TIDMAGTA
RNS Number : 3046I
Agriterra Ltd
31 March 2020
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Agriterra Limited / Ticker: AGTA / Index: AIM / Sector:
Agriculture
Agriterra Limited ('Agriterra' or the 'Company')
Unaudited Interim Results and Trading Restoration
Agriterra Limited, the AIM listed African agricultural company,
announces its unaudited interim results for the six months ended 30
September 2019.
Restoration to trading on AIM
The Company's ordinary shares were suspended from trading on AIM
at 7.30 a.m. on 1 October 2019 as a result of a delay in the
publication of the Company's audited annual results for the year
ended 31 March 2019 (the "2019 Annual Accounts"). The 2019 Annual
Accounts were published to the market earlier today, however the
ordinary shares have remained suspended pending release of the
Company's interim results for the six month period ended 30
September 2019. Accordingly, the release of this announcement
facilitates lifting of the suspension, and trading on AIM of the
Company's shares is expected to recommence from 7.30 a.m.
tomorrow.
For further information please visit www.agriterra-ltd.com or
contact:
Agriterra Limited Strand Hanson Limited
(Nominated & Financial Adviser and
Broker)
============================ =====================================
Caroline Havers James Spinney / Ritchie Balmer / Rob
Patrick
caroline@agriterra-ltd.com +44 (0) 207 409 3494
Chair's Statement
I am pleased to provide an update on our performance in the
first half of the 2020 financial year ('HY-2020'). We had not been
able to update the market earlier on these results, pending the
finalisation of our audited financial statements for the year
ending 31 March 2019. As shareholders are aware, the Company's
shares have been suspended from trading on AIM since 1 October
2019, pending further investigation into a theft uncovered by
management in June 2019.
Fraud Investigation
Following the report to the Auditors of the incidence of theft
which occurred on 17 June 2019, the Auditors requested a detailed
investigation of the circumstances. An initial management review
brought to light a further incident concerning a fictitious
purchase of grain in January 2019. Consequently, the Audit
Committee commissioned an external team of internal auditors to
conduct a detailed review of the procurement cycle. This review
brought to light a further incidence in December 2018, together
with a potential theft of petty cash which could not be accounted
for. The gross loss to the Group of all incidences was $ 21,000
with a net loss of $ 9,000. The Auditors questioned the
independence of the internal audit team and therefore could not
conclude that the frauds did not have a material impact on the
financial statements without the need for a forensic audit. The
Company commissioned PKF Littlejohn LLP to perform the forensic
audit, the scope of which was agreed with the Auditors. The
forensic audit concluded that there was no evidence that further
incidences of fraud had occurred and that there was no material
impact on the financial statements of those incidences which had
come to light. The additional costs incurred by the Auditors in
respect of the frauds were approximately $55,000 and by the
forensic auditor approximately $ 155,000.
Operational update
Grain division
Sales to relief agencies after Cyclone Idai, underpinned sales
in the Grain division in our traditionally quiet first quarter,
however inventory overhang in the market as a result of the aid
programmes slowed continued sales progress in the second
quarter.
Revenue for the 6 months improved to $ 3.9m (HY-2019: $ 1.5m)
and consequently EBITDA improved to $ 0.4m (HY-2019: Loss of $
0.3m). The finance costs fell to $ 352,000 (HY-2019: $ 467,000)
resulting in a significantly reduced loss after tax of $ 139,000
(HY-2019: $ 789,000).
Improved quality and the commissioning of a 1kg packaging line,
are expected to lead our entry directly into the informal sector in
the second half. Delay in the approval of additional overdraft
facilities to finance the procurement of maize, meant that the
division was not able to take advantage of lower early season maize
prices. Consequently, it is expected that the division's margins
will be under more pressure in the second half.
Beef division
After a significant improvement in the division's trading in the
prior year, the Beef division has seen a fall in volumes as the
South African Rand depreciated to less than 4 Metical during
Q1/early Q2 FY-20. This has led to tough trading conditions in the
south of the country where our beef product has to compete with
imports from South Africa.
Revenue for the 6 months fell to $ 2.2m (HY-2019: $ 2.6m) and
EBITDA declined to a loss of $ 0.4m (HY-2019: restated loss $
0.2m). Finance costs increased to $ 84,000 (HY-2019: $ 52,000) and
the loss after tax increased to $ 708,000 (HY-2019: restated loss $
364,000). The comparative results for the Beef division have been
restated to reflect an adjustment to inventories of $ 0.2m that
came to light during the annual audit.
