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 its unaudited preliminary results for the year ended 31 December 2012.
Highlights
Financial
● Profit for the year US$ 21.55 million (2011 US$39.70 million)
● Earnings per share US cents 32.51 (2011 US cents 66.39 cents)
● Dividend for the year maintained at 8.00 pence (2.25 pence interim already paid)
Indonesian palm oil
● Plantation profits similar at US$ 25.16 million (2011 US$25.83 million)
● Indonesian crops of f.f.b. 27 % higher than in 2011 as crops increased on new
projects and established estates; unchanged crop on associates' estates
● Palm-oil price averaged US$ 998 per tonne (2011 US$1,123 per tonne)
● Group's total planted area, including its share of associates' areas, increased to
30,700 hectares (2011 - 29,800 hectares)
● Palm-oil price has edged higher in 2013, currently around US$ 840 per tonne
● Initial work has commenced on the newly-acquired land in South Sumatra, Musi
Rawas
Australian beef cattle
● NAPCo achieved higher sales whilst maintaining its herd size
● Despite strong operating cash flows, NAPCo made a loss resulting from unrealised downward year-end herd valuation and a modest property write down
● Difficult season for Woodlands led to loss but good rainfall in early 2013 has enabled
substantial rebuilding of herd
Malaysian property
● Few sales of land or developed properties completed by associate Bertam
Properties, leading to a small loss; sales in pipeline
● Penang property market remains firm
● Bertam Estate benefiting from Bertam Properties' development activity
Commenting on the results, Peter Hadsley-Chaplin, chairman of MP Evans, said:
"The Indonesian plantation results were similar to last year with an 11% decline in the palm-oil price offset by a sharp increase in crops to well above our 300,000-tonne target for the year. The results from the Group's plantation associates were lower, in line with the weaker palm oil price. In Australia, despite higher sales and strong cash inflows, NAPCo made a loss following a reduced year-end cattle-herd valuation, resulting from lower prices and lighter weights, and a modest property write down. Woodlands also recorded a loss following a difficult season but conditions have much improved in 2013. Palm-oil prices have edged higher in 2013 whilst cattle prices have remained at similar levels. The board believes the longer-term prospects for both markets remain favourable."
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Enquiries: |
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M.P. Evans Group PLC |
Telephone: 020 7796 4133 on 16 April only. |
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Thereafter - 01892 516333 |
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Peter Hadsley-Chaplin |
Chairman |
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Philip Fletcher |
Managing director |
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Tristan Price |
Finance director |
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Hudson Sandler |
Telephone: 020 7796 4133 |
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Charlie Jack Katie Matthews |
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Peel Hunt LLP |
Telephone: 020 7418 8900 |
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Dan Webster Matthew Armitt |
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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
The profit for 2012 was US$ 21.55 million in a year when excellent crop increases were unable to make up for the falling prices of crude palm oil ("CPO") and beef cattle, leading to a reduction in profit of US$ 18.14 million compared with 2011. Earnings per share fell to US cents 32.51 (2011 US cents 66.39). The principal reason for the lower results was a fall in the Group's share of profits from its associated companies of US$ 13.76 million, flowing from both plantation and beef-cattle operations.
DIVIDEND
The board is recommending a final dividend for the year of 5.75p per share, the same as for 2011. Together with the interim dividend of 2.25p per share paid in November 2012, the same as the interim dividend paid in November 2011, the total dividend for the year is unchanged at 8.00p. A scrip-dividend alternative is again being offered.
STRATEGIC DEVELOPMENTS
In Indonesia, the Group added 1,020 hectares of planting on its new projects during the course of 2012, with an additional 500 hectares planted for the smallholder co-operative schemes. The rate of planting on any project inevitably slows down as the area still to be planted diminishes and this is now the case in Kalimantan, where the development of the area is in its final stage. Negotiations with local people for land compensation become more intricate and so take longer to conclude and, along with the Group's consistent policy of ensuring open and accurate documentation of the resulting agreement, the time taken to release land for development has lengthened. The board's current estimate is that the areas on these two new projects that may ultimately be planted is 15,000 hectares in Kalimantan and 10,000 hectares on Bangka, of which 10,600 hectares and 6,000 hectares respectively relate to the Group and the balance to smallholder co-operative schemes.
