Interim Results

Rowe Evans Investments PLC 27 September 2002 ROWE EVANS INVESTMENTS PLC OIL PALM AND RUBBER PLANTATIONS IN INDONESIA Associated companies with plantation and property-development interests in Malaysia and cotton farming in Australia Announcement of unaudited interim results for the six months ended 30 June 2002 Highlights from the chairman's statement and unaudited interim results for the six months ended 30 June 2002 • profit before tax £2,658,000 (2001 £774,000) • much firmer palm oil prices during the period - average US$360/tonne (2001 US$250) • crop of oil palm fresh fruit bunches ('f.f.b.') lower due to dry period • share of associated companies' profits £1,580,000 (2001 £410,000) - Indonesia - higher f.f.b. crops after last year's acute downturn plus higher selling prices resulted in strong improvement in profits - Malaysia - better prices offset by lower crops resulted in higher plantation profits. Improved Malaysian property results in a lacklustre market - Australia - record cotton crop resulted in sharply improved profits • work expected to start on palm oil mill on Pangkatan Estate in early in 2003 • improved palm oil prices have continued so far since the half year • decision made to transfer to Alternative Investment Market (AIM): trading expected to commence on 28 October 2002 Chairman's statement I am pleased to report a profit before taxation for the six months ended 30 June 2002 of £2,658,000 which compares with £774,000 for the same period last year. The first half of 2002 was characterised by much improved palm oil prices, offset by lower crops on the Group's estates (but higher on the Indonesian associated companies' estates) and a stronger Rupiah. REVIEW OF THE PERIOD The palm oil market The vegetable oil market generally, and the palm oil market in particular, experienced a fall off in production in the first half of 2002 together with higher demand from most major users over the last year or so. Consequently stocks have moved markedly lower and, as a result of this, there has been upward pressure on prices and palm oil has been no exception. Having reached a low point of around US$215 per tonne in the first half of 2001 the price steadily improved and is currently around the US$400 level. The effect of this on the Group's operations can be clearly seen in the table below which shows that the average price that we received for our fresh fruit bunches ('f.f.b.') was Rp567,000 per tonne for the first half, compared with Rp351,000 for the first half last year. Exchange rates The US Dollar weakened against most currencies during the period, the Indonesian Rupiah and Sterling included. The Rupiah proved to be remarkably robust and gained ground on Sterling too. The stronger average rate of the Rupiah had a marginally negative effect on our Sterling earnings as palm oil is traded in US Dollars and a substantial amount of costs are Rupiah based. Results for the period Estate profit Crop and sales details were as follows:- 6 months 6 months Year ended ended ended 30 June 30 June 31 December 2002 2001 2001 CROPS Tonnes Tonnes Tonnes Oil palm fresh fruit bunches 54,900* 61,400 125,700 Rubber 584* 486 982 * including 3,127 tonnes of f.f.b. and 159 tonnes of rubber from Sennah Estate AVERAGE SELLING PRICES PER TONNE Oil palm fresh fruit bunches - Rp'000 567 351 383 Crude palm oil - Rotterdam cif - US$ 360 250 281 Rubber - Rp'000 5,052 5,825 5,411 EXCHANGE RATES Rp Rp Rp £1 = Indonesian Rupiah - average 13,917 14,953 14,666 - period-end 13,348 15,988 15,230 The markedly stronger palm oil price, offset by lower crops and the stronger Rupiah, resulted in an estate profit of £1,163,000 (2001 £627,000). The lower crops resulted from a period of lower than average rainfall in North Sumatra. Sennah Estate (1,813 hectares) was acquired during the period and contributed to the results to a minor extent. Associated companies The Group's share of the profits before taxation of the associated companies was £1,580,000 compared with last year's £410,000. Crops were as follows:- 6 months 6 months Year ended ended ended 30 June 30 June 31 December 2002 2001 2001 Oil palm fresh fruit bunches Tonnes Tonnes Tonnes - Indonesia 119,000 104,000 230,000 - Malaysia 35,000 41,000 82,000 Rubber - Indonesia 924 863 1,961 - Malaysia 27 40 92 Cotton Bales Bales Bales - Australia 18,350 8,000 8,000 Indonesia Whereas last year PT Agro Muko (30.43% owned) experienced an acute downturn in its crop in the first half combined with low palm oil prices, this year higher crops and prices resulted in a marked recovery in profits. Similarly, the results of PT Kerasaan Indonesia (36% owned) improved as a result of the firmer palm oil price. Malaysia The Bertam Holdings PLC group (45.94% owned) benefited from the improved palm oil market although its ffb crops were adversely affected by the dry weather. Its associated companies all showed