Plans are being made and finance sought to develop a sustainable
presence in the Maputo market. This will provide a platform for
growth in the Beef division.
Results
Group revenue for the half-year ended 30 September 2019
increased 47% to $ 6.1m (H1-2019: $4.1m). As a result of an
improved trading performance in the Grain division, and despite the
difficulties in the Beef division, the Group's trading operations
showed a reduction in the operating loss (incl. other gains and
losses) before interest to $ 0.41m (H1-2019: restated loss $
0.63m). Central costs increased to $ 0.42m (H1-2019: $ 0.32m) after
incurring $ 0.2m of additional forensic audit costs in respect of
the previous year. Consequently, the Group operating loss fell to $
0.8m (H1-2019: restated loss $ 1.0m). After an interest charge of $
0.5m (H1-2019: $ 0.5m) the loss after tax attributable to
shareholders was $ 1.3m (H1-2019: restated loss $ 1.5m). During the
period, inventories increased $ 0.9m and capital expenditure less
disposals amounted to $ 0.3m. Net debt at 30 September 2019 was $
4.8m (31 March 2019: $ 2.4m).
Outlook and COVID-19
Elections were held in October 2019 and led to variable demand
in Q3 FY-20 for both divisions and the availability of maize has
put pressure on margins in Q4.
COVID-19 has had a significant negative impact globally, both
economically and socially. There is a risk that there will be a
significant outbreak of the COVID-19 virus in Mozambique, which
could potentially impact the population and the Group's operations
through the contraction of the economy.
All operating companies have already introduced comprehensive
training and awareness programmes, combined with practical measures
to protect staff health and maintain operating capabilities. The
Group remains alert to the fast changing environment and is
prepared to put in place mitigating actions as events develop. Our
products are key staples in the domestic Mozambican market and
demand is not expected to be significantly affected should the
pandemic take hold. In the case of a prolonged and profound impact
on the national economy of the COVID-19 pandemic, the demand for
meal in particular, is likely to remain strong.
On the supply side the local maize crop looks to be very good
and will start coming off in the next few weeks. There will be no
need to purchase imported maize. Discussions are already being had
with the Government disaster planning teams, Ministry of
Agriculture and the Provincial Governor to ensure the continued
ability of local maize to come to market. Alternative sources of
inputs, such as packaging, are available locally if imports are
threatened by closure of overseas factories and borders.
The recent decline in the oil price, has led to a postponement
of investment in the sector in the North and reinforces the
importance of developing the presence of our Beef division in the
South, a key driver for improved performance next year.
CSO Havers
Chair
31 March 2020
Consolidated statement of profit or loss and other comprehensive
income
Consolidated income statement
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
(Restated)
Note $000 $000 $000
CONTINUING OPERATIONS
Revenue 2 6,082 4,134 10,629
Cost of sales (4,793) (3,502) (9,891)
Increase in fair value of biological
assets 76 117 478
Gross profit 1,365 749 1,216
Operating expenses (2,249) (1,705) (3,860)
Other income 4 - 225
Profit on disposal of property, plant
and equipment 51 - 340
--------------
Operating loss (829) (956) (2,079)
Net finance costs 3 (439) (519) (1,016)
--------------
Loss before taxation (1,268) (1,475) (3,095)
Taxation - - -
-------------- -------------- ----------
Loss for the period 2 (1,268) (1,475) (3,095)
Loss for the period attributable to
owners of the Company (1,268) (1,475) (3,095)
============== ============== ==========
LOSS PER SHARE
Basic and diluted loss per share -
US Cents 4 (6.0) (6.9) (14.6)
============== ============== ==========
Consolidated Statement of comprehensive income
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
(Restated)
$000 $000 $000
Loss for the period (1,268) (1,475) (3,095)
Items that may be reclassified subsequently
to profit or loss:
Foreign exchange translation differences (185) 157 (133)
Other comprehensive (loss)/income for
the period (185) 157 (133)
-------------- -------------- ----------
Total comprehensive loss for the period
attributable to owners of the Company (1,453) (1,318) (3,228)
============== ============== ==========
Consolidated statement of financial position
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
(Restated)
Note $000 $000 $000
Non-current assets
Property, plant and equipment 6,283 6,436 6,292
Intangible assets 160 - 166
6,443 6,436 6,458
------------- ------------- ----------
Current assets
Biological assets 701 695 830
Inventories 1,594 1,590 675
Trade and other receivables 952 1,268 698
Cash and cash equivalents 1,590 2,818 2,197
