| Fri 27 Jun 2008, 10:29 | | LAF - Lonrho Plc - Interim Results for the 6 months ended 31 March 2008 |
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LAF
LOLAF
LAF - Lonrho Plc - Interim Results for the 6 months ended 31 March 2008
Lonrho Plc
(Formerly Lonrho Africa Plc)
(Incorporated and registered in England and Wales)
(Registration number 2805337)
(Share code: LAF; ISIN number: GB0002568813)
("Lonrho" or "the Company")
Interim results for the 6 months ended 31 March 2008
27 June 2008
Lonrho Plc (AIM: LONR), the conglomerate with a structured portfolio of African
investments, announces its Interim Results for the sixth months ended 31 March
2008.
Lonrho remains focused on investing in and developing opportunities across the
continent, where it operates five strategic divisions in fourteen countries.
Financial Highlights:
The results for the six months to 31 March 2008 reflect that Lonrho continues to
invest in and grow businesses across Africa.
For the six months to 31 March 2008:
- Turnover has increased to GBP17.8m (2007: GBP4.6m).
- A loss of GBP4.0m (2007: GBP3.3m) which is as expected given the ongoing
development of the Group`s investments.
- Primarily due to a loss of GBP6.1m in SAILS which reflects the substantial
costs of developing new routes in the shipping industry. These reflect one
off deployment and establishment costs for four new ships. In addition,
although Fly540 Kenya was profitable, costs of GBP1.7m on the ongoing roll
out of Fly540 Africa in Uganda, Tanzania, Angola and Ghana have been
incurred.
- Lonrho received shares in LonZim Plc with a value of GBP7.3m in respect of
a non-compete agreement.
- Cash held in the United Kingdom at 31 March 2008 was GBP18.3m.
These are the first results prepared by the Company in accordance with
International Financial Reporting Standards. The comparative figures have
been restated accordingly. In addition, the figures for 31 March 2007 have
been restated following the reclassification of Norse Air Limited as an
associate as disclosed in the Annual Report and Accounts for the year ended
30 September 2007.
Operational Highlights:
Ports and Infrastructure:
- Luba Freeport
- Development of a further 83m of quay is due for completion in September
2008
- KwikBuild
- Acquisition of KwikBuild delivering prefabricated building solutions across
Africa
Transportation:
- Fly540
- Now operating in six countries in Africa
- SAILS
- Increased SAILS fleet from two to six vessels, introduced 1,000 `reefer`
chilled containers and increased stake to 67%
Support Services:
- Lonrho Springs
- Constructing new water bottling plants in Angola, DRC and South Africa
- CES
- Established new operations in South Africa to provide turnkey network
solutions, hardware and maintenance support across the African marketplace
- Hotels
- 23% increase in revenue at Hotel Cardoso
- Build Operate Transfer contract to redevelop the Karavia hotel in
Lubumbashi in the DRC
Natural Resources:
- Completed airborne magnetic and radiometric survey on the Lulo concession
in Angola with exceptional results
Zimbabwe:
- Listed LonZim Plc on AIM raising GBP29.0m, Lonrho receiving a 20% free
carried interest
Geoffrey White, Lonrho CEO commented:
"During the period, we have continued to build a strong foundation for the
business through strategic investments. Our investments have been selected on
the basis of significant potential for growth both locally and across the
African continent.
"The future of Lonrho lies in expanding existing businesses across the
continent. Over the next year we will focus on strengthening synergies between
our group of companies and divisions to assist in this process. We remain
extremely positive about Lonrho`s prospects in Africa."
