Agriterra Ltd / Ticker: AGTA / Index: AIM / Sector: Agriculture
24 October 2011
Agriterra Ltd ('Agriterra' or 'the Group')
Final Results
Agriterra Ltd, the AIM listed company focussed on the agricultural sector in Africa, announces its results for the year ended 31 May 2011.
OVERVIEW
· Substantial organic growth across cattle ranching and maize processing division, and entrance into the cocoa market following the acquisition of Tropical Farms Limited
· 55% increase in turnover to $13.6m (2010: $8.8m) and total maize meal sales up 56% to 28,822 tonnes (2010: 18,496 tonnes)
· Initial revenue generated from beef business - feedlot in operation and first sales achieved an average of $835 per carcass
· Rapid growth in beef herd to 2,350 head including a 560 head top quality Beefmaster breeding herd
· Hydroelectric dam capable of irrigating 4,000 hectares at Mavonde under construction and due for completion by the end of 2011
· Construction of abattoir commenced and due for completion in Q2 2012 - capacity of 4,000 head per month
CHAIRMAN'S STATEMENT
This has been a highly active period for the Group, marked by both substantial organic growth across our existing beef and maize divisions, and post year end, through product and geographic diversification in the form of our new cocoa farm management, buying and trading business.
At Mozbife Limitada ('Mozbife'), the cattle ranching business, we have invested significantly during the year and continue to do so post year end. This has translated into the growth of our total herd, now standing at 2,350, achieved despite the temporary import restrictions of cattle from South Africa which constrained the development of our Beefmaster breeding herd. Our total land holdings now stand at over 16,000 hectares, which includes the 1,000 hectare Mavonde Stud Ranch, which supports the Beefmaster breeding herd, the 15,000 hectare Dombe ranch on which a Use of Development of Land licence ('DUAT') was granted by the Government of Mozambique in the year and over 700 hectares at the Vanduzi feedlot operations.
At Mavonde, we are in the process of constructing the Mavonde dam which will eventually facilitate the irrigation of up to 4,000 hectares of pasture. To this end we are investigating the possible acquisition of additional neighbouring land.
Our strategy of becoming a vertically integrated beef producer is progressing. Phase 1 of our Vanduzi feedlot project has been completed, while the construction of the abattoir with a capacity of 4,000 head per month continues with commissioning expected in Q2 2012. In addition to product from our own herds, throughput for the feedlot and abattoir will be supplemented using cattle bought in from local communities, building on the Group's experience from our well established maize buying operation.
The abattoir is a key facet in establishing ourselves as a "field to fork" producer in order to maximise the benefits from a full value chain. With this in mind, we believe Mozbife has the potential to be a high margin business capable of generating substantial recurring revenue for the Agriterra group.
Our maize buying and milling operations at Desenvolvimento E Comercialização Agricola Limitada ('DECA') and Compagri Limitada ('Compagri') have performed strongly during the year with total sales increasing by 55% from the previous year to US$13.6 million while combined sales of meal from both facilities totalled 28,822 tonnes over the year, an increase of 56% on the previous year. The synergies between our maize operations and our beef division are already providing economic benefits, as bran, the by-product of the milling processes, is in part used as a feed supplement for the Vanduzi feedlots.
The acquisition of Sierra Leone based Tropical Farms Limited ('TFL'), post year end, is a significant new addition to our product range. The board believes that cocoa represents an exciting opportunity for the Group given the strengthening global demand, in particular for sustainable and traceable cocoa. TFL, which at present is a buying and trading operation, provides the ideal conduit to branch out into cocoa production in West Africa. At present, our energies are focussed on implementing new initiatives to help increase yields for our out-growers, thereby improving our volumes, margins and profitability in Sierra Leone. These initiatives, which include the implementation of modern farm management techniques and farmer incentive schemes, have proved to be extremely successful at our maize facilities in Mozambique, and with this in mind, the board is confident that similar results can be achieved with cocoa production in Sierra Leone and the wider region. The Group is also actively pursuing opportunities to acquire plantation land to further secure the supply of sustainable and traceable cocoa.
