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 its unaudited preliminary results for the year ended 31 December 2011.
Highlights
Financial
● Profit for the year increased by 62% to US$39.70 million (2010 US$24.45 million)
● Earnings per share increased by 61% to US cents 66.39 (2010 US cents 41.17)
● Final dividend for the year increased to 5.75 pence per share (2010 - 5.50 pence).
2.25 pence interim already paid (2010 - 2.00 pence)
Indonesian palm oil
● Plantation profits 19% higher at US$25.83 million (2010 US$21.68 million)
● Palm-oil price averaged US$1,123 per tonne (cif) (2010 US$905 per tonne)
● Indonesian crops of oil palm fresh fruit bunches ("f.f.b.") from new
projects and established estates, at 249,300 tonnes, 27% higher than in 2010;
9% higher on associates' estates, at 401,200 tonnes
● Group's total planted area, including its share of associates' areas, increased 5%
to 29,800 hectares (28,400 hectares at end 2010)
● Palm-oil market has picked up sharply in 2012, currently around US$1,175 per tonne
● Completion of Group's palm-oil mill in East Kalimantan allowing capture of additional sales value
● Group remains on track for f.f.b. production of 300,000 in 2012 and 500,000 in 2015
Australian beef cattle
● Increased profit contribution from associate NAPCo, and small trading profit repeated for Woodlands
● Australian beef-cattle prices remained steady in 2011
● Good rainfall in early 2012 has benefited Woodlands and NAPCo properties
Malaysian property and other asset disposals
● Much-improved development profits by associate, Bertam Properties, with
minimal land disposals in 2011
● Bertam Estate valuation benefiting from Bertam Properties' development activity
Commenting on the results, Peter Hadsley-Chaplin, Chairman of MP Evans, said:
"An excellent year which saw substantially-higher profits following a sharp increase in crops from both the new projects and the established estates and strong palm-oil prices. Progress continues with the new projects - the new palm-oil mill and bulking installation in Kalimantan were successfully commissioned at the end of 2011. A significant improvement in profits was achieved by the Australian associated company, NAPCo, after a good season."
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Enquiries: |
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M.P. Evans Group PLC |
Telephone: 020 7796 4133 on 17 April only. |
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Thereafter - 01892 516333 |
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Peter Hadsley-Chaplin |
Chairman |
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Philip Fletcher |
Managing director |
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Tristan Price |
Finance director |
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Hudson Sandler |
Telephone: 020 7796 4133 |
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Charlie Jack Katie Matthews |
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Peel Hunt LLP |
Telephone: 020 7418 8900 |
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Dan Webster Matthew Armitt |
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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 Group delivered a very strong performance in 2011 with a profit for the year increasing 62% to US$39.70 million (2010 US$24.45 million). Earnings per share increased to US cents 66.39 (2010 US cents 41.17). Strong palm-oil prices and increasing crops of oil palm fresh fruit bunches ("f.f.b.") on both the new projects and the established estates (both majority owned and in the associated companies) were the prime reason for the improved results.
DIVIDEND
The board recommends an increased final dividend for the year of 5.75p per share which compares with last year's final dividend of 5.50p per share. Together with the interim dividend of 2.25p per share paid in November 2011 (November 2010 - 2.00p), the total for the year amounts to 8.00p, an increase of 0.50p from the previous year. A scrip-dividend alternative is again being offered.
STRATEGIC DEVELOPMENTS
Indonesia
The Group continued in 2011 on its course towards completing the development of the two new projects, in East Kalimantan and Bangka. As at the end of the year, a total of 17,100 hectares had been planted on these projects of which 5,000 hectares were on behalf of the smallholders' cooperatives. These cooperatives are managed by the Group and, in East Kalimantan, their f.f.b. is already being processed in the Group's mill (see below). The upward trend of crops continues on both projects as new areas mature and yields increase on those areas that have already matured. A total of 2,020 hectares were planted on the new projects in 2011 of which 560 hectares were for the cooperatives. 175 hectares of Group land were sold to smallholder cooperatives during the year.
