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LAF
LOLAF
LAF - Lonrho Plc - Interim results for the 6 months ended 31 March 2009
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 2009
Lonrho Plc (AIM: LONR), Lonrho (AIM: LONR), the conglomerate with a structured
portfolio of African investments, announces its unaudited Interim Results for
the sixth months ended 31 March 2009. The financial information in this
statement does not constitute the Company`s statutory accounts within the
meaning of Section 240 of the Companies Act 1985.
The interim report and financial statements are being posted to shareholders and
will be published on the Company`s website (www.lonrho.com) today.
LONRHO 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 de Borchgrave, Executive Director +44 (0)20 7016 5105
Pelham PR
Charles Vivian +44 (0) 20 7337 1538
+44 (0) 7977 297903
James MacFarlane +44 (0) 20 7337 1527
+44 (0) 7841 672831
Beaumont Cornish Limited (Nomad)
Rosalind Hill Abrahams +44 (0) 20 7628 3396
Roland Cornish +44 (0) 20 7628 3396
CHIEF EXECUTIVE`S STATEMENT
During the period Lonrho has continued to focus on the growth and development
of its core businesses. The Company remains committed to its strategy of
investing in Africa, and concentrating on building businesses that are
essential to, and benefit from, the growth of the continent.
In line with this strategy we continue to mitigate risk by operating in a
series of countries across the continent and developing our tried and tested
proven core businesses.
Lonrho operates in seventeen African countries in five strategic sectors.
- Agriculture and agri-processing
- Transportation
- Infrastructure
- Support Services
- Hotels
In these challenging World markets, Lonrho is well placed to advance, and
is investing in one of the strongest global emerging markets. While the rest
of the World struggles to generate economic growth, Africa manages to remain
with positive GDP growth year on year.
Prudently, Lonrho has successfully developed a portfolio of businesses
geographically distributed across Africa`s strongest emerging economies.
These businesses are now well positioned to capitalise on further growth
opportunities.
FINANCIAL HIGHLIGHTS:
- Year to date turnover on continuing operations for the first six months
was GBP41.5m, this is an increase of +275% on a reported basis against the
previous year and 60% increase on a like for like basis.
- The Group held cash balances of GBP13m at 31 March 2009.
- Net assets have increased to GBP85.4m up from GBP69.7m at 30 September 2008.
- Profit before tax for the first six months on a reported basis was GBP0.6m
compared to a loss of GBP7.8m in the previous year.
The Group has recognised foreign exchange gains of GBP6.1m in respect of the
half year to 31 March 2009. As at 31 March 2009, the Group also had unrecognised
foreign exchange gains of GBP7.1m.
The six months profit before tax includes a one off gain of GBP2.3m in relation
to the liquidation of S A Independent Liner Services Pty Limited (SAILS) in
October 2008.
OPERATIONAL REVIEW
A review of the major operations, by division, follows.
AGRICULTURE
Rollex Pty Limited ("Rollex") (51%holding)
Rollex continues to be the central focus within Lonrho Agriculture`s logistical
division based around its 4,600mSquared airside agri-processing facility at
Johannesburg International Airport. Rollex vertically integrates the African
agricultural market, taking produce from growers, processing it and delivering
it to the supermarket shelf. The company supplies local African supermarkets for
domestic consumption as well as exporting fresh fruit and vegetables to the
major European supermarkets.
During the period, the company has grown and has established the infrastructure
and export logistics capability to export fish and meat from Namibia to Europe.
Further cold store and agri-processing facilities are planned for Angola, Malawi
and Zimbabwe.
Lonrho Agribusiness (BVI) Limited ("Lonrho Agriculture") (100% holding)
Lonrho Agriculture has engaged agronomists who are currently finalising
reports on proposed new farming operations in Malawi, Angola and Mali. Over
the next two to three years Lonrho intends to bring 350,000 hectares of
latent agricultural land into production to support the Rollex operations for
the local and export markets. It is planned that when optimised the Rollex
business will generate 40% of its own inputs and source 60% from local
producers.
