| Tue 24 Mar 2009, 10:29 | | LAF - Lonrho - Trading Update for the Quarter Ended 31 December 2008 |
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LAF
LOLAF
LAF - Lonrho - Trading Update for the Quarter Ended 31 December 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")
Trading Update for the Quarter Ended 31 December 2008
24 March 2009
Lonrho PLC (AIM: LONR) today announces its unaudited trading update for the
first quarter ended 31 December 2008 ("First Quarter") and an update with
regard to the unaudited results for the year ended 30 September 2008. The
Board of Lonrho has resolved to henceforth issue quarterly trading updates on
the progress of the Group to ensure that shareholders remain fully informed
of developments and progress.
Both sets of results (and comparative figures included therein) do not form
audited accounts nor have been extracted from audited accounts and they have
not been filed with Companies House. As set out below the company`s intention
is to release and post its annual results on or before 31 March 2009
Trading Update - 3 months to 31 December 2008
The Group is delivering significant revenue growth in its continuing
operations as investments made during the past three years are now producing
tangible results. During the past two years Lonrho has created in excess of
one thousand direct and indirect new jobs from its operations in Africa.
The first quarter of 2008/09 has seen Lonrho`s investments across Africa
continue to report strong operational performances in all of the five
strategic sectors of Lonrho`s operations. (Transportation, Infrastructure,
Agriculture, Support Services and Hotels). Lonrho has built a stable of
businesses geographically distributed across Africa`s strongest emerging
markets. Lonrho believes these businesses are well positioned to capitalise
on further growth opportunities.
First Quarter turnover was GBP21.9m. This represents a significant increase
of 132% on a reported basis, and 53% increase on a like for like basis
against the prior year.
EBITDA in the First Quarter to 31 December 2008 was a loss of GBP1.9m
compared to a loss of GBP3.6m in the prior year on a reported basis, this is
a 45% improvement against last year. Operating loss on a reported basis in
the first quarter was GBP2.7m compared to a loss of GBP3.4m in the previous
year, which is a 22% improvement. The First Quarter loss includes rollout
costs and operating losses connected to the expansion of Lonrho`s aviation
subsidiary, Fly 540, into new countries of GBP1.7m (Nil Q1 08/07).
As at 31 December 2008, the Group also had unrecognised foreign exchange
gains of GBP10.6m in respect of the first quarter. Net assets stood at
GBP87.0m up from GBP74.9m at 30 September 2008.
Trading Highlights
- The acquisition of 51% of Rollex SA was completed with effect from 1
October 2008. Rollex is the central company within Lonrho Agriculture`s
logistical division and like for like Quarter 1 sales were up 49% year
on year driven by a new cold store and export processing facility in
Windhoek, Namibia and expansion and growth of the base operations
airside at Johannesburg airport. The fruit salad processing line at the
Johannesburg facility is now delivering processed fruit salad in South
Africa and opening lucrative export markets in Europe.
- Lonrho`s pan African aviation company, branded Fly540, has continued to
expand its operations to include Uganda and Tanzania. Over 25,000
passengers were carried in December alone and the Kenya airline (49%
holding) continues to operate profitably. The roll out plans for Angola
and Ghana are well advanced.
- The Luba Freeport (63% holding) quay extension has been completed
delivering 300m of usable quay. Revenue has increased by 14% on a
reported quarterly basis against the previous year. Costs have been
kept below budget and negotiations are proceeding well for new clients
to utilise the port as a central operational base as the Gulf of Guinea
oil exploration market continues to deliver strong growth.
- Kwikbuild Corporation Limited`s (62% holding) South African subsidiary e-
Kwikbuild opened a new production facility on time and on budget in Port
Elizabeth in November 2008 almost tripling its capacity. This has
enabled it to win its first export orders to Angola. Significant pan
African export opportunities are developing for the Company through
Lonrho`s extensive African network.
- Hotel Cardoso in Mozambique (59% holding + Management Contract )
continued with the hotel refurbishment and upgrade and is due to
complete works on schedule in the second quarter.
- Hotel Grand Karavia in Lubumbashi, DRC, (50% holding + Management
Contract) continues with its US$ 20 million refurbishment program of
which Lonrho is committed for a maximum of US$ 2.5 million, the balance
being funded by DBSA for US$ 10 million and local joint venture partners
and banks. The hotel is scheduled to re-open in the Summer of 2009.
- Lonrho IT, (CES, 50% holding) continues to grow its operations in South
Africa and intends to establish new branches in Zambia and Angola in the
coming quarter.
- Bytes & Pieces, (65% holding) continues to perform to expectations.
- Lonrho Springs (100% holding) continues its operations in Mozambique
(100% holding) and Kinshasa, DRC (21.4% holding) and new developments
previously announced in Angola (51% holding) and Lubumbashi (51%
holding) and South Africa (90%) remain under development.
- Lonrho Mining. Lonrho`s holding in Lonrho Mining, listed on the
Australian Stock Exchange currently stands at 25.59% holding.
- Lonrho announced its withdrawal from shipping, and the liquidation of
its shipping line (SAILS) to focus on its other core African businesses
Financing Activities
In December 2008, foreseeing significant difficulties in world markets in
2009, the Company raised GBP15.4 million before costs (US$ 24.4 million) to
ensure the continued development of its core businesses. The placing was made
following consultation with major institutional investors, by means of the
issue of some 308 million new ordinary shares in the Company at 5 pence per
Ordinary Share. The Company has no debt at Plc level. The net proceeds of the
Placing have significantly reduced the Company`s exposure to further
insecurity in world financial markets.