As announced on 27 November 2012, the Group has acquired the rights to develop 20,000 hectares of land at Musi Rawas, an area near Lubuk Linggau in South Sumatra. The process of agreeing terms of compensation with local people who currently occupy or farm the land has already begun but, at this stage, it is still too early to know with any accuracy how much of the land will be released to the Group and what area will ultimately be planted. The Group has given an undertaking that 30% of the total land planted will be developed as smallholder co-operative schemes. It has become increasingly difficult to find areas of environmentally-suitable land of this sort. The acquisition of these rights is expected to lead to significant increases in the Group's crops in the latter part of the decade.
In Australia, in order to improve the capacity and efficiency of its grain-farming operation at Wainui, The North Australian Pastoral Company Pty Limited ("NAPCo") purchased an adjoining 450-hectare irrigated farm at the end of 2012. The programme of investing in additional boreholes on NAPCo's main breeding property, Alexandria, has continued, thereby increasing carrying capacity but also mitigating the impact of dry seasons on the herd size. No further shares in NAPCo were acquired during the year. The board will continue to review any opportunities that arise in respect of the Group's shareholding.
On Woodlands, the installation of fencing and watering points together with pasture-improvement work has now been largely completed. This is expected to result in the ability to carry larger numbers of cattle. It nonetheless remains the board's intention to dispose of Woodlands when market conditions are suitable.
In Malaysia, the Group's two principal remaining interests are the 74-hectare Bertam Estate and its 40% share of Bertam Properties Sdn. Berhad ("Bertam Properties"). Whilst the board plans ultimately to sell both of these, this is not considered an urgent priority since it is expected that, in the short term (the next two to three years), Bertam Properties will continue to generate significant cash flows from land sales and from its successful property-development activities. As usual, surplus cash flows will be distributed by way of dividend. The value of Bertam Estate is likely to continue to escalate as a result of the continuing development of the (adjoining) Bertam Properties project.
PALM-OIL AND BEEF-CATTLE MARKETS
2012 started well with CPO prices reaching towards historical highs and, for the first three quarters of the year, prices remained at or above US$ 1,000 per tonne. However, at this point, the rising global supply of palm oil supported by good weather in the main producing countries, combined with lower-than-anticipated rates of growth in demand for vegetable oils, led to an accumulation of CPO stocks that eventually triggered a sudden fall in the price to around US$ 800 per tonne.
Prices for lighter-weight, grass-fed and grain-finished cattle all fell in 2012, although the prices of lighter-weight cattle intended for sale to feedlots for grain finishing fell most as grain prices rose, reducing the profitability of feedlot operations. The strength of the Australian Dollar negatively affected export demand from both Japan and Korea, traditionally important markets for Australian beef, but this had begun to recover by the end of the year. A further decline in the US cattle herd provided some support, although not enough to prevent the market from weakening over the year.
OPERATIONS
Indonesia
Majority-owned estates
In 2012, increased crops resulted in a gross profit from the Group's majority-owned Indonesian plantations of US$ 25.16 million, only marginally less than in 2011 despite an 11% fall in the price of CPO.
In what signals an important point in the Group's development, the crop of oil-palm fresh fruit bunches ("f.f.b.") harvested during 2012 from these plantations exceeded the targeted volume of 300,000 tonnes by 17,000 tonnes. This is a significant milestone in the Group's strategy of expanding its output, which stood at only 145,000 tonnes in 2008. The Group remains on track to achieve its target of 500,000 tonnes in 2015. These increased crops are likely to generate significantly-higher revenues, profits and cash flow, although by how much depends on the level of CPO prices.