John Deere
The John Deere franchise for tractors and agricultural equipment for Angola
is under development. It is planned to commence trading this summer and will
be one of the largest John Deere operations in Africa. The Angolan Government
has announced significant financial incentives (US$350 million (GBP220 million))
to stimulate the agricultural sector in Angola. The Lonrho John Deere business
will incorporate a training centre for agricultural mechanics and a
comprehensive maintenance and spares facility to provide support for the
tractors and equipment to be supplied.
TRANSPORTATION
Lonrho Aviation (BVI) Limited ("Fly540") (100% holding)
Lonrho`s pan African aviation company, branded Fly540, has continued to
expand its operations. The business model remains to create an international
standard airline that can provide regional distribution for international
carriers flying into Africa and the first credible regional service connecting
Africa. Fly540 has built a significant network, connecting East Africa, based
from its Kenyan hub, Five Forty Aviation Limited (49% holding), and has grown
to become the second largest carrier in Kenya.
The roll out plans for a South West Africa hub based in Angola and a west
African hub in Ghana continue to proceed and are expected to be operational
before the year end. This will deliver, for the first time, an international
standard airline that connects Africa from North to South and East to West.
The Fly540 fleet is based around the ATR 72-500, a new 72 seater turbo prop
aircraft manufactured by an Airbus joint venture. The aircraft are ideally
suited to the African environment, and importantly are highly fuel efficient
using only a third of the fuel of comparable regional jets.
INFRASTRUCTURE
Luba Freeport Limited ("Luba Freeport") (63% holding)
Luba Freeport is the foremost natural deepwater port in the Gulf of Guinea.
The Gulf of Guinea is the burgeoning centre of the oil industry in Africa and
is forecast to provide one quarter of all USA oil requirements over the coming
years.
The port continues to attract new clients as the oil industry in the region
expands. Anchor tenants on long term leases include Exxonmobil, Hess, MI Swaco,
Schlumberger and SBM. The agreed 300 metres of deepwater quay has been completed
and will become fully operational in July 2009.
Negotiations are proceeding well for further clients to utilise the port as a
central operational base. Noble Energy has agreed a US$2 billion (GBP1.3
billion) contract with the Government of Equatorial Guinea and has signed an MOU
to locate their operations at Luba.
Kwikbuild Corporation Limited ("Kwikbuild") (62% holding)
Kwikbuild manufactures a range of prefabricated buildings including classrooms,
clinics and workers camps. Turnover has been lower than expected due to the
South African government postponing awarding contracts until after the elections
which were in April. Margins have improved during the current quarter and this
is attributable to the new plant that was opened during the period which is
functioning as planned and has significantly increased production capacity.
SUPPORT SERVICES
Sociedade Comercial Bytes & Pieces Limitada ("Bytes & Pieces") (65% holding)
Bytes & Pieces, the established market leader in the IT sector in Mozambique,
continues to grow as a result of expanding business provided to existing clients
as the market benefits from the continued rejuvenation of Mozambique. The
solutions that are offered to customers are based on converged technologies and
unified communications. Avaya IP Telephony systems and Polycom video
conferencing products have been added to the product portfolio to complement the
Dell, HP, Tata, CISCO and Microsoft products offered.
Computer Enterprise Solutions Limited ("CES") (50% holding)
The African roll out of Lonrho IT through CES continues to grow its operations
in South Africa and gain market share. It has also opened a new branch in Lusaka
in Zambia on the 1st April and anticipates opening another branch in Angola in
the coming quarter and thereafter in Malawi.
LONRHO HOTELS
Hotel Cardoso SARL ("Hotel Cardoso") (59% holding plus management contract)
The refurbishment of the Hotel Cardoso in Mozambique (together with the
redevelopment of the adjacent park) has now been completed. The hotel has
once again become one of the premier hotels in Maputo and is achieving strong
growth in both occupancy levels and revenue per average room. The redevelopment
of the adjacent park has proved highly successful, not only commercially but
also by re-establishing the area of the hotel as the one of the most popular in
Maputo.