The palm-oil mill and the jetty, bulking and warehousing installation in East Kalimantan were completed on time at the end of 2011. The mill has had a successful start, achieving good extraction rates from the f.f.b. supplied by the project and from f.f.b. purchased from the associated cooperatives and other nearby estates. Processing of the f.f.b. by the Group's own mill adds considerably more value than can be achieved by selling the fruit to third-party mills.
As a result of the increasing crops that will be generated by the two new projects, the Group is on track to produce 300,000 tonnes of f.f.b. from its majority-owned plantations in 2012 and 500,000 tonnes in 2015, from palms that have been planted to date. The overall crop was approximately 250,000 tonnes in 2011. These increased crops will generate significantly higher revenues and cash flows but the level of these will, of course, depend upon palm-oil prices.
Agreeing terms with local people to release land for planting remains a time-consuming task, as does the process of finalising and obtaining the ultimate land title, the hak guna usaha (HGU). Nevertheless, management's latest estimate is that, on the East Kalimantan project, a further 3,200 hectares in total may be available of which 1,000 hectares would be allocated to the smallholder schemes. On the Bangka project, a further 5,600 hectares in total are thought to be possibly available for planting of which 2,600 hectares would be allocated to the smallholders' cooperatives.
Appropriate land is not easy to come by but the Group will only consider areas with acceptable agricultural features which are environmentally suitable. However, management is actively seeking to secure further land, preferably near the East Kalimantan project.
Australia
The Group's 34.37% shareholding in The North Australian Pastoral Company Pty Limited ("NAPCo") remained unchanged during the year. However, the board continues to review any opportunities to acquire additional shares in the company as and when they arise.
Further progress at NAPCo was made during the year towards the achievement of two significant strategic initiatives. First, the expansion of the company's feedlot, Wainui, was completed. This has enabled greater economies of scale and also more flexibility of timing, in terms of bringing cattle into the feedlot at younger ages when conditions warrant it. The second initiative is the ongoing programme of drilling new boreholes on the company's main breeding property, Alexandria Station. The water improvements of recent years have enhanced the safe-carrying capacity of the property and enabled the number of calves branded annually to be increased in the last decade from some 32,000 to 40,000 today. The water-development programme on Alexandria will continue in 2012, after which NAPCo's board will review the prospective benefits of continuing with the programme.
In addition to the two strategic initiatives described above, the company, for a second successive year and as a result of the favourable season, took the opportunity to acquire additional steers for fattening. Whilst 14,000 head were purchased in 2010, the limited number of good-quality cattle available for purchase and consequent high prices resulted in a lesser number, 8,500, being purchased in 2011.
Notwithstanding the favourable prospects for Woodlands resulting from the increase in its herd and the development of its pastures, it remains the board's intention in the longer term to sell the property.
Malaysia
The Group's two principal remaining interests in Malaysia are the 70-hectare Bertam Estate and its 40% share of Bertam Properties Sdn. Berhad ("Bertam Properties"). Whilst the board ultimately plans to sell both of these, this is not considered an urgent priority. It is expected that in the next two to three years Bertam Properties will continue to generate significant cash flows from land sales and from its successful property-development activities. The value of Bertam Estate is likely to continue to escalate as a result of the continuing development of the (adjoining) Bertam Properties project.
PALM-OIL ACTIVITIES AND MARKET
The palm-oil market held up above the historically-high price of US$1,000 per tonne (Rotterdam cif) throughout most of the year, although it was on a generally declining trend. World stocks of palm oil increased during the year and the prices of agricultural commodities eased in the wake of the European debt crisis. Palm oil was no exception. However, concerns towards the end of 2011 that dry weather in South America would adversely affect the soybean crop added upward pressure on vegetable-oil prices and, accordingly, palm oil has strengthened markedly to the current level of around US$1,175 per tonne.
