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PGI Group Plc

Preliminary Statement of the Group's Results for the year ended 31 December 2008 

Chairman's statement

The Group profit for the year, before tax, biological assets and hyperinflation adjustments, was £2,008,000, compared with £2,417,000 for 2007.

The adjustments for the biological assets and hyperinflation in Zimbabwe are shown in a separate column. For the reasons I explained in my Chairman's statement when this presentation was introduced, they should be viewed with caution.

Including these adjustments resulted in a Group loss before tax of £1,606,000 (2007: Group profit before tax £3,618,000) 

The Food Group did well, improving its operating profit despite unusually dry conditions at the end of last season and large increases in input costs. The Malawi tea business benefited from much higher tea prices.

Khal Amazi, our Zambian flower business, again increased production, to a total last year of 138 million stems. It maintained its profitability despite suffering some flood damage to the estate infrastructure in the middle of the year.

Operating conditions in Zimbabwe were extremely difficult throughout the year. Inflation reached unprecedented levels and it became impossible to recruit enough labour. The estate produced barely half the volume of tea it had achieved in 2007.

Jensen, the Group's Russian property management and investment operation, started the year reasonably well, but was then hit by the rapidly deteriorating market conditions in the second half.

Further details of the Group's activities and performance are given in the Business Review.

At the end of June, we announced an agreement with Stephen Wayne, at that time Chief Executive of the Group and Jensen's Chief Executive, to change the arrangements with him and with Jensen. Details were set out in a circular to shareholders, and the proposals were passed at a meeting on 24 July 2008. The full particulars of the transactions resulting from these arrangements and the effect on the Group's results are included in the Group's report and accounts.

Sebastian Hobhouse was appointed Chief Executive when the transaction with Mr. Wayne was concluded. Mr Hobhouse has been a director for the past fifteen years, responsible for the Group's African businesses. Mr Wayne stood down from the Board, but remains Chief Executive of Jensen.

These changes signal that we will concentrate on developing the Food Group for PGI's future growth.

We are recommending an ordinary dividend of 0.25p per share (2007: 0.25p) payable on 5 August 2009 to Shareholders on the register on 1 May 2009.

The Company has issued an announcement today regarding the board's proposal to cancel the listing of the Company's shares on the London Stock Exchange. For a number of reasons, including the small market capitalisation of the Company, the small free float, the limited trading in the Company's shares and the costs of compliance with the Listing Rules, the directors have come to the view that it is no longer in the Company's best interests to maintain its Listing. The directors of the Company have explored the possibility of the Company or the directors offering to buy the shares of members who would not wish to continue to hold them after the cancellation of the listing but, as a result of a number of regulatory requirements, the cost of doing so would have been prohibitively high to the Company. Nonetheless, shareholders who want to offer their shares for sale in the market before the listing is cancelled will still be able to do so. A circular will shortly be sent to shareholders setting out details of these proposals.

The current year has started well, and rainfall in Southern Africa has been more or less normal. Tea prices appear to have stabilised at levels well above the average of the past five years. We are also benefiting from the strength of the US dollar, with all our overseas earnings denominated in that currency or currencies pegged to it. If these factors continue, we should produce a satisfactory result in 2009.

As is always the case, our progress depends on the hard work and commitment of our employees. My thanks to all of them.

Rupert Pennant-Rea

Chairman

23 April 2009

  Business Review 

Strategy and objectives

PGI Group Plc is listed on the main list of the London Stock Exchange. It has two business streams, a food group operating in Southern Africa and a property management division operating in Russia. 

The food group operates in Malawi, Zambia and Zimbabwe. The major products are tea, cut roses, fresh vegetables and nuts. The property management division, Jensen, is based in St. Petersburg. It manages funds that are invested in property and property development in that area.

The Group's strategy is to continue to develop the food group organically and by acquisition focusing on businesses where there is a competitive advantage and the opportunity to develop a strong market position.

The Group's objective is to create real shareholder value over the long term. In the shorter term, the Group aims to increase profits, earnings per share and dividends by more than the rate of inflation.

Key performance indicators

The Group monitors its overall performance by measuring the key performance indicators set out in the table below:

	2008	2007
Financial:
Adjusted earnings per share (pence) (1)	1.03	0.44
Free Cashflow  (£000) (2)	1,646	(538)
Non Financial:
Tea yield (3)	3,100 kgs/ha	3,448 kgs/ha
Rose yield (4)	310 stems /sq m	302 stems /sq m

 

• Adjusted earnings per share is the profit after taxation and minorities (before changes in the fair value of investment properties and biological assets and movements relating to the hyperinflation adjustments for Zimbabwe and before the exceptional profit arising on the restructuring of the arrangements with Mr. Wayne and Jensen), divided by the average number of shares in the year.