Crops and production
2012 Increase 2011
Tonnes % Tonnes
Crops
Own crops
- Pangkatan group 157,000 149,300
- Simpang Kiri 51,300 50,200
------- -------
208,300 4.4 199,500
- Kalimantan 73,700 219.0 23,100
- Bangka 35,000 31.1 26,700
------- -------
317,000 27.2 249,300
======= ===== =======
Smallholder co-operative crops
- Kalimantan 29,800 172.9 10,918
- Bangka 19,700 29.5 15,214
------- -------
49,500 89.4 26,132
======= ===== =======
Outside crop purchased
- Kalimantan 60,100 - -
======= ===== =======
Production
Crude palm oil
- Pangkatan 35,900 34,700
- Kalimantan 39,500 900
------- -------
75,400 111.8 35,600
======= ===== =======
Palm kernels
- Pangkatan 8,700 8,500
- Kalimantan 6,100 200
------- -------
14,800 70.1 8,700
======= ===== =======
% %
Extraction rate
Crude palm oil
- Pangkatan 23.1 23.2
- Kalimantan 24.1 23.2
======= =======
Palm kernels
- Pangkatan 5.6 5.7
- Kalimantan 3.7 4.4
======= =======
As expected, the main increase in crops came from the Group's new project in Kalimantan, where crops more than trebled. It is very encouraging that the Group was also able to record an increase of more than 4% in the crops from its mature North Sumatran estates through improved supervision and careful attention to field standards and maintenance of plantation infrastructure.
2012 was the first full year of operation of the palm-oil mill, bulking and warehouse installation and the jetty in Kalimantan. The mill processed the Group's own, burgeoning, crop and that of the smallholder co-operative schemes attached to the project and successfully bought in significant quantities of good-quality fruit from nearby commercial operations without their own mills. Whilst this opportunity is not expected to persist, the Group was able to take advantage of its position as the first mill operating in the area to extract good margins from buying additional fruit, as well as to benefit from the increased volumes processed by lowering its unit cost of production. Given the presence of third-party crop in its production and, indeed, crops from its own recently-matured areas, it is especially pleasing that the new mill achieved a CPO extraction rate of 24% during 2012.
In October 2012, the Group's Pangkatan mill in North Sumatra was accredited by the Roundtable on Sustainable Palm Oil ("RSPO"). This accreditation incorporates the crops produced on the Group's Pangkatan, Bilah and Sennah Estates, and recognises the CPO produced by the Pangkatan mill as being derived from a sustainable source. The RSPO audit process has already begun at the Group's palm-oil mill in Kalimantan and accreditation is expected towards the end of 2013 or the first part of 2014.
Operating costs
The Indonesian palm-oil industry has been subject to increased cost pressures, notably through increased wage costs. Good agricultural managers attract good salaries in an expanding industry. In relation to workers, increases in the legislated minimum wage, such as the newsworthy rates of up to 49%, published at the end of 2012 to take effect in 2013, also have an impact on the Group's costs. However, increases in the minimum wage do not translate fully into cost increases for the Group, since a large proportion of its employees are already paid at a higher rate than the minimum, although it undoubtedly results in upward pressure on this cost. In US Dollar terms, this increase was mitigated during 2012 by the weakening of the Rupiah against the US Dollar. The unit costs of its CPO and palm kernels remain at competitive levels, although the effect of the depreciation charge on the new mill in Kalimantan make its costs higher than those of the Pangkatan mill.
The Group is vigilant in minimising its costs. It has established a specialist purchasing and procurement team in its Jakarta office, with satellite staff in North Sumatra and Kalimantan. Management takes every opportunity to drive down the cost of its inputs and obtain the maximum advantage from combining the orders of its different operating units to obtain bulk discounts.
Australia
Woodlands recorded a farm gross loss of US$ 2.19 million, compared with a break-even result in 2011, which was caused by volatile seasonal conditions. There were good rains in February and up to June, although they were not sustained into the second half of the year which suffered rainfall well below average. This meant that forage oats did not become fully established and finished earlier than normal, resulting in fewer cattle being fattened and cattle being sent to market at lower weights than projected. It also proved impossible to plant the intended area of forage sorghum and other fodder crops. Consequently, the farm could not fatten cattle as quickly as planned during this period. At the beginning of the year there were 10,391 cattle on hand. During the year, 5,278 head were sold but, because of the dry period, only 540 head were purchased. After allowing for a small number of deaths, there were 5,562 head on hand at the end of the period.
Gross profit
As a result of the above, the Group gross profit amounted to US$ 23.04 million (2011 US$ 25.91 million).
Bearer biological-asset adjustment
CPO prices remain at high levels seen in an historical context. As a result, the 20-year average price for CPO used in the valuation of the Group's plantation assets rose from US$ 572 at the end of 2011 to US$ 602 at the end of 2012. The resultant increase in biological value was, however, held back by an increase in costs. Taken together, the increase in selling prices outweighed the increase in costs, and the value of palms already planted at the beginning of the year rose by US$8.62 million, to which was added US$ 3.29 million in respect of plantings carried out in 2012. In sum, therefore, US$ 11.91 million was added to the value of the Group's biological assets during the year (2011 US$ 16.57 million).
