even the heavier
cattle then declined quite sharply towards the end of the year as a
consequence of the general economic environment and following a dry season
in many other parts of Australia. The combination of lower stock numbers
at the end of the year, valued at lower prices, resulted in the company
recording a loss after tax, of which the Group's share amounted to
US$1,264,000 (2007 profit US$2,840,000). The process of rebuilding the
herd has now commenced.
MALAYSIAN PROPERTY
LAND DISPOSALS
Further progress was made in 2008 with regard to selling the Group's
plantation interests in Malaysia.
Perhentian Tinggi
As referred to in the 2007 annual report, agreements were signed in both
2006 and 2007 in respect of the sale of three separate pieces of
Perhentian Tinggi Estate. The sale of 101 hectares was completed in 2007
whilst the sales of 81 hectares (US$2.39 million) and the remaining 745
hectares (US$19.90 million) were completed in 2008.
Sungei Kruit
After an agreement was signed in 2007, the sale of the 828-hectare estate
(US$21.62 million) was completed in 2008.
Discontinued operations
The gains arising from the disposal of Perhentian Tinggi and Sungei Kruit
Estates, and the operating profits earned by each of them up to the date
of disposal, have been treated as "Discontinued operations".
Bertam Estate
In the view of the directors, the value of Bertam Estate (74 hectares),
based on recent independent advice, is not less than US$12 million. It is
the intention to dispose of this valuable parcel of land when a suitable
opportunity arises and when an acceptable price can be obtained.
Bertam Properties
2007 was an unusually active year for property disposals by Bertam
Properties. Further sales were achieved in 2008 but not at the same level.
The Group's 40% share of Bertam Properties' post-tax profits amounted to
US$3,528,000, compared with US$12,872,000 in 2007.
GROSS PROFIT
The Group gross profit from continuing operations for the year amounted to
US$13,834,000, compared with US$10,619,000 in 2007, an increase of some
30%.
BIOLOGICAL-ASSET ADJUSTMENT
The value of the biological assets increased markedly (by US$24,226,000
(gross)), partly as a result of the increase in the price of palm oil and
kernels and partly reflecting the new plantings on the new projects during
2008, particularly in Kalimantan. These benefits were partially offset by
the increase in the cost base of the Indonesian operations. Increases (or
decreases) in the value of biological assets from one year to the next are
reflected in the consolidated income statement.
OTHER ADMINISTRATIVE EXPENSES
Administrative expenses were lower in 2008 primarily because of the marked
reduction in the provision for potential National Insurance on the future
exercise of share options. This provision is related to the share price at
the balance-sheet date which was 198.50p per share at the end of 2008,
compared with 394.50p at the end of 2007. The price has since recovered to
around 270p. Head-office costs in Jakarta continue to build up as the
management team is strengthened for the new developments and the take over
of management in North Sumatra.
Legal costs were incurred in connection with the Sennah Estate legal case
and the Labuhan Batu workers' strike. Both of these matters have now been
resolved.
EXCEPTIONAL CREDITS
During the year the Group acquired a further 4.73% in its Australian
associate NAPCo. This holding was purchased for US$3,707,000 less than the
fair value of the assets acquired. Under International Financial Reporting
Standards, this difference is recognised as a gain which has been
classified as an exceptional item.
DISCONTINUED OPERATIONS
As referred to above, the sales of 81 hectares, and the remaining 745
hectares, of Perhentian Tinggi Estate and of the 828-hectare Sungei Kruit
Estate in Malaysia were completed in 2008. The profits arising from these
sales amounted to US$23,453,000. These profits and the net revenue
earnings from the estates up to the date of disposal are included in the
consolidated income statement under "Discontinued operations". These
estates benefited from the robust palm-oil prices up to the date of
disposal.
Also included under "Discontinued operations" are the results (US$246,000
profit after tax (2007 US$172,000)) relating to the Thai rubber factory.
The factory, which is in the course of disposal, benefited from strong
rubber prices during the year.
