Final Results

R.E.A.Hldgs PLC
10 April 2001

R.E.A. Holdings plc

10 April 2001

Preliminary Results For The Year Ending 31 December 2000



Commentary on preliminary results - 2000

Results

The profit before taxation for 2000, as shown in the accompanying consolidated
profit and loss account, and the comparative figure for 1999, may be analysed
as shown in the following table


                                                               2000       1999
                                                              £'000      £'000
Normal Profits
Continuing operations                                           233        347
Discontinued operations                                       (133)          -
Sale of assets and investments                                  524        265

                                                                624        612



As may be deduced from the above table, the group was again moderately
successful in 2000 in divesting assets and businesses at a profit but normal
profits from continuing operations represented only a very low return on the
capital deployed in those operations.

This situation was not unexpected given that an ever increasing proportion of
the group's assets is being committed to the oil palm development project in
Indonesia. With that project only beginning to approach maturity, the group
remained, during 2000, largely dependent for its continuing profits upon the
results of its other remaining agricultural businesses and the profit
potential of those businesses is limited. Nevertheless, the results from
continuing operations were a little disappointing with poor prices and
unsatisfactory weather combining to depress the results from Bangladesh, East
Africa and North America being all of the group's established agricultural
operations.

Also very disappointing was the fact that growing production from the
Indonesian project (55,000 tonnes of fresh fruit bunches against 18,000 tonnes
in 1999) was accompanied by falling prices for crude palm oil so that the
hoped for increasing contribution from the project to group results failed to
materialise.



Group development

As already noted, the group continued during 2000 to divest assets and
investments. The main transactions were the sales of much of the remaining
merchanting operations, of almost all of the residual assets in East Africa
(comprising interests in Kenyan development land) and of the UK based wire
rope core manufacturing operation (which was 51 per cent owned).

The sale of the East African residual assets was accompanied by the purchase
of additional shares in REA Vipingo Plantations Limited ('RVP') which,
although contrary to the group's established policy of progressively divesting
non-Indonesian assets, was made to facilitate the sale of the residual assets
and to simplify the group's interests in East Africa. The balance of the
proceeds from the divestments was applied in financing further investment in
the Indonesian project to which the group continued, throughout 2000, to
commit funds.



Net assets

The 2000 balance sheet includes revaluations by the directors of all group
properties and estates. As in the past, the net overall revaluation has been
combined with various exchange translation adjustments. These arise mainly
from the impact of currency fluctuations on the translation into sterling of
the local currency values of overseas estates. In revaluing the property
underlying the Indonesian project, the directors have made special provision
for the present political and economic uncertainties of Indonesia.



Dividends

The two semi-annual dividends accruing in 2000 on the 9 per cent cumulative
preference shares were paid. No dividends in respect of 2000 have been paid or
are proposed on the ordinary shares.



Fundamental uncertainty

In the audit report in respect of the year ended 31 December 2000, the
auditors have referred to fundamental uncertainty affecting the group in the
following terms:

'Fundamental uncertainty

The group's operations in Indonesia continue to be exposed to adverse
economic, political and social conditions. In forming our opinion we have
considered the adequacy of disclosures made in the accounts concerning the
economic and political situation in Indonesia and its effect on the group.

Although exchange rates and other economic indicators appear to have been
stable during the year, it is not possible to determine the effect that social
unrest, political change or further deterioration in economic conditions may
have on the future values of assets, earnings, profitability or cash flows of
the group. The accounts include the effects of these factors so far as they
can currently be determined and estimated.

The accounts have been prepared on a going concern basis. There remains a
fundamental uncertainty as to the effect on the group's operations of the
economic, political and social conditions in Indonesia.'





Consolidated balance sheet 31 December 2000


                                                         2000              1999
                                                         £000              £000
Fixed assets
Tangible fixed assets                                   1,625             1,896
Fixed asset investments                                 7,394            11,242

                                                        9,019            13,138

Current assets
Stocks                                                     35               898
Debtors                                                 8,677            13,906
Cash                                                    4,109             2,565

                                                       12,821            17,369
Creditors up to one year                              (5,201)          (11,448)

Net current assets                                      7,620             5,921

Total assets less current liabilities                  16,639            19,059
Creditors over one year                               (1,100)             (664)

Net assets                                             15,539            18,395

Capital and reserves
Called up share capital                                14,890            14,890
Share premium account                                     720               720
Capital redemption reserve                              3,240             3,240
Warrants                                                1,219             1,219
Revaluation reserve                                     (772)             1,860
Profit and loss account                               (3,778)           (3,534)

Shareholders' funds*                                   15,519            18,395
Minority interests                                         20                 -

Total capital employed                                 15,539            18,395



*     Shareholders' funds comprise equity interest of £9,814,000 (1999 
      £12,690,000) and non-equity interest of £5,705,000 (1999 £5,705,000).



Consolidated profit and loss account

for the year ended 31 December 2000


                                                             2000         1999


                                                             £000         £000
Turnover
Continuing                                                    894       23,899
Discontinued                                               13,054            -

                                                           13,948       23,899
Cost of sales                                            (11,485)     (20,781)

Gross profit                                                2,463        3,118
Other income and expenses                                 (1,278)      (2,077)

Group operating profit *                                    1,185        1,041
Share of operating profit of associates
-     continuing                                              124        1,886
-     discontinued                                           (22)            -
Disposal of assets and                                        524          265

     investments - discontinued
Interest
-     associates                                            (547)      (1,724)
-     group                                                 (640)        (856)
Profit on ordinary activities before taxation                 624          612
Taxation on ordinary activities                                15        (214)
Profit on ordinary activities after                           639          398
taxation
Minority interests                                           (21)        (161)

Profit for the financial year                                 618          237
Dividends, including non-equity                             (513)        (513)
dividends

Retained loss for the year                                    105        (276)

Earnings/(loss) per ordinary share
- basic                                                      1.1p       (3.0)p
- fully dilisted                                             1.1p       (3.0)p



* Group operating profit comprises £911,000 for continuing operations and £
274,000 for discontinued (1999 £1,041,000 and £nil) respectively.

