M.P. EVANS GROUP PLC
M.P. Evans Group PLC ("MP Evans" or "the Group"), a producer of Indonesian
palm oil and Australian beef cattle, announces unaudited preliminary
results for the year ended 31 December 2009.
Highlights
Financial
* Profit for the year US$20,710,000 (2008 US$53,596,000, which
included US$24,509,000 from one-off disposals)
* Earnings per share (continuing and discontinued operations)
US cents 34.94 (2008 US cents 96.26)
* Dividend for the year maintained: 5.00 pence final, plus 2.00 pence
interim already paid
Indonesian palm oil
* Palm-oil price averaged US$680 per tonne against 2008's US$941
per tonne, but plantation profits only 12% lower at US$13,143,000
(2008 US$14,893,000)
* Group's total planted area, including its share of associates'
areas, increased to 25,700 hectares, following a year of record
planting (21,500 hectares at end 2008)
* Indonesian crops of oil palm fresh fruit bunches ("f.f.b."),
including first crop from new Bangka project, 18% higher
than in 2008; 9% higher on associates' estates
* Palm-oil market trading strongly in 2010, currently around US$835
per tonne
* First crops from Kalimantan project expected in second half of
2010
Australian beef cattle
* Loss on both Woodlands and associate, NAPCo, as a result of drought
in Australia
* Widespread rainfall in Australia in late 2009 and early 2010 has
benefited Woodlands and NAPCo properties
* Australian beef-cattle prices continue to strengthen
* Woodlands continues to be marketed for sale as a non-core asset
Malaysian property and asset disposals
* No further disposals made in 2009. Plan to dispose of remaining
assets, with expected value of some US$50 million, at opportune
time
Commenting on the results, Peter Hadsley-Chaplin, chairman of MP Evans,
said:
"During 2009, the palm-oil market traded at historically-robust levels,
though below 2008's record prices, and it was pleasing to note the
significant increase in f.f.b. crops. A record planting programme was
achieved on the new projects.
"Following losses in 2009, prospects look much brighter for Australian
cattle with one of the best seasons of the last decade currently being
enjoyed and prices on the rise.
"We look forward to the future with confidence and accordingly we have
maintained our dividend levels."
Enquiries:
M.P. Evans Group PLC Telephone: 020 7796 4133 on 28 April only.
Thereafter - 01892 516333
Peter Hadsley-Chaplin Chairman
Philip Fletcher Managing director
Tristan Price Finance director
Hudson Sandler Telephone: 020 7796 4133
Andrew Hayes
Charlie Jack
Panmure Gordon & Co Telephone: 020 7614 8384
Edward Farmer
An analysts' meeting will be held today at 9:30 a.m. at the offices of
Hudson Sandler, 29 Cloth Fair, London EC1A 7NN.
OVERVIEW OF RESULTS
The profit for the year, US$20,710,000, was lower than the record
US$53,596,000 achieved in 2008. Earnings per share (continuing and
discontinued operations) fell accordingly to 34.94 cents (2008 - 96.26
cents). It should be noted, however, that 2008 included one-off gains from
the disposal of Malaysian plantation assets and exceptional credits mainly
relating to negative goodwill. F.f.b. crops were higher but the
exceptionally robust, unsustainable, palm-oil prices of 2008 (average
US$941/tonne) were not repeated to the same extent. Nevertheless, the
average for 2009, at US$680/tonne, was still an historically-high price.
The biological gain in the year was similar to last year's. The Group's
total planted area, including its share of the associates' areas,
increased to 25,700 hectares from 21,500 at the end of 2008.
The Australian beef operations, both in the Group's own property,
Woodlands, and in the associated company, NAPCo, encountered another
difficult year and losses were incurred. Despite promising rainfall in the
early part of the year, hot and dry conditions later on affected pastures
and forage crops and resulted in lower weight gains. The Malaysian
property associate, Bertam Properties Sdn. Berhad ("Bertam Properties"),
recorded lower profits largely because no land was sold during the year.
DIVIDEND
The board recommends a final dividend of 5.00p per share which, together
with the interim dividend of 2.00p paid in November 2009, makes 7.00p for
the year, the same as for 2008. A scrip-dividend alternative is being
offered this year subject to shareholders' approval at the annual general
meeting.