LONRHO ENQUIRIES
Lonrho Plc +44 (0)20 7016 5105
David Lenigas, Executive Chairman +44 (0)7881 825 378
Geoffrey White, Chief Executive +44 (0)7717 307 308
Officer
Emma de Borchgrave, Executive +44 (0)7867 785 177
Director
Pelham PR
Charles Vivian +44 (0) 20 7743 6672
+44 (0) 7977 297903
James MacFarlane +44 (0) 20 7743 6375
+44 (0) 7841 672831
Collins Stewart Europe : NOMAD to
Lonrho
Hugh Field +44 (0) 20 7523 8350
Chief Executive`s Statement
During the six month period to the end of March 2008 Lonrho has continued to
implement its business strategy across Africa. The Company remains focused on
investing in and developing opportunities across the continent, where it
operates five strategic divisions in fourteen countries. This diversity seeks to
mitigate risk geographically, politically and across sectors, whilst bringing
commercial benefits to each of Lonrho`s divisions.
The Lonrho corporate objective is to establish sound businesses, either through
investment in new ventures or acquisitions, and then grow each across the
continent. The majority of the strategic investments made to date are now
beginning to demonstrate their potential.
Lonrho`s core market sectors remain those fundamental to supporting economic
growth in Africa, and revolve around providing the services and industry needed
for economic development.
Africa has become one of the World`s new emerging market economies, and the
opportunities for economic development of the Continent are tangible. The
driving force behind the substantial growth in GDP in sub-Saharan Africa is
largely due to the burgeoning natural resources sector. This has led the way for
developments and growth in other sectors and is stimulating the foreign direct
investment needed to encourage, develop and drive the economy as a whole.
The Group has seen an increase in turnover from GBP4.6m for the six months
period to 31 March 2007 to GBP17.8m for the six months period to 31 March 2008
(the March 2007 figures having been restated following the reclassification of
Norse Air Limited as an associate as disclosed in the Annual Report and Accounts
for the year ended 30 September 2007).
The loss for the period of GBP4.0m (GBP3.3m for the period to 31 March 2007, the
figures having been restated following the reclassification of Norse Air Limited
as an associate as disclosed in the Annual Report and Accounts for the year
ended 30 September 2007) reflects the ongoing development phase of the Group`s
investments.
During the period SAILS incurred a loss of GBP6.1m on turnover of GBP6.7m which
reflects the substantial costs of developing new routes in the shipping
industry. These reflect one off deployment and establishment costs for four new
ships. In addition, although Fly540 Kenya was profitable, costs of GBP1.7m on
the ongoing roll out of Fly540 Africa in Uganda, Tanzania, Angola and Ghana have
been incurred.
The Group received shares with a value of GBP7.3m in LonZim Plc during the
period to reflect the non-compete agreement which Lonrho Plc has entered into.
This is shown as a `Gain on sale of intangible fixed asset` in the Consolidated
Interim Income Statement.
Cash held in the United Kingdom at 31 March 2008 was GBP18.3m.
The Group continues in an investment and growth phase. During the period, Lonrho
raised GBP40.85m (net of expenses) from institutions to continue the development
of the business.
This is the first report prepared by the Group in accordance with International
Financial Reporting Standards ("IFRS") which are required for all AIM listed
companies for accounting periods commencing on or after 1 January 2007. The
comparative figures have been restated accordingly. An IFRS Restatement Report,
which explains the effects on the financial statements of the adoption of IFRS,
can be found on the Company`s website at www.lonrho.com.
There has been no change in the Group`s position with regard to its investment
in Norse Air Limited as reported in the Annual Report and Accounts for 2007.
Legal action is ongoing.
A review of the major operations, by division, follows.
Transportation
Five Forty Aviation Limited ("Fly540") (49% holding)
The business concept of Fly540 was to establish a safe and reliable African
airline operating to international standards. Initially operating out of Kenya,
the successful business model is now being rolled out across Africa. A regional
hub is currently being established in Angola, with initial flights expected to
commence in August 2008, and plans to open a West African hub in Ghana in the
second half of 2008 are advanced. A subsidiary hub is operational in Uganda and
feasibility studies for further subsidiary hubs in Zimbabwe, Djibouti,
Mozambique, Tanzania, Mauritius and Equatorial Guinea are in process. Each hub
will eventually be linked delivering the first true pan-African airline, flying
passengers East to West and North to South.
