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Monteagle Holdings (MGL)

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Wednesday 24 December, 2003

Monteagle Holdings

Final Results

                      Monteagle Holdings Société Anonyme                       

           (Incorporated in Luxembourg - RC Luxembourg No. B 19600)            

                                                           Registered office   
                                                           6 rue Adolphe       
24th December 2003                                         L-1520, Luxembourg  

                 Results for the year ended 30th September 2003                 

                              (subject to audit)                               


Monteagle's objective is to achieve capital growth and a steadily progressive
dividend over the long term through a diversified range of investments. The
Company holds portfolios of leading investments in the U.S.A. and Europe and a
property in the United States. The Group's import, export and distribution
businesses operate internationally, and in Southern Africa we have a property
portfolio and interests in agriculture and mining.


I am pleased to report on a very successful year in which a number of long term
development projects have started to have a significant impact. The highlights
of the results are:

  * Group revenue up 74% to US$37 million.
  * Operating profit up 23% to US$1.3 million.
  * Dividend income from Zimbabwean investments down 90% to US$53,000
  * Exceptional profits realised of US$2.4 million before tax, US$1.3 million
    after tax and minorities
  * Basic and fully diluted earnings per share up 108% to 25 US cents
  * Net assets per share up 13% to US$4.70 of which US$3.21 are held in Europe,
U.S.A. and Australia

The factors behind these movements are commented on below.


The exceptional profit for this year arises mainly from profits realised by a
subsidiary on the sale of a significant part of our investment in a Zimbabwean
associated company (US$1.2 million), the sale by our mining associate, Falcon,
of its iodine project in Chile (US$2.8 million), less a provision to reduce the
equity accounted carrying value of our investment in Falcon and its
subsidiaries to market value (US$1.3 million).


Net assets per share, taking investments at market value, have increased by 13%
to US$4.70 (2002: US$4.15). Net assets held in hard currencies have increased,
mainly because of retained operating profits and profits on the exceptional
sales referred to above, and now stand at US$20,241,000 compared to
US$16,265,000 last year. US$3.21 (2002 - US$2.58) of total net assets of
US$4.70 per share relate to assets owned in Europe, the U.S.A. and Australia.
Our policy is not to hedge our net asset position against fluctuations in
exchange rates and therefore our net asset position will fluctuate as exchange
rates move compared to the US dollar, which is our accounting currency.


Turnover at our shipping and distribution businesses has increased considerably
through organic growth achieved in existing markets, namely South Africa, Japan
and Australia. Additional growth has also been achieved from the acquisition of
a marketing business in South Africa that trades in related products. The
consolidation of a full years' results reflects lower operating margins caused
mainly by volatile international currency markets experienced over the period,
particularly the strengthening of the South African rand against the US dollar.

Our tool import and distribution businesses in South Africa and Australia have
achieved solid growth during the year and continue to increase their market
share in both countries. The year under review has presented these businesses
with tremendous opportunities because of significant price deflation caused by
the weakening United States dollar. During the year a company operating in
overlapping markets was acquired and this has assisted in increasing market
penetration with an expanded product range. Consistent operating margins have
been maintained throughout the period.


The profit contribution from this division is significantly less than last
year, due to the sale of our California office property in August 2002. As
reported at the interim stage we continue to look for a suitable multi-tenanted
commercial property in California to reinvest the funds realised. In the
meantime part of the sale proceeds have been returned to Europe and US$3
million has been invested in US Treasury bills.


The climate in the investment world has improved during the year, particularly
during the second six months when it became clear that the global economy was
recovering. The Group has continued to add to its diverse list of quality
equities in the major first world markets.

FARMING (Conafex)

The strategy to reduce the dependence on Zimbabwe and broaden the base through
greater regional diversity resulted in the disposal of a significant part of
Conafex's investment in a Zimbabwe horticulture business for US$3 million and
Conafex is in the process of reinvesting these proceeds, mainly in Southern
Africa. This sale generated an exceptional profit of US$1.2 million.