improved profits primarily from property activities in Malaysia and the Australian cotton farming of Lendu Holdings PLC's Gubbagunyah Partnership in which the Bertam Holdings PLC group is an 8.7% partner. Australia Lendu Holdings PLC (35.11% owned) reported that its Australian irrigated cotton farm achieved a record crop of over 18,000 bales which, combined with reasonably good cotton prices and increased cattle trading profits, resulted in sharply improved profits. PANGKATAN PALM OIL MILL Progress continues with regard to the implementation of the palm oil mill on Pangkatan Estate. The various Government permissions and clearances are in the process of being obtained and negotiations with regard to bank finance are at an advanced stage. It is hoped that work will start on construction early in 2003. CURRENT TRADING Palm oil prices continue at the improved level referred to earlier and crops are increasing seasonally, although the original budget for the year of 142,000 tonnes (excluding Sennah Estate) is unlikely to be achieved. With regard to the associated undertakings, the Indonesian estates continue to benefit from the good palm oil prices and crops and the prospect for earnings and cash flows remains very positive. With regard to the Malaysian operations, the plantation activities continue successfully and the property activities are progressing steadily, despite the general downturn in the sector. Since 30 June 2002 the Lendu Holdings PLC group has acquired a further cotton farm in Australia with excess water capacity which will assist in the irrigation of the existing areas, although the season has so far been extremely dry. The total amount of cotton to be planted will depend on the likelihood of water allocations being made from the nearby river system which, in turn, will be determined by the amount of rainfall received before the planting season ends in October TRANSFER TO THE ALTERNATIVE INVESTMENT MARKET ('AIM') Your directors are very much aware of the need both to operate and to expand the Group's business in the most efficient and cost-effective manner. Accordingly, we have been considering the possibility of transferring trading in the Company's shares from the London Stock Exchange's main market for listed securities to AIM. The increasing profile of AIM, together with the flexibility afforded to AIM companies, has led us to decide to make the transfer as soon as possible. This will result in the simplification of administration and reporting requirements and there are expected to be longer-term benefits to shareholders. Application will be made shortly for all of the Company's issued share capital to be admitted to trading on AIM and it is anticipated that dealings will commence on 28 October 2002 and that the Company's official listing will be cancelled on the same day. Trading in the shares may then be conducted in the same way as on the main market, through a broker. The Company has appointed Brown, Shipley & Co. Limited to act as its nominated adviser and broker. Shareholders should be aware that companies listed on AIM are deemed to be unlisted for the purpose of certain areas of taxation law which may be of benefit to them. However, shareholders should consult their independent financial advisers on this point. The Company will continue to be subject to the regulatory and disciplinary controls of the London Stock Exchange. PHILIP FLETCHER 27 September 2002 Chairman Consolidated profit and loss account FOR THE SIX MONTHS ENDED 30 JUNE 2002 6 months 6 months Year ended ended ended 30 June 30 June 31 December 2002 2001 2001 £'000 £'000 £'000 Turnover 2,501 1,636 3,775 Cost of sales (1,338) (1,009) (2,450) Estate profit 1,163 627 1,325 Administrative expenses (240) (209) (410) Exchange differences (67) 99 129 Group operating profit 856 517 1,044 Share of operating profit in associates 1,580 410 2,255 Total operating profit 2,436 927 3,299 Exceptional items (note 3) 167 (246) (272) Profit on ordinary activities before interest 2,603 681 3,027 Interest receivable and similar income 75 93 165 Interest payable (20) - - Profit on ordinary activities before taxation 2,658 774 3,192 Tax on profit on ordinary activities (660) (286) (837) Profit on ordinary activities after taxation 1,998 488 2,355 Equity minority interests (210) (108) (212) Profit on ordinary activities attributable to the members of Rowe Evans Investments PLC 1,788 380 2,143 Equity dividend proposed - - (2,057) Profit retained for the financial period 1,788 380 86 Basic and diluted earnings per 10p share 3.69p 0.79p 4.43p All operations are classed as continuing Consolidated balance sheet AT 30 JUNE 2002 30 June 30 June 31 December 2002 2001 2001 £'000 £'000 £'000 Fixed assets Tangible assets 12,715 8,731 8,863 Investments 41,616 37,785 40,274 54,331 46,516 49,137 Current assets Stocks 236 117 130 Debtors 740 862 647 Cash at bank and in