Other administrative expenses
A sharp increase of US$ 1.59 million is reported in other administrative expenses, to US$ 4.29 million. This reflects both the absence of a credit for US$ 0.96 million that occurred in 2011 in respect of the reduction in provisions against loans made to smallholder co-operatives, and an impairment provision of US$ 0.26 million made exceptionally in 2012 against the value of the land at Woodlands. Furthermore, the Group's share price was 53 pence higher at the end of 2012 than it had been at the end of 2011, resulting in a provision of US$ 0.15 million for employers' National Insurance contributions which would fall due on hitherto unexercised executive share options as against a credit on the same item of US$ 0.13 million in 2011, an adverse swing of US$ 0.28 million.
ASSOCIATED COMPANIES
The Group's share of its associated companies' profits for the year, including the share of the Indonesian companies' biological-bearer-asset adjustments, compared with last year, was as follows:-
Post-tax Post-tax
profit profit
before after
biological Biological biological
2012 bearer-asset bearer-asset bearer-asset
adjustment adjustment adjustment
US$'000 US$'000 US$'000
PT Agro Muko (36.84%) 12,015 (26) 11,989
PT Kerasaan Indonesia (38.00%) 1,246 6 1,252
------ ------ ------
Total Indonesia 13,261 (20) 13,241
NAPCo (34.37%) (2,012) - (2,012)
Bertam Properties (40.00%) (347) - (347)
------ ------ ------
Total 10,902 (20) 10,882
====== ====== ======
Post-tax Post-tax
profit profit
before after
biological Biological biological
2011 bearer-asset bearer-asset bearer-asset
adjustment adjustment adjustment
US$'000 US$'000 US$'000
PT Agro Muko (36.84%) 13,912 2,357 16,269
PT Kerasaan Indonesia (38.00%) 1,880 472 2,352
------ ------ ------
Total Indonesia 15,792 2,829 18,621
NAPCo (34.37%) 4,231 - 4,231
Bertam Properties (40.00%) 1,786 - 1,786
------ ------ ------
Total 21,809 2,829 24,638
====== ====== ======
Indonesia
The Group's major plantation associate, PT Agro Muko, saw its crops increase by 4%, although it produced less CPO than in 2011 since extraction rates at its two mills fell as unusually-dry conditions, beneficial to oil extraction, experienced in 2011 were not repeated. In these circumstances, a fall in the CPO price also led to a fall in profits. Rubber output and profits fell too, since significant areas of rubber were felled for replanting, as planned, in 2012. At the Group's other plantation associate, PT Kerasaan Indonesia, crops fell as the estate brought an attack by leaf pests under control. The Group received gross dividends of US$ 9.21 million from PT Agro Muko in 2012 (2011 US$ 16.58 million, gross). Gross dividends from PT Kerasaan Indonesia were US$ 1.03 million (2011 US$ 2.01 million).
Crops and production
Increase/
2012 (decrease) 2011
Tonnes % Tonnes
F.f.b. crops
PT Agro Muko
- own 367,400 3.8 354,100
- outgrowers 8,600 (40.3) 14,400
------- -------
376,000 2.0 368,500
- PT Kerasaan Indonesia 41,200 (12.5) 47,100
------- -------
417,200 0.4 415,600
======= ==== =======
Production (PT Agro Muko)
- crude palm oil 87,100 (1.2) 88,200
- palm kernels 19,700 2.6 19,200
======= ==== =======
% %
Extraction rates
- crude palm oil 23.2 23.9
- palm kernels 5.2 5.2
======= =======
Tonnes Tonnes
Rubber crops
PT Agro Muko - own 1,340 (13.4) 1,550
======= ==== =======
Australia
Despite selling significantly more cattle than in previous years, and generating a strong operating cash inflow, NAPCo (34.37% held) recorded a loss, the Group's share of which amounted to US$ 2.01 million (2011 US$ 4.23 million profit). This loss was predominantly due to a reduced (unrealised) year-end herd valuation, resulting from lower cattle prices and lighter average weights per head than in 2011, following a poor end to the season, and to a modest reduction in the value of the company's property portfolio. In 2012, the revaluation of all the company's stations saw a 4.5% reduction in their total value, of which US$ 4.90 million (Group share US$ 1.68 million) was treated as an impairment in the income statement. However, the impact has been less than that on others in the industry, owing not only to the quality of the assets but also to regular maintenance and improvements.
