Interim Report

R.E.A.Hldgs PLC
19 September 2001

LETTER TO COMPANY ANNOUNCEMENTS OFFICE

LETTER DATED 18 September 2001

At a board meeting held today the directors considered and approved the 2001 
Interim Report incorporating the unaudited results for the six months to 30 June
2001.

LETTER FROM R. E. A. HOLDINGS plc 



                         R. E. A. HOLDINGS plc 
              (Registered in England and Wales number 671099)


                           Interim Report 2001 



Interim statement
 
The results for the half year to 30 June 2001 were considerably influenced by
the several significant corporate transactions agreed during the period. As
previously announced and approved by shareholders, the group's former head
office at 7 Bedford Square was sold together with the group's sisal interests
in East Africa, its fruit farming and viticultural interests in North America
and the residue of its former merchanting activities. These disposals
accounted for the bulk of the surplus on disposal of assets and investments.
The group also concluded agreements for the unconditional sale of half of its
remaining 50 per cent shareholding in Deundi Tea Company Limited and for the
conditional sale of the balance.
 
Substantially the whole of the continuing operations of the group are now
represented by the interests in the P.T. REA Kaltim Plantations ('REA Kaltim') 
oil palm project in East Kalimantan. Yields from those interests continued to 
increase and 46,700 tonnes of oil palm fresh fruit bunches were harvested in the
six months to 30 June 2001 as compared with 19,500 tonnes in the same period of 
2000. Results, however, were disappointing because of the very low price for 
crude palm oil which averaged US$248 per tonne over the period.
 
The open offer of ordinary shares of April 2001 raised some £1.3 million after 
expenses. The subsequent conversion of the former ordinary shares of £1 each 
into ordinary shares of 25p each and deferred shares of 75p each and the
cancellation of the resultant deferred shares has had no effect on shareholder 
funds because the £6.9 million arising from the cancellation has been credited 
to a special reserve. The proceeds of the sales of assets and investments, being
some £5.3 million, have been used to eliminate borrowings and augment the 
group's cash resources. 

Negotiations for the rescheduling of REA Kaltim's indebtedness are continuing. 
The negotiations have not progressed as quickly as might have been hoped as a 
result of a lack of consensus between the group and another significant 
shareholder in Makassar Investments Limited (the parent company of REA Kaltim) 
as to the rescheduling terms that should be agreed. The group believes that it 
may be appropriate to support a proposed composition between REA Kaltim and its 
loan creditors which it understands may be acceptable to a majority of such 
creditors. Pursuant to such composition, capital repayments would be postponed 
for several years while interest payments would be reduced for a two year period
to a level equivalent to the cost of inter bank funds and thereafter to a level 
that would provide a normal spread (but below the spread that would apply under 
existing loan terms). 

There has been a welcome increase in the crude palm oil price since 30 June
2001. That coupled with the expected continuing growth in REA Kaltim crops
augurs for better trading in the second half. 

Pending a final outcome to the REA Kaltim debt rescheduling negotiations, the
directors find it difficult to project the financing requirement that the
group will face to ensure adequate funding for REA Kaltim. Moreover, the
group has accepted that the first instalment of sale proceeds from the recent
divestment of further shares in Deundi Tea Company Limited be paid slightly
later than originally agreed. In the absence of certainty as to calls on the
group's cash resources, the directors, as previously announced, may feel
constrained to defer payment of the next fixed semi annual dividend on the
company's preference shares due on 31 December 2001.
 

R M Robinow 
Chairman 
18 September 2001 


                                                                              
Consolidated profit and loss account 
for the six months ended 30 June 2001  

                                                                              
                                     6 months to    6 months to        Year to 
                                         30 June        30 June    31 December 
                                            2001           2000           2000
                                            £000           £000           £200
  Turnover
  Continuing                                 203            272            638
  Discontinued                               105         11,619         13,310

                                             308         11,891         13,948 

  Cost of sales                              (26)       (10,254)       (11,485) 

  Gross profit                               282          1,637          2,463
                                                                             
  Other income and expenses                    1           (874)        (1,278) 

  Group operating profit (note 1)            283            763          1,185 

  Share of operating profit of associates   
  - continuing                               (67)           210            254 
  - discontinued                              52            (68)          (152)

  Disposal of assets & investment -          628             62            524 
  discontinued                                                                

  Interest payable - continuing (note 2)    (424)          (271)          (331) 
  Interest payable - discontinued (note 2)  (120)          (401)          (856)
                                                   
  Profit on ordinary activities before                                          
    taxation                                 352            295            624 

  Tax on profit on ordinary activities       (13)           (19)            15

  Profit on ordinary activities after                                           
    taxation                                 339            276            639

  Minority interests                         (15)           (16)           (21)

  Profit for the period                      324            260            618 
                                             
  Dividends, including non-equity dividends (257)          (256)          (513)

  Retained (loss)/profit for the period       67              4            105

  Earnings per ordinary share 
  - basic                                    0.7p           0.1p           1.1p
  - fully diluted                            0.7p           0.7p           1.1p

 
  Notes: 
  1. Group operating profit             
     Continuing                              237            437            838
     Discontinued                             46            326            347

  2. Interest payable       
     Associates                             (404)           255            547
     Group                                  (140)           417            640

 


Consolidated balance sheet 30 June 2001  
                                                                       
                                     30 June    30 June    31 December 
                                        2001       2000           2000 
                                        £000       £000           £000 
         Fixed assets                                                  
         Tangible fixed assets           129      1,805          1,625 
         Fixed asset investments       3,892     11,188          7,394 
                                       4,021     12,993          9,019 

