Interim Results

MONTEAGLE HOLDINGS SOCIETE ANONYME (Incorporated in Luxembourg. RC Number B19600) Registered Office: 6 rue Adolphe Fischer, 27th June 2003 L-1520, Luxembourg Results for the half year ended 31st March 2003 We are pleased to be able to report an encouraging start to the year as a result of significant growth in our import, export and distribution businesses. There was also major corporate activity in our listed subsidiary, Conafex Holdings S.A.. and our listed associate. Falcon Investments Holdings S.A. Results Turnover for the Group, including our share of associates, has increased to US$16,966,000 for the six months to 31st March 2003, compared to US$8,649,000 (restated), mainly because of a substantial increase in the volumes handled by our import, export and distribution businesses. Profit before interest, tax and exceptional items has declined slightly from US$553,000 to US$525,000 (restated) because of lower dividends received from Zimbabwe. Interest charges reflect increased funding costs for the higher volumes in the import and distribution business. Earnings per share have increased to US 13c from US 6c (restated) last year. Our commercial agribusiness subsidiary, Conafex has generated an exceptional profit of US$1,177,000 from the disposal of part of its holding of shares in Ariston Holdings Limited, its Zimbabwean farming associate. Sale proceeds of US$3,000,000 were received in Europe in May. Another exceptional profit of US$339,000 arose in our mining associate, Falcon, from the receipt of a non-refundable premium for an option to purchase its Chilean iodine development. The option has since been exercised and we expect to be able to book a profit of a further approximately US$1,300,000 in the second half of the year. Falcon expects to receive cash proceeds in Europe from this transaction in excess of US$4,000,000. Distribution Our international trading and private label food production operations experienced an extremely good half year, reflecting solid growth in volumes shipped during the period and increased market share on existing product lines. This trend has continued into the third quarter and we are forecasting continued growth during the second six months. Margins have declined due to lower margins on new business and the impact of exchange rate movements. L & G Tool & Machinery in South Africa continue to grow, and are increasing market share and profits. Price deflation on imported products has started to have an impact which will place pressure on turnover for the remaining period but, notwithstanding this, the outlook for the balance of the year looks good. Queensland Tool and Machinery in Australia continued to trade profitably, increasing their volumes for the half year. Investment Portfolios and Properties During the period the Group took advantage of value present in certain leading global equities by adding to its diverse share portfolio. After three years of falling indices equity markets seem to have stabilised and current values are looking more realistic on a long term view. Total income from our properties decreased during the period, mainly due to the loss of income from our office block in California which was sold in August 2002. The proceeds from this sale will be re-invested in property when a suitable opportunity occurs. Our multi-tenanted commercial property in San Diego remained fully occupied and rental income rose once again. Zimbabwe The carrying value of our remaining assets in Zimbabwe is now equivalent to US$ 0.8 per share and shareholders must continue to regard the value of these assets with caution. To be prudent, we have only included in these results dividends received from Zimbabwe in the period. Recent changes to exchange control regulations mean that it is highly unlikely that we will receive any dividends from Zimbabwe in the foreseeable future. Our commercial agricultural activities continue in Zimbabwe, but at a reduced intensity because of poor rainfall distribution, a shortage of necessary inputs and the uncertain political and economic outlook. Increased prices for our exportable produce are expected to partly compensate for lower volumes. The 3 remaining gold mines in Zimbabwe continue to operate, but are suffering from increasing interruptions to production caused by power cuts and the lack of availability of foreign currency to purchase spare parts and consumables. Despite producing less gold, the mines are now reporting a