• Free cashflow is the net cash flow from operating activities less net interest and capital expenditure but before expenditure on new projects.

• Tea yield is the production of made tea per hectare from mature estates excluding Zimbabwe .

• Rose yield is the production of cut stems per square meter of greenhouses.

The above table of KPI's indicates that the Group achieved increases in nearly all of the measures of performance and in most cases by significant amounts. The tea yield declined due to the prolonged dry weather in Malawi.

Divisional review

Food Group

This division made an operating profit before biological assets and hyperinflation adjustments of £3,601,000 on a turnover of £21,219,000. 

Profitability increased by 6% on 2007. 

The division's turnover for 2008 is split between:

Tea                              43%

Cut Flowers                41%

Vegetables                  11%

Macadamia Nuts            5%

Tea Businesses.

We operate two tea businesses, Lujeri Tea Estates based in Mulanje, Malawi and Eastern Highlands Plantations in Honde Valley, Zimbabwe. Both businesses were affected by prolonged dry winter weather which reduced the crop intake.

In Malawi the crop was 13% lower than 2007. This lower crop was offset by higher spot tea prices which increased by 40%. The full benefit of this was mitigated by the unprecedented increase in input costs of fertilizer and energy, though overall the effect was positive.

Surrounding the Malawi tea fields are smallholder growers and Lujeri has a successful commercial relationship with about 5,500 farmers. Lujeri acquires their greenleaf and supplies them with extension services and material support to help them improve their yields and livelihood. During the year these farmers successfully achieved accreditation to the Fairtrade standard and this should lead to further development opportunities for them.

In Zimbabwe just staying afloat has been a notable achievement. The effects of runaway inflation and the concomitant economic collapse made 2008 a year best forgotten. Labour availability reduced further and sourcing essential inputs for the business proved very tough. This translated into tea production that was 52% lower than 2007 and at the year end the business was operating at about one third of its productive capacity. 

The Lujeri business continued through the year to expend capital on replanting lower yielding seedling tea with both higher yielding and higher cup quality cultivars. This is being done under irrigation and it is proving successful at mitigating the risks of the variable rainfall. Further investments were made in our tea factories to ensure that they are fully compliant with all first world food factory requirements.

Cut Flowers

Our Zambian flower business, Khal Amazi, increased production by 7% to 138 million stems. This business remains focused on the production of a full colour range of sweetheart roses and managing the cold chain from the greenhouse to the European customers. 

Khal Amazi developed its customer base further in the year and its roses can now be found in a wide range of European supermarkets. This market penetration allowed the company to maintain sales in a slowing market. During the year the cost of airfreight increased very significantly which put margins under pressure. Khal Amazi's tight cost control and economies of scale have allowed it to maintain profitability over this volatile period.

Capital expenditure was limited to small increases in the productive area and improvements in the farm infrastructure

Vegetables

Chalimbana Fresh Produce operates a farm and packhouse that produces peas for export to European supermarkets. This business was unprofitable in 2008 which was very disappointing given the progress it had made over the previous two years in developing its markets. It proved impossible to both pass on to the customers the high airfreight cost increases and to maintain sales volumes in a slowing market.

Macadamia Nuts

We have macadamia orchards planted adjacent to tea fields in Malawi. The 794 hectares in the ground have all been planted over the last 20 years and crop production has been rising every year as the orchards mature. In 2008 production increased by 25%.

The orchard nuts are cracked into kernel at our purpose built factory at Thyolo in Malawi. This started operations in 2007 and operates to accredited international food factory standards.

Russia property group

This division made a loss of £708,000 on a turnover of £1,448,000. Profits in 2007 were £1,074,000 and the bulk of the loss was from write-downs in property valuations.

Jensen group operates out of St Petersburg, Russia and is a property manager, to a small extent on its own balance sheet (£2.7 million) and to a greater extent as a manager to dedicated property funds (£124 million). 

The funds are invested in a wide range of properties, from St Petersburg city centre retail and residential to developments in the hinterland. 

The professionally appraised values of the properties held in the US$101 million fund raised by Jensen in 2006 decreased by 29% during the year ended 31 December 2008. Following the disposal of one of the properties in July 2008, a distribution of US$20.2 million was made to investors in the fund.