Total consolidated recognised gains and losses

for the year ended 31 December 2000




                                                            2000           1999
                                                            £000           £000
Profit for the financial year                                618            237
Goodwill previously written off on disposals                 250              -

Currency translation and revaluation adjustments         (3,231)             46

                                                         (2,363)            283










Consolidated cash flows for the year ended

31 December 2000
                                                                  2000     1999
                                                                  £000     £000
Net cash inflow from operating activities                        5,007    6,169

Dividends from associates                                            -      235

Returns on investments and servicing of finance
Interest received                                                1,541      568
Interest paid                                                    (640)    (856)
Investment income                                                   14        2
Dividends paid to minority shareholders                           (40)        -
Dividends paid to preference shareholders                        (513)    (559)

                                                                   362    (845)

Taxation                                                             2    (183)

Capital expenditure and financial investment
Purchase of tangible fixed assets                                 (29)     (21)
Sale of tangible fixed assets                                        -    1,337
Sale of investments                                              1,008      108
Purchase of investments                                              -     (70)

                                                                   979    1,354

Acquisitions and disposals
Purchase of shares in associated companies                       (313)        -
Sale of subsidiaries                                               200        -
Goodwill on sale of a business                                     300        -
Adjustment of selling price of interests in Willington            (53)        -

                                                                   134        -

Equity dividends paid                                            (368)        -

Cash inflow before management of liquid resources and            6,116    6,730
financing
Management of liquid resources                                 (1,641)  (2,050)

Financing
Net repayment of debt up to one year                           (4,972)    (118)
Net issue of debt over one year                                    575      315
Finance lease repayments                                         (129)    (118)
Share issue and expenses                                             -        1

                                                               (4,526)       80


Decrease/increase in cash                                         (51)    4,760






Notes to the preliminary accounts





Segment information

In the tables below the group's net assets, turnover and profit before
taxation (excluding result of sales of assets) are analysed by geographical
area and by business class. The element of continuing turnover and profit
before taxation (excluding result of sales of assets) included in total, is
separately identified.

Net assets, in the case of the geographical analysis, are allocated to the
area where the main operation of a particular activity is carried out and
where the majority of that activity's assets are situated. Unallocated items
include general group financing and head office costs; financing which is
directly attributable to a particular activity has been allocated to that
activity.

(a)     Net assets                        2000     2000          1999     1999
                                     Associates   Total     Associates   Total
Net assets - by geographical area           £m       £m            £m       £m
     United Kingdom                          -      8.0             -      6.6
     Continental Europe                      -      0.3             -      0.4
     Bangladesh                            1.1      1.1           1.1      1.1
     Indonesia                             3.7      3.7           7.1      7.1
     America                               0.3      0.3           0.4      0.4
     Africa                                2.1      2.1           2.0      2.8
                                           7.2     15.5          10.6     18.4
Net assets - by business class
     Merchanting                             -      0.3             -      1.8
     Agriculture                           7.2      7.2          10.6     10.6
     Other activities                        -        -             -      0.4
     Unallocated                             -      8.0             -      5.6
                                           7.2     15.5          10.6     18.4

(b)     Turnover
                                                 2000              2000    1999
                                                Total          Of which   Total
                                                             continuing
Turnover - by geographical area                    £m                £m      £m
     United Kingdom                               2.7               0.3     3.3
     Continental Europe                           5.4                 -    12.0
     Asia                                         2.5               0.2     4.2
     America                                      2.0               0.1     2.6
     Africa                                       1.2               0.3     1.3
     Australasia                                  0.1                 -     0.5
                                                 13.9               0.9    23.9
Turnover - by geographical area, by origin of
transaction
     United Kingdom                              11.1               0.8    22.0
     Continental Europe                           2.5                 -     1.6
     Africa                                       0.3               0.1     0.3
                                                 13.9               0.9    23.9
Turnover - by business class
     Merchanting                                 12.1               0.2    22.2
     Other activities                             1.8               0.7     1.7
                                                 13.9               0.9    23.9

Notes to preliminary accounts - continued
(c)     Profit before taxation excluding sales of assets

                                       2000   2000       2000

                                 Associates  Total   of which       1999   1999

                                       £000   £000 continuing Associates  Total

                                                         £000       £000   £000
Profit - by geographical area,
by origin of transaction
     United Kingdom                       -    493        654        -      183
     Continental Europe                   -    116          -        -       48
     Bangladesh                         (1)    (1)        (1)     (58)     (58)
     Indonesia                        (129)  (129)      (129)      157      157
     America                          (122)  (122)       (92)       87       87
     Africa                           (193)  (257)      (199)     (24)     (70)

                                      (445)    100        233      162      347

Profit - by business class
     Merchanting                          -     29         65        -      369
     Agriculture                      (445)  (445)      (415)      162      162
     Other activities                     -   (67)          -        -     (11)
     Unallocated                          -    583        583        -    (173)

                                      (445)    100        233      162      347