Fly540 Kenya has now been flying for 18 months and has operated profitably in
Kenya since December 2007. Domestic passenger numbers have reached up to 20,000
a month making Fly540 Kenya the second largest carrier next to the national
carrier. At the start of 2008, as planned, Fly540 Kenya started international
flights to adjacent countries including Uganda, Somalia and Southern Sudan.
Lonrho Air (B.V.I.) Limited ("Lonrho Air") (100% holding)
Lonrho Air, established in the British Virgin Islands, owns the aircraft assets
used by Fly540. In this structure, the aircraft are financed centrally and asset
security is maximized as the aircraft are not owned by the Fly540 operating
companies but owned offshore and leased to them. This provides the ability to
recover aircraft if appropriate and re-deploy to other operations thus
mitigating political and country risks.
In January 2008, Lonrho Air signed an agreement with Avions de Transport
Regional, GEI (ATR) to purchase eight of the latest specification, new, ATR 72-
500 aircraft. Four of the aircraft are scheduled for delivery later in 2008,
with the remaining four to be delivered in 2009. All the aircraft will be
branded Fly540. A further agreement with ATR was signed in February 2008 for the
purchase of a further two ATR 72-500 aircraft for delivery in 2010 to meet
projected demands. These aircraft are new turboprops and one of the most fuel
efficient passenger airliners available, permitting Fly540 to provide low cost
services across Africa. Lonrho Air is seeking SACE/COFACE guarantees provided by
the Governments of Italy and France, which will assist with obtaining finance
for the purchase of the aircraft.
SA Independent Liner Services ("SAILS") (67% holding)
SAILS, registered in South Africa, is a scheduled containerised shipping line
operating along the West Coast of Africa from South Africa to Europe and return.
Lonrho initially acquired 45% of the company with Board control in July 2007 and
then a further 6% in October 2007, taking its holding to 51%. Subsequently
Lonrho invested a further GBP5.4m into SAILS to acquire another 16% taking its
holding to 67%. Lonrho`s investment in SAILS allowed the company to grow its
fleet from two to six vessels and introduce 1,000 new `reefer` chilled
containers. SAILS` fleet is now one of the largest reefer container shippers in
the region and is a major carrier of chilled goods from South Africa to Europe.
The new ships which were deployed in the first quarter of 2008 are now beginning
to establish regular and reliable scheduled routes. Scheduled arrivals and
departures need to be demonstrated to potential clients, and load factors are
now increasing substantially as the line demonstrates its regularity.
Following the deployment of the four new vessels, further routes will be
analysed and, if appropriate, established providing shipping services along the
East Coast of Africa, to the Middle East and India, and potentially a Far
Eastern service.
Ports and Infrastructure
Luba Freeport Limited ("Luba Freeport") (63% holding )
Luba Freeport, a venture with the Government of Equatorial Guinea, is an oil
services and logistics terminal that services not only the oil industry in
Equatorial Guinea but also the entire Gulf of Guinea. Luba has two key
advantages in this market. Firstly it is a natural deep water port, with depths
of up to 18 metres facilitating the largest vessels, and, secondly, the port is
a true `free port`, permitting suppliers to land goods and re-export them
without duties being levied.
Lonrho has already developed 70 metres of new quay, which was completed on time
and on budget in November 2007 at a cost of US$10.8m (GBP5.4m), and is currently
developing a further 83 metres of quay to be completed in September 2008 at a
cost of Euro7.9m (GBP6.3m).
The clients of the Freeport include Amerada Hess, Mobil Equatorial Guinea, Baker
Hughes, Marathon, LOTEG, Schlumberger, Nalco, SBM, Ophir, Petronas, Noble Energy
and MI (Equatorial Guinea).
Kwikbuild Corporation Limited ("Kwikbuild") (52.2% holding)
In October 2007, Lonrho acquired a 52.2% shareholding in Kwikbuild providing
access to the rapidly growing low cost housing market, with plans to roll the
Kwikbuild business model out across Africa.