ASSOCIATED COMPANIES
The Group's share of its associated companies' post-tax profits/(losses)
for the year compared with last year were as follows:-
Post-tax Post-tax
profit/(loss) profit/(loss)
before after
biological Biological biological
2008 bearer-asset bearer-asset bearer-asset
adjustment adjustment adjustment
US$'000 US$'000 US$'000
PT Agro Muko (31.53%) 8,049 361 8,410
PT Kerasaan Indonesia (38.00%) 1,588 (132) 1,456
------ ------ ------
Total Indonesia 9,637 229 9,866
NAPCo (34.37%) (1,264) - (1,264)
Bertam Properties (40.00%) 3,528 - 3,528
------ ------ ------
Total 11,901 229 12,130
====== ====== ======
Post-tax Post-tax
profit before profit after
biological Biological biological
2007 bearer-asset bearer-asset bearer-asset
adjustment adjustment adjustment
US$'000 US$'000 US$'000
PT Agro Muko (31.53%) 6,244 6,212 12,456
PT Kerasaan Indonesia (38.00%) 1,569 875 2,444
------ ------ ------
Total Indonesia 7,813 7,087 14,900
NAPCo (29.64%) 2,840 - 2,840
Bertam Properties (40.00%) 12,872 - 12,872
------ ------ ------
Total 23,525 7,087 30,612
====== ====== ======
PROFIT FOR THE YEAR
As a result of all of the above, the Group profit for the year amounted to
US$53,596,000 compared with US$46,630,000 in 2007.
CURRENT TRADING AND PROSPECTS
During the early part of 2009, the palm-oil market fell further from the
year-end level of US$525 per tonne to around US$435 before recovering to
the current level of around US$725 per tonne. This was in response to a
decline in stocks of both palm oil and other vegetable oils, the latter
partly arising from a lower-than-expected soybean crop in Argentina in the
wake of severe droughts suffered there. The Group's f.f.b. crops on the
majority-owned Indonesian estates for the first quarter are broadly in
line with those achieved last year and some 15% lower on the associated-
company estates, owing to a seasonal downturn in the yield cycle being
experienced by PT Agro Muko. Clearing and planting work continues apace on
the Group's new Indonesian oil-palm projects.
Beneficial rain has fallen both on Woodlands and on the majority of
NAPCo's properties. Prices for the lighter-weight, grass-fed cattle have
increased following the rainfall. However, they have eased back for the
heavier, grain-finished cattle as these are more aligned to the export
market where demand has slowed in line with the global economic downturn.
Notwithstanding this, demand appears to be holding up well for good-
quality pastoral properties and pastoral companies.
In view of, inter alia, the expected lower average palm-oil price and
reduction in, or lack of, Malaysian property sales, the results for 2009
are likely to be lower than for 2008.
GOING CONCERN
The directors' have formed the view that the Group has adequate resources
to continue as a going concern for the foreseeable future and has prepared
the preliminary financial information on this basis.
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2008
Result before Year
biological Biological ended
bearer-asset bearer-asset 31 December
adjustment adjustment 2008
US$'000 US$'000 US$'000
Continuing operations
Revenue 30,387 - 30,387
Cost of sales (16,759) 206 (16,553)
------ ------ ------
Gross profit 13,628 206 13,834
Gain on biological assets - 24,226 24,226
Planting expenditure - (13,283) (13,283)
Foreign-exchange gains 44 - 44
Other administrative expenses (4,182) - (4,182)
------ ------ ------
Group operating profit 9,490 11,149 20,639
Exceptional credit (note 2) 3,900 - 3,900
------ ------ ------
Group profit on continuing
operations before interest & tax 13,390 11,149 24,539
Investment revenue 1,295 - 1,295
Finance costs (2,387) - (2,387)
------ ------ ------
Group-controlled profit
before taxation 12,298 11,149 23,447
Tax charge on profit on
ordinary activities (note 3) (4,181) (2,309) (6,490)
------ ------ ------
Group-controlled profit
after taxation 8,117 8,840 16,957
Share of associated companies'
profit after tax 11,901 229 12,130
------ ------ ------
Profit after tax and before
discontinued operations 20,018 9,069 29,087
Discontinued operations 29,895 (5,386) 24,509
------ ------ ------
Profit for the year 49,913 3,683 53,596