Conafex acquired a 50% stake in the Coffee Tea and Chocolate Company ('CTC'),
based in Cape Town, at the end of August 2003 for US$871,000. CTC brings a new
dimension to Conafex's planned strategy of adding value to raw agricultural
products, mainly black and herbal teas and coffee, through packaging, branding
and marketing to all the leading supermarket chains in South Africa. In
November 2003 Conafex acquired a 17.5% shareholding in Intertrading for
US$754,000 with an option to acquire a further 15.6% (for US$713,000) prior to
the end of November 2004. Intertrading is a Johannesburg listed trader of South
African produced fresh fruit, vegetables and macadamia nuts, marketing this
produce internationally via sea and air freight. There will be substantial
synergies arising with Conafex and its European associates, who simultaneously
acquired 17.5% of Intertrading.

The results, for a shortened eleven month accounting period to 31st August
2003, reported for our farming operations are significantly worse than last
year due to the lack of dividend income from Zimbabwe, the timing of receipt of
commission income and the inherent delays in re-investing the proceeds from the
sale of Zimbabwean investments in income producing investments outside

MINING (Falcon)

Our mining associate Falcon has sold its iodine project in Chile and expects to
receive net proceeds of at least US$4 million. This has generated an
exceptional profit, our share of which is US$1.2 million after tax and
minorities. Falcon is looking to reinvest these proceeds in a well established
and profitable business in a hard currency area.

The three remaining gold mines produced 847kg of gold in the year, a
considerable decrease (23%) from the 1,093kg produced in the previous year.
However, the rise in the price of gold by US$62 (19%) over the year, combined
with (i) an improvement in the exchange rate used in converting part of the
gold sales into Zimbabwe dollars and (ii) an increase in the proportion of the
proceeds paid in US dollars has meant that profits have increased considerably
in Zimbabwe dollar terms.


Our agricultural and mining interests in Zimbabwe have again not been
consolidated as the ability of these businesses to remit earnings continues to
be very uncertain. Our objective for these operations is to preserve their
management infrastructure.


None of the above achievements would have been accomplished without the
continuing efforts of all our management and staff during another challenging
year. Most of our employees are based in Southern Africa where the significant
strengthening of the South African rand and the uncertain economic climate in
Zimbabwe have added extra challenges.


The Directors recommend an increased dividend for the year of 6.0 US cents per
share (2002: 5 US cents).


We expect that the diversification by Conafex will enhance earnings and Falcon
intends to complete an investment in a well established, profitable operating
business in the ensuing year. However, the situation in Zimbabwe makes it
impossible to forecast the future for our operations in that country.

Our import and distribution businesses continue to grow and expand their range
of products. The decline in value of the US dollar will, if sustained, increase
the US dollar value of our properties and listed investments outside the United
States. Our international investment portfolio remains in 'blue chip' stocks
and our balance sheet continues to be liquid. We continue to be optimistic for
the year ahead.

J. M. Robotham                                                  D. C. Marshall 
Chairman                                                        Chief Executive


The Annual General Meeting will be held on Friday 26th March 2004 at 4.00 p.m.
at the registered office of the Company, 6 rue Adolphe Fischer L-1520

Last day to trade cum div Thursday, 18 March

Shares trade ex dividend on the South African stock exchange Friday, 19 March

Shares trade ex dividend on the Luxembourg stock exchange Friday 19 March

Record date Friday 26 March

Pay Date Friday 23 April

Currency conversion date, noon on Wednesday, 10 March

No dematerialisation or rematerialisation of share certificates on the South
African Register, nor may transfer of shares between the registers in
Luxembourg and South Africa take place between Friday 19 March 2004 and Friday
26 March 2004, both days inclusive.

Copies of the annual report and accounts will be posted to shareholders in
early 2004.

Unaudited Consolidated Profit and Loss Account

For the year ended 30th September                            2003        2002
                                                           US$000      US$000
Group revenue                                             37,046      21,233 
Operating costs                                          (35,762)    (20,190)
Operating profit                                           1,284       1,043 
Share of associated companies results                         (8)        (72)
Income from Zimbabwean investments - dividends                53         541 
Income from other investments - dividends                    256         140 
- interest                                                   160         172 
Interest paid and similar charges                           (534)       (522)
Exchange                                                    (22)        (136)
Profit on ordinary activities before exceptional items     1,189       1,166 
and tax                                                                      
Exceptional items                                          2,451         467 
Profit before tax and minority interests                   3,640       1,633 
Tax                                                       (1,316)       (514)
Profit after tax before minority interests                 2,324       1,119 
Minority interests                                          (743)       (371)
Profit attributable to shareholders of the Group           1,581         748 
Reconciliation of headline earnings per share                                
Basic and fully diluted earnings per share (US cents)        25 c        12 c
Less exceptional item, net of tax and minority interests    (20)c        (7)c
(US cents)                                                                   
Headline earnings per share (US cents)                        5 c         5 c
Proposed dividend                                            6.0c       5.0c 

