Final Results

M.P.EVANS GROUP PLC Preliminary unaudited results for the year ended 31 December 2004 "Record profits and merger successfully completed" Highlights * Record profit before taxation, up 23% to £10,318,000 (2003 £8,358,000), reflecting higher crops of oil palm fresh fruit bunches and strong palm oil prices * 28% increase in operating profits reported from associated companies * Strong net operating cash flow, up 29% at £4,600,000 (2003 £3,555,000) * Dividend up 9% to 6.00p (2003 - 5.50p), reflecting the Group's progressive policy * Successful merger with Bertam and Lendu completed on 2 February 2005, post year end * Strategy implementation progressing well with recent sale of Sungei Reyla Estate in Malaysia and investment in 12,000-hectare oil palm Plantation project in Bangka, Indonesia Commenting on the results, R M Robinow, Chairman of M. P. Evans Group PLC, said: "I am pleased to report on another strong year for the Group with record profits achieved. Since the year end we have successfully completed our merger with our former associates, Bertam and Lendu, establishing a strong platform for the future growth of the Group. We have already made significant progress in implementing our strategy with the recent sale of Sungei Reyla Estate in Malaysia and investment in a 12,000-hectare oil palm plantation project in Bangka, Indonesia. Both palm oil and Australian beef-cattle prices remain at satisfactory levels and, in view of the growth in demand projected for both these sectors, especially within Asia, the board is positive about their prospects in both the near and longer term." Enquires: M.P.Evans Group PLC Telephone 020 7796 4133 on 9 May 2005 only Thereafter telephone: 01892 516333 Peter Hadsley-Chaplin, joint managing director Philip Fletcher, joint managing director gcg hudson sandler Telephone: 020 7796 4133 Andrew Hayes Noemie de Andia Extract from the chairman's statement Results The figures in this annual report relate to the results, cash flows and net assets of the Rowe Evans Investments PLC ("Rowe Evans") Group as it was at 31 December 2004, prior to the merger with Bertam and Lendu. The merger took place on 2 February 2005 when the Company changed its name to M. P. Evans Group PLC. An unaudited pro-forma statement of net assets, prepared, for illustrative purposes, on the basis that the merger had been in place on 31 December 2004, has also been provided. I am pleased to report a record profit before taxation of £10,318,000, compared with £8,358,000 in 2003. This reflects the higher crops of oil palm fresh fruit bunches ("f.f.b.") in both the Group (160,100 tonnes (2003 - 147,700 tonnes)) and the associated companies (404,100 tonnes (2003 - 385,700 tonnes)) coupled with higher average palm oil prices. These positive factors were, however, partially offset by the strength of Sterling against the US Dollar. The associated companies reported increased profits. PT Agro Muko, which benefited not only from the favourable conditions for palm oil, referred to above, but also from an increased rubber crop allied with robust prices, reported profits 30% higher in Sterling terms. Bertam (48.3% owned in 2004) reported similar plantation profits to 2003 but also benefited from the higher profits of its 40% associate, Bertam Properties Sdn. Bhd., which were primarily derived from land disposals. The Group generated net operating cash inflows of £4,600,000 (2003 £3,555,000). As a result of the foregoing, the board recommends a dividend of 6.00p per 10p share, an increase of 0.50p over the 5.50p relating to 2003. The balance sheet at 31 December 2004 both as per this report and as per the pro-forma statement of net assets of the enlarged group remains strong. Based on the professional valuations of the various assets involved in the 2 February 2005 merger, the board's estimation of the asset value (excluding any disposal taxes) of the enlarged group at 31 December 2004, at the exchange rate on that date, was approximately 230p per share. Strategy implementation The benefits of the merger have already made themselves evident, with significant progress achieved in the pursuit of the new strategy. The strategic policy is to dispose of the low-earning Malaysian oil-palm plantations, many of which possess substantial property-development value, and reinvest the proceeds in the higher-earning Indonesian palm oil and Australian beef-cattle sectors. In line with this policy, as announced to the London Stock Exchange on 27 April 2005, contracts were recently exchanged in relation to the sale of Sungei Reyla Estate, for a total of RM31.4 million (approximately £4.3 million at the current rate of exchange). With regard to new investment, as also announced on 27 April 2005, agreements were recently signed in relation to the Group's acquisition of 90% of a new 12,000-hectare oil palm development, including a crude palm oil mill, on the Indonesian island of Bangka. It is expected to be established over approximately the next four years. This represents the single largest new oil-palm development ever undertaken by the Group. It is a significant step towards the