F.f.b. crops from the majority-owned Indonesian estates, at 249,300 tonnes, were 27% ahead of last year's 196,400 tonnes. The crops from the new projects, in East Kalimantan and Bangka, were, as expected, sharply higher (by 99%) than in 2010 as new areas mature and yields increase on those areas which have already reached maturity. Yields on the established estates in Sumatra increased further (by 16%) with the investment in upgraded infrastructure and improved harvesting standards starting to pay off. A further small improvement in the extraction rate (to 23.2%) at the Pangkatan mill was also achieved.
Majority-owned estates
Crops and production
2011 Increase 2010
Tonnes % Tonnes
Crops - f.f.b. - Pangkatan group 149,300 130,200
- Simpang Kiri 50,200 41,200
- East Kalimantan 23,100 6,100
- Bangka 26,700 18,900
------- -------
249,300 27 196,400
======= === =======
Production - crude palm oil
- Pangkatan mill 34,700 16 30,000
- Kalimantan mill 900 - -
------- -------
35,600 19 30,000
======= === =======
- palm kernels
- Pangkatan mill 8,500 16 7,300
- Kalimantan mill 200 - -
------- -------
8,700 16 7,300
======= === =======
% %
Extraction rate - crude palm oil
- Pangkatan mill 23.2 23.0
- Kalimantan mill 23.2 -
======= =======
- palm kernels
- Pangkatan mill 5.7 5.6
- Kalimantan mill 4.4 -
======= =======
The Bangka project recorded an increased profit from its operations as its crop is on an upward trend and palm-oil prices were at good levels. As would be expected from a project at a very early stage, the East Kalimantan operations recorded a loss. This was in part due to its f.f.b. being sold at unfavourable levels to a third-party mill until the new mill was able to process the f.f.b. at the end of the year. The revenue from early yields does not outweigh the costs of field maintenance and harvesting. However, with the f.f.b. crops expected to increase significantly year by year, and with the new palm-oil mill now operating, profitability and positive cash flows are expected in the near future. The initial production in the last weeks of 2011 of 900 tonnes of palm oil and 200 tonnes of palm kernels were retained in stock before being sold in early 2012.
The gross profit achieved by the Indonesian plantation operations amounted to US$25.83 million, 19% higher than the US$21.68 million achieved in 2010. This significant improvement was as a result of markedly higher crops of f.f.b. on both the new projects and the established estates and continuing robust palm-oil prices.
BEEF-CATTLE ACTIVITIES AND MARKET
Prices for lighter-weight cattle, such as those fattened on Woodlands, traded at firm levels during the course of 2011. Favourable seasonal conditions across most parts of Australia underpinned strong competition for limited supplies of cattle. Prices for the grain-finished, heavier cattle, such as those produced by NAPCo, which are more export-orientated, also traded at historically-strong levels but were a little more volatile in response to the fluctuations of the Australian Dollar. The strength of the market was further supported by the continuing decline of the US cattle herd.
On Woodlands, plentiful rain in the early part of 2011 produced good pastures. The herd numbers at the end of the year (10,400 head) were similar to that at the end of 2010 (10,200 head) although the average weight per head was markedly higher (+16%). Because of more advantageous prices for heavier cattle, it was decided to let some of the herd achieve higher weights before selling. The price used for valuing the year-end herd at the end of 2011 was similar to that at the end of the previous year.
Unfortunately, although there was abundant rain during the year, some of it came at the wrong time for the forage-oats planting. As a result, the quality of the forage oats was not up to standard and the extra weight gains that would normally be achieved by cattle on such areas were disappointingly not able to be achieved. However, because a large herd was maintained on the property, Woodlands achieved a small gross profit for the year of US$0.11 million (2010 US$0.25 million).
GROSS PROFIT
As a result of the above, the Group gross profit amounted to US$25.92 million (2010 US$21.89 million).
