REG - R.E.A.Hldgs PLC - Half Yearly Report <Origin Href="QuoteRef">REAH.L</Origin> - Part 2
29/10/2014 14:56
- Part 2: For the preceding part double click ID:nRSV8790Pa
$'000 $'000 $'000
Sales of goods 65,269 46,175 108,350
Revenue from services 1,167 121 2,197
_______ _______ _______
66,436 46,296 110,547
Other operating income - 12 -
Investment revenue 167 56 467
_______ _______ _______
Total revenue 66,603 46,364 111,014
_______ _______ _______
3. Segment information
The group continues to operate in two segments, being the cultivation of oil
palms and the stone and coal operations, together with a head office segment
made up of the activities of the UK, European and Singaporean subsidiaries. In
the period ended 30 June 2014, the relevant measures for the stone and coal
operations continued to fall below the quantitative thresholds set out in IFRS
8. Accordingly, no segment information is included in these financial
statements.
4. Agricultural produce inventory movement
The net gain arising from changes in fair value of agricultural produce
inventory represents the movement in the fair value of that inventory less the
amount of the movement in such inventory at historic cost (which is included
in cost of sales).
5. Administrative expenses
6 months to 6 months to Year to
30 June 30 June 31 December
2014 2013 2013
$'000 $'000 $'000
Net foreign exchange losses 106 9 56
(Decrease)/increase of provision for UK pension contributions (261) 189 272
Profit on disposal of fixed assets - - (20)
Net loss on financial liabilities at FVTPL - 291 -
Indonesian operations 7,476 7,643 16,575
Head office 3,106 2,639 5,522
_______ _______ _______
10,427 10,771 22,405
Amounts included as additions to biological assets (2,240) (2,742) (3,446)
_______ _______ _______
8,187 8,029 18,959
_______ _______ _______
6. Finance costs
6 months to 6 months to Year to
30 June 30 June 31 December
2014 2013 2013
$'000 $'000 $'000
Interest on bank loans and overdrafts 3,939 2,130 5,497
Interest on US dollar notes 1,681 2,009 4,008
Interest on sterling notes 2,790 2,959 5,599
Change in value of sterling notes arising from exchange fluctuations (1,851) (4,026) 1,064
Change in fair value of derivative financial instruments (2,080) 4,254 (2,974)
Change in value of loans arising from exchange fluctuations 528 - (6,298)
Other finance charges 538 (104) 293
_______ _______ _______
9,247 7,222 7,189
Amount included as additions to biological assets (1,676) (1,664) (3,860)
_______ _______ _______
7,571 5,558 3,329
_______ _______ _______
7. Tax
6 months to 6 months to Year to
30 June 30 June 31 December
2014 2013 2013
$'000 $'000 $'000
Current tax:
UK corporation tax 301 - 399
Foreign tax 5,783 1,835 1,773
_______ _______ _______
Total current tax 6,084 1,835 2,172
_______ _______ _______
Deferred tax:
Current year (1,051) (1,489) 8,040
Change in UK tax rate - - 211
Prior year - - 2,121
_______ _______ _______
Total deferred tax (1,051) (1,489) 10,372
_______ _______ _______
Total tax 5,033 346 12,544
_______ _______ _______
The tax charge for the period of $5,033,000 (2013: $346,000) is based on the
reported results of the operations in each jurisdiction, using relevant rates
of tax, adjusted for items which include non-taxable income/expense,
Indonesian withholding taxes not utilisable in the UK and tax refunds not
fully recovered. If the income mix in the second half of 2014 differs
materially from that of the first half, it will result in a disproportionate
movement in the effective rate of taxation for the full year.
In June and July 2014, the company's principal operating subsidiary, PT REA
Kaltim Plantations, received from the Indonesian tax authorities tax refunds
of some $9 million pursuant to a favourable decision of the Jakarta Tax Court
in relation to a disputed tax assessment disallowing mark to market losses
incurred in 2008 on cross currency interest rate swaps. Pending any decision
by the Indonesian tax authorities to appeal to the Indonesian Supreme Court,
the group has retained in full all the provisions previously made against the
recoverability of the tax paid in relation to the dispute.
8. Earnings/(loss) per share
6 months to 6 months to Year to
30 June 30 June 31 December
2014 2013 2013
$'000 $'000 $'000
Earnings/(loss) for the purpose of earnings/(loss) per share* 8,122 (6,177) 5,457
_______ _______ _______
* being net profit/(loss) attributable to ordinary shareholders
'000 '000 '000
Weighted average number of ordinary shares for the purpose of earnings/(loss) per share 35,079 33,885 34,494
_______ _______ _______
9. Dividends
6 months to 6 months to Year to
30 June 30 June 31 December
2014 2013 2013
$'000 $'000 $'000
Amounts paid or payable and recognised as distributions to equity holders:
Preference dividends of 9p per share per annum 3,990 3,451 7,291
Ordinary dividends:
Interim re 2012 (3.5p per share paid 25 January 2013) - 1,852 1,852
Final re 2012 (3.5p per share paid 26 July 2013) - 1,862 1,887
Interim re 2013 (3.5p per share paid 24 January 2014) 2,036 - -
Final re 2013 (3.75p per share paid 25 July 2014) 2,244 - -
_______ _______ _______
8,270 7,165 11,030
_______ _______ _______
10. Biological assets
6 months to 6 months to Year to
30 June 30 June 31 December
2014 2013 2013
$'000 $'000 $'000
Beginning of period 288,180 265,663 265,663
Additions to planted area and costs to maturity 8,538 6,904 17,330
Transfers from property, plant and equipment - 55 -
Transfer to non-current receivables (50) (1) (1,942)
Transfer to current receivables - (133) (4)
Net biological gain 3,202 1,043 7,133
_______ _______ _______
End of period 299,870 273,531 288,180
_______ _______ _______
Net biological gain comprises:
Fair value of crops harvested during the period (44,000) (28,588) (66,796)
Gain arising from movement in fair value attributable to other physical changes 39,997 22,990 60,646
Gain arising from movement in fair value attributable to price changes 7,205 6,641 13,283
_______ _______ _______
3,202 1,043 7,133
_______ _______ _______
11. Capital expenditure on property, plant and equipment and capital
commitments
In the period, there were additions to property, plant and equipment of $6.4
million (2013: $6.6 million).