Kwikbuild provides an economic, cost effective and rapid solution for buildings.
Kwikbuild, through its investment in e-Kwikbuild Housing (Pty) Limited provides
quality building solutions through the design and development of a range of
prefabricated buildings for the school, office and housing sectors. Providing
schooling solutions for the Government of South Africa, Kwikbuild expects to
build in excess of five hundred class rooms over each of the coming two years.
Support Services
Lonrho Springs Limited ("Lonrho Springs") (100% holding)
Lonrho Springs is focused on the development of international standard water
bottling plants. The bottled water market is rapidly growing across Africa with
major shortages in most countries for clean bottled water. Many African
countries remain importers of bottled water and the high costs associated with
this make drinking water an expensive and exclusive commodity.
Lonrho has made significant gains in the African bottled water market with
plants currently operating in Maputo, Mozambique and Kinshasa, Democratic
Republic of Congo. Since acquiring the technology and brand name of Swissta
Water the company has become one of the market leaders in Mozambique.
In December 2007, Lonrho announced that its wholly owned subsidiary, Lonrho
Springs B.V.I. ("Lonrho Springs") had signed an agreement to develop a US$9.0m
(GBP4.5m) water bottling plant in Luanda, Angola.
In February 2008, Lonrho announced that it had acquired the rights to Aquamine
(Proprietary) Limited in South Africa with the intention of developing this into
a substantial South African water bottling company. Also in February 2008 Lonrho
announced that it had signed an agreement to develop a new water bottling
factory in Lubumbashi in the Democratic Republic of Congo, which will be owned
51% by Lonrho Springs.
Further plants are being investigated for Nigeria, Ethiopia, Libya, Sudan and
Kenya.
Combined Enterprise Solutions Limited ("CES") (50% holding) Sociadade Comercial
Bytes & Pieces Limitada ("Bytes & Pieces") (65% holding)
Lonrho completed the acquisition of 65% of Bytes and Pieces, one of the leading
IT suppliers in Mozambique, in September 2007, which was subsequently rated as
the top IT company in Mozambique in KPMG Mozambique`s 2007 report.
During the period, Lonrho successfully expanded outside of Mozambique under the
name of CES, which currently has an operations office and sales force in
Johannesburg. CES holds a master franchise for Dell servers and also distributes
HP and Microsoft products. Recent agreements with Tata IT have launched the
company as a significant force in the African IT marketplace.
Hotels
Hotel Cardoso SARL ("Hotel Cardoso") (59% holding)
Revenues in the Hotel Cardoso in Maputo have risen by 23% over the comparable
period and profits have risen to US$250,000 (GBP125,000) for the six months to
31 March 2008 from a profit of US$37,000 (GBP18,500) for the six months to 31
March 2007. Hotel Cardoso is on budget to achieve revenues of US$4.0m (GBP2.0m)
in 2008, earning US$1.0m (GBP500,000) in profit before tax.
The hotel is currently undergoing a US$1.5m (GBP750,000) refurbishment of its
rooms, which is due for completion at the end of September 2008. This will
further increase average revenue per room in 2009 and forecast profits for 2009.
The Grand Karavia Hotel (proposed 50% holding and exclusive management contract)
In February 2008, Lonrho announced that it had been awarded the redevelopment
and subsequent management contract for the Karavia Hotel in Lubumbashi,
Democratic Republic of Congo.
The refurbishment of the old Sheraton Hotel that has been derelict since 1985 is
expected to cost US$20.0m (GBP10.0m) and will be completed mid-2009. Funding for
the development has been sourced from the Development Bank of South Africa and
Standard Bank.
Lonrho has a ten year, exclusive, renewable management contract.
Lubumbashi is chronically underserviced with hotel accommodation, and the
projections for the hotel, given the quantum of foreign direct investment into
the Katanga region, are very promising.