significant increase in profits because of an improvement in the proportion of sale proceeds receivable in foreign currency and the devaluation of the official exchange rate to Z$824:US$1 (from Z$55:US$1). Special credit must go to all our employees in Zimbabwe for maintaining the operations of both the agricultural and gold mining businesses of our Group but nevertheless we remain very concerned about the future of Zimbabwe. Conclusion The Group had assets at market value, net of minority interests, of US$27,720,000 (US$4.4 per share) at 31st March 2003. This compares to US$25,858,000 (US$4.1 per share) at 30th September 2002. Net assets outside southern Africa are again at a record level and now stand at US$2.86 per share. We have concentrated our resources over recent years to facilitate continuing growth in our import and distribution businesses. Our investment portfolios and Properties are performing creditably in the current environment. Conafex and Falcon, who have previously traded almost exclusively in Zimbabwe, have recently succeeded in disposing of some non-core assets and are seeking to diversify by re-investing the cash generated into suitable businesses outside Zimbabwe. J.M. Robotham, D.C. Marshall Chairman Chief Executive Consolidated group profit and loss Half years Year account ended ended 31st March 30th September 2003 2002 2002 Restated Notes Unaudited Unaudited Audited US$000 US$000 US$000 Group Revenue including share of 16,966 8,649 21,655 Associates Less revenue of Associates (214) (248) (422) _______ _______ _______ Group revenue 2 16,752 8,401 21,233 Operating costs (16,304) (8,146) (20,190) _______ _______ _______ Operating profit 448 255 1,043 Share of associated companies' results (140) (74) (72) Income from Zimbabwean investments - 20 173 541 dividends Income from investments - dividends 134 104 140 - interest 63 95 172 _______ _______ _______ 525 553 1,824 Interest paid and similar charges (304) (232) (658) _______ _______ _______ Profit on ordinary activities before 221 321 1,166 exceptional items and taxation Exceptional items 3 1,294 288 467 _______ _______ _______ Profit before taxation 1,515 609 1,633 Taxation (157) (140) (514) _______ _______ _______ Profit after taxation 2 1,358 469 1,119 Attributable to outside shareholders (526) (80) (371) _______ _______ _______ PROFIT ATTRIBUTABLE TO SHAREHOLDERS 832 389 748 _______ _______ _______ Dividend per share (US cents) - - 5.0c Earnings per share (US cents) - basic 4 13c 6c 12c Headline (loss)/earnings per share (US (1)c 4c 5c cents) Changes in equity Net profit for the period 832 389 748 Exchange differences 21 (47) (55) Group share of fair value adjustments 1,009 (4,123) (4,711) Dividends (315) (536) (536) _______ _______ _______ Total recognised profits /(losses) 1,547 (4,317) (4,554) Shareholders' funds at start of period 26,173 30,727 30,727 _______ _______ _______ Shareholders' funds at end of period 27,720 26,410 26,173 _______ _______ _______ Consolidated group balance sheet 31st March 30th September 2003 2002 2002 Unaudited Unaudited Audited US$000 US$000 US$000 Fixed assets Tangible fixed assets 9,932 10,901 9,245 Investments Listed associates 3,828 1,762 2,378 Listed - other 7,094 6,681 5,594 Unconsolidated subsidiary 8,444 8,119 8,444 Unlisted associates 348 513 526 Other unlisted - 1 1 _______ _______ _______ 29,646 27,977 26,188 _______ _______ _______ Current assets Inventories 5,338 3,920 4,299 Debtors 4,946 4,391 5,715 Cash 4,315 4,171 5,022 _______ _______ _______ 14,599 12,482 15,036 Current liabilities Creditors (falling due within one year) (6,773) (6,007) (6,177) _______ _______ _______ Net current assets 7,826 6,475 8,859 _______ _______ _______ Total assets less current liabilities 37,472 34,452 35,047 Creditors (falling due after more than one (3,736) (3,280) (3,487) year) Provisions for liabilities and deferred 113 (14) 117 taxation _______ _______ _______ 33,849 31,158 31,677 _______ _______ _______ Capital and reserves Share capital 9,450 9,450 9,450 Other reserves 7,044 6,865 6,268 Retained earnings 11,226 10,095 10,455 _______ _______ _______ Shareholders' funds 27,720 26,410 26,173 Minority interests 6,129 4,748 5,504 _______ _______ _______ 33,849 31,158 31,677 _______ _______ _______ Consolidated cash flow statement Half years ended Year ended 31st March 30th September 2003 2002 2002 Unaudited Unaudited US$000 US$000 US$000 Operating activities Cash generated from/(absorbed by) 199 254 (741) operating