         Current assets                                                
         Stocks                            -        379             35 
         Debtors                       9,703     12,634          8,677 
         Cash                          4,963      4,396          4,109 
                                      14,666     17,409         12,821 
 

         Creditors up to one year  
         Borrowings                     (623)    (7,034)        (2,762) 
         Creditors                    (1,167)    (3,975)        (2,439)
                                      (1,790)   (11,009)        (5,201) 

         Net current assets           12,876      6,400          7,620 
 
         Total assets less current 
           liabilities                16,897     19,393         16,639
 
                                                                     
         Creditors over one year - 
           borrowings                      -       (603)        (1,100)
                                                                       
         Net assets                   16,897     18,790         15,539 

         Capital and reserves                                         
         Called up share capital       8,812     14,890         14,890
         Share premium account         1,178        720            720
         Capital redemption reserve    3,240      3,240          3,240
         Special reserve               6,888          -              -
         Warrants                      1,218      1,219          1,219 
         Revaluation reserve            (466)     2,000           (772)
         Profit and loss account      (3,973)    (3,280)        (3,778) 

         Shareholders' funds*         16,897     18,789         15,519
         Minority interests                -          1             20 

                                      16,897     18,790         15,539 


* Shareholders' funds comprise equity interests of £11,150,000 (30 June 2000
£13,084,000; 31 December 2000 £9,814,000) and non-equity interests of £5,705,000
(30 June 2000 £5,705,000; 31 December 2000 £5,705,000)
 
 

Consolidated cash flows                              
for the six months ended 30 June 2001
                                                           
                                        6 months to   6 months to      Year to 
                                            30 June        30 June  31 December
                                               2001           2000         2000
                                               £000           £000         £000 

  Group operating profit                        283            763        1,185 
  Interest receivable                             -           (239)      (1,541)
  Investment income                               -              -          (14)
  Depreciation                                   15             86          146 
  Decrease in stocks                             11            521          504
  (Increase)/Decrease in debtors             (1,941)         1,294        4,675
  (Decrease)/increase in creditors             (330)           706           45 
  Exchange (loss)/gain                          (13)             6            7 

  Net cash flow from operating activities    (1,975)         3,137        5,007 

  Dividends from associates                       -            (10)           - 

  Returns on investments and servicing of                                     
  finance                                                                     
  Interest received                               -            239        1,541 
  Interest paid                                (140)          (417)        (640)
  Investment income                               -              -           14 
  Dividends paid to minority shareholders         -            (17)         (40)
  Dividends paid to preference shareholders    (257)          (256)        (513)
  Taxation                                       (1)           (11)           2 

  Capital expenditure and financial investment 
  Purchase of tangible fixed assets             (47)            (16)        (29)
  Sale of tangible fixed assets               2,110              44           - 
  Sale of investments                                           361       1,008
  
  Acquisition and disposals                                                     
  Purchase of shares in associated companies      -               -        (313)
  Sale of subsidiaries                        3,145               -         200 
  Goodwill on sale of a business                  -               -         300 
  Adjustment of selling price of interests       41               -         (53)

  Equity dividends paid                           -            (368)       (368)

  Cash inflow before management of liquid 
  resources and financing                     2,876           2,686       6,116 

  Management of liquid resources and financing 
  Issue of ordinary shares                    1,268              -            - 
  Other                                      (4,029)        (1,736)      (6,167)
 
                                                115            950          (51)

                                
  Reconciliation of movement in net cash/(debt) 
  Increase in cash in period                    115            950          (51)
  Cash flow from debt and leases              3,214            110        4,526 
  Cash flow from management of liquid           764          1,636        1,709 
  resources                                                                   
                                              4,093          2,696        6,184 

  Net cash/(debt) at beginning of period        247         (5,937)      (5,937)

  Net cash/(debt) at end of period            4,340         (3,241)         247 

 


Notes to the interim statement 
for the six months ended 30 June 2001 

                                        6 months to   6 months to       Year to 
                                            30 June        30 June  31 December
                                               2001           2000         2000
                                               £000           £000         £000

Profit on ordinary activities before taxation   
(by business class) 
                                                
Merchanting - discontinued                       45            195           29
Agriculture (all associates) 
- continuing                                   (359)            54         (130)
- discontinued                                  (60)          (167)        (315)
Other activities- discontinued                   (7)           (14)         (67)
Unallocated         
- continuing                                    105            165          583
Disposal of assets and investments 
- discontinued                                  628             62          524 

                                                352            295          624 
                                             
Continuing                                     (104)           219          453
Discontinued                                    456             76          171 
 
                                                352            295          624 

Reconciliation of shareholders' funds 

Profit for financial period                     324            260          618
Dividends                                      (257)          (256)        (513)
Issue of shares                               1,268              -            -
Revaluations and foreign exchange translation    43            140       (3,231)
Goodwill previously written off, reinstated       -            250          250
                                              1,378            394       (2,876)

Shareholders' funds at beginning of period   15,519         18,395       18,395
Shareholders' funds at end of period         16,897         18,789       15,519


Notes: 
The interim financial information has not been audited and does not constitute 
statutory accounts for the purpose of Section 240 of the Companies Act 1985, but
has been prepared on the basis of the accounting policies set out in the annual 
accounts as at 31 December 2000. 

The figures for the year ended 31 December 2000 are abridged and have been
extracted from the statutory accounts filed with the Registrar of Companies
on which the auditors issued an unqualified report.
 
Registered office 
Third floor 
40-42 Osnaburgh Street 
London NW1 3ND