New hotel projects are under consideration in Equatorial Guinea, Angola and
Mozambique.
Natural Resources
Lonrho Mining Limited ("Lonrho Mining") (24.16% holding)
Lulo Diamond Concession - Angola
Lonrho Mining`s key exploration project, the Lulo Diamond Concession in the
Lunda Norte Province in North-Eastern Angola is a highly prospective 3,000km2
diamond concession. On 31 March 2008 Lonrho Mining announced that it had
completed an airborne magnetic and radiometric survey covering 1,000km2 within
the Concession. The interpretation, by Lonrho Mining`s independent geophysical
consultant, gave exceptionally encouraging results. The diamond potential of
this region is likely to be very high given the activity of an estimated 6,000
artisanal diamond miners within the Cacuilo River terraces. A drilling programme
and a bulk sampling operation will commence later this year.
Schmidtsdrift - South Africa
Production for the six months was 2,801 carats from 556,939 tonnes at an average
grade of 0.50 carats per hundred tonnes. The production included 42 stones in
excess of 5 carats in size.
A total of 4,797 carats were sold during the six months at an average price of
US$509 (GBP254) raising a total of US$2.4m (GBP1.2m). All sales were made to
Unitrade 1266 CC.
Zimbabwe
LonZim Plc ("LonZim") (20% holding and management contract)
During the period Lonrho established LonZim, which was listed on AIM in December
2007 and raised GBP29.0m to invest in opportunities in Zimbabwe and those
related to the Zimbabwean economy.
Lonrho has been appointed by LonZim to provide management support services on
the terms of a management services agreement.
Lonrho, on behalf of itself and any of its subsidiaries or companies in which
Lonrho has majority control of the board, has agreed not to make investments in
Zimbabwe, or an area of Mozambique known as the Beira Corridor, during the
period of the management services agreement.
Lonrho received a free carry interest of 20% of the current issued share capital
of LonZim, which has resulted in a GBP7.3m credit to the Consolidated Interim
Income Statement in the six months to 31 March 2008, and charges a fee of 2% of
funds invested.
In January 2008 LonZim made its first investment through the acquisition of 80%
of Blueberry International Services Limited ("Blueberry International"). In
March LonZim acquired the remaining 20% of Blueberry International. Blueberry
International controls 60% of Celsys, a Zimbabwe Stock Exchange listed company
in the security printing and IT business sectors, and 100% of Millpal, an
industrial chemical manufacturer and distributor. In March 2008, LonZim
announced that it had agreed to acquire 100% of Paynet Limited. Since the period
end, LonZim signed an option agreement to acquire a 51% controlling stake in
ForgetMeNot Africa Limited and has completed the acquisition of a hotel
development site in Beira, Mozambique.
Lonrho Plc
Consolidated interim income statement
For the six months ended 31 March 2008
Unaudited Unaudited Unaudited Unaudited Unaudited
6 months 6 months 6 months 6 months 12 months
31 March 31 March 31 March 31 March 30
2008 2008 2008 2007 September
2007
Note Continuing Acquisiti Total Total Total
operations ons GBPm GBPm
GBPm GBPm As restated
GBPm
Revenue 17.8 - 17.8 4.6 11.2
Cost of sales (20.0) - (20.0) (3.4) (11.0)
Gross (2.2) - (2.2) 1.2 0.2
(loss)/profit
Other - - - - 0.4
operating
income
Operating 2 (11.3) (0.4) (11.7) (4.3) (14.7)
costs
Operating
loss before (13.5) (0.4) (13.9) (3.1) (14.1)
financing
costs
Finance 0.2 - 0.2 0.2 0.5
income
Finance - - - (0.4) (0.9)
expenses
Net financing costs 0.2 - 0.2 (0.2) (0.4)
Share of profit of - 0.1 0.1 - (0.1)
associates
Write off of
goodwill and - - - - (3.4)
investment in
associates
Gain on sale
of intangible 3 - 7.3 7.3 - -
fixed asset
(Loss)/profit (13.3) 7.0 (6.3) (3.3) (18.0)
before tax
Income tax 2.3 - 2.3 - 0.6
(Loss)/profit for (11.0) 7.0 (4.0) (3.3) (17.4)
the period
Attributable
to:
Equity (0.8) (2.6) (14.7)
holders of the
parent
Minority (3.2) (0.7) (2.7)
interests
Loss for the period (4.0) (3.3) (17.4)
Basic and diluted (0.2)p (1.2)p (6.1)p
loss per share
Note
The figures in respect of the period ended 31 March 2007 have been restated
following the reclassification of the Group`s investment
in Norse Air Limited as an associate as disclosed in the Annual Report and
Accounts for the year to 30 September 2007.