Capital commitments contracted, but not provided for by the group as at 30
June 2014, amounted to $1.7 million (31 December 2013: $6.5 million, 30 June
2013: $4.0 million).
12. Issuance, purchase and sale of securities
There have been no issuances during the period. The table below summarises
the changes in ordinary shares held in treasury between 1 January and 30 June
2014:
Number of Average
treasury price per
shares share
£ £'000 $'000
Shares acquired November to December 2013 and held at 1 January 2014 4,967 4.43 (22) (36)
Shares acquired January to April 2014 20,033 4.40 (88) (149)
Shares sold May 2014 (25,000) 4.57 114 192
_______ _______ _______ _______
Profit on sale - 4 7
_______ _______ _______ _______
Shares acquired June 2014 and held at 30 June 2014 28,408 4.88 (139) (238)
_______ _______ _______ _______
Since 30 June 2014, a further 65,592 ordinary shares have been acquired. The
total number of ordinary shares held in treasury at the date of this report is
94,000 at an average purchase price of £4.82 per share.
13. Hedging instruments
Hedging instruments comprise the two outstanding cross currency interest rate
swaps ("CCIRS"), as described in note 27 (page 100) of the 2013 annual
report. The fair value of the CCIRS has been derived by a discounted cash flow
analysis using quoted foreign forward exchange rates and yield curves derived
from quoted interest rates with maturities corresponding to the applicable
cash flows. The valuation of the CCIRS at 30 June 2014 at fair value resulted
in a gain of $2,080,000 (30 June 2013: loss $4,254,000). The movement in the
period has been dealt with through the consolidated income statement.
14. Reconciliation of operating profit to operating cash flows
6 months to 6 months to Year to
30 June 30 June 31 December
2014 2013 2013
$'000 $'000 $'000
Operating profit 24,481 2,963 28,078
Depreciation of property, plant and equipment 5,438 4,895 9,482
(Increase)/decrease in fair value of agricultural produce inventory (1,022) 1,277 (548)
Amortisation of prepaid operating lease rentals 241 225 457
Amortisation of sterling and US dollar note issue expenses 220 552 778
Biological gain (3,202) (1,043) (7,133)
(Profit)/loss on disposal of property, plant and equipment - - (20)
_______ _______ _______
Operating cash flows before movements in working capital 26,156 8,869 31,094
(Increase)/decrease in inventories (excluding fair value movements) (5,106) 167 (365)
Increase in receivables (3,047) (4,091) (933)
Decrease in payables (1,861) (8,470) (10,162)
Exchange translation differences 109 (719) (276)
_______ _______ _______
Cash generated/(utilised) by operations 16,251 (4,244) 19,358
Taxes paid (2,142) (3,494) (7,065)
Tax refund received 8,461 - 8
Interest paid (8,410) (5,558) (11,537)
_______ _______ _______
Net cash from/(to) operating activities 14,160 (13,296) 764
_______ _______ _______
15. Movement in net borrowings
6 months to 6 months to Year to
30 June 30 June 31 December
2014 2013 2013
$'000 $'000 $'000
Change in net borrowings resulting from cash flows:
(Decrease)/increase in cash and cash equivalents (9,530) (10,884) 9,013
Net decrease/(increase) in borrowings 940 (10,000) (52,600)
_______ _______ _______
(8,590) (20,884) (43,587)
Redemption of US dollar notes, net of amortisation of issue expenses - - 9,344
Net sale and repurchase of US dollar notes - - (1,238)
Amortisation of sterling and US dollar notes issue expenses (220) (416) (447)
_______ _______ _______
(8,810) (21,300) (35,928)
Currency translation differences (1,227) 4,323 6,842
Net borrowings at beginning of period (157,918) (128,832) (128,832)
_______ _______ _______
Net borrowings at end of period (167,955) (145,809) (157,918)
_______ _______ _______
16. Related parties
Transactions between the company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note. During the first six months of 2014 no new material related party
transactions have been started and only those related party transactions which
were disclosed in the company's 2013 annual report have continued.
17. Events after the reporting period
A final dividend of 3.75p per ordinary share in respect of the year ended 31
December 2013 was paid on 25 July 2014.
On 1 July 2014, the group raised $10.6 million through a placing for cash of
5.2 million new 9 per cent cumulative preference shares at 120p per share.
18. Rates of exchange
30 June 2014 30 June 2013 31 December 2013
Closing Average Closing Average Closing Average
Indonesian rupiah to US dollar 11,969 11,795 9,929 9,744 12,189 10,494
US dollar to pound sterling 1.7099 1.67 1.5167 1.55 1.6563 1.57
19.Shareholder information
The company's half yearly report for the six months ended 30 June 2014 will
shortly be available for downloading from the company's web site at
www.rea.co.uk
Press enquiries to:
R.E.A. Holdings plc
Tel: 020 7436 7877
This information is provided by RNS
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