activities Interest paid (304) (232) (658) Taxation paid (298) (233) (451) Net cash outflow from operating (403) (211) (1,850) activities _______ _______ _______ Investment activities Purchase of tangible fixed assets - (46) (285) Purchase of investments (561) (3,377) (5,158) Disposal of tangible fixed assets 26 - 3,287 Acquisition of subsidiary (16) - - Disposal of investments 72 - 834 Interest received and other investment 197 199 312 income Dividends received from Zimbabwe 20 173 541 investments _______ _______ _______ Net cash outflow from investment (262) (3,051) (469) activities _______ _______ _______ Net cash outflow before financing (665) (3,262) (2,319) _______ _______ _______ Financing activities Net increase/(decrease) in long term debt (33) (205) 3 Dividend paid - group - - (536) - minority shareholders - - (112) _______ _______ _______ Net cash inflow/(outflow) from financing (33) (205) (645) activities _______ _______ _______ Net decrease in funds (698) (3,467) (2,964) Net funds at start of period 4,531 7,495 7,495 Effect of foreign exchange rates (9) (91) - _______ _______ _______ Net funds at end of period 3,824 3,937 4,531 _______ _______ _______ Offices: United Kingdom: South Africa: 25 City Road, 11 Sunbury Park, London, EC1Y 1BQ La Lucia 4051, Durban Transfer agents: Europe South Africa Northern Registrars Limited Computershare Investor Services Limited Northern House, Woodsome Park, 70 Marshall Street, Fenay Bridge, Huddersfield, Johannesburg 2001 HD8 0LA, U.K. (P.O. Box 61051, Marshalltown, 2107) Notes to the interim statement 1. The results and the cash flow statement for the half-year ended 31st March 2003 are unaudited and have been prepared on the basis of accounting policies adopted in the accounts for the year ended 30th September 2002 and comply with International Accounting Standards and Luxembourg law. The Group changed its accounting policy at 30th September 2002 and the results of Zimbabwean subsidiaries are not consolidated. They have been included in the accounts as fixed asset investments. Comparative figures for the half year to March 2002 have been restated. The results for the year to 30th September 2002 are an abridged version of the Group's full accounts for that year which have been filed with the relevant authorities. 2. The segmental analysis of turnover and operating profit is as follows: - Half years ended 31st March Year ended 30th September 2003 2002 2002 Restated US$000 US$000 US$000 Revenue Result Revenue Result Revenue Result Analysed by activity:- Import/distribution 15,854 849 7,618 644 19,342 1,628 Property 555 44 749 255 1,492 1,023 Food production and 198 (187) 35 (218) 192 13 processing Mining - 20 - 32 - 57 Other 25 1,232 76 (113) 207 (254) ______ ______ ______ ______ ______ ______ 16,632 1,958 8,478 826 21,233 2,467 Share of associated companies results:- Food production and 214 (22) 248 157 422 229 processing Mining - (118) - (123) - (389) ______ ______ ______ Group revenue including 16,846 8,726 21,655 associates ______ ______ ______ Interest paid (303) (251) (674) ______ ______ ______ Profit before tax 1,515 609 1,633 ______ ______ ______ The analysis for the year ended 30th September 2002 has been restated to re-allocate sundry income items, previously reported under Property, into Other. 3. The exceptional items arise from the surplus on disposal of investments and tangible fixed assets. 31st March 30th September 2003 2002 2002 US$000 US$000 US$000 Surplus on disposal of listed and unlisted 1,165 213 investments Surplus on disposals of tangible fixed - - 533 assets Provisions against investments (264) - - Share of associated company's proceeds 339 - - from grant of option Share of associated company's fair value 54 288 (279) adjustment to investments ______ ______ ______ Exceptional items - net income 1,294 288 467 ______ ______ ______ 4. Earnings per share are based on profits attributable to members and on the average of 6,300,000 shares in issue during the period, allowing for the shares held in Treasury. Headline earnings per share exclude extraordinary items after tax. 5. Net assets per share are based on Shareholders' funds, after allowance for proposed dividends, divided by the number of shares in issue of 6,300,000 at the period end. 6. There was no capital expenditure during the period and no contracted nor outstanding authorised capital expenditure at the balance sheet date.

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