Lonrho Plc
Consolidated interim balance sheet
As at 31 March 2008
Unaudited Unaudited Unaudited
31 March 2008 31 March 2007 30 September
2007
Total Total Total
GBPm GBPm GBPm
As restated
Assets
Goodwill 10.5 5.9 6.5
Intangible 1.4 0.3 1.2
assets
Property plant 45.7 25.4 36.9
and equipment
Investments in 1.4 1.2 -
associates
Other 12.7 - 5.0
investments
Deferred tax 4.0 - 2.2
assets
Total non-current 75.7 32.8 51.8
assets
Inventories 2.2 0.3 1.4
Trade and other 12.3 10.3 4.0
receivables
Cash and cash 19.4 8.2 15.2
equivalents
Total current assets 33.9 18.8 20.6
Total assets 109.6 51.6 72.4
Equity
Called up share 3.8 2.2 2.8
capital
Share premium 73.0 17.4 33.2
account
Revaluation 1.6 1.6 1.6
reserve
Share option 2.2 0.8 2.2
reserve
Foreign currency 0.3 - 0.1
reserve
Retained 2.3 14.5 3.0
earnings
Total equity 83.2 36.5 42.9
attributable to
equity holders of the
parent
Minority interests 0.4 0.3 (0.2)
Total equity 83.6 36.8 42.7
Liabilities
Interest bearing - - 1.1
loans and borrowings
Deferred tax 0.7 0.6 0.7
liabilities
Obligations of 2.1 - -
finance leases
Other financial 3.2 1.5 1.8
liabilities
Total non-current 6.0 2.1 3.6
liabilities
Bank overdraft 0.5 0.1 4.3
Interest-bearing 3.4 3.9 0.2
loans and borrowings
Obligations 0.5 - 8.8
under finance leases
Trade and other 15.6 8.7 12.8
payables and accruals
Total current 20.0 12.7 26.1
liabilities
Total liabilities 26.0 14.8 29.7
Total equity and 109.6 51.6 72.4
liabilities
Note
The figures in respect of the period ended 31 March 2007 have been restated
following the reclassification of the Group`s investment
in Norse Air Limited as an associate as disclosed in the Annual Report and
Accounts for the year to 30 September 2007.
Lonrho Plc
Consolidated interim statement of recognised income and expenses
For the six months ended 31 Unaudited Unaudited Unaudited
March 2008 31 31 March 12
March 2007 months
2008 2007
Total Total Total
GBPm GBPm GBPm
As
restated
Foreign exchange translation 0.4 - 0.1
differences
Loss for the period (4.0) (3.3) (17.4)
Total recognised income and (3.6) (3.3) (17.3)
expenses for the period
Attributable to:
Equity holders of the (0.6) (2.6) (14.6)
parent
Minority interest (3.0) (0.7) (2.7)
Total recognised income and (3.6) (3.3) (17.3)
expenses for the period
Note
The figures in respect of the period ended 31 March 2007 have been restated
following the reclassification of the Group`s investment
in Norse Air Limited as an associate as disclosed in the Annual Report and
Accounts for the year to 30 September 2007.