------ ------ ------
Attributable to:
Equity holders of
M.P. Evans Group PLC 47,885 1,904 49,789
Minority interests 2,028 1,779 3,807
------ ------ ------
49,913 3,683 53,596
------ ------ ------
Basic earnings per 10p share (US cents)
Continuing operations 48.88
Discontinued operations 47.38
------
Continuing and discontinued operations (note 4) 96.26
------
Diluted earnings per 10p share (US cents)
Continuing operations 47.30
Discontinued operations 45.86
------
Continuing and discontinued operations (note 4) 93.16
------
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2007
Result before Year
biological Biological ended
bearer-asset bearer-asset 31 December
adjustment adjustment* 2007
US$'000 US$'000 US$'000
Continuing operations
Revenue 21,265 - 21,265
Cost of sales (10,732) 86 (10,646)
------ ------ ------
Gross profit 10,533 86 10,619
Gain on biological assets - 18,747 18,747
Planting expenditure - (8,636) (8,636)
Foreign-exchange losses (1,487) - (1,487)
Other administrative expenses (5,141) - (5,141)
------ ------ ------
Group operating profit 3,905 10,197 14,102
Exceptional credit (note 2) 3,641 - 3,641
------ ------ ------
Group profit on continuing
operations before interest & tax 7,546 10,197 17,743
Investment revenue 1,306 - 1,306
Finance costs (1,763) - (1,763)
------ ------ ------
Group-controlled profit
before taxation 7,089 10,197 17,286
Tax charge on profit on
ordinary activities (note 3) (3,928) (3,185) (7,113)
------ ------ ------
Group-controlled profit
after taxation 3,161 7,012 10,173
Share of associated companies'
profit after tax 23,525 7,087 30,612
------ ------ ------
Profit after tax and before
discontinued operations 26,686 14,099 40,785
Discontinued operations 5,458 387 5,845
------ ------ ------
Profit for the year 32,144 14,486 46,630
------ ------ ------
Attributable to:
Equity holders of
M.P. Evans Group PLC 30,328 11,936 42,264
Minority interests 1,816 2,550 4,366
------ ------ ------
32,144 14,486 46,630
------ ------ ------
Basic earnings per 10p share (US cents)
Continuing operations 70.94
Discontinued operations 11.38
------
Continuing and discontinued operations (note 4) 82.32
------
Diluted earnings per 10p share (US cents)
Continuing operations 68.56
Discontinued operations 11.01
------
Continuing and discontinued operations (note 4) 79.57
------
* Restated - see note 5
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
for the year ended 31 December 2008
2008 2007
US$'000 US$'000
Unrealised share of movements in
associated undertakings' reserves 1,321 (1,780)
Previously unrealised profit on sale
of land to associated undertaking
released to the consolidated income
statement on sale of that land by the
associate (193) (3,855)
Exchange differences on translation of
foreign operations (20,208) 8,637
Other 416 -
------ ------
Net income recognised directly in equity (18,664) 3,002
Profit for the year 53,596 46,630
------ ------
Total recognised income and expense for
the year 34,932 49,632
------ ------
Attributable to:
Equity holders of M.P. Evans Group PLC 31,125 45,266
Minority interest 3,807 4,366
------ ------
34,932 49,632
------ ------
CONSOLIDATED BALANCE SHEET
at 31 December 2008
Before
biological Biological
bearer-asset bearer-asset 31 December
adjustment adjustment 2008
US$'000 US$'000 US$'000
Non-current assets
Goodwill 1,157 - 1,157
Biological assets - 78,779 78,779
Property, plant and equipment 77,973 (30,519) 47,454
Investments 80,913 20,010 100,923
Deferred tax asset 2,334 - 2,334
------- ------- -------
162,377 68,270 230,647
------- ------- -------
Current assets
Biological assets 1,872 - 1,872
Inventories 10,292 - 10,292
Trade and other receivables 5,176 - 5,176
Current tax asset 933 - 933
Cash and cash equivalents 56,472 - 56,472
Assets held for sale 275 - 275
------- ------- -------
75,020 - 75,020
------- ------- -------
Total assets 237,397 68,270 305,667
------- ------- -------
Current liabilities
Borrowings 18,986 - 18,986
Trade and other payables 5,238 - 5,238
Current tax liability 1,510 - 1,510
Liabilities related to
assets held for sale 109 - 109
------- ------- -------
25,843 - 25,843
------- ------- -------
