Strong crop growth at MP Evans (MPE) last year was more than enough to offset depressed palm oil prices and send profits at the producer soaring 62 per cent to $37.1m (£25.1m).
The group's Indonesia-based plantations enjoyed a 12 per cent rise in crop volumes, as a planting programme that started a decade ago started to bear fruit. That left plantation profits 44 per cent higher at $35.8m. The group achieved good extraction rates, too, and per-unit costs fell significantly as volumes grew. The Indonesian Rupiah depreciated against the US dollar and that lifted earnings, because the lion's share of costs is in local currency.
Meanwhile, the Australian cattle business bounced back, thanks to stronger prices and beefier sized livestock. Good rainfall has provided decent pasture, too, which bodes well for the coming year.
As for current trading, palm oil prices have fallen further and first-quarter crop volumes are lower than last year due to dry weather. That prompted brokerage Peel Hunt to downgrade profit forecasts. Analyst Charles Hall now expects adjusted pre-tax profit of $36.5m, giving EPS of 49¢, down from $38.5m and 54¢ in 2014. Still, healthy profit margins are achievable and volumes should rise substantially this year as younger plantations mature. "Between now and 2022 we will probably see volumes double," says chairman Peter Hadsley-Chaplin.
| MP EVANS (MPE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 395p | MARKET VALUE: | £218m | |
| TOUCH: | 385-405p | 12-MONTH HIGH: | 500p | LOW: 359p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 673¢ | NET CASH: | $1.5m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 42.1 | 19.4 | 41.2 | 7.5 |
| 2011 | 57.8 | 24.4 | 66.4 | 8 |
| 2012 | 83.2 | 16.7 | 32.5 | 8 |
| 2013 | 82.2 | 12.2 | 36.0 | 8.25 |
| 2014 | 90.9 | 34.9 | 61.1 | 8.75 |
| % change | +11 | +185 | +70 | +6 |
Ex-div: 23 Apr Payment: 18 Jun £1=$1.46 | ||||