BEARER BIOLOGICAL-ASSET ADJUSTMENT
Even though the price of crude palm oil broadly fell during 2011, it nevertheless remained at high levels seen in an historical context. As a result, the 20-year average price used in the valuation of biological assets rose sharply from US$533 per tonne to US$572 per tonne. This increase in value was partly eroded by an increase in costs. Some of these arose as a result of initiatives to drive up field standards that are expected to lead, in due course, to upward revisions in expected future yields. Overall, the increase in prices outweighed the increase in costs, and the valuation of palms already planted at the beginning of the year increased by US$13.71 million. In addition, new hectarage planted during 2011 added US$4.23 million to the value of the Group's biological assets, whilst the sale of 175 hectares to the cooperative schemes attached to the Group's development in East Kalimantan removed US$1.37 million. In total, therefore, the Group's biological assets increased by US$16.57 million during the year under review.
OTHER ADMINISTRATIVE EXPENSES
Other administrative expenses, at US$2.70 million, were substantially lower than for 2010 (US$4.93 million). This was primarily due to a reduction in the provision for impairment of the amounts deemed recoverable from the smallholder cooperative schemes in East Kalimantan and Bangka. The finance for planting the land allocated to the cooperatives is provided, in the first instance, by the Group. At a later stage, bank finance is provided to the cooperatives, whereupon most of the loans from the Group are repaid. A review of the recoverability of these loans is carried out twice a year and the 2011 reviews indicated that more was recoverable than was thought to be the case in 2010. Accordingly, the provision was reduced in 2011 by US$0.96 million, compared with an increase in the provision made in 2010 of US$1.35 million, a movement of US$2.31 million.
The Company's share price was lower at 31 December 2011 than it was at the end of 2010. As a consequence, the provision for UK National Insurance on the future exercise of options under the executive option scheme was reduced at 31 December 2011 by US$0.13 million, compared with the increase in the provision in 2010 of US$0.62 million, a movement of US$0.75 million.
ASSOCIATED COMPANIES
The Group's share of its associated companies' profits for the year, including the share of biological bearer-asset adjustments in the Indonesian oil-palm plantation companies, compared with last year were as follows:-
Post-tax Post-tax
profit profit
before after
biological Biological biological
2011 bearer-asset bearer-asset bearer-asset
adjustment adjustment adjustment
US$'000 US$'000 US$'000
PT Agro Muko (36.84%) 13,912 2,357 16,269
PT Kerasaan Indonesia (38.00%) 1,880 472 2,352
------ ------ ------
Total Indonesia 15,792 2,829 18,621
NAPCo (34.37%) 4,231 - 4,231
Bertam Properties (40.00%) 1,786 - 1,786
------ ------ ------
Total 21,809 2,829 24,638
====== ====== ======
Post-tax Post-tax
profit profit
before after
biological Biological biological
2010 bearer-asset bearer-asset bearer-asset
adjustment adjustment adjustment
US$'000 US$'000 US$'000
PT Agro Muko (36.84%) 9,029 (2,933) 6,096
PT Kerasaan Indonesia (38.00%) 1,745 (68) 1,677
------ ------ ------
Total Indonesia 10,774 (3,001) 7,773
NAPCo (34.37%) 2,365 - 2,365
Bertam Properties (40.00%) 2,987 - 2,987
------ ------ ------
Total 16,126 (3,001) 13,125
====== ====== ======
Indonesia
Crops and production from the estates owned by PT Agro Muko (36.84%) and PT Kerasaan Indonesia (38.00%) were as follows:-
Increase/
2011 (decrease) 2010
Tonnes % Tonnes
F.f.b. crops - PT Agro Muko
- own 354,100 11 317,900
- outgrowers 14,400 (11) 16,100
------- -------
368,500 10 334,000
- PT Kerasaan Indonesia 47,100 (2) 48,200
------- -------
415,600 9 382,200
======= == =======
Production (PT Agro Muko)
- crude palm oil 88,200 16 75,800
- palm kernels 19,200 12 17,100
======= == =======
% %
Extraction rate - crude palm oil 23.9 22.7
- palm kernels 5.2 5.1
======= =======