Net current assets 49,177 - 49,177
------- ------- -------
Non-current liabilities
Borrowings 2,018 - 2,018
Deferred tax liability 1,612 13,442 15,054
Retirement-benefit obligations 1,377 - 1,377
------- ------- -------
5,007 13,442 18,449
------- ------- -------
Total liabilities 30,850 13,442 44,292
------- ------- -------
Net assets 206,547 54,828 261,375
------- ------- -------
Equity
Share capital 8,812 - 8,812
Other reserves 60,111 20,010 80,121
Retained earnings 133,846 26,399 160,245
------- ------- -------
Equity attributable to members
of M.P. Evans Group PLC 202,769 46,409 249,178
Minority interest 3,778 8,419 12,197
------- ------- -------
Total equity 206,547 54,828 261,375
------- ------- -------
CONSOLIDATED BALANCE SHEET
at 31 December 2007
Before
biological Biological
bearer-asset bearer-asset 31 December
adjustment adjustment 2007
US$'000 US$'000 US$'000
Non-current assets
Goodwill 1,008 - 1,008
Biological assets - 54,553 54,553
Property, plant and equipment 70,086 (17,443) 52,643
Investments 90,363 19,782 110,145
Deferred tax asset 1,010 - 1,010
------ ------ ------
162,467 56,892 219,359
------ ------ ------
Current assets
Biological assets 2,893 - 2,893
Inventories 9,522 - 9,522
Trade and other receivables 5,256 - 5,256
Current tax asset 1,130 - 1,130
Cash and cash equivalents 31,765 - 31,765
Assets held for sale 15,922 7,694 23,616
------- ------- -------
66,488 7,694 74,182
------- ------- -------
Total assets 228,955 64,586 293,541
------- ------- -------
Current liabilities
Borrowings 24,391 - 24,391
Trade and other payables 13,339 - 13,339
Current tax liability 1,724 - 1,724
Liabilities related to
assets held for sale - 2,308 2,308
------- ------- -------
39,454 2,308 41,762
------ ------ ------
Net current assets 27,034 5,386 32,420
------- ------- -------
Non-current liabilities
Borrowings 2,003 - 2,003
Deferred tax liability 1,909 11,133 13,042
Retirement-benefit obligations 1,375 - 1,375
------- ------- -------
5,287 11,133 16,420
------- ------- -------
Total liabilities 44,741 13,441 58,182
------- ------- -------
Net assets 184,214 51,145 235,359
------- ------- -------
Equity
Share capital 8,728 - 8,728
Other reserves 78,276 19,782 98,058
Retained earnings 91,903 24,723 116,626
------- ------- -------
Equity attributable to members
of M.P. Evans Group PLC 178,907 44,505 223,412
Minority interest 5,307 6,640 11,947
------- ------- -------
Total equity 184,214 51,145 235,359
------- ------- -------
CONSOLIDATED CASH-FLOW STATEMENT
for the year ended 31 December 2008
Year ended Year ended
31 December 31 December
2008 2007
US$'000 US$'000
Net cash (outflow) from operating activities (21,724)* (4,850)*
------ ------
Investing activities
Interest received 1,267 1,244
Dividends from associated undertakings 17,266 11,396
Dividends from trading investments 283 206
Proceeds on disposal of assets held for sale 50,570 4,091
Purchase of property, plant and equipment (3,688) (14,955)
Investment in subsidiary undertaking (2,616) (106)
Investment in associated undertaking (5,475) (1,414)
Disposal of subsidiary 145 -
------ ------
Net cash from investing activities 57,752 462
------ ------
Financing activities
Dividends paid (6,819) (6,655)
Repayment of borrowings (575) (1,004)
Proceeds on issue of shares 280 1,095
New bank loans raised - 10,130
Dividend paid to minorities (1,070) (498)
------ ------
Net cash (used by)/from financing activities (8,184) 3,068
------ ------
Net increase/(decrease) in cash
and cash equivalents 27,844 (1,320)
Cash and cash equivalents at beginning
of the year 31,765 33,114
Effect of foreign-exchange rates (3,137) (29)
------ ------
Cash and cash equivalents at end of the year 56,472 31,765
------ ------
* Including expenditure on new planting of US$13,283,000 (2007 US$8,636,000)
NOTES
1. Dividends paid and proposed
2008 2007
US$'000 US$'000
2008 interim dividend - 2.00p per 10p share
(2007 interim dividend - 2.00p) 1,675 2,067
2007 final dividend - 5.00p per 10p share
(2006 final dividend - 4.50p) 5,144 4,588
------ ------
6,819 6,655
------ ------
The interim dividend for 2008 of 2.00p (2007 - 2.00p) per share was paid
on 4 November 2008.