planned acquisition of an additional 50,000 hectares of land in Indonesia suitable for oil-palm development and is expected substantially to enhance long-term profits and cash flows. With regard to progress in Australia, a further 3.64% of The North Australian Pastoral Company Pty Limited ("NAPCo") was acquired in February 2005. This has brought the Group's total holding to 27.92%. Additional investment opportunities in the Australian beef-cattle sector are currently under review. Prospects Ffb crops on the enlarged Group's estates in both Indonesia and Malaysia are expected to be similar to 2004 whilst the Indonesian associates expect a marked increase as the young areas at PT Agro Muko mature. Both palm oil and Australian beef-cattle prices remain at satisfactory levels and, in view of the growth in demand projected for both these sectors, especially within Asia, the board is positive about their prospects in both the near and longer term. Richard M Robinow Chairman CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2004 2004 2003 £'000 £'000 Turnover* 7,734 7,599 Cost of sales (3,300) (3,390) ------ ------ Estate profit 4,434 4,209 ------ ------ Foreign-exchange gains/(losses) 258 (88) Income from fixed-asset investments 17 - Other administrative expenses (519) (539) ------ ------ Total administrative expenses (244) (627) ------ ------ Group operating profit* 4,190 3,582 Share of operating profit in associates 5,658 4,431 ------ ------ Total operating profit 9,848 8,013 Exceptional items (note 1) Net gains on sale of fixed assets 378 256 ------ ------ Profit on ordinary activities before interest 10,226 8,269 Interest receivable and similar income 92 89 ------ ------ Profit on ordinary activities before taxation 10,318 8,358 Tax charge on profit on ordinary activities (note 2) (3,151) (2,644) ------ ------ Profit on ordinary activities after taxation 7,167 5,714 Equity minority interests (719) (619) ------ ------ Profit on ordinary activities attributable to the members of M.P. Evans Group PLC (formerly Rowe Evans Investments PLC) 6,448 5,095 Equity dividend proposed (note 3) (3,030) (2,644) ------ ------ Profit retained for the financial year 3,418 2,451 ====== ====== Basic earnings per 10p share - pence (note 4) 13.41 10.59 ====== ====== Diluted earnings per 10p share - pence (note 4) 13.19 10.49 ====== ====== * All operations are classed as continuing STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 31 DECEMBER 2004 2004 2003 £'000 £'000 Profit attributable to the members of the Company 6,448 5,095 Unrealised share of movements in associated undertakings' reserves (1,039) (1,730) Exchange differences on foreign-currency net investments (1,518) (530) ------ ------ Total recognised gains and losses for the year 3,891 2,835 ====== ====== CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2004 2004 2003 £'000 £'000 Fixed assets Tangible assets 14,925 12,950 Investments 34,895 34,199 ------ ------ 49,820 47,149 ------ ------ Current assets Stocks 212 221 Debtors 622 759 Investments 2,651 2,826 Cash at bank and in hand 1,530 1,039 ------ ------ 5,015 4,845 Creditors - amounts falling due within one year (4,585) (3,416) ------ ------ Net current assets 430 1,429 ------ ------ Total assets less current liabilities 50,250 48,578 Creditors - amounts falling due after more than one year (1,037) - Provisions for liabilities and charges (676) (742) Equity minority interests (2,770) (2,930) ------ ------ Net assets 45,767 44,906 ------ ------ Capital and reserves Called-up share capital 4,807 4,807 Share premium account 5,108 5,108 Capital redemption reserve 60 60 Share of associated companies' reserves 18,699 19,086 Profit and loss account 17,093 15,845 ------ ------ Total equity shareholders' funds 45,767 44,906 ------ ------ CONSOLIDATED CASH-FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2004 2004 2003 £'000 £'000 Net cash inflow from operating activities 4,600 3,555 Dividends from associated undertakings 2,959 2,486 Returns on investments and servicing of finance (306) (235) Taxation (1,467) (1,278) Capital expenditure and financial investment (3,917) (727) Equity dividend paid (2,644) (2,284) ------ ------ Net cash (outflow)/inflow before management of liquid resources and financing (775) 1,517 Management of liquid resources (274) (442) Financing 1,555 (181) ------ ------ Increase in cash 506 894 ====== ====== RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2004 2004 2003 £'000 £'000 Total operating profit 9,848 8,013 Exchange differences (190) (186) Depreciation 246 299 Share of associated undertakings' profits (5,658) (4,431) Increase in stocks (26) (46) Decrease/(increase) in debtors 23 (118) Increase in creditors 357 24 ------ ------ Net cash inflow from operating activities 4,600 3,555 ====== ====== NOTES 1) Exceptional items 2004 2003 £'000 £'000 Net gain on sale of fixed assets Share of associated undertakings' net gains on sale of fixed-asset investments 25 293 Group loss on sale of tangible fixed assets (26) (51) Share of associated undertakings' net gains on sale of tangible fixed assets 379 14 ------ ------ Total net exceptional credits 378 256 ====== ====== There is no material impact on either the current or prior-year tax charge resulting from exceptional items disclosed after operating profit. 