Tonnes Tonnes
Rubber crops (PT Agro Muko) - own 1,546 30 1,189
======= == =======
The combination of PT Agro Muko's increased crops, both f.f.b. and rubber, improved palm-oil extraction rates and robust selling prices for both palm oil and rubber resulted in a markedly-improved profit when compared to 2010. Favourable weather and better access resulting from the extensive road-improvement programme of the last few years gave rise to increased f.f.b. yields and a sharply-higher extraction rate. Because of very favourable rubber prices which, for PT Agro Muko, were, as an average, over 40% higher in local currency in 2011 than the previous year, the replanting programme was again delayed. The trees were intensively tapped resulting in a crop 30% higher than in 2010. The crop will fall in 2012. As referred to above, rubber prices were, as an average, much higher for 2011 than 2010, although they fell quite sharply towards the end of 2011 partly because producers in the world's largest rubber market, Thailand, ran into difficulty as a result of the severe flooding that was widely reported. They have since recovered some of the lost ground.
PT Kerasaan's f.f.b. crop for 2011 was similar to that of 2010. However, as a result of the higher palm-oil prices referred to above, profits increased in 2011.
Australia
NAPCo enjoyed another excellent year, as a result both of widespread rainfall across all of its properties, giving rise to lush pastures and good weight gains and of firm cattle prices throughout the year. Despite the sharp increase in the number of cattle sold of 57,200, compared with 36,800 in 2010, the herd increased slightly from 195,300 to 197,600 head. As a consequence, the Group's share of NAPCo's profit for the year was US$4.23 million, compared with US$2.37 million in 2010. The Group's share of NAPCo's dividends for 2011 amounted to US$0.96 million (gross), compared with US$0.48 million (gross) in 2010.
Malaysia
2011 was a successful year for the Bertam Properties Sdn. Berhad group's ("Bertam Properties") property-development activities with continuing strong demand for its housing and other commercial-property products. The Malaysian property market has remained reasonably robust. There was a small compulsory acquisition of the group's land during 2011 but, unlike in 2010, there were no land sales, although a number of transactions are on their way through and are expected to be completed, and taken to account, in 2012. The group's post-tax profit for the year amounted to US$4.47 million, compared with US$7.47 million in 2010 (of which US$6.68 million related to land sales). The Group's share of the post-tax profit amounted to US$1.79 million (2010 US$2.99 million). The Group's share of Bertam Properties' dividends in 2011 amounted to US$2.61 million (2010 US$3.73 million).
PROFIT FOR THE YEAR
As a result of all of the above, the Group profit for the year amounted to US$39.70 million, a 62% increase over 2010's US$24.45 million.
CURRENT TRADING AND PROSPECTS
Palm-oil prices were on a downward trend for most of 2011, albeit still at historically-high levels, but there has been a sharp upturn in the first part of 2012 to the current level of around US$1,175 per tonne (Rotterdam cif). With weather concerns in South America affecting sentiment in respect of soybean oil, competition for land between corn and soybeans in the US and an upturn in demand for vegetable oils, price prospects in the short term appear to be encouraging.
F.f.b. crops have made a good start in 2012, with 66,500 tonnes harvested from the majority-owned estates up to 31 March 2012, a 20% increase over the same period last year. The Group remains on track to produce 300,000 tonnes of f.f.b. in 2012. The new mill is performing well and additional sales value is being captured.
Cattle prices have eased from the higher levels seen in 2011, but nonetheless remain at historically-firm levels. Growing demand in Asia and the continuing decline of the US cattle herd would indicate that the medium-to-long-term outlook for Australian beef-cattle markets remains positive.