After several years of low sales resulting from the retention of females to rebuild the breeding herd, in 2012 the company sold 59,500 cattle. This was significantly more than the previous three years when sales averaged less than 45,000 head per annum. Notwithstanding higher sales made in 2012, herd numbers, at 197,300 head, were very similar to those at the end of 2011, an outcome bolstered by a good increase in the number of brandings which, at 62,500, were the highest since 2008. The Group's share of NAPCo's gross dividends amounted to US$ 0.93 million (2011 US$ 0.96 million, gross).
Malaysia
Whilst the Malaysian property market remains reasonably robust, slower completion of sales of developed properties during the first half of 2012 than in 2011 persisted through to the end of the year. As a result, the Group's share of Bertam Properties' post-tax loss for the year amounted to US$ 0.35 million, compared with a profit of US$ 1.79 million in 2011.
There were two small land sales recognised during the year, amounting to 2.6 hectares, which generated a profit of US$ 0.91 million and, between them, the small remaining plantation operations and golf resort broke even. Neither sales of land, nor of developed properties, are brought to account until they are fully completed. Bertam Properties has a number of partially-completed sales that are expected to be reflected in the results for 2013. The Group's share of Bertam Properties' dividends amounted to US$ 2.59 million (2011 US$ 2.61 million).
PROFIT FOR THE YEAR
As a result of all the above, the Group profit for the year amounted to US$ 21.55 million, a reduction of US$ 18.14 million compared with the US$ 39.70 million in 2011.
CURRENT TRADING AND PROSPECTS
Crops of f.f.b. have continued in 2013 on the upward trajectory recorded in 2012 with 78,700 tonnes having been harvested in the first quarter of the year, an increase of 19% compared with last year.
Prices of crude palm oil (c.i.f. Rotterdam) have edged higher from the US$ 810 level at which they closed at the end of 2012 to bring them to their current level of around US$ 840 per tonne. Good crops expected from increased plantings of soybeans in South America, a competing source of vegetable oil, may be offset by falling palm-oil yields in Southeast Asia, with palm-oil prices further underpinned by a continuing historically-large discount to soybean oil. There seems to be little prospect of an immediate return to the levels of CPO prices seen in the early part of 2012, with growth in demand for vegetable oils looking set to rise at lower levels than in recent years. However, market sentiment appears to support a further gradual strengthening in CPO prices, suggesting a mildly encouraging outlook for the remainder of 2013.
Cattle prices have stabilised following the year end as some welcome rainfall has been received in some areas of Australia. Woodlands has benefited significantly from this and the scheduled planting of forage oats into a full moisture profile is under way. Cattle numbers on Woodlands have now returned to more than 10,000 head, half of which are being fattened on behalf of other commercial operators, for a fee linked to weight gain.
Some NAPCo properties have also received rain, whilst others are experiencing drier-than-usual conditions. In the current year, the company expects to sell approximately 61,000 head, approximately two thirds of which will be grain finished at Wainui. This is a welcome improvement on the increased numbers of cattle sold in 2012, and compared with earlier years, referred to under 'Operations' above.
In the longer term, the prospects for the Australian beef-cattle market as a whole appear favourable, not least as the US cattle herd now stands at its lowest level for 60 years.
PROPOSED BOARD APPOINTMENT
Having considered a short list of possible candidates, the board is proposing that shareholders approve the appointment of a new independent non-executive director, Jock Green-Armytage, at the forthcoming annual general meeting. Mr Green-Armytage brings long experience of the plantation sector, having served on the boards of Guthrie Corporation PLC, REA Holdings PLC and, indeed, of this company for five years in the late 1980's. He has also either chaired or served on the boards of a number of companies in other sectors, including NM Rothschild & Sons Limited, Kelt Energy plc, William Baird PLC and Amec plc, and he is currently chairman of JZ International and Star Capital Partners.