STRATEGIC DEVELOPMENTS
Indonesia
Further good progress was made with planting on the new projects in 2009,
with some 5,600 hectares (including smallholder co-operative areas) in
total planted, the largest annual planting ever achieved by the Group. A
total of nearly 13,000 hectares had been planted by the end of 2009. The
Bangka project produced its first f.f.b. crop and the yield achieved
promises well. During the second half of 2010, f.f.b. harvesting is
expected to commence on the new Kalimantan project. The fruit will
initially be processed by an external mill whilst the Group's own mill is
under construction. The mill is expected to be commissioned towards the
end of 2011.
As referred to in the 2009 interim report, in order to facilitate both the
quicker release of land for planting and more rapid compliance with
obligations in respect of smallholder development, it was decided to sell
(at around cost) to the smallholder co-operative schemes significant areas
of land already developed on both the Kalimantan and Bangka projects. The
total developed land sold, or to be sold, in this way amounted to some
3,500 hectares at 31 December 2009. The co-operatives will all be managed
by the Group for a fee and their f.f.b. will be processed under contract
by the Group's palm-oil mills. After the re-ordering of the areas in this
way, the Group's planted land at 31 December 2009 amounted to 7,250
hectares in Kalimantan (plus co-operatives' 2,570 hectares) and 2,030
hectares in Bangka (plus co-operatives' 1,000 hectares).
A re-evaluation has also been undertaken of the areas available to the
Group for planting on the Kalimantan and Bangka projects. In common with
all new oil-palm projects, the ultimate plantable area, after excising
land unsuitable for planting, conservation areas and land where no
compensation settlement can be reached with the local population, is
established with more precision as the development progresses. In
addition, the original expectation was that significant areas outside the
Group's allocated land would be utilised for the co-operative schemes.
This, however, has not proved to be the case and most of the co-
operatives' land falls within the Group's land area. Accordingly, the
expectation now is that approximately 17,000 hectares will be available in
Kalimantan (plus 4,000 hectares for the co-operatives) and 7,000 hectares
in Bangka (plus 4,200 hectares for the co-operatives). Since the Group's
plantable land bank is therefore smaller than originally anticipated, a
search for suitable new land, preferably in the vicinity of the Kalimantan
project, is being actively undertaken.
Australia
The board continues to seek opportunities to build on its current
investment in the Australian beef-cattle sector. It has selected NAPCo as
the appropriate vehicle through which to invest in this sector and,
although no further shares were acquired in 2009 (or in 2010), the board
will review any opportunity to acquire additional shares as and when they
arise. A number of significant strategic initiatives have recently been
introduced at NAPCo. These include the sale of a Channel-Country property
in 2009, the decision to expand the company's feedlot and the continuing
programme of drilling new water boreholes, and consequently increasing the
cattle-carrying capacity, on the company's premier breeding station,
Alexandria. Together, these measures improve the company's resilience to
drought. The cost to date of the Group's investment in NAPCo is
approximately A$8 per share which compares favourably with the company's
net asset value which stood at A$16.46 per share at the end of 2009.
With regard to Woodlands, whilst the strategic reasons for selling the
property remain valid, it will only be sold if an acceptable offer is
received. To date, there have been significant expressions of interest but
no firm offers. The property has benefited considerably from the welcome
rainfall of the past few months, which has brought the pastures on
markedly in the newly-improved areas. This has substantially increased the
cattle-carrying capacity.
Malaysia
The programme of disposing of the Group's Malaysian assets has progressed
well with some US$110 million having been realised over the last four
years. The plan is to dispose of the remaining assets, with an expected
value of approximately US$50 million. The proceeds of the sales have been,
and will continue to be, utilised in the Group's expansion in Indonesian
palm oil and Australian cattle.
INDONESIAN PALM-OIL ACTIVITIES AND MARKET
Having briefly reached the very high level of US$1,400 per tonne
(Rotterdam cif) in early 2008, the palm-oil price declined steadily during
the remainder of that year. At the beginning of 2009, it stood at around
US$525 but during the rest of the year it was mainly on an upward trend,
with one brief but significant reversal in the third quarter. Overall, the
price spent the majority of the year in the S$650 to US$800 range, an
historically-robust level.
