RNS Number:1988A
Dimension Resources Ld
29 June 2004
DIMENSION RESOURCES LIMITED
Preliminary statement
31 December 2003
Dimension Resources Ltd is the parent company for a group quarrying and
processing decorative stone in the Republic of South Africa. Its products are
primarily intended to be exported worldwide, although a substantial client base
has been built in South Africa.
Financial Results
The results for the year are viewed by the directors as extremely disappointing.
I had expected that the Group would be profitable at an operating level in
South Africa during 2003, but this expectation was not met due to a number of
factors. In the long term perhaps the most important of these is the continuing
decline in the rate of exchange between the US dollar, in which sales are
priced, and the South African Rand, which applies to most costs. So far as the
year under review is concerned, however, machinery breakdowns were the major
depressing factor, giving rise to both reduced production and substantially
increased costs. While the trend remains an improvement in trading the
directors are fully aware that, to achieve profitability, they need to improve
the performance of production machinery to enable orders to be fulfilled.
Finally, recognition in the current year of unpaid remuneration for the managing
director increased the loss by #37,190. This remuneration remains unpaid, and
both Geoffrey Hoodless and I waived our remuneration entitlement for 2003.
Sales demand, for the granite and bowenite quarries, remains strong, and the
limiting factor on growth is production capacity rather than orders. For this
reason, the directors are seeking ways of obtaining finance for new equipment in
order to increase production levels. The company will open the African Rainbow
quarry in the latter part of 2004, (once its mining licence under the new mining
code has been granted), and the indications are that this quarry will provide
the volume increases needed for the Group's success.
The Group remains virtually debt free, having a small overdraft facility and a
finance lease on a front-end loader. So far as assets are concerned, the Group
has both a freehold processing plant in Vredendal and a freehold office in
Somerset West, both in South Africa, in addition to its quarries and equipment.
Stone Quarries
Bowenite
The Group supplies bowenite blocks under an exclusive contract with Antolini
Luigi & Cie, one of the leading Italian stone companies. Antolini has accepted
all blocks produced by the Group to date. The quarry has been developed to
enable blocks of a more consistent quality to be produced despite the fractured
nature of the deposit. This development is now bearing fruit in increasing
levels of production. In addition to the block sales the company has reached an
agreement with the Antolini group, whereby the company will supply two
containers of bowenite tiles, initially. The directors expect these volumes to
grow once bowenite, in tile form, is introduced into the market.
Coloured granites
The Group's properties in the Pofadder area of Namaqualand have deposits of a
number of coloured granites. Quarries have been established for grey/blue
("Atlantic Blue"), brown ("Cape Autumn"), red ("Cape Red") and multicoloured
("African Rainbow") granites. Production remains concentrated on Cape Autumn.
Cape Autumn is selling well in the South African market in particular, and the
company has seen a steady increase in sales volumes. Although the company has
not managed to create an export market for this material in block form, as a
result of the exchange rate, the material is being exported in slab form by
South African clients. On the basis of known demand, the directors expect a
substantial increase in sales for 2004.
African Rainbow is still in the quarry development stage, but test blocks have
been well received both locally in South Africa and abroad. This is one
material where increased prices will offset the dollar devaluation. Firm orders
have been received for the material, but the new mining laws, which require a
revised plan in order to renew the mining licence, have hampered production.
The mining licence is expected to be issued towards the third quarter of 2004.
Projections indicate that the opening of this quarry will provide the extra
sales required for the success of the Group.
Marble
Due to the currency changes outlined above, the directors decided not to proceed
with the proposal to open a new black marble quarry near Vredendal. The
directors continue to seek a supply of marble for processing at the Vredendal
plant, and the Group has entered into negotiations to acquire rights over a
large area, which has marble and granite deposits on it, in Namibia.
Processed stone
Vredendal plant
The processing plant comprises a freehold factory and offices of some 1,800
square metres on a site of over 18,000 square metres. The factory is fully
equipped for marble tile production, with an automated marble tile cutting line
and facilities for handling and cutting marble blocks. The plant does not
enable granite to be processed.
The factory remains under-utilised, although export orders for bowenite tiles
have been received. Further increases in products for the factory remain a
priority for the future.
Sales Showroom and Distribution Warehouse
The Group's warehouse and showroom in Somerset West continues to supply the
local market with product from the processing plant. Sales through this outlet
continue to increase with the Group's own products being supplemented by
distributorship agreements. The Group has recently commenced selling and
installing special products for bathrooms and kitchens.