2) Taxation 2004 2003 £'000 £'000 United Kingdom corporation tax charge for the year 1,524 1,325 Relief for overseas taxation (1,524) (1,325) ------ ------ - - Overseas taxation 1,783 1,379 Adjustments in respect of prior periods 3 28 ------- ------- 1,786 1,407 Share of associated undertakings' taxation 1,377 1,237 ------- ------- Total current tax 3,163 2,644 Deferred taxation - reversal of timing differences (12) - ------- ------- 3,151 2,644 ======= ======= Unrelieved losses of £4,151,000 (2003 £3,707,000) remain available to offset future taxable profits of Group companies. 3) Equity dividend proposed The board recommends a dividend of 6.00p per 10p share (2003 - 5.50p) 2004 2003 Amount per 10p share 6.00p 5.50p Cost £3,030,000 £2,644,000 Payable on or after 22-06-2005 08-06-2004 Record date 20-05-2005 14-05-2004 Ex-dividend date 18-05-2005 12-05-2004 4) Basic and diluted earnings per share The calculation of basic earnings per 10p share in 2004 is based on profits of £6,448,000 and on 48,073,072 shares, which was the average number of shares in issue during the year. The calculation of basic earnings per share in 2003 was based on profits of £5,095,000 and on 48,106,854 shares, which was the average number of shares in issue during that year. The calculation of diluted earnings per 10p share in 2004 is based on profits of £6,448,000 and on 48,869,108 shares, which was the diluted average number of shares in issue during the year. The calculation of diluted earnings per share in 2003 is based on profits of £5,095,000 and on 48,567,059 shares, which was the diluted average number of shares in issue during that year. The additional shares used in the calculations of the 2004 and 2003 diluted earnings per share represent adjustments made for shares under option. 5) Financial information The financial information set out in this announcement does not constitute the Company's statutory accounts for the years ended 31 December 2004 or 2003. The financial information for the year ended 31 December 2004 has been prepared under accounting policies consistent with those disclosed in the 2003 statutory accounts. The financial information for the year ended 31 December 2003 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under section 237(2)or (3) of the Companies Act 1985. The statutory accounts for the year ended 31 December 2004 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. 6) Timetable The report and financial statements will be despatched to shareholders on 18 May 2005 and the annual general meeting will be held on 21 June 2005. 7) Distribution Copies of the full report and financial statements for the year ended 31 December 2004 will be available from the Company, 3 Clanricarde Gardens, Tunbridge Wells, Kent TN1 1HQ on and after 18 May 2005. PRO FORMA STATEMENT OF NET ASSETS AT 31 DECEMBER 2004 M.P. Bertam Lendu Sungkai Others Consol- Pro Evans Holdings Holdings Holdings idation forma Group adjust- net Ments assets 2004 2004 2004 2004 2004 2004 2004 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Fixed assets Intangible assets - - - - - (1,210) (1,210) Tangible Assets 14,925 15,984 2,939 528 129 - 34,505 Investments 34,895 21,037 9,910 15,077 163 (56,012) 25,070 ------ ------ ------ ------ ------ ------ ------ 49,820 37,021 12,849 15,605 292 (57,222) 58,365 ------ ------ ------ ------ ------ ------ ------ Current assets Stocks 212 453 363 - - 264 1,292 Debtors 622 3,211 147 13 72 (62) 4,003 Investments 2,651 1,982 - - - - 4,633 Cash at bank and in hand 1,530 4,036 200 728 459 - 6,953 Creditors - amounts falling due) within one year (4,585) (707) (2,835) (1) (326) (639) (9,093) ------ ------ ------ ------ ------ ------ ------ Net current assets 430 8,975 (2,125) 740 205 (437) 7,788 ------ ------ ------ ------ ------ ------ ------ Total assets less current Liabilities 50,250 45,996 10,724 16,345 497 (57,659) 66,153 Creditors - amounts falling due after more than one year (1,037) (146) - - - - (1,183) Provisions for liabilities and charges (676) (53) (119) - - - (848) Equity minority interest (2,770) - (300) - - 270 (2,800) ------ ------ ------ ------ ------ ------ ------ Pro forma net assets 45,767 45,797 10,305 16,345 497 (57,389) 61,322 ====== ====== ====== ====== ====== ====== ====== On 2 February 2005 the Group amalgamated with Bertam Holdings PLC, Lendu Holdings PLC, Sungkai Holdings Limited, and others (M.P. Evans Malaysia Sdn. Bhd. and M.P. Evans (UK) Limited). The above pro forma statement of net assets is an illustrative unaudited statement of the combined net assets of the enlarged Group. As such, and because of its nature, it may not give a true picture of the financial position of the Group. It has been prepared on the basis that the amalgamation occurred on the 31 December 2004. The figures are taken from the unaudited accounts of the above Groups/Companies. By order of the board J F Elliott Secretary 9 May 2005

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