Demand continued from the traditional major markets of China, India,
Europe and Indonesia with India being particularly predominant. Production
of palm oil worldwide increased in 2009 but soybean oil production was
lower, as were soybean crushings. The mineral-oil price strengthened as
the year progressed and this, combined with the upcoming mandatory
requirements in some South East Asian countries for blending road fuel
with bio diesel, kept strong support under the price of palm oil.
MAJORITY-OWNED SUMATRAN ESTATES
CROPS AND PRODUCTION
2009 2008
Tonnes Tonnes
Crops - f.f.b. - Pangkatan group 121,100 106,000
- Simpang Kiri 38,500 38,700
------- -------
159,600 144,700
======= =======
Production (Pangkatan mill) - crude palm oil 27,000 22,300
- palm kernels 6,800 6,100
======= =======
% %
Extraction rate - crude palm oil 22.41 21.06
- palm kernels 5.62 5.79
======= =======
As significant young plantings matured, f.f.b. crops continued their
improvement of last year and were some 10% higher than in 2008. The
extraction rate achieved at the Pangkatan mill also continued its marked
improvement in 2009. Management has focussed attention on field and mill
standards and the improvement has continued into 2010 with extraction
rates in excess of 23% pleasingly having been achieved.
As a result of the above, a gross profit from the Indonesian plantation
activities of US$13,143,000 was achieved, only 12% lower than last year's
US$14,893,000.
AUSTRALIAN BEEF-CATTLE ACTIVITIES AND MARKET
Prices for lighter-weight cattle, such as those fattened on Woodlands,
fluctuated during 2009 in response to seasonal conditions but on average
traded around the middle of the range of the last three years.
On Woodlands, rain in the early part of 2009 promised well but unusually
hot and dry weather later on prevented pasture and crop growth to the
extent hoped for. As a result, cattle weight gains were disappointing and
the turnover of the Group's own cattle was well down, at some 1,250 head,
compared with the approximately 2,750 in 2008, although over 3,000 head of
cattle on agistment from NAPCo were turned off during the year. The
weather pattern again had an adverse effect on the wheat and sorghum crops
in 2009 and disappointing yields were achieved. Indeed, a decision has
been taken not to continue with grain crops but to concentrate on forage
crops and further upgrading the pastures. The Group's focus will now,
until the property is sold, be fully on cattle fattening to which it is
felt the property is best suited.
GROSS PROFIT
The Group's gross profit for the year amounted to US$11,705,000 compared
with US$13,834,000 for 2008.
BEARER BIOLOGICAL-ASSET ADJUSTMENT
The high palm-oil price during 2009, noted above, led to an increase of
US$16, to US$502, in the long-term average price used to evaluate the
Group's biological assets. Whilst the gain arising from this increase was
to some extent offset by increases in the costs of maintaining and
harvesting the Group's palms, it nevertheless accounted for more than half
the biological gain in the year of US$23,518,000 (2008 US$24,226,000). The
remaining biological gain was on plantings on the Group's new projects and
its established estates. The same factors that affected the Group's own
estates also resulted in an increase of US$2,692,000 in the Group's shares
of the associated companies' profits for the year.
OTHER ADMINISTRATIVE EXPENSES
Administrative expenses were higher in 2009, compared with the previous
year. This arose primarily from an increase in the provision for National
Insurance on the future exercise of share options. The provision is based
on the Company's share price at the balance-sheet date which was 309.50p
at 31 December 2009 compared with 198.50p at the end of 2008. Also, the
Indonesian head-office team is increasing in size to deal with the
maturing new projects and the milling facilities which are presently under
construction.