Peter Hadsley-Chaplin
Chairman
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2012
Result before Year
biological Biological ended
bearer-asset bearer-asset 31 December
adjustment adjustment 2012
US$'000 US$'000 US$'000
Revenue 83,213 - 83,213
Cost of sales (62,893) 2,715 (60,178)
------ ------ ------
Gross profit 20,320 2,715 23,035
Gain on biological
assets (note 4) - 11,907 11,907
Planting expenditure - (9,784) (9,784)
Foreign-exchange (losses)/gains (1,761) - (1,761)
Other administrative expenses (4,292) - (4,292)
Other income 17 - 17
------ ------ ------
Operating profit 14,284 4,838 19,122
Finance income 1,338 - 1,338
Finance costs (3,437) (323) (3,760)
------ ------ ------
Group-controlled profit
before tax 12,185 4,515 16,700
Tax on profit on ordinary
activities (note 2) (4,791) (1,239) (6,030)
------ ------ ------
Group-controlled profit
after tax 7,394 3,276 10,670
Share of associated companies'
profit after tax 10,902 (20) 10,882
------ ------ ------
Profit for the year 18,296 3,256 21,552
====== ====== ======
Attributable to:
Owners of M.P. Evans Group PLC 15,070 2,615 17,685
Minority interests 3,226 641 3,867
------ ------ ------
18,296 3,256 21,552
====== ====== ======
(US cents) (US cents)
Basic earnings per 10p share 27.70 32.51
===== ======
(US cents) (US cents)
Diluted earnings per 10p share 27.65 32.44
===== ======
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2011
Result before Year
biological Biological ended
bearer-asset bearer-asset 31 December
adjustment adjustment 2011
US$'000 US$'000 US$'000
Revenue 57,756 - 57,756
Cost of sales (33,636) 1,799 (31,837)
------ ------ ------
Gross profit 24,120 1,799 25,919
Gain on biological
assets (note 4) - 17,936 17,936
Planting expenditure - (15,619) (15,619)
Foreign-exchange gains 528 - 528
Other administrative expenses (2,470) (230) (2,700)
Other income 143 - 143
------ ------ ------
Operating profit 22,321 3,886 26,207
Finance income 1,078 - 1,078
Finance costs (2,361) (574) (2,935)
------ ------ ------
Group-controlled profit
before tax 21,038 3,312 24,350
Tax on profit on ordinary
activities (note 2) (8,450) (842) (9,292)
------ ------ ------
Group-controlled profit
after tax 12,588 2,470 15,058
Share of associated companies'
Profit after tax 21,809 2,829 24,638
------ ------ ------
Profit for the year 34,397 5,299 39,696
====== ====== ======
Attributable to:
Owners of M.P. Evans Group PLC 30,340 5,182 35,522
Minority interests 4,057 117 4,174
------ ------ ------
34,397 5,299 39,696
====== ====== ======
(US cents) (US cents)
Basic earnings per 10p share 56.71 66.39
===== ======
(US cents) (US cents)
Diluted earnings per 10p share 56.06 65.64
===== ======
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2012
2012 2011
US$'000 US$'000
Other comprehensive (expense)/income
Previously unrealised profit on sale of land
to associated undertaking released to the
consolidated income statement on sale of
that land by the associate (137) (54)
Exchange differences on translation of
foreign operations 295 (70)
Other comprehensive expense (192) -
------ ------
Other comprehensive expense(net of
tax) for the year (34) (124)
Profit for the year 21,552 39,696
------ ------
Total comprehensive income 21,518 39,572
====== ======
Attributable to:
Owners of M.P. Evans Group PLC 17,651 35,398
Minority interests 3,867 4,174
------ ------
21,518 39,572
====== ======
CONSOLIDATED BALANCE SHEET
at 31 December 2012 Before
biological Biological
bearer-asset bearer-asset 31 December
adjustment adjustment 2012
US$'000 US$'000 US$'000
Non-current assets
Goodwill 1,157 - 1,157
Biological assets - 139,335 139,335
Property, plant and equipment 179,979 (72,617) 107,362
Investments in associates 105,130 25,613 130,743
Investments 109 - 109
Deferred-tax asset 6,454 - 6,454
Non-current receivables - - -
------- ------- -------
292,829 92,331 385,160
------- ------- -------
Current assets
Biological assets 4,594 - 4,594
Inventories 9,664 (447) 9,217
Trade and other receivables 14,325 - 14,325
Current-tax asset 1,477 - 1,477
Cash and cash equivalents 54,757 - 54,757
------- ------- -------
84,817 (447) 84,370
------- ------- -------
Total assets 377,646 91,884 469,530
======= ======= =======
