DECA

Interim Results

RNS Number : 6053B
Agriterra Ltd
22 February 2011
 



Agriterra Ltd / Ticker: AGTA / Index: AIM / Sector: Agriculture

22 February 2011

Agriterra Ltd ('Agriterra' or 'the Group')

Interim Results

 

Agriterra Ltd, the AIM listed group focussed on the agricultural sector in central and southern Africa, announces its results for the six months ended 30 November 2010.

 

Chairman's Statement

 

The economic fundamentals for the agricultural sector are extremely positive.  The increasing focus on global food security means that there are significant opportunities for the Group given our personnel and experience.  Africa offers huge development potential and our ability to identify opportunities and build substantial operations is proven through each of Desenvolvimento E Comercialização Agricola Limitada ('DECA'), Compagri Limitada ('Compagri') and Mozbife Limitada ('Mozbife').  These businesses provide us with a solid platform to expand the Group in order to capitalise on this rapidly growing sector and accordingly we are actively evaluating additional opportunities in agriculture and associated logistics businesses across the continent. 

 

Our efforts during the period have remained centred on consolidating our maize processing operation at our DECA facility in Chimoio and expanding the Compagri facility in Tete, which recommenced operations during the period and is now beginning to contribute revenues to the Group.  The expansion of our beef ranching operations is continuing apace following a successful calving season and development of our Vanduzi feedlot project.

 

Maize Processing - DECA and Compagri

 

Our grain processing facilities, which include the 40,000 tonne capacity DECA facility at Chimoio, and the 12,600 tonne capacity Compagri facility in the Tete Province of Mozambique, have achieved notable successes during the period, with record sales made at both operations.

 

We started the period with a strong maize stock pile, following a record buying year in 2009, which enabled us to manage the processing and sales of the product in-line with the recent favourable pricing environment.  The sale of 17,250 tonnes of maize meal and bran, from both the DECA and Compagri facilities during the period, resulted in record turnover for the maize businesses, with revenue totalling US$5.2 million, more than double that of the corresponding period in 2009.  This increase in revenue, coupled with the completion of construction and bedding down of the Tete facility, has enabled the grain processing branch of the Agriterra business to swing into profit at an operational level. 

 

As buying and processing operations are ramped up, particularly at the Compagri facility which caters for the booming mining area of Tete and its surroundings, I believe that our maize processing facilities will continue to provide a solid foundation and internal cash flow for the continued expansion of the Group.

 

Mozbife

 

Beef ranching offers a material value opportunity in Africa.  Our rapidly growing ranching business in Mozambique remains an area of significant expansion and investment for the Group, with total head exceeding 1,100 across the 1,000ha Mavonde and 15,000ha Dombe ranches by the end of the period.  

 

The period under review encompassed the calving season, where we experienced an 82% pregnancy rate and 100% survival rate of all calves.  This was a tremendous achievement for Mozbife, and underpins the quality of our beef stock and high veterinarian standards which we enforce across both ranches.  This successful breeding programme is critical both to the continued growth of the herd and the improvement of animal quality as imported South African Beefmaster stock is cross bred with native cattle to develop a herd with excellent meat yield potential coupled with high local disease resistance.

 

The Vanduzi abattoir/feedlot project is also advancing rapidly, with the first feed pens and boundary fencing completed in the period.  Post period end saw the first delivery of animals ahead of slaughter at the Beira abattoir, with dress out weight percentages between 58% and 63%, which was more than 10% above management expectations and an average sale price per animal in excess of US$900.  The attractive sale price for the animals highlights the financial returns possible for an established beef ranching operation in Mozambique and underpins the huge potential of Mozbife. 

 

Our extensive land clearing and preparation programme at Vanduzi is also progressing encouragingly, with 170 hectares planted with maize crop to ensure security of feedlot and a further 270 hectares now cleared for additional planting.  This, coupled with the planned development of an abattoir by the Group, will provide Mozbife with the foundations required to develop into one of southern Africa's largest producers of beef.  We have also recruited three highly experienced ranching professionals, who have proven track records in developing major beef operations, to manage the onward development and growth of our herds and feedlot/abattoir project.

 

Financial Results

 

For the period, the Group is reporting a pre-tax profit of US$97,000 (H12009: loss of US$1,967,000) on turnover of US$5,284,000 (H1 2009: US$2,480,000).  Cash balances at the period end remained healthy at $7,080,000, following a placing of 145,483,334 new ordinary shares at a price of 3 pence per placing share, raising US$7 million before expenses.  In addition the Group had circa 29,500 tonnes of maize in stock at the end of the period, ready to be processed and sold.