ASSOCIATED COMPANIES
The Group's share of its associated companies' profits/(losses) for the
year, including the share of biological bearer-asset adjustments, compared
with last year were as follows:-
Post-tax Post-tax
profit/(loss) profit/(loss)
before after
biological Biological biological
2009 bearer-asset bearer-asset bearer-asset
adjustment adjustment adjustment
US$'000 US$'000 US$'000
PT Agro Muko (31.53%) 5,992 2,432 8,424
PT Kerasaan Indonesia (38.00%) 1,399 260 1,659
------ ------ ------
Total Indonesia 7,391 2,692 10,083
NAPCo (34.37%) (1,041) - (1,041)
Bertam Properties (40.00%) 984 - 984
------ ------ ------
Total 7,334 2,692 10,026
====== ====== ======
Post-tax Post-tax
profit/(loss) profit/(loss)
before after
biological Biological biological
2008 bearer-asset bearer-asset bearer-asset
adjustment adjustment adjustment
US$'000 US$'000 US$'000
PT Agro Muko (31.53%) 8,049 361 8,410
PT Kerasaan Indonesia (38.00%) 1,588 (132) 1,456
------ ------ ------
Total Indonesia 9,637 229 9,866
NAPCo (34.37%) (1,264) - (1,264)
Bertam Properties (40.00%) 3,528 - 3,528
------ ------ ------
Total 11,901 229 12,130
====== ====== ======
Indonesia
ASSOCIATED-COMPANY ESTATES
Crops and production from the estates owned by PT Agro Muko (31.53%) and
PT Kerasaan Indonesia (38.00% owned) were as follows:-
2009 2008
Tonnes Tonnes
F.f.b. crops - PT Agro Muko - own 328,200 300,600
- outgrowers 23,000 13,500
------- -------
351,200 314,100
- PT Kerasaan Indonesia 52,000 49,800
------- -------
403,200 363,900
======= =======
Production (PT Agro Muko) - crude palm oil 79,400 68,000
- palm kernels 18,200 15,400
======= =======
% %
Extraction rate - crude palm oil 22.63 21.66
- palm kernels 5.19 4.90
======= =======
Tonnes Tonnes
Rubber crops (PT Agro Muko) - own 1,221 1,498
- outgrowers - 332
======= =======
As with the majority-owned estates, the Indonesian associated companies,
PT Agro Muko and PT Kerasaan Indonesia, achieved higher f.f.b. crops but
suffered from the lower average palm-oil prices. PT Agro Muko's rubber
operations, as expected, were less profitable than last year as an
extensive replanting programme is under way, resulting in significantly
lower crops. As with palm oil, rubber prices fell during the year. As a
result of the above, the Group's share of the post-tax (pre-biological-
bearer-asset adjustments) results of these two associated companies was
some 23% lower in 2009 than 2008.
The valuation of biological assets increased sharply, particularly in PT
Agro Muko, as the 20-year average palm-oil price increased and significant
new areas were planted replacing old, low-value oil-palm and rubber areas.
This was partially offset by the increased operating cost base. The
Group's share of the post-tax, post-biological-bearer-asset adjustment
profit amounted to US$10,083,000, a 2% increase over 2008's US$9,866,000.
Since the year end, the Group has purchased for cash (US$7.31 million),
another 5.31% in PT Agro Muko, bringing the shareholding to 36.84%. Two of
the shareholders, International Finance Corporation and Deutsche
Investitions-Und Entwicklungsgesellschaft mbh ("DEG"), who between them
owned 14.42%, sold their shares pro rata to the remaining three
shareholders, the SA SIPEF NV Group, PT Austindo Nusantara Jaya and the
Group. As a result of this transaction, PT Agro Muko is now owned as to
47.29% by the SA SIPEF NV Group, 15.87% by PT Austindo Nusantara Jaya and
36.84% by the Group.
Arising from the above-mentioned transaction, it was decided that PT Agro
Muko would suspend dividend payments during 2009 but would re-start such
payments after the transaction had been completed in 2010. Accordingly,
the Group received a dividend of US$4.42 million (gross) in April 2010 on
its 36.84% holding. The Group's 31.53% share of dividends from PT Agro
Muko in 2008 was US$5.68 million (gross). The Group's share of PT Kerasaan
Indonesia's dividends in 2009 amounted to US$1.31 million (gross),
compared with US$1.52 million (gross) in 2008.
Australia
NAPCo incurred a loss in 2009 which was largely attributable to the
significantly-reduced number of cattle sold at below-average prices and
weights. These factors, in turn, stemmed from the effects of the poor
season suffered in 2008.
The Group's share of NAPCo's dividends for 2009 amounted to US$542,000,
compared with US$604,000 in 2008. Dividends are likely to remain at
relatively low levels in the short term as revenue is directed towards
capital improvements.
Malaysia
Unlike the last few years, Bertam Properties did not sell any pieces of
land in 2009, although a number of likely sales are now in the pipeline.
Property development continued successfully during the year although
profits were down on 2008. The Group's share of Bertam Properties'
dividends in 2009 amounted to US$5.11 million, compared with US$10.41
million in 2008.
DISCONTINUED OPERATIONS
The Thai rubber manufacturing operations were sold during 2009 for RM7.85
million (approximately US$2.20 million), realising a gain of US$1.56
million.