4,837 6,371 4,400
------------- ------------- ----------
Total assets 11,280 12,807 10,858
------------- ------------- ----------
Current liabilities
Borrowings 5 3,727 2,367 1,708
Trade and other payables 1,218 376 1,186
4,945 2,743 2,894
------------- ------------- ----------
Net current (liabilities)/assets (108) 3,628 1,506
------------- ------------- ----------
Non-current liabilities
Borrowings 5 2,674 3,040 2,850
------------- ------------- ----------
Total liabilities 7,619 5,783 5,744
------------- ------------- ----------
Net assets 3,661 7,024 5,114
============= ============= ==========
Share capital 6 3,373 3,373 3,373
Share premium 151,442 151,442 151,442
Share based payments reserve 172 1,988 172
Translation reserve (17,055) (16,580) (16,870)
Accumulated losses (134,271) (133,199) (133,003)
------------- ------------- ----------
Equity attributable to equity holders of the parent 3,661 7,024 5,114
============= ============= ==========
The unaudited condensed consolidated financial statements of
Agriterra Limited for the 6 months ended 30 September 2019 were
approved by the Board of Directors and authorised for issue on 31
March 2020. Signed on behalf of the Board of Directors:
CSO Havers
Chair
Consolidated cash flow statement
Year
6 months ended 6 months ended ended
30 September 30 September 31 March
2019 2018 2019
Note Unaudited Unaudited Audited
(Restated)
$000 $000 $000
Loss before tax for the period (1,268) (1,475) (3,095)
Adjustments for:
Amortization and depreciation 420 178 620
Profit on disposal of property, plant and equipment (51) (122) (340)
Foreign exchange (gain)/loss (42) (188) 80
Increase in value of biological assets (76) (117) (478)
Net decrease in biological assets 205 577 754
Finance costs 441 519 1,016
Interest received (2) - -
Operating cash flows before movements in working capital (373) (628) (1,443)
(Increase)/decrease in inventories (919) (665) 238
(Increase)/decrease in trade and other receivables (254) (86) 392
Increase/(decrease) in trade and other payables 32 (61) 744
Cash used in operating activities (1,514) (1,440) (69)
Corporation tax paid - - -
Interest received 3 2 - -
Net cash used in operating activities (1,512) (1,440) (69)
--------------- --------------- ----------
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment,
net of expenses incurred 51 142 346
Acquisition of property, plant and equipment (385) (47) (920)
Acquisition of intangible assets (3) - (193)
Net cash (used in)/generated from investing activities (337) 95 (767)
--------------- --------------- ----------
Cash flow from financing activities
Finance costs 3 (441) (519) (1,016)
Net drawdown/(repayment) of overdrafts 5 1,913 (2,821) (3,258)
Net (repayment)/drawdown of loans and finance leases 5 (230) 3,958 3,773
Net cash generated from/(used in) financing activities 1,242 618 (501)
--------------- --------------- ----------
Net decrease in cash and cash equivalents (607) (727) (1,337)
Effect of exchange rates on cash and cash equivalents - 4 (7)
--------------- --------------- ----------
Cash and cash equivalents at beginning of period 2,197 3,541 3,541
--------------- --------------- ----------
Cash and cash equivalents at end of period 1,590 2,818 2,197
=============== =============== ==========
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 non-cellular company limited by
shares incorporated and domiciled in Guernsey, Channel Islands. The
address of its registered office is Richmond House, St Julian's
Avenue, St Peter Port, Guernsey GY1 1GZ.
The Company's Ordinary Shares are quoted on the AIM Market of
the London Stock Exchange ('AIM').
The unaudited condensed consolidated financial statements have
been prepared in US Dollars ('US$' or '$') as this is the currency
of the primary economic environment in which the Group
operates.
1. Basis of preparation
The condensed consolidated financial statements of the Group for
the 6 months ended 30 September 2019 (the 'H1-2019 financial
statements'), which are unaudited and have not been reviewed by the
Company's Auditor, have been prepared in accordance with the
International Financial Reporting Standards ('IFRS'), as adopted by
the European Union, accounting policies adopted by the Group and
set out in the annual report for the year ended 31 March 2019
(available at www.agriterra-ltd.com). The Group does not anticipate
any significant change in these accounting policies for the year
ended 31 March 2020. References to 'IFRS' hereafter should be
construed as references to IFRSs as adopted by the EU.
This interim report has been prepared to comply with the
requirements of the AIM Rules of the London Stock Exchange (the
'AIM Rules'). In preparing this report, the Group has adopted the
guidance in the AIM Rules for interim accounts which do not require
that the interim condensed consolidated financial statements are
prepared in accordance with IAS 34, 'Interim financial reporting' .