The slowing property market conditions curtailed sales activity in the second half. In August Jensen raised a new fund of $62.5million which was uninvested at the year end.

Principal risks and uncertainties

The Group's operations are based in Zimbabwe, Malawi, Zambia and Russia. The political, economic, legal and regulatory environments in the countries differ, in many respects, from those in more developed countries. Consequently, the Group results and assets could be affected by factors such as: political or labour unrest; violence and lack of law enforcement; expropriation of property; high inflation and interest rates not off-set by devaluations of the local currency and imposition or change of exchange controls.

The financial risk management objectives and policies are set out in the Group's report and accounts.

The Food Group businesses are affected by unexpected variations in weather patterns affecting the crops and variations in commodity prices.

The Group operates a funded defined benefits pension plan. A material proportion of the assets of this scheme is invested in equities and the value of these assets will fluctuate in line with global equity markets. The liabilities of the scheme may also increase due to continuing improvements in the mortality rates.

Financial review

Profits

The profit before tax, before changes in the fair value of investment properties and biological assets, and movements relating to hyperinflation adjustments for Zimbabwe, amounted to £2,933,000 compared with £1,345,000 in 2007. The profits for 2008 include a profit of £711,000 relating to the restructuring of the arrangements with Mr S Wayne and Jensen, which were passed by shareholders in July 2008.

Excluding this profit, the increase in profits before tax, as described above, was 65%.

The Adjusted earnings per share as defined in the Key performance indicators, more than doubled from 0.44p to 1.03p. This was higher than the increase in the Adjusted profit before tax, adjusted on the same basis, mainly due to the lower tax charge.

The loss before tax but after the adjustments for biological assets and hyperinflation amounted to £1,606,000.

Taxation

The taxation charge on the profits, before changes in the fair value of investment properties and biological assets, and movements relating to hyperinflation adjustment for Zimbabwe, amounted to £26,000 (2007: £655,000).

The lower charge reflected a change in the mix of profits between overseas operations in areas with differing tax rates together with the increased utilisation of tax losses brought forward and adjustments in respect of prior periods.

Dividend

The Board is recommending an ordinary dividend of 0.25p per share (2007: 0.25p).

Capital expenditure

£1,565,000 was invested in capital expenditure in 2008 compared with £1,837,000 in 2007.

The major items of expenditure were on agricultural development (the planting of tea under irrigation and the planting of new rose varieties). The remainder was on general infrastructure and factory improvements.

Cash flow

The Group's free cash flow amounted to £1,646,000 compared with an outflow of £538,000 in 2007. Free cash flow is computed as set out below:

	2008		2007
	£'000		£'000
Net cash from operating activities	3,441		1,109
Net interest cost	(350)		(454)
Capital expenditure excluding expenditure on new projects	(1,445)		(1,193)
Free cash flow	1,646		(538)

Net debt

The Group's net debt amounted to £3.273 million at 31 December 2008 (2007: £2.837 million). Approximately £3.56 million of the Group's net debt at the end of 2007 was denominated in US$ or currencies directly linked to the US$. The strengthening of the US$ and other currencies against the £ during 2008 has increased the Group's reported net debt by £1.46 million.

Excluding these exchange rate movements, net debt has decreased by £1.02 million.

Going concern basis

The Group's financial position and its business activities together with the factors likely to affect its future development and performance are included in this Business Review. The principal risks and uncertainties that are likely to affect the Group's future development are also reviewed. A summary of the Group's policies and processes in respect of capital and financial risk management including foreign exchange, interest rate, credit and liquidity risks are included in the Group's report and accounts. 

The Group meets its day-to-day working capital and other funding requirements through a combination of medium-term loans and short-term overdraft lending. The overseas bank facilities have recently been renewed and the directors are not aware of any reason why these facilities should not be renewed in future. In addition the Group has significant positive bank balances. As a consequence, and after reviewing the current situation, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Board has continued to adopt the going concern basis in preparing the Group's annual report and accounts for 2008.

Financial risk management

Details of the Group's financial risk management objectives and policies including capital management and capital structure are contained in the Group's report and accounts.

Pensions

The Group's defined benefit pension scheme valued in accordance with IAS19 recorded a deficit of £4,449,000 (2007: £3,497,000). 

The increased deficit resulted from a decline in the value of the investments during the year, partly offset by an increase in the discount rate applied to the liabilities.

Full details are contained in the Group's report and accounts.