PROFIT FOR THE YEAR
As a result of all of the above, the Group profit for the year amounted to
US$20,710,000, compared with S$53,596,000 in 2008.
FINANCE
The Group has agreed a new RM60 million (approximately US$18.75 million at
the current rate of exchange) facility with AmBank (Malaysia) Berhad in
Malaysia, which will be used in developing the Group's new projects in
East Kalimantan. The loan facility with the German development bank DEG
has been terminated following its withdrawal from the Indonesian palm-oil
sector, and the US$2 million drawn down by the Group to date will shortly
be repaid. The situation remains that the Group's development programme
will be determined by the funding available.
CURRENT TRADING AND PROSPECTS
Since the end of 2009, the palm-oil price has remained around the
US$800/tonne level and is currently at US$835. Despite the prospect of a
much higher soybean crop in South America and generally high stocks of
palm oil, continuing strong demand from the traditional markets of China,
India, Europe and Indonesia itself, as well as the renewed strength of
crude-oil prices, has sustained the palm oil-market. Rubber prices have
recently hit historic highs to the benefit of the Group's associate
PT Agro Muko.
F.f.b. crops to date on the Sumatran estates (both majority-owned and
associates) have been similar to those of last year, whilst the crop from
the new Bangka project is increasing markedly.
Following some delays in reaching compensation settlements with
smallholders, 650 hectares in total have been planted to date on the new
projects. It is expected that the rate of planting will accelerate as the
year progresses. Work continues on the mill in Kalimantan and the
earthworks are nearing completion.
Encouragingly, prices for both the lighter and heavier weight cattle,
produced by Woodlands and NAPCo respectively, have moved considerably
higher in the first few months of 2010 following welcome rainfall in many
parts of Australia and a general improvement in world beef prices.
Prospects for continuing heightened global demand appear favourable in the
short and longer term following the significant downsizing of the cattle
herd in both Australia and the United States (Australia's major
competitor). The decline in cattle numbers resulted from both the drought
and the poor returns experienced following the sharp hike in grain prices
in 2008. On average, grain-fed cattle in the United States spend
significantly longer in the feedlots than in Australia. U.S. profit
margins are therefore more sensitive to fluctuations in the price of
grain, which provides Australia with a competitive edge.
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2009
Result before Year
biological Biological ended
bearer-asset bearer-asset 31 December
adjustment adjustment 2009
US$'000 US$'000 US$'000
Continuing operations
Revenue 28,391 - 28,391
Cost of sales (17,167) 481 (16,686)
------ ------ ------
Gross profit 11,224 481 11,705
Gain on biological assets (637) 23,518 22,881
Planting expenditure - (15,154) (15,154)
Foreign-exchange gains 1,460 - 1,460
Other administrative expenses (5,177) - (5,177)
Other income 226 - 226
------ ------ ------
Operating profit 7,096 8,845 15,941
Exceptional charge (note 2) - - -
------ ------ ------
Profit on continuing operations
before interest & tax 7,096 8,845 15,941
Finance income 623 - 623
Finance costs (1,226) - (1,226)
------ ------ ------
Group-controlled profit
before tax 6,493 8,845 15,338
Tax on profit on ordinary
activities (note 3) (5,654) (578) (6,232)
------ ------ ------
Group-controlled profit
after tax 839 8,267 9,106
Share of associated companies'
profit after tax 7,334 2,692 10,026
------ ------ ------
Profit after tax on
continued operations 8,173 10,959 19,132
Discontinued operations 1,578 - 1,578
------ ------ ------
Profit for the year 9,751 10,959 20,710
------ ------ ------
Attributable to:
Owners of M.P. Evans Group PLC 8,076 10,174 18,250
Minority interests 1,675 785 2,460
------ ------ ------
9,751 10,959 20,710
------ ------ ------
Basic earnings per 10p share (US cents)
Continuing operations 31.92
Discontinued operations 3.02
------
Continuing and discontinued operations (note 4) 34.94
------
Diluted earnings per 10p share (US cents)
Continuing operations 31.01
Discontinued operations 2.93
------
Continuing and discontinued operations (note 4) 33.94
