LENDU HOLDINGS PLC
OWNERS AND OPERATORS OF IRRIGATED-COTTON, BEEF-CATTLE AND CEREAL FARMS,
COMPRISING 26,000 HECTARES, IN QUEENSLAND AND NEW SOUTH WALES, AUSTRALIA
Announcement of unaudited results
for the financial year ended 30 June 2003
Highlights from the chairman's statement and unaudited results as follows
* Pre-tax profit of �378,000 (2002 �915,000)
* Earnings per share 4.21p (2002 - 4.94p)
* Dividend proposed of 0.25p per share (2002 - 2.50p)
* Farm loss of �37,000 (2002 profit �1,246,000) owing to substantially reduced cotton planting and ensuing
crop following Australian drought
* Exceptional gain on sale of investments of �1,040,000 used towards purchase of Warendi
* Drought continues and only limited cotton planting expected in October
* New cattle strategy progressing satisfactorily
Chairman's statement
REVIEW OF THE YEAR
Results and dividend
A profit before taxation of �378,000 was achieved, compared with �915,000 last year. As I foreshadowed in my
interim statement, a farm loss was recorded - albeit a small one of �37,000. However, this was substantially
offset by a gain on the sale of investments of �1,040,000, whose proceeds were used towards the acquisition of
the cotton property, Warendi. The year also witnessed the successful transfer of trading in the Company's
shares to the Alternative Investment Market ("AIM").
In view of the difficult season experienced last year, and now anticipated this year, and also the higher
borrowings following the Warendi purchase, only a small dividend of 0.25p per share is recommended, compared
with 2.50p last year. Notwithstanding the increased borrowings, the balance sheet remains sound and the Group
continues to operate within its bank facilities.
Farm operations
During the year, Australia experienced one of the most severe droughts recorded in over a century. Although
the Group's properties were adversely affected by this, they were not as severely hit as many other farms in
the country. In September/October a total of 1,320 hectares of cotton were planted on Gubbagunyah/Oonavale and
Warendi. This represented approximately half of what would have been planted if a full water allocation had
been received and the reservoirs were full. The crop achieved of 9,718 bales compares with last year's record
of 18,355 but, in the light of the extremely dry growing period, I believe this was most creditable. Cotton
prices declined sharply in the second half of the year, touching a low of around A$400 per bale. However, in
view of the forward sales transacted at higher levels earlier in the year, an average price of A$489 per bale
was achieved, compared with A$463 last year.
The cattle trading profit of A$607,000 was approximately half of last year's A$1,211,000. 2001/02 saw
unusually high prices achieved from cattle sales and also the sale of a significant part of the herd. This was
in line with the board's policy of disposing of the breeding herd and, instead, utilising the pasture more
productively by "growing out" and fattening young cattle either bought in by ourselves or for other operators
who pay a fee in relation to weight gain. The disposal programme was reduced in 2002/03 in view of the drought
and the consequent decline in cattle values. However, on a positive note, the remaining part of the breeding
herd was able to be retained as there was still sufficient pasture. The cows have since calved and it is
planned that both the cows and their progeny will be sold when the calves have grown heavier.
CURRENT TRADING
Cotton and other crops
The dry conditions have continued in much of Australia, including the region of the properties. Cotton may be
planted through to late October or even early November and it is therefore still possible that significant
rainfall and high flows in the river system which feeds the farm's reservoirs will be received. As things
stand, however, the water currently either on-farm or allocated from the government dams' limited supplies
would allow a planting of only some 225 hectares. Even if there is little water received in the meantime, it
is expected that significantly more than this will be planted, although most of it may be grown as a dryland
crop, relying on natural rainfall during the season rather than on irrigation from the farm's reservoirs.
Recently, further to a sharp upward movement in the cotton price as a result of fears about the effect of
Hurricane Isobel on US cotton production, 500 bales of 2004 cotton have been sold forward at A$552 per bale.
Some of the irrigation areas which would normally be planted with cotton have instead been planted with winter
cereals (chiefly wheat) and legume crops. These are growing reasonably well notwithstanding the relatively
sparse rainfall. Harvesting will take place in November/December but further rain is required to ensure a good
crop. Further areas have been set aside for summer crops other than cotton, such as sorghum, corn, sunflowers
and soyabeans, some of which may be planted as late as January.