Following the year end the board has proposed a final dividend for 2008 of
5.00p per 10p share. If confirmed at the annual general meeting it will be
paid as follows:
2008 2007
Payable on or after 19-06-09 18-06-08
Record date 22-05-09 16-05-08
Ex-dividend date 20-05-09 14-05-08
2. Exceptional credit 2008 2007
US$'000 US$'000
Credit on purchase of shares in associated
undertaking 3,706 -
Previously unrealised profit on sale of land
to associated undertaking released through
the income statement on sale of that land
to a third party 193 3,855
Restructuring - (247)
Group profit on sale of tangible fixed assets - 33
------ ------
Total net exceptional credit 3,899 3,641
------ ------
The above items are separately identified as they relate to significant
items arising from transactions outside the ordinary course of business,
and have therefore been excluded from operating profit. There was no
material impact on the tax charge resulting from the exceptional credit in
either year.
3. Tax charge on profit on ordinary activities
2008 2007
US$'000 US$'000
United Kingdom corporation tax charge
for the year 5,314 4,868
Relief for overseas taxation (5,314) (4,868)
------ ------
- -
Overseas taxation 5,420 5,187
Adjustments in respect of prior periods 1 (20)
------ ------
Total current tax 5,421 5,167
Deferred taxation - origination and reversal
of timing differences 1,069 1,946
------ ------
6,490 7,113
------ ------
Unrelieved losses of US$20,983,000 (2007 US$20,455,000) remain available
to offset future taxable profits of Group companies.
4. Basic and diluted earnings per share
The calculation of earnings per 10p share is based on:-
2008 2008 2007 2007
US$'000 Number of US$'000 Number of
shares shares
Profit for the year
Continuing operations 25,280 36,419
Discontinued operations 24,509 5,845
Continuing and
discontinued operations 49,789 42,264
Average number of shares
in issue 51,721,726 51,341,761
Diluted average number of
shares in issue 53,446,285 53,118,232
------- ---------- ------- ----------
The difference between the number of shares in issue and the diluted
number of shares relates to unexercised share options held by directors
and key employees of the Group.
5. Biological assets
Non-current biological assets comprise plantation bearer-assets. The Group
values these plantation assets using a discounted cash flow over the
expected 25-year economic life of the asset. The discount rate used in
this valuation is 14%. The price of the crop (f.f.b.) is taken to be the
20-year average based on historical selling prices or, where the
plantation has its own mill, an inference based on the widely-quoted
commodity price for crude palm oil delivered c.i.f. Rotterdam. The
directors have concluded that using a 20-year average provides the best
estimate of the prices to be achieved over the valuation period.
Presentation
Following the publication of the 2007 annual report, the directors
conducted a review of the way in which the gain/(loss) on biological
assets was presented in the income statement. They concluded that a more
meaningful presentation would be to classify the cost of new planting
after gross profit, consistent with the classification of the biological
gain, rather than classify this expenditure within cost of sales. This
change does not affect reported figures for revenue or operating profit.
The effect on the comparative period has been to increase gross profit by
US$8,636,000.
6. Financial information
The financial information set out in this announcement does not constitute
the Company's statutory accounts for the years ended 31 December 2008 or
2007. The financial information for the year ended 31 December 2007, which
has been delivered to the Registrar of Companies, is derived from the
statutory accounts for that year as amended for the changes referred to in
note 5. The auditors reported on those accounts; their report was
unqualified, did not draw attention to any matters by way of emphasis and
did not contain a statement under section 237(2) or (3) of the Companies
Act 1985. The audit of the statutory accounts for the year ended 31
December 2008 is not yet complete. The statutory accounts for the year
ended 31 December 2008 will be finalised on the basis of the financial
information presented by the directors in this preliminary announcement
and will be delivered to the Registrar of Companies.
7. International Financial Reporting Standards
This announcement is based on the Group's financial statements which are
being prepared in accordance with International Financial Reporting
Standards ("IFRS"), as adopted for use in the EU.
Whilst the financial information included in this preliminary announcement
has been prepared in accordance with the recognition and measurement
criteria of IFRS, this announcement does not itself contain sufficient
information to comply with IFRS. The Group expects to publish full
financial statements that comply with IFRS in May 2009.
8. Timetable
The report and financial statements will be despatched to shareholders on
12 May 2009 and the annual general meeting will be held on 17 June 2009.
9. Distribution
Copies of the full report and financial statements for the year ended 31
December 2008 will be available from the Company, 3 Clanricarde Gardens,
Tunbridge Wells, Kent TN1 1HQ on and after 12 May 2009.
By order of the board
J F Elliott
Secretary
27 April 2009
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