------
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2008
Result before Year
biological Biological ended
bearer-asset bearer-asset 31 December
adjustment adjustment 2008
US$'000 US$'000 US$'000
Continuing operations
Revenue 30,387 - 30,387
Cost of sales (16,759) 206 (16,553)
------ ------ ------
Gross profit 13,628 206 13,834
Gain on biological assets - 24,226 24,226
Planting expenditure - (13,283) (13,283)
Foreign-exchange gains 44 - 44
Other administrative expenses (4,182) - (4,182)
Other income 283 - 283
------ ------ ------
Operating profit 9,773 11,149 20,922
Exceptional credit (note 2) 3,900 - 3,900
------ ------ ------
Profit on continuing operations
before interest & tax 13,673 11,149 24,822
Finance income 1,012 - 1,012
Finance costs (2,387) - (2,387)
------ ------ ------
Group-controlled profit
before tax 12,298 11,149 23,447
Tax on profit on ordinary
activities (note 3) (4,181) (2,309) (6,490)
------ ------ ------
Group-controlled profit
after tax 8,117 8,840 16,957
Share of associated companies'
profit after tax 11,901 229 12,130
------ ------ ------
Profit after tax on
continued operations 20,018 9,069 29,087
Discontinued operations 29,895 (5,386) 24,509
------ ------ ------
Profit for the year 49,913 3,683 53,596
------ ------ ------
Attributable to:
Owners of M.P. Evans Group PLC 47,885 1,904 49,789
Minority interests 2,028 1,779 3,807
------ ------ ------
49,913 3,683 53,596
------ ------ ------
Basic earnings per 10p share (US cents)
Continuing operations 48.88
Discontinued operations 47.38
------
Continuing and discontinued operations (note 4) 96.26
------
Diluted earnings per 10p share (US cents)
Continuing operations 47.30
Discontinued operations 45.86
------
Continuing and discontinued operations (note 4) 93.16
------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2009
2009 2008
US$'000 US$'000
Other comprehensive income
Unrealised share of movements in
associated undertakings' reserves 876 1,321
Previously unrealised profit on sale
of land to associated undertaking
released to the consolidated income
statement on sale of that land by the
associate (33) (193)
Exchange differences on translation of
foreign operations 11,805 (20,208)
Other - 416
------ ------
Net income recognised directly in equity 12,648 (18,664)
Profit for the year 20,710 53,596
------ ------
Total recognised income and expense for
the year 33,358 34,932
------ ------
Attributable to:
Owners of M.P. Evans Group PLC 32,194 31,125
Minority interest 1,164 3,807
------ ------
33,358 34,932
------ ------
CONSOLIDATED BALANCE SHEET
at 31 December 2009
Before
biological Biological
bearer-asset bearer-asset 31 December
adjustment adjustment 2009
US$'000 US$'000 US$'000
Non-current assets
Goodwill 1,157 - 1,157
Biological assets - 93,480 93,480
Property, plant and equipment 96,307 (36,375) 59,932
Investments in associates 89,885 22,702 112,587
Investments 2,642 - 2,642
Deferred tax asset 1,373 - 1,373
------ ------ ------
191,364 79,807 271,171
------ ------ ------
Current assets
Biological assets 2,650 - 2,650
Inventories 8,454 - 8,454
Trade and other receivables 14,852 - 14,852
Current tax asset 3,030 - 3,030
Cash and cash equivalents 38,081 - 38,081
Assets held for sale - - -
------- ------- -------
67,067 - 67,067
------- ------- -------
Total assets 258,431 79,807 338,238
------- ------- -------
Current liabilities
Borrowings 22,297 - 22,297
Trade and other payables 7,516 - 7,516
Current tax liability 632 - 632
Liabilities related to
assets held for sale - - -
------- ------- -------
30,445 - 30,445
------ ------ ------
Net current assets 36,622 - 36,622
------- ------- -------
Non-current liabilities
Borrowings 2,011 - 2,011
Deferred tax liability 2,796 14,020 16,816
Retirement-benefit obligations 1,251 - 1,251
------- ------- -------
6,058 14,020 20,078
------- ------- -------
Total liabilities 36,503 14,020 50,523
------- ------- -------
Net assets 221,928 65,787 287,715
------- ------- -------
Equity
Share capital 8,821 - 8,821
Other reserves 70,610 22,702 93,312
Retained earnings 138,188 35,177 173,365
------- ------- -------
Equity attributable to the owners
of M.P. Evans Group PLC 217,619 57,879 275,498
Minority interest 4,309 7,908 12,217
------- ------- -------
Total equity 221,928 65,787 287,715
------- ------- -------
CONSOLIDATED BALANCE SHEET
at 31 December 2008
Before