Whilst the financial figures included in this report have been
computed in accordance with IFRSs applicable to interim periods,
this report does not contain sufficient information to constitute
an interim financial report as that term is defined in IFRSs.
The financial information contained in this report also does not
constitute statutory accounts under the Companies (Guernsey) Law
2008, as amended. The financial information for the year ended 31
March 2019 is based on the statutory accounts for the period then
ended. The Auditors reported on those accounts. Their report was
unqualified and referred to going concern as a key audit matter.
The Auditors drew attention to note 3 to the financial statements
concerning the Group's ability to continue as a going concern which
shows that the Group will need to renew its overdraft facilities,
maintain its current borrowings and raise further finance in order
to continue as a going concern.
The H1-2019 financial statements have been prepared in
accordance with the IFRS principles applicable to a going concern,
which contemplate the realisation of assets and liquidation of
liabilities during the normal course of operations. Having carried
out a going concern review in preparing the H1-2019 financial
statements, the Directors have concluded that there is a reasonable
basis to adopt the going concern principle.
2. Segment information
The Board consider that the Group's operating activities during
the period comprised the segments of Grain and Beef, undertaken in
Africa. In addition, the Group has certain other unallocated
expenditure, assets and liabilities, either located in Africa or
held as support for the Africa operations.
The following is an analysis of the Group's revenue and results
by operating segment:
6 months ended 30 September 2019 - Unaudited Grain Beef Unallo-cated Elimina-tions Total
$000 $000 $000 $000 $000
------ ------ ------------- -------------- --------
Revenue
External sales(2) 3,888 2,194 - - 6,082
Inter-segment sales(1) 263 - - (263) -
------ ------ ------------- -------------- --------
4,151 2,194 - (263) 6,082
------ ------ ------------- -------------- --------
Segment results
- Operating profit/(loss) 203 (669) (418) - (884)
- Interest expense (352) (84) (3) - (439)
- Other gains and losses 10 45 - 55
Loss before tax (139) (708) (421) - (1,268)
Income tax - - - - -
------ ------ ------------- -------------- --------
Loss for the period (139) (708) (421) - (1,268)
====== ====== ============= ============== ========
6 months ended 30 September 2018 - Unaudited Grain Beef Unallo-cated Elimina-tions Total
(Restated)
$000 $000 $000 $000 $000
------ ------ ------------- -------------- --------
Revenue
External sales(2) 1,549 2,585 - - 4,134
Inter-segment sales(1) 385 - - (385) -
------ ------ ------------- -------------- --------
1,934 2,585 - (385) 4,134
------ ------ ------------- -------------- --------
Segment results
- Operating loss (322) (312) (322) - (956)
- Interest expense (467) (52) - - (519)
Loss before tax (789) (364) (322) - (1,475)
Income tax - - - - -
------ ------ ------------- -------------- --------
Loss for the period (789) (364) (322) - (1,475)
====== ====== ============= ============== ========
Year ended 31 March 2019 - Audited Grain Beef Unallo-cated Elimina-tions Total
$000 $000 $000 $000 $000
-------- ------ ------------- -------------- --------
Revenue
External sales(2) 5,586 5,043 - - 10,629
Inter-segment sales(1) 873 - - (873) -
-------- ------ ------------- -------------- --------
6,459 5,043 - (873) 10,629
-------- ------ ------------- -------------- --------
Segment results
- Operating loss (1,168) (973) (503) - (2,644)
- Interest expense (916) (100) - - (1,016)
- Other gains and losses 309 252 4 - 565
Loss before tax (1,775) (821) (499) - (3,095)
Income tax - - - - -
-------- ------ ------------- -------------- --------
Loss for the year (1,775) (821) (499) - (3,095)
======== ====== ============= ============== ========
(1) Inter-segment sales are charged at prevailing market prices.
(2) Revenue represents sales to external customers. Sales from the Grain
and Beef divisions are principally for supply to the Mozambican market.