hand 789 1,750 3,389 1,765 2,729 4,166 Creditors: Amounts falling due within one year Bank overdraft 174 - - Trade creditors 714 113 131 Other creditors including taxation and social security 101 68 63 Equity dividend proposed - - 2,057 989 181 2,251 Net current assets 776 2,548 1,915 Total assets less current liabilities 55,107 49,064 51,052 Provision for liabilities and charges (146) - (484) Equity minority interests (2,649) (1,098) (1,191) 52,312 47,966 49,377 Capital and reserves Called-up share capital 4,840 4,840 4,840 Share premium account 5,108 5,108 5,108 Capital redemption reserve 27 27 27 Revaluation reserve 685 685 685 Share of associated companies' reserves 25,729 24,144 24,388 Profit and loss account 15,923 13,162 14,329 Total equity shareholders' funds 52,312 47,966 49,377 Reconciliation of movements in shareholders' funds Profit attributable to members of the 1,788 380 2,143 Company Equity dividend - - (2,057) 1,788 380 86 Other recognised gains and losses relating to the period 1,147 (121) 1,996 Net addition to shareholders' funds 2,935 259 2,082 Opening equity shareholders' funds 49,377 47,707 47,295 Closing equity shareholders' funds 52,312 47,966 49,377 Consolidated cash-flow statement FOR THE SIX MONTHS ENDED 30 JUNE 2002 6 months 6 months Year ended ended ended 30 June 30 June 31 December 2002 2001 2001 £'000 £'000 £'000 Reconciliation of total operating profit to net cash inflow from operating activities Total operating profit 2,436 927 3,299 Exchange differences 38 (74) (82) Gain on sale of tangible fixed assets - - (7) Depreciation 129 114 231 Share of associated undertakings' profits (1,580) (410) (2,255) (Increase)/decrease in stocks (96) 9 (4) Increase in debtors (366) (145) (28) Increase in creditors 85 57 419 Net cash inflow from operating activities 646 478 1,573 Returns on investments and servicing of finance 909 651 1,488 Tax received/(paid) 33 (240) (431) Capital expenditure and financial investment (2,642) (83) (206) Equity dividend paid (2,057) (2,057) (2,057) Net cash (outflow)/inflow before management of liquid resources and financing (3,111) (1,251) 367 Management of liquid resources Decrease/(increase) in short-term deposits 2,604 1,196 (425) Financing Issue of shares 113 - - Decrease in cash (394) (55) (58) Returns on investments and servicing of finance Dividends received from associated undertakings 853 601 1,369 Dividends paid to minorities - (42) (46) Capital distribution to minorities - (1) - Interest and similar income received 56 93 165 Net cash inflow on returns on investments and servicing of finance 909 651 1,488 Capital expenditure and financial investment Purchase of tangible fixed assets (97) (95) (224) Sale of tangible fixed assets 10 12 17 Purchase of subsidiary undertaking (1,752) - 1 Net overdraft acquired with subsidiary (803) - - Net cash outflow from capital expenditure and financial Investment (2,642) (83) (206) Reconciliation of net cash flow and movement in net funds Decrease in cash in the period (394) (55) (58) (Decrease)/increase in liquid resources (2,604) (1,196) 425 Exchange differences 224 (52) (31) Movements in net funds (2,774) (1,303) 336 Net funds at 1 January 3,389 3,053 3,053 Net funds at 30 June/31 December 615 1,750 3,389 NOTES 1. Statutory information The financial information for the six-month periods ended 30 June 2002 and 2001 has been neither audited nor reviewed by the Group's auditors and does not constitute accounts within the meaning of section 240 of the Companies Act 1985. The financial information for the year ended 31 December 2001 is abridged from the statutory accounts which have been reported on by the Group's auditors, Deloitte & Touche, and which have been filed with the Registrar of Companies. The report of the auditors thereon was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. 2. Accounting policies These interim accounts have been prepared on the basis of accounting policies as set out in the annual financial statements at 31 December 2001. 3. Exceptional items 6 months 6 months Year ended ended ended 30 June 30 June 31 December 2002 2001 2001 £'000 £'000 £'000 Gain on sale of tangible fixed assets 4 11 - Share of associated undertakings' exceptional items Gain on sale of tangible fixed assets 163 50 - Gain on sale of fixed-asset investments - 6 109 Merger costs - (313) (381) 167 (246) (272) 4. Distribution The Company will be circulating its interim report to members on 2 October 2002 and copies may be obtained thereafter from M.P.Evans (UK) Limited, 3 Clanricarde Gardens, Tunbridge Wells, Kent TN1 1HQ. By order of the board M. P. Evans (UK) Limited Secretaries 27 September 2002 Enquiries: Philip Fletcher Telephone 01892 516333 Fax: 01892 518639 E-mail: philipf@mpevans.co.uk This information is provided by RNS The company news service from the London Stock Exchange

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