Unaudited Consolidated Statement of Recognised Gains and Losses

Exchange differences on translation of the financial       1,214         (55)
statements of foreign entities                                               
Group share of fair value adjustments                        990      (4,711)
Net gain/(loss) not recognised in the income statement     2,204      (4,766)
Dividend paid for the previous year                         (315)       (536)
Net profit for the period                                  1,581         748 
Total recognised profit/(loss) and increase/(decrease)     3,470      (4,554)
in shareholders' funds                                                       
Shareholders' funds brought forward                       26,173      30,727 
Shareholders' funds carried forward                       29,643      26,173 

Unaudited Consolidated Balance Sheet

AT 30th SEPTEMBER                                            2003        2002
                                                           US$000      US$000
Non current assets                                                           
Property, plant and equipment                             10,798       9,245 
Investments                                               17,514      16,943 
Intangibles                                                  269           - 
                                                          28,581      26,188 
Current assets                                                               
Inventories                                                7,264       4,299 
Accounts receivable                                       10,839       5,715 
Cash and bank balances                                     7,710       5,022 
                                                          25,813       15,036
Current liabilities                                                          
Accounts payable (falling due within one year)           (12,946)     (6,177)
Net current assets                                        12,867       8,859 
Total assets less current liabilities                     41,448      35,047 
Non current liabilities                                                      
Accounts payable (falling due after more than one year)   (4,890)     (3,487)
Deferred taxation                                            102         117 
                                                          36,660      31,677 
Capital and reserves                                                         
Called up share capital                                    9,450       9,450 
Other reserves                                             8,056       6,268 
Retained earnings                                         12,137      10,455 
Shareholders' funds                                       29,643      26,173 
Minority interests                                         7,017       5,504 
                                                          36,660      31,677 

Unaudited Consolidated Cash Flow Statement


                                                              2003        2002
                                                           US$000      US$000 
Operating activities                                                          
Cash generated/(absorbed) by operations                        240       (877)
Interest paid                                                (534)       (522)
Taxation paid                                                (694)       (451)
Net cash outflow from operating activities                   (988)     (1,850)
Investment activities                                                         
Purchase of tangible fixed assets                            (388)       (285)
Acquisition of investments                                 (1,860)     (5,158)
Disposal of tangible fixed assets                               12      3,287 
Disposal of investments                                      3,478        834 
Interest received and other investment income                  416        312 
Dividends received from Zimbabwean investments                  53        541 
Net cash inflow /(outflow) from investment activities        1,711       (469)
Net cash inflow/(outflow) before financing                     723     (2,319)
Financing activities                                                          
Net increase in long term debt                               1,403          3 
Dividend paid - group                                        (315)       (536)
- minority shareholders                                       (28)       (112)
Net cash inflow/(outflow) from financing activities          1,060       (645)
Net increase/(decrease) in funds                             1,783     (2,964)
Net funds at 1st October                                     4,531      7,495 
Effect of foreign exchange rate changes                                      -
Net funds at 30th September                                  6,314      4,531 


1.   As described in the Chairman's Review, the earnings, assets and           
     liabilities of Zimbabwean subsidiaries and associated companies have not  
     been consolidated. Investments have been reflected in accordance with IAS 
     39. These preliminary results for the year ended 30th September 2003 and  
     the balance sheet at that date, which are unaudited, have otherwise been  
     prepared on the basis of accounting policies adopted for the year ended   
     30th September 2002. The results are unaudited.                           
2.   Group capital expenditure in the year was US$388,000 (2002 - US$285,000). 
     There were no capital expenditure commitments at 30th September 2003 (2002
     - nil).                                                                   
3.   Bank loans and overdrafts of US$1,396,000 (2002 - US$491,000) are included
     in current liabilities. Group long term finance is secured on various     
     local properties and bears interest at local commercial rates.            