 

Outlook

 

We have a solid foundation and believe we are positioned to take advantage of opportunities in the rapidly expanding agricultural and logistics sector.  The outlook for the maize processing operations in the second half is positive with high current stock levels and a ramp up in activity at Compagri, which we believe will be underpinned by the current positive pricing environment for meal and bran.  With regards to our beef operations, with the business progressing well, we look forward to a first revenue contribution in H2 2011.  Our objective is to build a breeding herd in excess of 10,000 with an initial target for 2012 of over 4,000 head.  Throughput in the feedlot will be augmented by bought in local cattle, which will further contribute to revenues.  On acquisitions, as previously stated we are actively evaluating additional opportunities in agriculture and associated logistics businesses across the continent.

 

Finally, I would like to take this opportunity to thank our shareholders for their continued support over the period, and to my fellow board members and management teams for their unwavering dedication to the future growth and success of the Group.

 

 

Phil Edmonds

Chairman

21 February 2011

 

For further information please visit www.agriterra-ltd.com or contact:

Andrew Groves

Agriterra Ltd

Tel: +44 (0) 20 7408 9200

Jonathan Wright

Seymour Pierce Ltd

Tel: +44 (0) 20 7107 8000

David Foreman

Seymour Pierce Ltd

Tel: +44 (0) 20 7107 8000

Robin Henshall

Matrix Corporate Capital LLP

Tel: +44 (0) 20 3206 7000

Nick Stone

Matrix Corporate Capital LLP

Tel: +44 (0) 20 3206 7000

Hugo de Salis

St Brides Media & Finance Ltd

Tel: +44 (0) 20 7236 1177

Susie Geliher

St Brides Media & Finance Ltd

Tel: +44 (0) 20 7236 1177

 

Unaudited Consolidated Income Statement

For the six month period to 30 November 2010

 



Unaudited

6 months to

30 November

2010

Unaudited

6 months to

31 December

2009

Audited

year to

31 May

2010

Continuing Operations

Note

$'000

$'000

$'000

Revenue

4

5,284

2,480

8,791

Increase in value of biological assets

63

-

22

Cost of sales


(3,660)

(1,965)

(7,371)

Gross profit


1,687

515

1,442

Operating expenses


(2,248)

(2,939)

(5,686)

Other income


612

445

386

Operating profit / (loss)


51

(1,979)

(3,858)

Net finance income / (expense)


46

12

(46)

Profit / (loss) before taxation


97

(1,967)

(3,904)

Income tax expense


-

-

-

Profit / (loss) for the period from continuing operations


 

97

 

(1,967)

 

(3,904)

Discontinued operations :





Loss for the period


(10)

(83)

(920)

Profit / (loss) for the period attributable to equity holders


 

87

 

(2,050)

 

(4,824)






Earnings / (loss) per share:

Basic & diluted

 

5

 

0.02 cents

 

(0.43 cents)

 

(0.9 cents)

Earnings / (loss) per share from continuing operations:

Basic & diluted

 

 

 

 

 

0.02 cents

 

 

(0.43 cents)

 

 

(0.8 cents)

 

Unaudited Consolidated Statement of Comprehensive Income

For the six month period to 30 November 2010

 



Unaudited

6 months to

30 November

2010

Unaudited

6 months to

31 December

2009

Audited

year to

31 May

2010


Note

$'000

$'000

$'000

Profit / (loss) for the period


87

(2,050)

(4,824)

Other comprehensive income net of tax

Foreign exchange translation loss

 

(1,337)

 

(3,791)

 

(6,005)

Total comprehensive loss for the period

(1,250)

(5,841)

(10,829)






Comprehensive loss attributable to equity holders


 

(1,250)

 

(5,841)

 

(10,829)











 

 

Unaudited Consolidated Balance Sheet

As at 30 November 2010

 



Unaudited

30 November

2010

Unaudited

31 December

2009

Audited

31 May

2010


Note

$'000

$'000

$'000

Non current assets





Property, plant and equipment


8,891

11,507

9,986

Investments


-

-

114

Biological assets


312

264

236

Total non current assets


9,203

11,771

10,336






Current assets





Inventories


6,550

8,656

4,605

Trade and other receivables


2,140

1,874

1,019

Cash and cash equivalents


7,080

2,539

3,442

Total current assets


15,770

13,069

9,066






Total assets


24,973

24,840

19,402






Current liabilities





Trade and other payables


(2,407)

(2,685)

(2,176)