Financial Results
The Group is investing heavily in its cattle ranching division and in line with this, the Group is reporting a pre-tax loss of US$2.2m (2010: pre-tax loss of US$3.9m) on turnover of US$13.6m (2010: US$8.8m). Cash balances at the period end remained healthy at $8.2m (2010: $3.4m). In addition the Group had approximately 11,074 tonnes of maize in stock at the end of the period, ready to be processed and sold.
Outlook
The development of our integrated grain and beef businesses in Mozambique is progressing extremely well. Our initial beef sales have been exceptionally well received locally in Mozambique where demand can currently only be satisfied by imports. The growth in local demand will be further enhanced by significant investment in the resources sector. Geographically, Mozambique is also well placed to service export markets in the near and far east where demand for beef along with other agricultural product is expected to grow substantially.
Using our experience in Mozambique, the board believe that cocoa in West Africa represents a significant opportunity to develop our product range in a sector that is expected to benefit from increased demand with the emergence of a thriving middle class across the developing world. The Group's strategy to establish itself as a secure, sustainable and traceable source of supply is well timed to meet the requirements of the major cocoa consumers who are placing increased emphasis in this area.
Finally, on behalf of the board, I would like to thank all of those whose dedication over the year has contributed to Agriterra's achievements, and also to our shareholders, whose continued support of the Group has helped us reach this transformational phase in the Group's life.
Phil Edmonds
Chairman
21 October 2011
OPERATIONS REVIEW
Mozbife
Our beef division has enjoyed rapid growth over the year, and this remains a key area of investment for the Group. In addition to rapidly expanding our breeding herd, with a target of reaching 10,000 head in the medium term, we have also made significant strides in establishing Mozbife as a "field to fork" producer, enabling Mozbife to benefit from the downstream value of directly supplying our meat products to the consumer.
A key focus at our 1,000 hectare Mavonde stud ranch has been the construction of a dam, which is on schedule to be completed in December 2011. Once finished, the dam will hold 48 billion litres of water, making it the second largest dam in the Manica Province of Mozambique. The dam will have the capacity to irrigate in excess of 4,000 hectares, and in line with this, Mozbife is currently in negotiations to acquire additional land to enlarge the Mavonde ranch to 5,000 hectares. With full irrigation, the head to hectare ratio at Mavonde will be able to be increased from 1.5 to 7 head per hectare. Importantly, the dam will also provide 132kV of hydroelectric power for the Mavonde project which will reduce costs significantly by providing power for the irrigation pumps.
Clearing at Mavonde continues with 400 hectares now cleared and stocked with 560 high quality Beefmaster cattle, which are prized for their top weight gaining ability and quality of meat, in addition to their adaptability to hot climates. A successful breeding season has resulted in pregnancy rates continuing to exceed 80%. A further 200 Beefmasters have also been purchased in South Africa and are due for delivery in December 2011 in order for our total herd to continue to grow and reach 5,000 head by the end of 2012.
Investment at the 15,000 hectare Dombe ranch continues to be focussed on infrastructure, with the construction of paddocks, 80km of road and fencing well underway, as well as additional water boreholes for irrigation during particularly dry periods. The DUAT for the Dombe Ranch has also been received, which extends our lease on the property for a further 50 years. Cattle are currently being bought in from local communities, using a similar model to that established by Agriterra's maize out-grower business, in order to supplement the current herd which stands at 2,350 head. These additional cattle are being bought in to rapidly build the total herd across the two ranches, where the Group holds long leased land capable of supporting in excess of 20,000 head.
Additional investment has been focussed on the Vanduzi feedlot project, located near the town of Chimoio in central Mozambique. Phase 1 of the project has been completed with the construction of a six pen line, with each pen having capacity for 160 cattle. This provides a rolling capacity of approximately 1,000 head every three months. There are currently 600 head on the feedlot, made up of a mixture of Brahmin, Beefmaster, Jersey and local cattle. An additional six pen feedlot line is under construction, with completion targeted for November 2011 which will double the current rolling capacity to 2,000 head every three months. Sales of cattle from the feedlot have commenced with volumes expected to increase as recent purchases move through the 90 day feedlot cycle. An average price of $835 per carcass has been achieved to date. In addition, the neighbouring farm has been acquired by Agriterra in order to augment our total feed cropping and pasture capability, raising the total land suitable for planting to 700 hectares.
