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Omnia year end results show strong growth

Omnia, a specialist chemical services company providing customised solutions in the agriculture, mining and chemical markets, today announced results for the year ended 31 March 2005.

• Prochem results reflected for a full year
• Revenue increased by 30%
• Net profit for the year increased by 33%
• Basic earnings per share increased by 26%
• Number of shares in issue up by 5% after capitalisation award
• Operating cashflows invested in inventory
• Debt : Net tangible worth improved to 84%
• The contribution made to operating profit by the mining and chemicals sectors, collectively increased to 61% (2004: 39%).
• Extending footprint into Africa with an acquisition in the Chemicals division
• Final distribution to shareholders of 78 cents per share

The acquisition of Prochem took effect on 1 September 2003 and therefore the results for the prior year include Prochem for seven months. As a consequence, the reported interim increase, at 30 September 2004 for the first six months in net profit of 124% was not sustainable for the full year.

Commenting on the results, Omnia MD, Rod Humphris said:

“We are pleased to deliver another year of solid growth. The strength of these results is a reflection of good strategic progress in all areas of the Group. Our growth strategy continues to deliver; the better balance between the interests in the agricultural, mining and chemical businesses has demonstrated the diverse nature of our Group.

“Our ability to provide customised solutions by continually expanding our base of knowledge has allowed us to match customer needs to product innovation and optimal application, placing us at the forefront of the Chemical services industry in South Africa. We have also achieved excellent cross-border growth by securing contracts outside of the country and making new acquisitions in Africa.”

Looking Forward, Humphris said:

“The management restructuring effected during the will bring fresh skills and leadership to the Group and position Omnia for further profitable growth. Although the significant growth in earnings per share over the last few years will be difficult to match in the coming year, the Group remains positive that earnings will continue to grow in line with the Group’s five-year target.”

The Group is pleased with the performance of Prochem for the first full year with the Group. The continued strong growth in world mineral demand is positive for BME’s markets and even after taking into account the continued costs of further detonator development, a substantial improvement in earnings is anticipated for the coming year.

In the short term, crop finance for farmers will be significantly tighter leading to a reduction in maize plantings in the coming summer season. This will result in a reduction in fertilizer consumption and, in all likelihood, lower fertilizer margins as competitive pressures increase. Fortunately, Omnia’s strategy of firstly focusing its fertilizer operations on the commercial farmer who demands high levels of agronomic service means that volume reduction will be lower and secondly, the development of significant infrastructure in the southern African countries will enable the risk to be mitigated to some extent. Nevertheless, a tough year can be anticipated for the fertilizer division.