Net assets


22,566

22,155

17,226






Equity





Issued capital

6

1,387

1,145

1,161

Share premium


131,548

124,259

125,184

Share based payment reserve


1,360

1,281

1,360

Translation reserve


(6,518)

(2,967)

(5,181)

Retained earnings


(105,211)

(101,563)

(105,298)

Total equity attributable to equity holders of the parent


 

22,566

 

22,155

 

17,226











 

Consolidated Statement of Changes in Equity


Ordinary share capital

$'000

Deferred share capital

$'000

Share premium

$'000

Share based payment reserve

$'000

Translation reserve

$'000

Retained earnings

$'000

 

Total

$'000

Balances at 1 June 2009

801

238

119,349

1,281

824

(99,513)

22,980

Loss for the period

-

-

-

-

-

(2,050)

(2,050)

Other comprehensive income








Exchange translation differences on foreign operations

-

-

-

-

(3,791)

-

(3,791)

Total comprehensive income for the period

 

Transactions with owners

-

-

-

-

(3,791)

(2,050)

(5,841)

Share issues

106

-

4,910

-

-

-

5,016

Total transactions with owners

106

-

4,910

-

-

-

5,016









Balances at 30 November 2009

907

           238

124,259

1,281

(2,967)

(101,563)

22,155

Loss for the period

-

-

-

-

-

(2,774)

(2,774)

Other comprehensive income








Exchange translation differences on foreign operations

-

-

-

-

(2,214)

-

(2,214)

Total comprehensive income for the period

 

-

-

-

-

(2,214)

(2,774)

(4,988)

Transactions with owners








Share based payment charge

-

-

-

79

-

-

79

Acquisition of minority

-

-

-

-

-

(961)

(961)

Share issues

16

-

925

-

-

-

941

Total transactions with owners

16

-

925

79

-

(961)

59









Balances at 31 May 2010

923

238

125,184

1,360

(5,181)

(105,298)

17,226

Profit for the period

-

-

-

-

-

87

87

Other comprehensive income








Exchange translation differences on foreign operations

-

-

-

-

(1,337)

-

(1,337)

Total comprehensive income for the period

 

-

-

-

-

(1,337)

87

(1,250)

Transactions with owners








Share issue

226

-

6,364

-

-

-

6,590

Total transactions with owners

226

-

6,364

-

-

-

6,590









Balances at 30 November 2010

1,149

238

131,548

1,360

(6,518)

(105,211)

22,566









 

 

 

 

Unaudited Consolidated Statement of Cash Flows

 

For the six months to 30 November 2010


Unaudited

6 months to

30 November

2010

Unaudited

6 months to

31 December

2009

Audited

year to

31 May

2010

Operating activities

Note

$'000

$'000

$'000

Profit / (loss) before tax


97

(2,050)

(3,904)

Adjustments for:





Depreciation


499

291

1,359

Increase in value of biological assets

(63)

-

(22)

Profit on disposal of assets


(3)

-

(20)

Movements in exchange rates


(101)

(834)

(42)

Share based payment


-

-

79

Net interest (income)/expense


(46)

(12)

46

Operating cash flow before movements in working capital


383

(2,605)

(2,504)

Working capital adjustments:





- Increase in inventory


(2,205)

(6,937)

(3,182)

- Increase in receivables


(4)

(393)

(523)

- Increase / (decrease) in payables


21

67

(506)

Cash used in operations


(1,805)

(9,868)

(6,715)

Net interest received / (paid)


46

12

(46)

Net cash used in continuing operating activities


(1,759)

(9,856)

(6,761)

Net cash used in discontinued operating activities


(520)

(425)

(783))

Net cash outflow from operating activities

(2,279)

(10,281)

(7,544)

Investing activities





Purchase of property, plant and equipment

(196)

(532)

(1,346)

Proceeds of sale of property, plant and equipment


-

-

135

Purchase of biological assets


-

(57)

(42)

Purchase / (sale) of financial assets


125

-

(125)

Net cash used in continuing investing activities


(71)

(589)

(1,378)

Net cash from discontinued investing activities


100

-

3

Net cash from / (used) in investing activities

29

(589)

(1,375)

Financing activities





Proceeds from issue of share capital

6,031

5,016

4,810

Net cash flow from financing activities

6,031

5,016

4,810

Net increase / (decrease) in cash and cash equivalents

 

3,781

 

(5,484)

 

(4,109)

Cash and cash equivalents at start of the year

3,442

8,517

8,517

Effect of foreign exchange rates


(143)

(124)

(966)

Cash and cash equivalents at end of the period


7,080

2,539

3,442

 

Notes to the Unaudited Interim Group Financial Statements

 

1.