biological Biological
bearer-asset bearer-asset 31 December
adjustment adjustment 2008
US$'000 US$'000 US$'000
Non-current assets
Goodwill 1,157 - 1,157
Biological assets - 78,779 78,779
Property, plant and equipment 77,973 (30,519) 47,454
Investments in associates 78,234 20,010 98,244
Investments 2,679 - 2,679
Deferred tax asset 2,334 - 2,334
------- ------- -------
162,377 68,270 230,647
------- ------- -------
Current assets
Biological assets 1,872 - 1,872
Inventories 10,292 - 10,292
Trade and other receivables 5,176 - 5,176
Current tax asset 933 - 933
Cash and cash equivalents 56,472 - 56,472
Assets held for sale 275 - 275
------- ------- -------
75,020 - 75,020
------- ------- -------
Total assets 237,397 68,270 305,667
------- ------- -------
Current liabilities
Borrowings 18,986 - 18,986
Trade and other payables 5,238 - 5,238
Current tax liability 1,510 - 1,510
Liabilities related to
assets held for sale 109 - 109
------- ------- -------
25,843 - 25,843
------- ------- -------
Net current assets 49,177 - 49,177
------- ------- -------
Non-current liabilities
Borrowings 2,018 - 2,018
Deferred tax liability 1,612 13,442 15,054
Retirement-benefit obligations 1,377 - 1,377
------- ------- -------
5,007 13,442 18,449
------- ------- -------
Total liabilities 30,850 13,442 44,292
------- ------- -------
Net assets 206,547 54,828 261,375
------- ------- -------
Equity
Share capital 8,812 - 8,812
Other reserves 60,111 20,010 80,121
Retained earnings 133,846 26,399 160,245
------- ------- -------
Equity attributable to the owners
of M.P. Evans Group PLC 202,769 46,409 249,178
Minority interest 3,778 8,419 12,197
------- ------- -------
Total equity 206,547 54,828 261,375
------- ------- -------
CONSOLIDATED CASH-FLOW STATEMENT
for the year ended 31 December 2009
Year ended Year ended
31 December 31 December
2009 2008
US$'000 US$'000
Net cash (outflow) from operating activities (9,809)* (21,724)*
------ ------
Investing activities
Interest received 623 1,267
Dividends from associated undertakings 6,966 17,266
Dividends from trading investments - 283
Proceeds on disposal of assets held for sale 2,914 50,570
Purchase of property, plant and equipment (9,333) (3,688)
Investment in subsidiary undertaking - (2,616)
Investment in associated undertaking - (5,475)
Disposal of subsidiary - 145
------ ------
Net cash from investing activities 1,170 57,752
------ ------
Financing activities
Dividends paid to Company shareholders (6,033) (6,819)
Repayment of borrowings 10 -
Proceeds on issue of shares 99 280
Dividend paid to minorities (1,144) (1,070)
------ ------
Net cash used by financing activities (7,068) (7,609)
------ ------
Net (decrease)/increase in cash and
cash equivalents (15,707) 28,419
Net cash and cash equivalents at beginning
of the year 37,486 7,374
Effect of foreign-exchange rates on
cash and cash equivalents (5,995) 1,693
------ ------
Net cash and cash equivalents at end of the year 15,784 37,486
------ ------
* Including expenditure on new planting of US$15,154,000 (2008 US$13,283,000)
NOTES
1. Dividends paid and proposed
2009 2008
US$'000 US$'000
2009 interim dividend - 2.00p per 10p share
(2008 interim dividend - 2.00p) 1,724 1,675
2008 final dividend - 5.00p per 10p share
(2007 final dividend - 5.00p) 4,309 5,144
------ ------
6,033 6,819
------ ------
Following the year end the board has proposed a final dividend for 2009 of
5.00p per 10p share amounting to US$4,086,000. If confirmed at the annual
general meeting, shareholders will have the option to elect to receive the
dividend in shares rather than in cash, as follows:
2009 2008
Ex-dividend date 5 May 2010 22 May 2009
Record date 7 May 2010 20 May 2009
Post forms of election 14 May 2010 -
Final date for receipt of forms of election 4 June 2010 -
Definitive share certificates posted 24 June 2010 -
First day of dealing in the new shares 25 June 2010 -
Payable on or after 25 June 2010 19 June 2009
2. Exceptional credit 2009 2008
US$'000 US$'000
Continuing operations
Credit on purchase of shares in associated
undertaking - 3,707
Previously unrealised profit on sale of land
to associated undertaking released through
the income statement on sale of that land
to a third party - 193
------ ------
Total net exceptional credit - 3,900
------ ------
There was no material impact on the tax charge resulting from the
exceptional credit in 2008.