Construction of the abattoir at Chimoio is progressing well. The foundations at the 73m by 29m site are finished as is the erection of the external structure. The internal work is now underway, which is targeting a 4,000 head per month processing rate. Mozbife is also installing a goat processing line. Construction is expected to be finished in May 2012 ahead of commissioning in Q2 2012.
Maize Processing - DECA and Compagri
Agriterra's maize processing and farming operations continue to generate significant revenues for the Group, and remain key components of our wider agricultural strategy. The year under review has seen our DECA and Compagri facilities, located in Chimoio in central Mozambique and Tete in northern-west Mozambique respectively, continue to perform strongly and achieve record breaking successes.
Record maize sales were achieved by DECA and Compagri during the year, with total sales increasing by 55% on the previous year to US$13.6 million (2010: US$8.8 million). Combined sales of meal from both facilities totalled 28,822 tonnes over the period, an increase of 56% on previous full year (2010: 18,496 tonnes). These figures have vastly improved from last year due to the advent of milling at Compagri, which is now performing well in the export market.
Mozambique suffered from a poor harvest during the 2010/2011 season, which resulted in higher sales albeit at lower volumes acquired domestically. This situation led to a reduction in maize purchased to 25,185 tonnes, however the outlook remains buoyant with the current buying season commencing strongly with 6,000 tonnes secured before the year end and 34,000 tonnes acquired in total to date. This provides Agriterra with a very strong position as we look to the next ramp up in sales which we expect in November-December 2011 due to the cyclical nature of maize production and harvest.
I am confident that both our DECA and Compagri facilities are well placed to continue to grow thanks to the highly recognisable and well respected brand that we have established during our seven years of maize operations in Mozambique, as well as a highly efficient buying infrastructure across our regions of focus. Our Compagri facility in particular offers a great deal of potential growth due to the rapid increase in population density in that region of Mozambique, as a result of the current mining boom in Tete and its hinterland.
Tropical Farms Limited
Post year end, the Group acquired Sierra Leone based Tropical Farms Limited ('TFL'), enabling the Group to further diversify in terms of product and geographically. TFL has provided the Group with a platform from which to expand into cocoa production by making use of TFL's regional expertise and established buying operations in West Africa. The board understands the importance of forging long term relationships with farmers and out-growers, implementing farm management initiatives in order to maintain a sustainable and traceable supply of cocoa, and in time, we hope to supplement this production through the development of Agriterra's own cocoa plantations.
TFL has expanded from four to eleven buying centres and has a direct buying register of approximately 2,000 farmers across Sierra Leone. It is our intention to develop additional community buying centres, as well as solar and batch drying and fermentation facilities. The board expect that such investment will increase total buying capacity as well as guarantee supplies of cocoa. Importantly, TFL's buying model enables the origins of supplies to be traced without the need for local agents.
TFL is in the process of acquiring land near Freetown to construct a continuous cocoa drying, coffee processing and warehousing facility. The warehouse will also comprise a collateralised management warehouse facility providing security for trade finance for TFL's cocoa. This facility could be extended to cover other agricultural produce and be made available to third parties in due course.
In keeping with Agriterra's beef and maize businesses, the Board intends to transform TFL into a vertically integrated business, utilising a 'tree to market-place' business model. As well as organic development, the Board is currently evaluating additional acquisition opportunities from which to expand its activities.
A key instigator of the growth strategy for our cocoa business is Adrian Simpson, managing director of TFL. Adrian has 25 years' international experience in the commodities and risk management trade, including nine years at E D & F Man where he spent four years running a large cocoa buying operation in the Cote D'Ivoire and six years at Drum Resource Ltd, a London based company founded by Adrian that focussed on trading and international risk management for the commodity trade. I am confident that Adrian will play a key role in the development of our newly formed cocoa division as we build our presence in the sector across West Africa.