Lonrho Plc
Consolidated interim statement of cash flows
For the six months ended 31 Unaudited Unaudited Unaudited
March 2008 6 months 6 months 12 months
31 March 2008 31 March 2007 30 September
2007
Total Total Total
GBPm GBPm GBPm
As restated
Cash flows from operating (12.5) (2.5) (9.6)
activities
Cash paid for inventories (0.7) (1.3) (1.3)
Cash receipts from customers (7.8) (0.1) (0.6)
Cash paid to suppliers 1.1 0.6 4.1
Cash expensed from (19.9) (3.3) (7.4)
operations
Interest paid - (0.3) (1.2)
Net cash from operating (19.9) (3.6) (8.6)
activities
Cash flows from investing
activities
Acquisition of property, (8.7) (6.9) (18.6)
plant and equipment
Acquisition of investments (0.4) (2.6) -
Net proceeds from sale of - 3.5 1.9
investments
Interest received 0.2 0.2 0.5
Acquisition of subsidiary, - (3.9) (2.1)
net of cash acquired
Net proceeds from closure / - - 1.0
disposal of subsidiaries
Acquisition of associates (2.1) - (4.4)
Net cash from investing (11.0) (9.7) (21.7)
activities
Cash flows from financing
activities
Proceeds from the issue of 32.8 - 15.8
share capital
Funds received in advance - - 8.0
of future share issue
Loan advance 2.5 0.8 1.3
Loan repayment (0.2) - (0.3)
Net cash from financing 35.1 0.8 24.8
activities
Net increase/(decrease) in 4.2 (12.5) (5.5)
cash and cash equivalents
Cash and cash equivalents 15.2 20.7 20.7
at 1 October 2007
Cash and cash equivalents 19.4 8.2 15.2
Note
The figures in respect of the period ended 31 March 2007 have been restated
following the reclassification of the Group`s investment
in Norse Air Limited as an associate as disclosed in the Annual Report and
Accounts for the year to 30 September 2007.
Notes
1. Note of preparation
1.1 These interim financial statements for the period ended 31 March 2008,
which are neither audited or reviewed have been prepared for the first time
consistent with International Financial Reporting Standards ("IFRS") and do
not comprise full accounts within the meaning of S240 of the Companies Act
1985. Results for the comparative periods have been restated under IFRS.
The changes in accounting polices resulting from the IFRS restatement,
together with the financial impacts of these changes and the full IFRS
accounting polices of the Group are set out in the document entitled `IFRS
Restatement Report`, which can be found on the Group`s website at
www.lonrho.com.
1.2 This unaudited interim report does not comprise the Group`s statutory
accounts. The financial information in respect of the year ended 30
September 2007 is extracted from the statutory accounts under UK GAAP for
this period and amended by adjustments arising from the implementation of
IFRS. The statutory accounts for this period have been filed with the
Registrar of Companies. The auditors report on these accounts was qualified
in respect of the limitation in audit scope in respect only of the
information relating to the analysis and disclosure of the results of the
Group`s associate undertaking for the period.
1.3 Basic earnings/(loss) per share is arrived at by the dividing profit/(loss)
for the period by the weighted average number of shares in issue during the
period. Diluted earnings/(loss) per share is arrived by dividing the
profit/(loss) by the weighted average number of shares in issue throughout
the period, adjusted for the dilutive effect of potential ordinary shares.
2. Operating costs
Included within total Group operating costs of GBP11.7m (2007: GBP4.3m) is
an amount of GBP4.5m (2007: GBP2.1m) relating to head office administrative
expenses.
3. Gain on sale of intangible fixed asset
The Group received shares in LonZim Plc worth GBP7.3m during the period. In
return for this Lonrho Plc has entered into a non-compete agreement with
LonZim Plc and hence this gain is reported as a sale of an intangible fixed
asset for the period in the Consolidated Interim Income Statement.
South African sponsor to Lonrho Plc
Java Capital (Proprietary) Limited
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