Grand Karavia SARL ("Grand Karavia") (50% holding plus management contract)
The hotel Grand Karavia in Lubumbashi, the centre of the mining region
in the DRC, is well advanced on its US$20 million (GBP12.5 million)
refurbishment. Contractors are on site and redeveloping the hotel and
landscaping the grounds. The 215 room hotel is scheduled to re-open in
late 2009 and will provide the only international standard accommodation
in Lubumbashi.
With the surge of new projects in Lubumbashi, the demand for hotel
accommodation is strong and the Karavia is expected to operate with high
occupancy levels.
OTHER INVESTMENTS
Lonrho Mining Limited ("Lonrho Mining") (25.32% holding)
Lonrho Mining is exploring a highly prospective diamond concession in
Angola, the Lulo concession, where the initial survey and aeromagnetic
results are very encouraging.
Lonzim Plc ("Lonzim") (24.53% holding)
Zimbabwe has seen a difficult six months and both the economic and
political environment have been challenging. However significant progress
has been made and there is optimism that Zimbabwe has entered a period of
consolidation and the economic decline of a country, once so successful,
is coming to an end.
LonZim continues to focus on commercial opportunities in Zimbabwe and the
Beira corridor and looks to invest in industries that the Board believes will
show strong and speedy recovery when Zimbabwe begins economic growth.
The historic investments made by LonZim in Zimbabwe continue to trade in
the difficult economic environment. The focus for each company has been to
retain quality staff and the capabilities necessary to grow and gain market
share as and when Zimbabwe recovers. Each is well positioned to do so, and
with LonZim backing, the portfolio of investments is strategically placed
to be able to benefit from the recovery.
CONSOLIDATED INTERIM INCOME STATEMENT
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
31 March 2009 31 March 2008 30 September 2008
Continu Discont Total Continu Discont Total Continu Discont Total
ing inued ing inued ing inued
operati operati operati operati operati operati
ons ons ons ons ons ons
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 41.5 1.2 42.7 11.1 6.7 17.8 24.5 18.6 43.1
Cost of (33.0) (1.9) (34.9) (6.6) (13.4) (20.0) (15.6) (38.3) (53.9)
sales
GROSS 8.5 (0.7) 7.8 4.5 (6.7) (2.2) 8.9 (19.7) (10.8)
PROFIT/
(LOSS)
Gain on - - - 5.8 - 5.8 5.8 - 5.8
sale of
intangi
ble
asset
Other 0.3 - 0.3 - - 0.3 - 0.3
operati
ng
income
Impairm - - - - - (0.6) (5.1) (5.7)
ent of
goodwil
l
Operati (15.6) (0.1) (15.7) (10.8) (0.7) (11.5) (22.6) (4.8) (27.4)
ng
costs
OPERATI (6.8) (0.8) (7.6) (0.5) (7.4) (7.9) (8.2) (29.6) (37.8)
NG LOSS
Finance 6.9 - 6.9 1.1 - 1.1 6.6 - 6.6
income