Corporate social responsibility

Agriculture

Our agricultural businesses are very long term by nature. For example tea has a productive life of 50 years if managed in a long term sustainable manner. As a result we actively manage our environment to ensure the long term health of our land and water resources. We pay particular attention to:

• Soil conservation

• Agrochemical and artificial fertilizer use

• Biodiversity and the conservation of natural forest on our estates.

• Water storage and preservation of the catchment.

Social welfare

We are large employers of people (12,246 in our food group) and have coherent and easily understood codes of conduct. We have higher standards than that required by local labour laws and we seek to improve upon them further following recommendations from our external accreditation schemes.

External accreditation

All of our businesses are subject to independent auditing by recognised standard setters. For the tea businesses these include Ethical Tea Partnership and Fairtrade. For the flowers they include MPS, ETI and BOPP.

Carbon footprint

We aim to progressively reduce our carbon footprint over time by substituting electricity sources with hydro electric schemes on our estates.

• In Malawi we generate 1,000 KW from hydro electric which is about 25% of our requirement

• In Zimbabwe we are installing a 1,100KW hydro electric plant that will provide up to 50% of our requirements. This plant is being funded by a development partner for the benefit of the local community in the Honde valley.

The tea and macadamia processing factories, require energy to run the dryers. We use eucalyptus timber specially grown on the estate for this purpose. We also have a programme to increase the efficiency of the boilers and dryers to reduce the energy requirement.

Outlook

A statement on the outlook is included in the Chairman's statement.

  Consolidated income statement for the year ended 31 December 2008

		2008			2007
		Result before			Result before
		biological	Biological		biological	Biological
		assets and	assets and		assets and	assets and
		hyperinflation	hyperinflation		hyperinflation	hyperinflation	Total
		adjustments	Adjustments	Total	adjustments	adjustments
	Notes	£000	£000	£000	£000	£000	£000
Continuing operations
Revenue		22,667	(99)	22,568	18,713	(261)	18,452
Cost of sales		(11,459)	(2)	(11,461)	(8,768)	(117)	(8,885)
Gross profit		11,208	(101)	11,107	9,945	(378)	9,567
Distribution costs		(3,278)	2	(3,276)	(2,248)	(8)	(2,256)
Administrative expenses		(5,419)	32	(5,387)	(5,902)	(29)	(5,931)
Other operating income		819	(7)	812	154	15	169
Share of associate's results		(103)	-	(103)	132	-	132
Fair value adjustment to:
- investment properties		(747)	-	(747)	916	-	916
- biological assets		-	(3,559)	(3,559)	-	1,438	1,438
Operating profit/(loss)		2,480	(3,633)	(1,153)	2,997	1,038	4,035
Finance revenue		151	-	151	88	-	88
Finance costs		(623)	6	(617)	(668)	6	(662)
Monetary working capital hyperinflation adjustment		-	13	13	-	157	157
Profit/(loss) before taxation	3	2,008	(3,614)	(1,606)	2,417	1,201	3,618
Taxation	4	(26)	549	523	(655)	(251)	(906)
Profit/(loss) for the year		1,982	(3,065)	(1,083)	1,762	950	2,712
Profit/(loss) attributable to:
Equity holders of the parent		1,864	(2,324)	(460)	780	682	1,462
Minority interests		118	(741)	(623)	982	268	1,250
		1,982	(3,065)	(1,083)	1,762	950	2,712

		Pence		Pence	Pence		Pence
Earnings/(loss) per ordinary share	5
From continuing and discontinued operations:
- basic		1.45		(0.36)	0.60		1.13
Dividend per ordinary share	6			0.25			0.25

  Consolidated Balance sheet at 31 December 2008

		Group
		2008	2007
		£000	£000
ASSETS
Non-current assets
Goodwill		2,833	2,047
Biological assets		14,121	12,984
Property, plant and equipment		12,893	10,435
Investment properties		1,726	2,208
Investments
- associates		327	320
- other		59	45
		31,959	28,039
Current assets
Inventories		3,033	2,262
Trade and other receivables		2,226	1,983
Other financial assets		77	17
Cash and cash equivalents		2,682	2,006
		8,018	6,268
Assets classified as held for sale		1,408	-
		9,426	6,268
Total assets		41,385	34,307
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent company
Share capital		32,401	32,365
Share premium account		425	425
Capital redemption reserve		250	250
Revaluation reserve		676	457
Retained earnings		(12,989)	(16,746)
		20,763	16,751
Minority interests		4,286	3,920
Total equity		25,049	20,671
Non-current liabilities
Interest bearing loans and borrowings		1,208	1,552
Other payables		202	177
Provision for deferred tax liabilities		1,944	2,600
Defined pension plan deficit		4,449	3,497
		7,803	7,826
Current liabilities
Interest bearing loans and borrowings		4,747	3,291
Trade and other payables		2,915	2,229
Other financial liabilities		-	9
Current tax liabilities		449	281
		8,111	5,810
Liabilities directly associated with
the assets classified as held for sale		422	-
		8,533	5,810
Total liabilities		16,336	13,636
Total equity and liabilities		41,385	34,307