Euan Kay
Executive Director
21 October 2011
For further information please visit www.agriterra-ltd.com or contact:
Andrew Groves |
Agriterra Ltd |
Tel: +44 (0) 20 7408 9200 |
Jonathan Wright |
Seymour Pierce Ltd |
Tel: +44 (0) 20 7107 8000 |
David Foreman |
Seymour Pierce Ltd |
Tel: +44 (0) 20 7107 8000 |
Nick Stone |
Matrix Corporate Capital LLP |
Tel: +44 (0) 20 3206 7000 |
Hugo de Salis |
St Brides Media & Finance Ltd |
Tel: +44 (0) 20 7236 1177 |
Susie Geliher |
St Brides Media & Finance Ltd |
Tel: +44 (0) 20 7236 1177 |
CONSOLIDATED INCOME STATEMENT
For the year ended 31 May 2011
|
|
|
Year ended 31 May |
|
Year ended 31 May |
|
|
|
2011 |
|
2010 |
Continuing Operations |
Note |
|
$'000 |
|
$'000 |
|
|
|
|
|
|
Revenue |
|
|
13,588 |
|
8,791 |
Increase in value of biological assets |
5 |
|
214 |
|
22 |
Cost of sales |
|
|
(10,372) |
|
(7,371) |
|
|
|
|
|
|
Gross profit |
|
|
3,430 |
|
1,442 |
|
|
|
|
|
|
Operating expenses |
|
|
(6,109) |
|
(5,686) |
Other income |
|
|
349 |
|
386 |
|
|
|
|
|
|
Operating loss |
|
|
(2,330) |
|
(3,858) |
|
|
|
|
|
|
Finance income |
|
|
159 |
|
106 |
Finance costs |
|
|
- |
|
(152) |
|
|
|
|
|
|
Loss before taxation |
|
|
(2,171) |
|
(3,904) |
|
|
|
|
|
|
Income tax expense |
3 |
|
(168) |
|
- |
|
|
|
|
|
|
Loss after tax |
|
|
(2,339) |
|
(3,904) |
|
|
|
|
|
|
Discontinued operations |
|
|
|
|
|
Loss for the year |
|
|
(89) |
|
(920) |
|
|
|
|
|
|
Loss for the year attributable to owners of the parent |
|
|
(2,428) |
|
(4,824) |
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
- Basic and diluted (cents) |
4 |
|
(0.4c) |
|
(0.9c) |
|
|
|
|
|
|
Loss per share from continuing operations |
|
|
|
|
|
- Basic and diluted (cents) |
4 |
|
(0.4c) |
|
(0.8c) |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 May 2011
|
|
Year ended 31 May |
|
Year ended 31 May |
|
|
2011 |
|
2010 |
|
|
$'000 |
|
$'000 |
|
|
|
|
|
Loss for the year |
|
(2,428) |
|
(4,824) |
|
|
|
|
|
Foreign exchange translation differences |
|
3,399 |
|
(6,005) |
|
|
|
|
|
Other comprehensive income for the year |
|
3,399 |
|
(6,005) |
|
|
|
|
|
Total comprehensive income for the year attributable to owners of the parent company |
|
971 |
|
(10,829) |
|
|
|
|
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 May
|
|
|
2011 |
|
2010 |
|
Note |
|
$'000 |
|
$'000 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Intangible assets |
|
|
271 |
|
- |
Property, plant and equipment |
|
|
13,264 |
|
9,986 |
Investments |
|
|
- |
|
114 |
Biological assets |
5 |
|
631 |
|
236 |
Total non-current assets |
|
|
14,166 |
|
10,336 |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Biological assets |
5 |
|
157 |
|
- |
Inventories |
|
|
2,976 |
|
4,605 |
Trade and other receivables |
|
|
2,039 |
|
1,019 |
Cash and cash equivalents |
|
|
8,172 |
|
3,442 |
Total current assets |
|
|
13,344 |
|
9,066 |
|
|
|
|
|
|
TOTAL ASSETS |
|
|
27,510 |
|
19,402 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
|
|
(2,678) |
|
(2,176) |
|
|
|
|
|
|
NET ASSETS |
|
|
24,832 |
|
17,226 |
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
Issued capital |
6 |
|
1,387 |
|
1,161 |
Share premium |
|
|
131,593 |
|
125,184 |
Share based payment reserve |
|
|
1,360 |
|
1,360 |
Translation reserve |
|
|
(1,782) |
|
(5,181) |
Retained earnings |
|
|
(107,726) |
|
(105,298) |
|
|
|
|
|
|
TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT |
|
24,832 |
|
17,226 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY As at 31 May 2011
|
Ordinary share capital $'000 |
Deferred share capital $'000 |
Share premium $'000 |
Share based payment reserve $'000 |
Translation reserve $'000 |
Retained earnings $'000 |
Total $'000 |
Balances at 1 June 2009 |
801 |
238 |
119,349 |
1,281 |
824 |
(99,513) |
22,980 |
Loss for the year |
- |
- |
- |
- |
- |
(4,824) |
(4,824) |
Other comprehensive income |
|
|
|
|
|
|
|
Exchange translation differences on foreign operations |
- |
- |
- |
- |
(6,005) |
- |
(6,005) |