Peter Hadsley-Chaplin
Chairman
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2011
Result before Year
biological Biological ended
bearer-asset bearer-asset 31 December
adjustment adjustment 2011
US$'000 US$'000 US$'000
Revenue 57,756 - 57,756
Cost of sales (33,636) 1,799 (31,837)
------ ------ ------
Gross profit 24,120 1,799 25,919
Gain on biological
assets (note 4) - 17,936 17,936
Planting expenditure - (15,619) (15,619)
Foreign-exchange gains 528 - 528
Other administrative expenses (2,470) (230) (2,700)
Other income 143 - 143
------ ------ ------
Operating profit 22,321 3,886 26,207
Finance income 1,078 - 1,078
Finance costs (2,361) (574) (2,935)
------ ------ ------
Group-controlled profit
before tax 21,038 3,312 24,350
Tax on profit on ordinary
activities (note 2) (8,450) (842) (9,292)
------ ------ ------
Group-controlled profit
after tax 12,588 2,470 15,058
Share of associated companies'
Profit after tax 21,809 2,829 24,638
------ ------ ------
Profit for the year 34,397 5,299 39,696
====== ====== ======
Attributable to:
Owners of M.P. Evans Group PLC 30,340 5,182 35,522
Minority interests 4,057 117 4,174
------ ------ ------
34,397 5,299 39,696
====== ====== ======
(US cents)
Basic earnings per 10p share 66.39
======
(US cents)
Diluted earnings per 10p share 65.64
======
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2010
Result before Year
biological Biological ended
bearer-asset bearer-asset 31 December
adjustment adjustment 2010
US$'000 US$'000 US$'000
Revenue 42,091 - 42,091
Cost of sales (21,215) 1,011 (20,204)
------ ------ ------
Gross profit 20,876 1,011 21,887
Gain on biological assets - 17,589 17,589
Planting expenditure - (15,204) (15,204)
Foreign-exchange gains 739 - 739
Other administrative expenses (4,934) - (4,934)
Other income 218 - 218
------ ------ ------
Operating profit 16,899 3,396 20,295
Finance income 711 - 711
Finance costs (1,647) - (1,647)
------ ------ ------
Group-controlled profit
before tax 15,963 3,396 19,359
Tax on profit on ordinary
activities (note 2) (7,459) (577) (8,036)
------ ------ ------
Group-controlled profit
after tax 8,504 2,819 11,323
Share of associated companies'
profit/(loss) after tax 16,126 (3,001) 13,125
------ ------ ------
Profit/(loss)for the year 24,630 (182) 24,448
====== ====== ======
Attributable to:
Owners of M.P. Evans Group PLC 21,636 271 21,907
Minority interests 2,994 (453) 2,541
------ ------ ------
24,630 (182) 24,448
====== ====== ======
(US cents)
Basic earnings per 10p share 41.17
======
(US cents)
Diluted earnings per 10p share 40.52
======
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2011
2011 2010
US$'000 US$'000
Other comprehensive (expense)/income
Previously unrealised profit on sale of land
to associated undertaking released to the
consolidated income statement on sale of
that land by the associate (54) (327)
Exchange differences on translation of
foreign operations (70) 14,203
------ ------
Other comprehensive (expense)/income (net of
tax) for the year (124) 13,876
Profit for the year 39,696 24,448
------ ------
Total comprehensive income 39,572 38,324
====== ======
Attributable to:
Owners of M.P. Evans Group PLC 35,398 35,777
Minority interests 4,174 2,547
------ ------
39,572 38,324
====== ======
CONSOLIDATED BALANCE SHEET
at 31 December 2011 Before
biological Biological
bearer-asset bearer-asset 31 December
adjustment adjustment 2011
US$'000 US$'000 US$'000
Non-current assets
Goodwill 1,157 - 1,157
Biological assets - 127,428 127,428
Property, plant and equipment 161,700 (65,670) 96,030
Investments in associates 106,026 25,633 131,659
Investments 145 - 145
Deferred-tax asset 2,808 - 2,808
Non-current debtor 2,189 - 2,189
------- ------- -------
274,025 87,391 361,416
------- ------- -------
Current assets
Biological assets 9,878 - 9,878
Inventories 8,582 - 8,582