3. Tax on profit on ordinary activities
2009 2008
US$'000 US$'000
United Kingdom corporation tax charge
for the year 2,643 5,314
Relief for overseas taxation (2,643) (5,314)
------ ------
- -
Overseas taxation 4,188 5,420
Adjustments in respect of prior years (229) 1
------ ------
Total current tax 3,959 5,421
Deferred taxation - origination and reversal
of timing differences 2,273 1,069
------ ------
6,232 6,490
------ ------
4. Basic and diluted earnings per share
The calculation of earnings per 10p share is based on:-
2009 2009 2008 2008
US$'000 Number of US$'000 Number of
shares shares
Profit for the year
attributable to the owners
of M.P. Evans Group PLC
Continuing operations 16,672 25,280
Discontinued operations 1,578 24,509
Continuing and
discontinued operations 18,250 49,789
Average number of shares
in issue 52,233,610 51,721,726
Diluted average number of
shares in issue 53,771,958 53,446,285
------- ---------- ------- ----------
The difference between the number of shares in issue and the diluted
number of shares relates to unexercised share options held by directors
and key employees of the Group.
5. Biological assets
Non-current biological assets comprise plantation bearer assets. The Group
values these plantation assets using a discounted cash flow over the
expected 25-year economic life of the asset. The discount rate used in
this valuation is 14%. The price of the crop (oil-palm fresh fruit
bunches) is taken to be the 20-year average based on historical selling
prices or, where the plantation has its own mill, an inference based on
the widely-quoted commodity price for crude palm oil delivered c.i.f.
Rotterdam. The directors have concluded that using a 20-year average
provides the best estimate of the prices to be achieved over the valuation
period.
Presentation
In the balance sheet, the adjustment column shows that the recognition of
the biological asset valuation replaces depreciated historical planting
costs of US$36,375,000 (2008 US$30,519,000) which, prior to the adoption
of IFRS, were included in the carrying value of property, plant and
equipment. These costs are now replaced by the biological bearer-asset
adjustment which, including the Group's share of the asset recognised by
associates, together with the related deferred tax, amounts to
US$102,162,000 (2008 US$85,347,000).
6. Financial information
The financial information set out in this announcement does not constitute
the Company's statutory accounts for the years ended 31 December 2009 or
2008. The financial information for the year ended 31 December 2008, which
has been delivered to the Registrar of Companies, is derived from the
statutory accounts for that year as amended for the changes referred to in
note 5. The auditors reported on those accounts; their report was
unqualified, did not draw attention to any matters by way of emphasis and
did not contain a statement under section 498(2) or (3) of the Companies
Act 2006. The audit of the statutory accounts for the year ended 31
December 2009 is not yet complete. The statutory accounts for the year
ended 31 December 2009 will be finalised on the basis of the financial
information presented by the directors in this preliminary announcement
and will be delivered to the Registrar of Companies.
7. International Financial Reporting Standards
This announcement is based on the Group's financial statements which are
being prepared in accordance with International Financial Reporting
Standards ("IFRS"), as adopted for use in the EU.
Whilst the financial information included in this preliminary announcement
has been prepared in accordance with the recognition and measurement
criteria of IFRS, this announcement does not itself contain sufficient
information to comply with IFRS. The Group expects to publish full
financial statements that comply with IFRS in May 2010.
8. Timetable
The report and financial statements will be despatched to shareholders on
14 May 2010 and the annual general meeting will be held on 11 June 2010.
9. Distribution
Copies of the full report and financial statements for the year ended 31
December 2009 will be available from the Company, 3 Clanricarde Gardens,
Tunbridge Wells, Kent TN1 1HQ on and after 14 May 2010.
By order of the board
J F Elliott
Secretary
28 April 2010