  Consolidated Cash flow statements for the year ended 31 December 2008

		Group
		2008	2007
		Including	Including
		hyperinflation	hyperinflation
		adjustments	adjustments
		£000	£000
Operating activities
(Loss)/profit before tax from continuing operations		(1,606)	3,618
Adjustments to reconcile (loss)/profit before tax to net cash flows
Non-cash:
Depreciation of property, plant and equipment		1,289	823
Disposal of property, plant and equipment		(10)	53
Disposal of investment property		60	-
Additional retirement benefit costs		(265)	(200)
Share based payments		50	60
Disposal of shares to minority interests		9	4
Net finance costs		466	574
Non cash payments under revised arrangements		(499)	-
Fair value adjustments		4,246	(2,354)
Share of net losses/(profit) of associates		103	(132)
Hyperinflation indexation adjustment		73	508
Monetary working capital hyperinflation adjustment		(13)	(157)
Working capital adjustments:
Increase in inventories		(771)	(159)
(Increase)/decrease in trade and other receivables		(303)	(241)
Increase in trade and other payables		702	38
Exchange difference on working capital		310	(881)
Oversea tax paid		(400)	(445)
Net cash from operating activities		3,441	1,109
Cash flows from investing activities
Capital expenditure		(1,565)	(1,837)
Disposal of property, plant and equipment		10	-
Disposal of investment property		404	-
Interest received		151	156
Receipts from/(additions to) investments (net)		8	9
Net cash from investing activities		(992)	(1,672)
Cash flows from financing activities
Issue of shares (net of expenses)		36	44
Payment of loans		(1,053)	163
Interest paid		(501)	(610)
Dividends paid to equity holders of the parent		(324)	(323)
Dividends and other payments to minority interests (net)		(615)	(228)
Distributions from property fund (net)		(25)	(1)
Net cash from financing activities		(2,482)	(955)
Net (decrease)/increase in cash and cash equivalents		(33)	(1,518)
Cash and cash equivalents at beginning of period		(459)	959
Effects of exchange rate changes on cash and cash equivalents		(544)	100
Cash and cash equivalents at end of period		(1,036)	(459)
Cash and cash equivalents comprise:
Cash		2,682	2,006
Overdrafts		(3,718)	(2,465)
Cash and cash equivalents		(1,036)	(459)
Interest bearing loans and borrowings due within one year		(4,747)	(3,291)
Less: short term debt		1,029	826
Overdrafts		(3,718)	(2,465)

  Consolidated statement of changes in equity

		Attributable to equity holders of the Company
		Share
		premium &
		capital
	Share	redemption	Revaluation	Retained		Minority	Total
	capital	reserves	reserve	earnings	Total	interests	equity
	£000	£000	£000	£000	£000	£000	£000
Balance at 1 January 2008	32,365	675	457	(16,746)	16,751	3,920	20,671
Changes in equity for 2008
Hyperinflation indexation movement	-	-	-	72	72	-	72
Exchange differences on translation of net oversea assets:
- before hyperinflation indexation	-	-	69	6,315	6,384	1,558	7,942
- hyperinflation indexation movement	-	-	-	(320)	(320)	-	(320)
Revaluation of property	-	-	218	-	218	54	272
Actuarial loss (net) of defined benefits pension plan	-	-	-	(1,101)	(1,101)	-	(1,101)
Deferred tax on property revaluations	-	-	(68)	49	(19)	(17)	(36)
Net (expense)/income recognised directly in equity	-	-	219	5,015	5,234	1,595	6,829
Loss for the year	-	-	-	(460)	(460)	(623)	(1,083)
Total recognised income	-	-	219	4,555	4,774	972	5,746
Issue of new ordinary shares (net of expenses):
- exercise of share options	36	-	-	-	36	-	36
Purchase of treasury shares	-	-	-	(499)	(499)	-	(499)
Share-based payment	-	-	-	50	50	-	50
Dividend paid	-	-	-	(324)	(324)	-	(324)
Dividend paid to minority interests	-	-	-	-	-	(439)	(439)
Distributions from property fund (net)	-	-	-	(25)	(25)	(197)	(222)
Disposal of shares to minority interests	-	-	-	-	-	9	9
Advances from non-equity minority interests (net)	-	-	-	-	-	21	21
Balance at 31 December 2008	32,401	675	676	(12,989)	20,763	4,286	25,049