Cattle
With regard to the cattle operations, the quality of all the animals continues to be good as the farms have
deliberately not been overstocked. The programme of growing out young cattle has commenced, such that 1,050
young steers have been purchased and their daily weight gain has already proved most satisfactory. The new
pasture areas created on Woodlands are now developing well. It is planned that, within the next eighteen
months or so, Woodlands alone will be capable of turning off 5,000 to 6,000 steers per annum.
Gubbagunyah/Oonavale will have a similar capacity once the breeders have been sold. The high quality of the
pastures across the farms will serve to render cattle a distinctive second string to the Group's bow, as the
operations have in the past been heavily reliant upon cotton.
MOUNT HOPE
I referred in my interim statement to the intention to sell Mount Hope, together with part of its water
entitlement, for some A$600,000. In the meantime, it has been decided to retain the vast majority of its
valuable water entitlement, which is in the course of being transferred to Warendi, and to sell the property
chiefly as a dryland block.
PURCHASE OF MR AND MRS TURNER'S SHARES
As shareholders will be aware, the manager, Mr Cam Turner and his wife, Mary Jane, have been partners in
Gubbagunyah Partnership from the outset. Their initial share was 10% but this was diluted to 3% when further
funds were raised at the time of the acquisition of Oonavale. For personal reasons they decided to sell their
interest and the Group, together with the other corporate partner, Bertam (UK) Limited ("Bertam"), agreed to
acquire their 3% on a basis pro rata to the existing holdings, at a price based on the valuation that I quoted
in last year's report. Completion recently took place. The cost to the Group was A$540,000 and its share in
the property has accordingly increased from 87.3% to 90% with Bertam increasing from 9.7% to 10%.
OUTLOOK
Notwithstanding the difficult season, I remain convinced of the long-term merits of investment in the irrigated-
cotton and beef-cattle sectors of Australia and I believe the Group's properties are well placed within these
sectors.
P E Hadsley-Chaplin
Chairman
The board announces the following unaudited results and proposed dividend for
the financial year ended 30 June 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 30 June 2003
2003 2002
�'000 �'000 �'000 �'000
Turnover (note 1) 2,507 4,105
Cost of sales (2,544) (2,859)
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Farm (loss)/profit (37) 1,246
Administrative expenses (268) (194)
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Group operating (loss)/profit (305) 1,052
Exceptional gain on sale of fixed-asset investments 1,040 -
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Profit on ordinary activities before interest 735 1,052
Income from fixed-asset investments 3 50
Interest receivable and similar income 10 -
Interest payable and similar charges (370) (187)
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(357) (137)
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Profit on ordinary activities before taxation 378 915
Tax credit/(charge) on profit on ordinary activities (note 3) 127 (145)
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Profit on ordinary activities after taxation 505 770
Equity minority interests 67 (104)
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Profit on ordinary activities attributable to
the members of Lendu Holdings PLC 572 666
Equity dividend proposed (note 2) (34) (337)
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Profit retained for the financial year 538 329
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Basic and diluted earnings per 5p share (note 4) 4.21p 4.94p
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All operations are classed as continuing.