General information

 

Agriterra Limited ('Agriterra' or 'the Company') and its subsidiaries (together the 'Group') is focussed on the Agricultural sector in Africa.  Agriterra is a public limited company incorporated and domiciled in the Guernsey.  The address of its registered office is Richmond House, St Julians Avenue, St Peter Port, Guernsey GY1 1GZ

 

The Company is listed on the AIM Market of London Stock Exchange plc.

 

The unaudited interim consolidated financial statements for the six months ended 30 November 2010 were approved for issue by the board on 18 February 2010.

 

The figures for the six months ended 30 November 2010 and the six months ended 31 December 2009 are unaudited and do not constitute full accounts. The comparative figures for the year ended 31 May 2010 are extracts from the annual report and do not constitute statutory accounts.

 

The unaudited interim consolidated financial statements have been prepared in US Dollars as this is the currency of the primary economic environment in which the Group operates.

 

2.

Basis of preparation

 

The basis of preparation and accounting policies set out in the Annual Report and Accounts for the period ended 31 May 2010 have been applied in the preparation of these interim condensed consolidated financial statements. These are in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and with those of the Standing Interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) of the International Accounting Standards Board (IASB). References to 'IFRS' hereafter should be construed as references to IFRSs as adopted by the EU

 

3.

Accounting policies

 

The accounting policies and methods of calculation adopted are consistent with those of the financial statements for the period ended 31 May 2010.

 

4.

Segment information

 

The directors consider that the Group's activities comprise one business segment, agriculture and other unallocated expenditure in one geographical segment, Africa.

 


Continuing activities

6 months ending 30 November 2010

Agriculture

Other

Total


$'000

$'000

$'000

Revenue

5,284

-

5,284

Operating profit

213

(162)

51

Interest income

46

-

46

Profit / (loss) before tax

259

(162)

97

Income tax



-

Profit for the period from continuing activities



97





 


Continuing activities

6 months ending 30 November 2009

Agriculture

Other

Total


$'000

$'000

$'000

Revenue

2,480

-

2,480

Operating loss

(978)

(1,001)

(1,979)

Interest income

9

3

12

Loss before tax

(969)

(998)

(1,967)

Income tax



-

Loss for the period from continuing activities



(1,967)





 


Continuing activities

Period ending 31 May 2010

Agriculture

Other

Total


$'000

$'000

$'000

Revenue

8,791

-

8,791

Operating loss

(2,170)

(1,688)

(3,858)

Interest income / (expense)

4

(50)

(46)

Loss before tax

(2,166)

(1,738)

(3,904)

Income tax



-

Loss for the period from continuing activities



(3,904))





 

5.

Earnings per share

 

The calculation of basic and diluted earnings per share is based on the following data:

 



Unaudited

6 months to

30 November

2010

Unaudited

6 months to

31 December

2009

Unaudited

11 months to

31 May

2010



$'000

$'000

$'000

Profit / (loss) the purpose of calculating basic earnings per share (profit / (loss) attributable to equity holders)

 

87

 

(2,050)

 

(3,690)

Profit / (loss) for the purpose of calculating basic earnings per share from continuing activities

 

97

 

(1,967)

 

(4,824)

Number of shares





Weighted average number of ordinary shares for the purposes of calculating basic and diluted loss per share

 

 

548,901,427

 

 

479,077,718

 

 

515,129,499





Basic and diluted loss per share (cents)

0.02

(0.43)

(0.94)

Loss per share from continuing activities (cents)

0.02

(0.41)

(0.76)

 

 

6.

Share Capital

 



Ordinary shares of 0.1p each



Authorised

Allotted and fully paid



Number

Number

$'000

At 1 July 2009


845,000,000

473,821,554

801

Issue of shares


-

63,950,000

106

At 30 November 2009


845,000,000

537,771,554

907

Issue of shares


-

10,000,000

16

At 31 May 2010


845,000,000

547,771,554

923

Issue of shares


-

145,483,334

226

At 30 November 2010


845,000,000

693,254,888

1,149






 

 


Deferred shares of 0.1p each



Authorised

Allotted and fully paid



Number

Number

$'000

At period ends


155,000,000

155,000,000

238






Total share capital





At 30 November 2009


1,000,000,000

692,771,554

1,145

At 31 May 2010


1,000,000,000

702,771,554

1,161

At 30 November 2010


1,000,000,000

848,254,888

1,387

 

 

 


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