Trade and other receivables 14,439 - 14,439
Current-tax asset 6,300 - 6,300
Cash and cash equivalents 52,755 - 52,755
------- ------- -------
91,954 - 91,954
------- ------- -------
Total assets 365,979 87,391 453,370
======= ======= =======
Current liabilities
Borrowings 25,255 - 25,255
Trade and other payables 14,814 - 14,814
Current-tax liability 4,322 - 4,322
------- ------- -------
44,391 - 44,391
------- ------- -------
Net current assets 47,563 - 47,563
------- ------- -------
Non-current liabilities
Borrowings 31,450 - 31,450
Deferred-tax liability 3,213 15,440 18,653
Retirement-benefit obligations 2,963 - 2,963
------- ------- -------
37,626 15,440 53,066
------- ------- -------
Total liabilities 82,017 15,440 97,457
======= ======= =======
Net assets 283,962 71,951 355,913
======= ======= =======
Equity
Share capital 9,093 - 9,093
Other reserves 84,320 25,633 109,953
Retained earnings 180,187 38,742 218,929
------- ------- -------
Equity attributable to the owners
of M.P. Evans Group PLC 273,600 64,375 337,975
Minority interests 10,362 7,576 17,938
------- ------- -------
Total equity 283,962 71,951 355,913
======= ======= =======
CONSOLIDATED BALANCE SHEET
at 31 December 2010
Before
biological Biological
bearer-asset bearer-asset 31 December
adjustment adjustment 2010
US$'000 US$'000 US$'000
Non-current assets
Goodwill 1,157 - 1,157
Biological assets - 110,862 110,862
Property, plant and equipment 120,476 (52,416) 68,060
Investments in associates 106,776 22,803 129,579
Investments 149 - 149
Deferred-tax asset 808 - 808
------- ------- -------
229,366 81,249 310,615
------- ------- -------
Current assets
Biological assets 7,991 - 7,991
Inventories 7,921 - 7,921
Trade and other receivables 24,388 - 24,388
Current-tax asset 1,962 - 1,962
Cash and cash equivalents 35,399 - 35,399
------- ------- -------
77,661 - 77,661
------- ------- -------
Total assets 307,027 81,249 388,276
------- ------- -------
Current liabilities
Borrowings 25,255 - 25,255
Trade and other payables 8,278 - 8,278
Current-tax liability 2,611 - 2,611
------- ------- -------
36,144 - 36,144
------- ------- -------
Net current assets 41,517 - 41,517
------- ------- -------
Non-current liabilities
Borrowings 10,175 - 10,175
Deferred-tax liability 3,178 14,597 17,775
Retirement-benefit obligations 1,840 - 1,840
------- ------- -------
15,193 14,597 29,790
------- ------- -------
Total liabilities 51,337 14,597 65,934
------- ------- -------
Net assets 255,690 66,652 322,342
======= ======= =======
Equity
Share capital 8,987 - 8,987
Other reserves 82,250 22,803 105,053
Retained earnings 157,149 36,389 193,538
------- ------- -------
Equity attributable to the owners
of M.P. Evans Group PLC 248,386 59,192 307,578
Minority interests 7,304 7,460 14,764
------- ------- -------
Total equity 255,690 66,652 322,342
======= ======= =======
CONSOLIDATED CASH-FLOW STATEMENT
for the year ended 31 December 2011
Year ended Year ended
31 December 31 December
2011 2010
US$'000 US$'000
Net cash generated by operating activities 48,339 19,417
------ ------
Investing activities
Interest received 1,078 711
Proceeds on disposal of assets 598 690
Proceeds on disposal of investments - 3,255
Purchase of property, plant and equipment (31,789) (9,920)
Planting expenditure (15,619) (15,204)
Investment in associated undertaking - (7,310)
------ ------
Net cash used from investing activities (45,732) (27,778)
------ ------
Financing activities
Dividends paid to Company shareholders (6,064) (5,064)
Repayment of borrowings - (2,011)
Proceeds on issue of shares 1,034 1,301
Dividend paid to minorities (1,000) -
Loan drawdown 20,921 10,175
------ ------
Net cash generated from financing
activities 14,891 4,401
------ ------
Net increase/(decrease) in cash and
cash equivalents 17,498 (3,960)
Net cash and cash equivalents 1 January 10,144 15,784