CONSOLIDATED BALANCE SHEET
At 30 June 2003
2003 2002
�'000 �'000 �'000 �'000
Fixed assets
Intangible assets - -
Tangible assets 18,430 11,268
Investments 51 241
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18,481 11,509
Current assets
Stocks 488 553
Debtors 1,042 539
Cash at bank and in hand 346 123
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1,876 1,215
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Creditors: amounts falling due
within one year (5,415) (2,549)
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Net current liabilities (3,539) (1,334)
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Total assets less current liabilities 14,942 10,175
Creditors: amounts falling due
after more than one year (3,500) (46)
Provisions for liabilities and charges - (147)
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11,442 9,982
Equity minority interests (624) (800)
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10,818 9,182
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Capital and reserves
Called-up share capital 682 674
Share premium account 946 876
Revaluation reserve 3,302 2,986
Profit and loss account 5,888 4,646
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Total equity shareholders' funds 10,818 9,182
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CONSOLIDATED CASH-FLOW STATEMENT
For the year ended 30 June 2003
2003 2002
�'000 �'000 �'000 �'000
Net cash inflow from operating activities 155 835
Returns on investments and servicing
of finance (250) (63)
Taxation 9 -
Capital expenditure and financial investment (5,237) (391)
Equity dividend paid (260) (31)
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Net cash (outflow)/inflow before financing (5,583) 350
Financing
New borrowings - commercial bills 5,772 1,673
- loan from Bertam (U.K.) Limited 81 -
Repayment of borrowings - commercial bills - (1,985)
Capital element of hire-purchase payments (52) (59)
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Net cash inflow/(outflow) from financing 5,801 (371)
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Increase/(decrease) in cash 218 (21)
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Reconciliation of operating (loss)/profit to net
cash inflow from operating activities
Group operating (loss)/profit (305) 1,052
Depreciation charges 269 248
Amortisation of goodwill 33 -
Gain on sale of tangible fixed assets - (14)
Provision for impairment in value of investments - 13
Decrease/(increase) in stocks 65 (89)
Increase in debtors (503) (487)
Increase in creditors 408 83
Exchange differences 188 29
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Net cash inflow from operating activities 155 835
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STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the year ended 30 June 2003
2003 2002
�'000 �'000
Profit attributable to the members of the Company 572 666
Exchange differences on foreign-currency net investments 1,055 169
Tax on exchange differences (35) -
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Total recognised gains and losses for the year 1,592 835
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RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
For the year ended 30 June 2003
2003 2002
�'000 �'000
Profit attributable to members of the Company 572 666
Equity dividend (34) (337)
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538 329
Equity shares issued 78 4
Other recognised gains and losses relating to the
year, net of tax 1,020 169
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Net addition to equity shareholders' funds 1,636 502
Opening equity shareholders' funds 9,182 8,680
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Closing equity shareholders' funds 10,818 9,182
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NOTES
1) Turnover
Turnover amounting to �2,507,000 (2002 �4,105,000) and the farm
loss of �37,000 (2002 profit of �1,246,000) related to cotton,
livestock and cereal farming in Australia, the Group's principal
activity.
2) Equity dividend proposed
The board recommends a dividend of 0.25p per 5p share (2002 -
2.50p). Shareholders will be given the opportunity to elect to
receive the dividend in shares rather than in cash.
2003 2002
Amount per 5p share 0.25p 2.50p
Cost �34,000 �337,000
Payable on or after 17-11-03 20-11-02
Ex-dividend date 01-10-03 09-10-02
Record date 03-10-03 11-10-02
Post forms of election 14-10-03 18-10-02
Final date for receipt of forms of election 03-11-03 11-11-02
Definitive share certificates posted 17-11-03 18-11-02
First day of dealings in the new shares 18-11-03 19-11-02
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3) Tax (credit)/charge on profit on ordinary
activities
2003 2002
�'000 �'000
United Kingdom corporation tax at 30% (2002 - 30%) 6 -
Double taxation relief (1) -
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5 -
Overseas taxation 15 -
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20 -
Deferred taxation - (reversal)/origination of timing differences (147) 145
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(127) 145
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4) Earnings per share
The calculation of the basic and diluted earnings per 5p share is based on the profit of �572,000 (2002
�666,000) and on 13,578,583 (2002 - 13,481,842) shares which is the average number of shares in issue
during the year. There is no dilution of earnings in either year.
5) Statutory information
The financial information set out in the announcement does not constitute the Company's statutory accounts
for the years ended 30 June 2003 or 2002. The financial information for the year ended 30 June 2002 is
derived from the statutory accounts for that year which have been delivered to the Registrar of Companies.
The auditors reported on those accounts; their report was unqualified and did not contain a statement under
section 237(2) or (3) of the Companies Act 1985. The statutory accounts for the year ended 30 June 2003
will be finalised on the basis of the financial information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies following the Company's annual general
meeting.
6) Timetable
The report and financial statements will be despatched to members on 14 October 2003 and the annual general
meeting will be held on 14 November 2003.
7) Distribution
Copies of the full report and financial statements for the year ended 30 June 2003 will be available from
M. P. Evans (UK) Limited, 3 Clanricarde Gardens, Tunbridge Wells, Kent TN1 1HQ on and after 14 October
2003.
By order of the board
M.P.Evans (UK) Limited
Secretaries
25 September 2003
Enquiries: Peter Hadsley-Chaplin
Telephone 01892 516333
Fax 01892 518639
E-mail peterhc@mpevans.co.uk