Total comprehensive income for the year
|
- |
- |
- |
- |
(6,005) |
(4,824) |
(10,829) |
Transactions with owners |
|
|
|
|
|
|
|
Share based payment charge |
- |
- |
- |
79 |
- |
- |
79 |
Acquisition of minority |
- |
- |
- |
- |
- |
(961) |
(961) |
Share issues |
122 |
- |
6,107 |
- |
- |
- |
6,229 |
Issue costs |
- |
- |
(272) |
- |
- |
- |
(272) |
Total transactions with owners
|
122 |
- |
5,835 |
79 |
- |
(961) |
5,075 |
Balances at 31 May 2010 |
923 |
238 |
125,184 |
1,360 |
(5,181) |
(105,298) |
17,226 |
|
|
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
- |
- |
(2,428) |
(2,428) |
Other comprehensive income |
|
|
|
|
|
|
|
Exchange translation differences on foreign operations |
- |
- |
- |
- |
3,399 |
- |
3,399 |
Total comprehensive income for the year
Transactions with owners |
- |
- |
|
- |
3,399 |
(2,428) |
971 |
Share issues |
226 |
- |
6,570 |
- |
- |
- |
6,796 |
Issue costs |
- |
- |
(161) |
- |
- |
- |
(161) |
Total transactions with owners |
226 |
- |
6,409 |
- |
- |
- |
6,635 |
Balances at 31 May 2011 |
1,149 |
238 |
131,593 |
1,360 |
(1,782) |
(107,726) |
24,832 |
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 May 2011
|
|
|
Year ended 31 May |
|
Year ended 31 May |
|
|
|
2011 |
|
2010 |
|
|
|
$'000 |
|
$'000 |
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
Loss before tax |
|
|
(2,171) |
|
(3,904) |
Adjustments for: |
|
|
|
|
|
- Depreciation of property, plant and equipment |
|
|
1,228 |
|
1,359 |
- Loss/(profit) on disposal of property, plant and equipment |
|
5 |
|
(20) |
|
- Share based payment charge |
|
|
- |
|
79 |
- Foreign exchange |
|
|
(355) |
|
(42) |
- Net interest (income) / expense |
|
|
(159) |
|
46 |
Operating cash flow before movements in working capital |
(1,452) |
|
(2,482) |
||
Working capital adjustments: |
|
|
|
|
|
- Decrease / (increase) in inventory |
|
|
1,973 |
|
(3,182) |
- Increase in receivables |
|
|
(547) |
|
(523) |
- Increase / (decrease) in payables |
|
|
261 |
|
(506) |
Cash from / (used in) operations |
|
|
235 |
|
(6,693) |
Finance charges |
|
|
- |
|
(152) |
Interest received |
|
|
159 |
|
106 |
Net cash from / (used in) continuing operating activities |
394 |
|
(6,739) |
||
Net cash outflow from discontinued activities |
|
|
(198) |
|
(783) |
Net cash from / (used in) operating activities |
|
|
196 |
|
(7,522) |
|
|
|
|
|
|
Taxation |
|
|
|
|
|
Corporate tax paid |
|
|
(38) |
|
- |
Net cash outflow from taxation |
|
|
(38) |
|
- |
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Purchase of intangible asset |
|
|
(250) |
|
- |
Purchase of property, plant and equipment |
|
|
(2,568) |
|
(1,346) |
Proceeds on sale of property, plant and equipment |
|
|
38 |
|
135 |
Purchase of biological assets |
|
|
(255) |
|
(64) |
Proceeds on sale / (purchase) of investment in financial assets |
|
128 |
|
(125) |
|
Net cash used in investing in continuing activities |
|
|
(2,907) |
|
(1,400) |
Net cash from investing in discontinued activities |
- |
|
3 |
||
Net cash used in investing activities |
|
|
(2,907) |
|
(1,397) |
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Proceeds from issue of share capital |
|
|
6,883 |
|
5,082 |
Share issue costs |
|
|
(161) |
|
(272) |
Draw down of related party loan |
|
|
- |
|
225 |
Repayment of related party loan |
|
|
- |
|
(225) |
Net cash from financing activities |
|
|
6,722 |
|
4,810 |
|
|
|
|
|
|
Net increase / (decrease) in cash and cash equivalents |
|
3,973 |
|
(4,109) |
|
|
|
|
|
|
|
Cash and cash equivalents at start of the year |
|
|
3,442 |
|
8,517 |
|
|
|
|
|
|
Exchange rate adjustment |
|
|
757 |
|
(966) |
|
|
|
|
|
|
Cash and cash equivalents at end of the year |
|
|
8,172 |
|
3,442 |
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 May 2011
1. General Information
Agriterra Limited is incorporated and domiciled in Guernsey. The nature of the Group's operations and its principal activities are set out in the Chairman's Statement and Operations Overview above.