Effect of foreign-exchange rates on
cash and cash equivalents (142) (1,680)
------ ------
Net cash and cash equivalents 31 December 27,500 10,144
====== ======
NOTES
1. Dividends paid and proposed
2011 2010
US$'000 US$'000
2011 interim dividend - 2.25p per 10p share
(2010 interim dividend - 2.00p) 1,887 1,663
2010 final dividend - 5.50p per 10p share
(2009 final dividend - 5.00p) 4,725 3,993
------ ------
6,612 5,656
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Following the year end the board has proposed a final dividend for 2011 of 5.75p per 10p share amounting to US$4.94 million. Shareholders will again have the option to elect to receive the dividend in shares rather than in cash. The calculation period will be 25 April to 1 May 2012. The dividend will be paid on or after 21 June 2012 to those shareholders on the register at the close of business on 27 April 2012, as follows:
2011 2010
Ex-dividend date 25 April 2012 27 April 2011
Record date 27 April 2012 3 May 2011
Final date for receipt of election
instruction 29 May 2012 26 May 2011
Definitive share certificates posted 20 June 2012 16 June 2011
First day of dealing in the new shares 21 June 2012 17 June 2011
Dividend payable on or after 21 June 2012 17 June 2011
2. Tax on profit on ordinary activities
2011 2010
US$'000 US$'000
United Kingdom corporation tax charge
for the year 342 303
Relief for overseas taxation (342) (303)
------ ------
- -
Overseas taxation 10,523 6,865
Adjustments in respect of prior years (5) 9
------ ------
Total current tax 10,518 6,874
Deferred taxation - origination and reversal
Of temporary differences (1,226) 1,162
------ ------
9,292 8,036
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3. Basic and diluted earnings per share
The calculation of earnings per 10p share is based on:-
2011 2011 2010 2010
US$'000 Number of US$'000 Number of
shares shares
Profit for the year
attributable to the owners
of M.P. Evans Group PLC 35,522 21,907
====== ======
Average number of shares
in issue 53,502,656 53,206,617
Diluted average number of
shares in issue* 54,116,145 54,059,915
========== ==========
* 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.
4. 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.
In the balance sheet, the adjustment column shows that the recognition of the biological-asset valuation replaces depreciated-historical-planting costs of US$65.67 million (2010 US$52.42 million) 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$137.62 million (2010 US$119.07 million).
5. Financial information
The information in this preliminary results announcement has been prepared on the basis of the accounting policies which have been set out in the Group accounts for the year ended 31 December 2010 and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. No additional standards or amendments to existing standards have been adopted by the Group with effect from 1 January 2011. Full accounts of M.P.Evans Group PLC for the year ended 31 December 2010, which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
The statutory accounts for the year ended 31 December 2011 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement. The auditors anticipate issuing an unmodified opinion.
6. 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 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 on or after 26 April 2012.
7. Timetable
The report and financial statements will be available on the Group's website on or after 26 April 2012 and despatched to shareholders shortly thereafter. The annual general meeting will be held on 8 June 2012.
8. Distribution
Copies of the full report and financial statements for the year ended 31 December 2011 will be available from the Company, 3 Clanricarde Gardens, Tunbridge Wells, Kent TN1 1HQ.
By order of the board
Mrs Claire Hayes
Secretary
17 April 2012