Key Developments Announced
During the First Quarter, Lonrho announced some key developments:
- Agreement to develop a 75 hectare aggregate project in Angola to meet
the ongoing and increasing demand for construction aggregates in Angola
- Signed an agreement for 25,000 hectares of agricultural projects in
Angola for the domestic market
- Signed an agreement to become the John Deere tractor and agricultural
equipment distributor for Angola
- Undertaking feasibility studies of 25,000 hectares of agricultural land
in Malawi
- Undertaking feasibility studies for a five year scheduled development of
up to 100,000 hectares in the Niger floodplain in Mali for the domestic
and North African market
Appointment of new Finance Director
The Company was pleased to announce the appointment of David Armstrong as
Finance Director. Mr Armstrong (FCA) brings extensive experience of operating
throughout Africa. With Mr Armstrong`s appointment, Ms Jean Ellis stood down
as the Company`s Finance Director and has assumed the role of a non-executive
director of the Company.
Current Trading and Future Outlook
Each of the Company`s core businesses has continued to perform to
expectations in the first 8 weeks of 2009. Although the impact of the global
recession is being felt across Africa, the impact on the African continent is
less severe and forecasts expect sub Saharan growth in GDP to continue in
2009 albeit at a slower rate. The board remains confident that the Company is
focused on market sectors and specific countries that will continue to see
growth.
It is intended that the next quarterly update for the company will be
released in April 2009.
Results for the year ended 30 September 2008
It is the Company`s intention to issue and post its audited financial
statements for the year ended 30 September 2008 on or before 31 March
2009.The unaudited results to 30 September 2008, (which are still subject to
review for final adjustments and foreign exchange movements), are expected to
show a Turnover of GBP42.0m, an attributable loss after tax to Lonrho`s
equity shareholders of (GBP33.3m) and net assets of GBP69.7m (2007:
GBP42.7m). The attributable loss to Lonrho`s equity shareholders in the year
ended 30 September 2008 includes the operating losses and write off of SAILS
(GBP29.1m) (in which Lonrho held a 67% shareholding) in the current financial
year. SAILS contributed Turnover of GBP18.3m in the year. In light of the
current world financial markets, and with cogniscence of a global economic
slowdown affecting the shipping market, the board felt it was prudent to
review its ongoing support for SAILS and announced the liquidation of SAILS
on the 15th October 2008. Closure costs in respect of SAILS are not expected
to be material in the current financial year.
David Lenigas, Lonrho`s Executive Chairman commented:
"The announcement of the first quarter results marks a tangible coming of age
for Lonrho. We now have businesses operating across five strategic sectors in
seventeen countries in Africa with reported revenues increasing 53% on a like
for like basis against the same period last year."
"We expect Lonrho`s operations to continue to deliver strong quarterly
trading performances in 2009, and we are focusing on strengthening our core
businesses. We remain extremely positive about Lonrho`s prospects in our
chosen countries of operation and specific market sectors across Africa."
LONRHO GROUP GROUP TURNOVER YTD - UNAUDITED
DECEMBER 2008
GBP`000S
TURNOVER on a reported basis
3 3 Months
Months to
to 31 DEC
31 DEC 2007 Variance Var
2008 %
Agri Processing
Rollex 12,189 0 12,189 100%
Transport
540 Group 4,206 1,805 2,401 133%
Other 0 166 (166) -
100%
Support Services
Bytes & Pieces 1,925 1,369 556 41%
Other 438 246 192 78%
Infrastructure
Luba Freeport 2,111 1,854 257 14%
E-Kwikbuild 377 0 377 100%
Hotels
Hotel Cardoso 700 485 215 44%
Continuing 21,946 5,925 16,021 270%
operations
Shipping -
Discontinued
SAILS 0 3,522 (3,522) -
100%
Discontinued 0 3,522 (3,522) -
operations 100%
Total Turnover 21,946 9,447 12,499 132%
TURNOVER on a like-for-like basis
3 3 Months
Months to
to 31 DEC
31 DEC 2007 Variance Var
2008 %
Agri Processing
Rollex 12,189 8,166 4,023 49%
Transport
540 Group 4,206 1,805 2,401 133%
Other 0 166 (166) -
100%
Support Services
Bytes & Pieces 1,925 1,369 556 41%
Other 438 246 192 78%
Infrastructure
Luba Freeport 2,111 1,854 257 14%
E-Kwikbuild 377 248 129 52%
Hotels
Hotel Cardoso 700 485 215 44%
Continuing 21,946 14,340 7,607 53%
operations
Shipping -
Discontinued
SAILS 0 0 0 0%
Discontinued 0 0 0 0%
operations
Total Turnover 21,946 14,340 7,607 53%
* Including Rollex and E-Kwikbuild and removal of Sails and Norse Air from
2007
Results sourced from December 2008 management accounts
Enquiries
Lonrho Plc -
David Lenigas, Executive Chairman +44 (0)20 7016 5105
Geoffrey White, Chief Executive Officer +44 (0)20 7016 5105
David Armstrong, Finance Director +44 (0)20 7016 5105
Emma Priestly, Executive Director +44 (0)20 7016 5105
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)
Hugh Field +44 (0) 20 7523 8350
South African sponsor to Lonrho Plc
Java Capital (Proprietary) Limited
Date: 24/03/2009 10:29:01 Produced by the JSE SENS Department.
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