Current liabilities
Borrowings 25,458 - 25,458
Trade and other payables 14,797 - 14,797
Current-tax liability 1,541 - 1,541
------- ------- -------
41,796 - 41,796
------- ------- -------
Net current assets 43,021 (447) 42,574
------- ------- -------
Non-current liabilities
Borrowings 31,423 - 31,423
Deferred-tax liability 2,514 16,679 19,193
Retirement-benefit obligations 4,230 - 4,230
------- ------- -------
38,167 16,679 54,846
------- ------- -------
Total liabilities 79,963 16,679 96,642
======= ======= =======
Net assets 297,683 75,205 372,888
======= ======= =======
Equity
Share capital 9,227 - 9,227
Other reserves 83,133 25,613 108,746
Retained earnings 191,734 41,376 233,110
------- ------- -------
Equity attributable to the owners
of M.P. Evans Group PLC 284,094 66,989 351,083
Minority interests 13,589 8,216 21,805
------- ------- -------
Total equity 297,683 75,205 372,888
======= ======= =======
CONSOLIDATED BALANCE SHEET
at 31 December 2011 Before
biological Biological
bearer-asset bearer-asset 31 December
adjustment adjustment 2011
US$'000 US$'000 US$'000
Non-current assets
Goodwill 1,157 - 1,157
Biological assets - 127,428 127,428
Property, plant and equipment 161,700 (65,670) 96,030
Investments in associates 106,026 25,633 131,659
Investments 145 - 145
Deferred-tax asset 2,808 - 2,808
Non-current receivables 2,189 - 2,189
------- ------- -------
274,025 87,391 361,416
------- ------- -------
Current assets
Biological assets 9,878 - 9,878
Inventories 8,582 - 8,582
Trade and other receivables 14,439 - 14,439
Current-tax asset 6,300 - 6,300
Cash and cash equivalents 52,755 - 52,755
------- ------- -------
91,954 - 91,954
------- ------- -------
Total assets 365,979 87,391 453,370
======= ======= =======
Current liabilities
Borrowings 25,255 - 25,255
Trade and other payables 14,814 - 14,814
Current-tax liability 4,322 - 4,322
------- ------- -------
44,391 - 44,391
------- ------- -------
Net current assets 47,563 - 47,563
------- ------- -------
Non-current liabilities
Borrowings 31,450 - 31,450
Deferred-tax liability 3,213 15,440 18,653
Retirement-benefit obligations 2,963 - 2,963
------- ------- -------
37,626 15,440 53,066
------- ------- -------
Total liabilities 82,017 15,440 97,457
======= ======= =======
Net assets 283,962 71,951 355,913
======= ======= =======
Equity
Share capital 9,093 - 9,093
Other reserves 84,320 25,633 109,953
Retained earnings 180,187 38,742 218,929
------- ------- -------
Equity attributable to the owners
of M.P. Evans Group PLC 273,600 64,375 337,975
Minority interests 10,362 7,576 17,938
------- ------- -------
Total equity 283,962 71,951 355,913
======= ======= =======
CONSOLIDATED CASH-FLOW STATEMENT
for the year ended 31 December 2012
Year ended Year ended
31 December 31 December
2012 2011
US$'000 US$'000
Net cash generated by operating activities 33,897 48,339
------
Investing activities
Interest received 1,338 1,078
Proceeds on disposal of assets 239 598
Purchase of property, plant and equipment (18,540) (31,789)
Planting expenditure (9,784) (15,619)
------ ------
Net cash used by investing activities (26,747) (45,732)
------ ------
Financing activities
Dividends paid to Company shareholders (6,151) (6,064)
Repayment of borrowings (1,323) -
Proceeds on issue of shares 1,586 1,034
Dividend paid to minorities - (1,000)
Loan drawdown 310 20,921
------ ------
Net cash (used)/generated by financing
activities (5,578) 14,891
------ ------
Net increase in cash and cash equivalents 1,572 17,498
Net cash and cash equivalents 1 January 27,500 10,144
Effect of foreign-exchange rates on
cash and cash equivalents (227) (142)
------ ------
Net cash and cash equivalents 31 December 29,299 27,500
====== ======
NOTES
1. Dividends paid and proposed
2012 2011
US$'000 US$'000
2012 interim dividend - 2.25p per 10p share
(2011 interim dividend - 2.25p) 1,985 1,887
2011 final dividend - 5.75p per 10p share
(2010 final dividend - 2.00p) 4,877 4,725
------ ------
6,862 6,612
====== ======
Following the year end the board has proposed a final dividend for 2012 of 5.75p per 10p share amounting to US$4.89 million. Shareholders will again have the option to elect to receive the dividend in shares rather than in cash. The calculation period will be 24 April to 30 April 2013. The dividend will be paid on or after 20 June 2013 to those shareholders on the register at the close of business on 26 April 2013, as follows:
2012 2011
Ex-dividend date 24 April 2013 25 April 2012
Record date 26 April 2013 27 April 2012
Final date for receipt of election
instruction 30 May 2013 29 May 2012
Definitive share certificates posted 19 June 2013 20 June 2012
First day of dealing in the new shares 20 June 2013 21 June 2012
Dividend payable on or after 20 June 2013 21 June 2012
2. Tax on profit on ordinary activities
2012 2011
US$'000 US$'000
United Kingdom corporation-tax charge
for the year 370 342
Relief for overseas taxation (370) (342)
------ ------
- -
Overseas taxation 8,821 10,523
Adjustments in respect of prior years (5) (5)
------ ------
Total current tax 8,816 10,518
Deferred taxation - origination and reversal
Of temporary differences (2,786) (1,226)
------ ------
6,030 9,292
------ ------
3. Basic and diluted earnings per share
The calculation of earnings per 10p share is based on:-
2012 2012 2011 2011
US$'000 Number of US$'000 Number of
shares shares
Profit for the year
attributable to the owners
of M.P. Evans Group PLC 17,685 35,522
====== ======
Average number of shares
in issue 54,406,455 53,502,656
Diluted average number of
shares in issue* 54,509,339 54,116,145
========== ==========
* The difference between the number of shares in issue and the diluted number of shares relates to unexercised share options held by directors and key employees of the Group.
4. Biological assets
Non-current biological assets comprise plantation bearer assets. The Group values these plantation assets using a discounted cash flow over the expected 25-year economic life of the asset. The discount rate used in this valuation is 14%. The price of the crop (oil-palm fresh fruit bunches) is taken to be the 20-year average based on historical selling prices or, where the plantation has its own mill, an inference based on the widely-quoted commodity price for crude palm oil delivered c.i.f. Rotterdam. The directors have concluded that using a 20-year average provides the best estimate of the prices to be achieved over the valuation period.
In the balance sheet, the adjustment column shows that the recognition of the biological-asset valuation replaces depreciated-historical-planting costs of US$ 72.62 million (2011 US$65.67 million) which, prior to the adoption of IFRS, were included in the carrying value of property, plant and equipment. These costs are now replaced by the biological bearer-asset adjustment which, including the Group's share of the asset recognised by associates, together with the related deferred tax, amounts to US$ 147.82 million (2011 US$137.62 million).
5. Financial information
The information in this preliminary results announcement has been prepared on the basis of the accounting policies which have been set out in the Group accounts for the year ended 31 December 2011 and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. No additional standards or amendments to existing standards have been adopted by the Group with effect from 1 January 2012. Full accounts of M.P. Evans Group PLC for the year ended 31 December 2011, which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
The statutory accounts for the year ended 31 December 2012 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement. The auditors anticipate issuing an unmodified opinion.
6. 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 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 on or after 24 April 2013.
7. Timetable
The report and financial statements will be available on the Group's website on or after 24 April 2013 and despatched to shareholders shortly thereafter. The annual general meeting will be held on 6 June 2013.
8. Distribution
Copies of the full report and financial statements for the year ended 31 December 2012 will be available from the Company, 3 Clanricarde Gardens, Tunbridge Wells, Kent TN1 1HQ.
By order of the board
Mrs Claire Hayes
Secretary
16 April 2013
This information is provided by RNS
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