Annual General Meeting
The company's annual general meeting will be held on 25 August 2004, and a
notice is being despatched to shareholders with the annual report and accounts
on 30 June 2004.
Future prospects
While the Board believes that the prospects for the Group are constantly
improving , the requirement remains to increase production to enable the Group
to reach profitability. The Board is planning to achieve this in part through
increased production, in particular the African Rainbow quarry. The Board also
intends to seek a corporate deal to add bulk to its present activities.
Finally I would like to thank all members of staff for their efforts through a
difficult period.
Brian Moritz (Chairman)
DIMENSION RESOURCES LIMITED
Consolidated income statement
for the year ended 31 December 2003
Group Company
2003 2002 2003 2002
GBP GBP GBP GBP
Turnover 245,647 234,259 - -
Cost of sales 136,993 120,790 - -
Gross profit 108,655 113,469 - -
Administrative expenses (636,606) (401,192) (66,989) (44,553)
Operating loss (527,952) (287,723) (66,989) (44,553)
Interest receivable and similar income 4,304 2,407 440 1,103
Interest payable and similar charges (2,717) (8,367) - -
Net loss before taxation (526,365) (293,683) (66,548) (43,450)
Taxation - - - -
Net loss for the year (526,365) (293,683) (66,548) (43,450)
Earnings per share (pence) (0.41) (0.28)
Weighted average number of shares in
issue 128,905,511 104,042,498
DIMENSION RESOURCES LIMITED
Consolidated balance sheet for the year ended 31 December 2003
Group Company
2003 2002 2003 2002
GBP GBP GBP GBP
ASSETS
Non-current assets 17,694,475 15,696,061 17,950,380 17,743,100
Tangible assets 1,419,723 1,360,850 - -
Stone deposits 14,306,101 14,306,101 - -
Pre-production costs 29,053 29,110 - -
Foreign currency translation reserve 1,939,598 - - -
Investments - - 17,950,380 17,743,100
Current assets 490,689 311,424 182,139 16,252
Inventories 203,531 243,053 - -
Trade and other receivables 91,727 53,831 3,450 6,699
Cash at bank and on hand 195,431 14,540 178,689 9,553
Total assets 18,185,164 16,007,485 18,132,518 17,759,352
EQUITY AND LIABILITIES
Shareholders' funds 17,936,872 15,769,817 18,103,866 17,722,815
Called up share capital 6,799,000 6,706,000 6,799,000 6,706,000
Share premium account 11,932,457 11,577,856 11,932,457 11,577,857
Profit and loss account -794,585 -2,514,039 -627,591 -561,042
Long-term liabilities 132,734 48,597 - 10,000
Foreign currency translation reserve - 41,597 - -
Creditors: amounts falling due within
one year 115,558 147,473 28,652 26,537
Trade and other payables 88,117 125,383 28,652 26,537
Provisions 27,441 22,090 - -
Total equity and liabilities 18,185,164 16,007,485 18,132,518 17,759,352
DIMENSION RESOURCES LIMITED
Consolidated cash flow statement
for the year ended 31 December 2003
Group Company
2003 2002 2003 2002
GBP GBP GBP GBP
CASH FLOWS FROM OPERATING ACTIVITIES (262,956) (137,532) (61,185) (74,749)
Cash absorbed by operations (264,543) (131,572) (61,625) (75,852)
Interest received 4,304 2,407 440 1,103
Interest paid (2,717) (8,367) - -
CASH FLOWS FROM INVESTING ACTIVITIES (3,753) (56,824) (207,280) (96,008)
Payments to acquire tangible assets (3,753) (56,824) - -
Loans to subsidiary companies - - (207,280) (96,008)
CASH FLOWS FROM FINANCING ACTIVITIES 447,601 22,400 437,600 10,000
Repayment of long term borrowings - 16,151 (10,000) 10,000
Investments - 6,249 - -
Issue of ordinary share capital and share
premium 447,601 - 447,600 -
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 180,891 (171,956) 169,135 (160,758)
Cash and cash equivalents at the
beginning of the year 14,540 186,496 9,553 170,311
Cash and cash equivalents at the
end of the year 195,431 14,540 178,688 9,553
Notes
1. Financial information
The financial information set out above does not constitute the Company's
statutory financial statements for the year ended 31 December 2003, but is
derived from those statements. The auditors have reported on the financial
statements to 31 December 2003 and their report was unqualified.
2. Availability of annual report
Copies of the annual report for the year ended 31 December 2003 will be
available from the Company Secretary at 22 Melton Street, London NW1 2BW.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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