The segment items included within continuing operations in the
consolidated income statement for the periods are as follows:
6 months ended 30 September 2019 - Unaudited Grain Beef Unallo-cated Elimina-tions Total
$000 $000 $000 $000 $000
------ ----- ------------- -------------- ------
Depreciation and amortisation 173 239 8 - 420
====== ===== ============= ============== ======
6 months ended 30 September 2018 - Unaudited (Restated) Grain Beef Unallo-cated Elimina-tions Total
$000 $000 $000 $000 $000
------ ----- ------------- -------------- ------
Depreciation 22 156 - - 178
====== ===== ============= ============== ======
Year ended 31 March 2019 - Audited Grain Beef Unallo-cated Elimina-tions Total
$000 $000 $000 $000 $000
------ ----- ------------- -------------- ------
Depreciation and amortisation 374 236 10 - 620
====== ===== ============= ============== ======
3. NET FINANCE COSTS
6 months ended 6 months ended Year
30 September 30 September ended
2019 2018 31 March
Unaudited Unaudited 2019
Audited
$000 $000 $000
--------------- --------------- ----------
Interest expense:
Bank loans, overdrafts and finance leases 441 519 1,016
Interest income:
Bank deposits (2) - -
--------------- --------------- ----------
439 519 1,016
=============== =============== ==========
4. LOSS per share
The calculation of the basic and diluted loss per share is based on the following data:
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited (Restated) Audited
US$000 US$000 US$000
------------- --------------------- -----------
Loss for the period/year for the purposes of basic and
diluted earnings per share attributable
to equity holders of the Company (1,268) (1,475) (3,095)
============= ===================== ===========
Weighted average number of Ordinary Shares for the purposes
of basic and diluted lossper share 21,240,618 21,240,618 21,240,618
============= ===================== ===========
Basic and diluted loss per share - US cents (6.0) (6.9) (14.6)
============= ===================== ===========
The Company has issued options over ordinary shares which could
potentially dilute basic loss per share in the future. There is no
difference between basic loss per share and diluted loss per share
as the potential ordinary shares are anti-dilutive.
5. Borrowings
30 September 2019 30 September 2018 31 March
2019
Unaudited Unaudited Audited
$000 $000 $000
------------------ ------------------ ---------
Non-current
Bank loans and finance leases 2,674 3,040 2,850
Current
Bank loans and finance leases 860 793 801
Bank overdrafts 2,867 1,574 907
3,727 2,367 1,708
------------------ ------------------ ---------
6,401 5,407 4,558
================== ================== =========
Grain division
On 25 May 2018 the existing 300 million Metical facility was
restructured into a 240 million Metical ($ 3.77m) 5 year term loan
with an interest rate of the Bank's prime lending rate +0.25% and a
12 month 60 million Metical ($ 0.94m) overdraft facility at the
Bank's prime lending rate less 1.75%. At 30 September 2019, the
principal outstanding on the term loan was 184 million Metical ($
3.0m) and the amount drawn on the overdraft facility was 59.1
million Metical ($ 0.96m).
In July 2019 the division entered into a new finance lease
arrangement for 12.7 million Metical ($ 206,000) secured on certain
vehicles.
In September 2019, additional overdraft facility agreements were
agreed of 90 Million Metical. At 30 September 2019, the amount
drawn on these facilities was 88.8 million Metical (S 1.44m).
As at 30 September 2019, the Group had undrawn overdraft
borrowing facilities for the Grain division of $ 46,000 (2018: $
104,000).
Beef division
On 18 February 2019, the Group entered into a finance lease for
MTN 27.6m ($ 0.43m) repayable over 5 years, secured on certain
agricultural equipment.
The Beef division has an overdraft facility of 30 million
Metical ($ 0.48m). The amount drawn down at 30 September 2019 was $
0.47m (2018: $ 0.4m).
As at 30 September 2019, the Group had undrawn overdraft
borrowing facilities for the Beef division of $ 13,000 (2018: $
75,000).
Reconciliation to cash flow statement
At 31 Cash flow Foreign At 30 September
March Exchange 2019
2019
Non-current bank loans and finance
leases 2,850 (264) 88 2,674
Current bank loans and finance
leases 801 34 25 860
Overdrafts 907 1,913 47 2,867
4,558 1,683 160 6,401
======= ========== ========== ================
6. Share capital
Authorised Allotted and fully paid
Number Number US$000
------------ ------------------------ -------
At 31 March 2019, 30 September 2018 and 2019 23,450,000 21,240,618 3,135
At 31 March 2019, 30 September 2018 and 2019
Deferred shares of 0.1p each 155,000,000 155,000,000 238
Total share capital 178,450,000 176,240,618 3,373
============ ======================== =======
The Company has one class of ordinary share which carries no
right to fixed income.
The deferred shares carry no right to any dividend; no right to
receive notice, attend, speak or vote at any general meeting of the
Company; and on a return of capital on liquidation or otherwise,
the holders of the deferred shares are entitled to receive the
nominal amount paid up after the repayment of GBP1,000,000 per
ordinary share. The deferred shares may be converted into ordinary
shares by resolution of the Board.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR WPUPPWUPUGQG
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