The financial information set out above for the years ended 31 May 2011 and 2010 does not constitute the Group's statutory accounts but is derived from those accounts. Statutory accounts for the year ended 31 May 2011 have been reported on by the Group's auditors and contain an unqualified opinion. The results have been prepared using accounting policies consistent with those used in the preparation of the statutory accounts.
The reporting currency for the Group is the U.S. Dollar (USD) as it better reflects the Group's business activities in the agricultural sector in Africa. Full statutory financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.
The full audit report is contained in the Company's Annual Report, which will be available on the Company's website by 30 November 2011.
2. Critical accounting estimates and judgments
The preparation of financial statements in conformity with EU adopted IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Impairments
Impairment reviews on non-current assets are carried out on each cash-generating unit identified in accordance with IAS 36 "Impairment of Assets". At each reporting date, where there are indicators of impairment, the net book value of the cash generating unit is compared with the associated fair value.
On 6 January 2009, the shareholders approved the adoption of the investing strategy to acquire or invest in businesses or projects operating in the agricultural and associated civil engineering industries in Southern Africa.
The directors decided to suspend exploration activities and reduce expenditure to the minimum required in order to retain exploration licenses. Consequently the directors consider that the value of exploration and evaluation and other related assets of $79,580,000 is fully impaired.
Biological assets
Biological assets (cattle) are measured at their fair value at each balance sheet date. The fair value of cattle is based on the estimated market value for cattle of a similar age and breed, less the estimated costs to bring them to market. Changes in any estimates could lead to recognition of significant fair value changes in the income statement. At 31 May 2011 the value of the breeding herd disclosed as a non-current asset was $631,000 (2010: $236,000). The value of the herd held for slaughter disclosed as a current asset was $157,000 (2010:$ nil).
3. Income tax expense
|
2011 |
|
2010 |
|
$'000 |
|
$'000 |
|
|
|
|
Loss before tax from continuing activities: |
(2,171) |
|
(3,904) |
|
|
|
|
Tax at the Mozambican corporation tax rate 32% (2010: 32%) |
(695) |
|
(1,249) |
Tax effect of expenses that are not deductible in determining taxable profit |
21 |
|
3 |
Tax effect of utilisation of losses |
(90) |
|
- |
Tax effect of losses not allowable |
341 |
|
587 |
Tax effect of losses not recognised in overseas subsidiaries (net of effect of different rates) |
503 |
|
659 |
Charge in respect of prior years |
88 |
|
- |
|
|
|
|
Tax expense for the year |
168 |
|
- |
The tax reconciliation has been prepared using a 32% tax rate, the corporate income tax rate in Mozambique, as this is where the Group's principal assets of its continuing operations are located.
4. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
|
2011 |
|
2010 |
|
$'000 |
|
$'000 |
|
|
|
|
Loss for the purposes of basic earnings per share (loss for the year attributable to equity holders of the parent) |
2,428 |
|
4,824 |
Loss for the purposes of basic earnings per share from continuing activities |
2,339 |
|
3,904 |
Loss for the purposes of basic earnings per share from discontinued activities |
89 |
|
920 |
|
|
|
|
Number of shares |
|
|
|
|
|
|
|
Weighted average number of ordinary shares for the purposes of basic and diluted loss per share |
625,894,111 |
|
515,129,499 |
|
|
|
|
Loss per share |
0.4c |
|
0.9c |
Loss per share from continuing activities |
0.4c |
|
0.8c |
Due to the loss incurred in the year, there is no dilutive effect of share options.
5. Biological assets |
|
|
|
|
|
|
$'000 |
|
|
|
|
At 1 June 2009 |
|
|
207 |
Purchase of biological assets |
|
|
64 |
Change in fair value |
|
|
22 |
Foreign exchange |
|
|
(57) |
Balance at 1 June 2010 |
|
|
236 |
|
|
|
|
Purchase of biological assets |
|
|
289 |
Sale of biological assets |
|
|
(34) |
Change in fair value |
|
|
214 |
Foreign exchange |
|
|
83 |
Balance at 31 May 2011 |
|
|
788 |
Biological assets comprise a breeding herd of cattle. Certain livestock is held for slaughter and has been classified as a current asset. The remainder is expected to be held for more than one year and has been classified as a non-current asset, as follows:
|
|
2011 |
2010 |
2011 |
2010 |
|
|
Head |
Head |
$'000 |
$'000 |
|
|
|
|
|
|
Non-current asset |
|
1,153 |
400 |
631 |
236 |
Current asset |
|
292 |
- |
157 |
- |
|
|
1,445 |
400 |
788 |
236 |
The change in fair value has been included in cost of sales in the income statement.
6. Share capital
|
|
||
Group and company |
|
||
|
Authorised |
Allotted and fully paid |
|
Ordinary shares of 0.1p each |
Number |
Number |
$'000 |
|
|
|
|
At 1 June 2009 |
2,345,000,000 |
473,821,554 |
801 |
Issue of shares |
- |
73,950,000 |
122 |
At 1 June 2010 |
2,345,000,000 |
547,771,554 |
923 |
Issue of shares |
- |
145,483,334 |
226 |
At 31 May 2011 |
2,345,000,000 |
693,254,888 |
1,149 |
Deferred shares of 0.1p each |
|
|
|
At 1 June 2009, 2010 and 31 May 2011 |
155,000,000 |
155,000,000 |
238 |
Total share capital |
|
|
|
At 31 May 2011 |
2,500,000,000 |
848,254,888 |
1,387 |
At 31 May 2010 |
2,500,000,000 |
702,771,554 |
1,161 |
The Company has one class of ordinary share which carries no right to fixed income.
The deferred shares carry no right to any dividend; no right to receive notice, attend, speak or vote at any general meeting of the Company; and on a return of capital on liquidation or otherwise, the holders of the deferred shares are entitled to receive the nominal amount paid up after the repayment of £1,000,000 per ordinary share. In the event that disputes over certain oil and gas assets are satisfactorily resolved, the deferred shares may be converted into ordinary shares by resolution of the board.
On 31 October 2009, the Company issued 63,950,000 ordinary shares of 0.1p each for cash at 5p per share raising gross cash proceeds of $5m to provide funding for the development of its agricultural activities.
On 23 December 2009 the Company issued 10,000,000 ordinary shares of 0.1p each as consideration shares for the acquisition of the 25% minority interest of the issued share capital of DECA, Compagri and Mozbife.
On 16 November 2010 the Company issued 145,483,334 ordinary shares of 0.1p each for cash at 3p per share raising gross cash proceeds of $6.9m to provide funding for the continued development of the Company's cattle ranching and feedlot production business in Mozambique
7. Post balance sheet events
On 13 July 2011, the Company through its wholly owned subsidiary West Africa Cocoa Services Limited, acquired the entire issued share capital of Tropical Farms Limited ("TFL"), a cocoa company in Sierra Leone.
TFL has established a high quality, sustainable and traceable cocoa buying operation. There are four buying centres in operation and a direct buying register of approximately 2,000 cocoa farmers. In addition to the existing infrastructure and sourcing register, TFL has an experienced management team who will enable the Company to accelerate development of additional community buying centres, solar drying and fermentation facilities.
** ENDS **