  Notes to the Preliminary Statement

1. Basis of preparation and significant accounting policies

These financial statements, from which the information in this preliminary statement has been derived, have been prepared in accordance with International Financial Reporting Standards ('IFRS') adopted by the European Union and they therefore comply with Article 4 of the EU IAS Regulation. They have been prepared on the historical cost basis, except for biological assets and investment properties which have been measured at fair value. They have also been prepared on the going concern basis as set out in the Business Review.

The consolidated and company financial statements are presented in sterling and all values are rounded to the nearest thousand (£000) except where otherwise indicated.

2. Status of financial information

The financial information contained in this preliminary announcement does not constitute the company's consolidated statutory financial statements for the years ended 31 December 2008 or 2007, but is derived from those financial statements.

The comparative figures for the year ended 31 December 2007 are an extract from the full accounts for that year which have been filed with the Registrar of Companies and on which the auditors have made a report under Section 235 of the Companies Act 1985. 

3. Segmental reporting

The Group's primary reporting segments are the following business sectors:

Food Group     - Tea, roses, vegetables and macadamia nuts.

Investment property management     - Properties in St. Petersburg, Russia.

By activity	Segment results
	2008			2007
	Result before			Result before
	biological	Biological		biological	Biological
	assets and	assets and		assets and	assets and
	hyperinflation	hyperinflation		hyperinflation	hyperinflation
	adjustments	adjustment	Total	adjustment	adjustment	Total
	£000	£000	£000	£000	£000	£000
Food Group	3,601	(3,633)	(32)	3,388	1,038	4,426
Investment property management	(708)	-	(708)	1,074	-	1,074
Central costs net of sundry income	(413)	-	(413)	(1,465)	-	(1,465)
	2,480	(3,633)	(1,153)	2,997	1,038	4,035
Net finance costs	(472)	6	(466)	(580)	6	(574)
Monetary working capital hyperinflation adjustment	-	13	13	-	157	157
Profit/(loss) before tax	2,008	(3,614)	(1,606)	2,417	1,201	3,618
Taxation	(26)	549	523	(655)	(251)	(906)
Profit/(loss) for the year from continuing operations	1,982	(3,065)	(1,083)	1,762	950	2,712

The investment property management segment includes a loss of £103,000 (2007: profit £132,000) in respect of the results of the associated company.

4. Taxation 

	2008		2007
	£000		£000
Continuing operations
Current taxation:
UK corporation tax	274		183
Double taxation relief	(274)		(183)
	-		-
Foreign tax:
Current tax on income for the period	420		250
Adjustment in respect of prior periods	(81)		(26)
	339		224
Deferred taxation:
Origination and reversal of temporary differences		(13)		213
Potential tax due on property revaluations and fair value adjustments		(728)		471
Adjustment in respect of prior periods		(121)		(2)
		(862)		682
Total tax (credit)/expense reported in the income statement for continuing operations		(523)		906

  

5. Earnings/(loss) per ordinary share

Basic

Basic earnings/(loss) per ordinary share is calculated by dividing the result attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

	2008	2007
	Thousands	Thousands
Weighted average number of ordinary shares in issue	128,398	129,406

	2008		2007
	Result before	Result after	Result before	Result after
	biological	biological	biological	biological
	assets and	assets and	assets and	assets and
	hyperinflation	hyperinflation	hyperinflation	hyperinflation
	adjustments	adjustments	adjustments	adjustments
	£000	£000	£000	£000
Profit/(loss) for the year attributable to the equity holders of the Company	1,864	(460)	780	1,462

	pence	pence	pence	pence
Basic earnings/(loss) per ordinary share	1.45	(0.36)	0.60	1.13

6. Dividend paid and proposed

	2008	2007
	£000	£000
Declared and paid during the year
Equity dividends on ordinary shares:
Dividend for 2007 of 0.25p per share, paid in August 2008	324	323

A dividend for 2008 of 0.25p per share has been recommended for payment on 5 August 2009.

ENDFR BLGDSUUDGGCX