Primary reporting format - business segments

The Group is organised on a worldwide basis into four main business segments:

Import and         tool import and non-perishable food exports in South Africa 
distribution       and exports to Japan and Australia.                         
Farming            commercial agriculture and horticulture interests in        
                   Zimbabwe held through Conafex.                              
Gold mining        three gold mines in Zimbabwe. One is owned 33.33% by the    
                   Group and 66.67% by our associated company, Falcon, and two 
                   are owned by Falcon through its 57.1% subsidiary, Falcon    
                   Gold Zimbabwe Limited.                                      
Property           investment properties in California and South Africa.       

Other operations of the Group mainly comprise transactions relating to the
share portfolios, profits on disposals of tangible and intangible fixed assets
and local head office costs.

There are no sales or other transactions between business segments. Segment
assets consist of property, plant and equipment, inventories and receivables
and exclude cash balances. Segment liabilities are operating liabilities and
exclude items such as taxation and borrowings. Capital expenditure comprises
additions to property, plant and equipment.

Unallocated assets and liabilities are cash balances, taxation and borrowings.

                                            2003                   2002        
Segmental analysis of results              US$000                 US$000       
                                    Revenue      Result     Revenue      Result
Import and distribution             34,962       2,065      19,342       1,628 
Property                             1,107         181       1,519         508 
Farming                                738        (356)        192          13 
Gold mining                              -          53            -         57 
Other operations                       239  *    1,337         180  *      109 
                                    37,046       3,280      21,233       2,315 
Share of revenue of associates and                                             
dividend income                                                                
Farming                                500          11         422         229 
Gold mining                              -         883           -        (389)
                                    37,546                  21,655             
Interest paid and similar charges                 (534)                   (522)
Profit before tax                                3,640                   1,633 

*    Other revenue excludes dividend income and the proceeds of sales of       
     investments and tangible assets, the profits of which are included in the 
     result of this segment.                                                   

The analysis for the year ended 30th September 2002 has been restated to
re-allocate property sale profits and sundry income items previously reported
under Property into Other operations.

                      Assets  Liabilities    Net assets/      Capital  Depreciation
                                           (liabilities)  Expenditure        charge
                      US$000       US$000         US$000       US$000        US$000

Segmental analysis of net assets 30th September 2003

Import and distribution  16,690      8,877       7,813          309          113
Property                 10,016        424       9,592           56           12
Farming - Group          10,581      1,540       9,041           23           31
- Associates                360          -         360            -            -
Gold mining - Associates  1,338          -       1,338            -            -
Other                     7,654        330       7,324            -            8
Unallocated *             7,857      6,665       1,192            -            -
Consolidated total       54,496     17,836      36,660          388          164

Segmental analysis of net assets 30th September 2002

Import/distribution       8,868      4,565       4,303          170           54
Property                  8,923        314       8,609          115           34
Farming - Group           8,570        432       8,138            -            -
 - Associates             2,339          -       2,339            -            -
Gold mining - Associates    565          -         565            -            -
Other                     6,973        331       6,642            -            8
Unallocated *             5,103      4,022       1,081            -            -
Consolidated total       41,341      9,664      31,677          285           96

                Revenue Net Assets Expenditure     Revenue Net Assets Expenditure

                           2003                              2002             
                          US$000                            US$000            
                  Group     Total     Capital      Group      Total    Capital
                US$000     US$000      US$000     US$000     US$000     US$000
South Africa    23,197      7,958         309     13,018      4,925        118
Zimbabwe             -      8,460           -          -     10,487          -
Australia        2,241      1,197           -      1,890        775         53
United States      884      7,430          56      1,334      7,313        114
Jersey           9,986      4,190           -      4,751      4,635          -
Other              738      7,425          23        240      3,542          -
                37,046     36,660         388     21,233     31,677        285

*    Unallocated assets and liabilities are cash balances taxation and         
     The segmental analyses for 2002 have been restated following a            
     re-assessment of allocations between sectors for 2003.                    


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