Finance (0.7) - (0.7) (0.2) (0.9) (1.1) (0.8) (2.7) (3.5)
expense
NET 6.2 - 6.2 0.9 (0.9) - 5.8 (2.7) 3.1
FINANCE
INCOME/
(EXPENS
E)
Share (0.3) - (0.3) 0.1 - 0.1 (4.0) - (4.0)
of
results
of
associa
tes
Gain on - 2.3 2.3 - - - - - -
disposa
l of
discont
inued
operati
on
PROFIT/ (0.9) 1.5 0.6 0.5 (8.3) (7.8) (6.4) (32.3) (38.7)
(LOSS)
BEFORE
TAX
Income (0.6) - (0.6) - 2.3 2.3 (0.2) (2.1) (2.3)
tax
(charge
) /
credit
PROFIT/ (1.5) 1.5 - 0.5 (6.0) (5.5) (6.6) (34.4) (41.0)
(LOSS)
FOR THE
PERIOD
ATTRIBU
TABLE
TO:
Equity (1.6) 1.7 0.1 0.4 (3.0) (2.6) (5.7) (27.6) (33.3)
holders
of the
parent
Minorit 0.1 (0.2) (0.1) 0.1 (3.0) (2.9) (0.9) (6.8) (7.7)
y
interes
t
PROFIT/ (1.5) 1.5 - 0.5 (6.0) (5.5) (6.6) (34.4) (41.0)
(LOSS)
FOR THE
PERIOD
EARNING
S PER
SHARE
Basic (0.3) 0.3 - 0.1 (0.9) (0.8) (1.5) (7.5) (9.0)
and
diluted
earning
s/(loss
) per
share
(pence)
CONSOLIDATED INTERIM BALANCE SHEET
Unaudited Unaudited Audited
31 March 2009 31 March 2008 30 September 2008
GBPm GBPm GBPm
ASSETS
Goodwill 11.6 10.5 5.1
Other intangible assets 2.8 1.4 0.8
Property, plant and 74.8 45.7 56.8
equipment
Investments in associates 7.0 7.2 8.8
Other investments 0.7 5.4 0.7
Deferred tax - 4.0 -
TOTAL NON-CURRENT ASSETS 96.9 74.2 72.2
Inventories 3.8 2.2 2.2
Trade and other receivables 24.8 12.3 11.6
Cash and cash equivalents 13.0 19.4 10.2
Assets classified as held - - 2.6
for sale
TOTAL CURRENT ASSETS 41.6 33.9 26.6
TOTAL ASSETS 138.5 108.1 98.8
EQUITY
Share capital 7.6 3.8 4.6
Share premium account 102.9 73.0 91.3
Revaluation reserve 4.5 1.6 4.5
Share option reserve 2.4 2.2 2.2
Foreign currency reserve (2.3) 0.3 -
Retained earnings (33.0) 0.5 (33.0)
TOTAL EQUITY ATTRIBUTABLE 82.1 81.4 69.6
TO EQUITY
HOLDERS OF THE COMPANY
MINORITY INTEREST 3.3 0.7 0.1
TOTAL EQUITY 85.4 82.1 69.7
LIABILITIES
Financial liabilities 10.8 3.2 0.3
Deferred tax 2.5 0.7 1.7
Obligations under finance 1.3 2.1 1.1
leases
TOTAL NON-CURRENT 14.6 6.0 3.1
LIABILITIES
Bank overdraft 0.2 0.5 0.4
Interest-bearing loans and 2.4 3.4 3.3
borrowings
Obligations under finance 0.2 0.5 0.2
leases
Trade and other payables 35.7 15.6 13.8
Liabilities classified as - - 8.3
held for sale
TOTAL CURRENT LIABILITIES 38.5 20.0 26.0
TOTAL LIABILITIES 53.1 26.0 29.1
TOTAL EQUITY AND 138.5 108.1 98.8
LIABILITIES
CONSOLIDATED INTERIM STATEMENT OF RECOGNISED INCOME AND EXPENSES
Unaudited Unaudited Audited
31 March 2009 31 March 2008 30 September 2008
GBPm GBPm GBPm
Foreign exchange (2.2) 0.4 0.4
translation differences
Revaluation of property, - - 4.9
plant and equipment
Deferred tax on revaluation - - (1.0)
of property, plant and
equipment
NET INCOME RECOGNISED (2.2) 0.4 4.3
DIRECTLY IN EXPENSE
Loss for period - (5.5) (41.0)
TOTAL RECOGNISED EXPENSE (2.2) (5.1) (36.7)
FOR THE PERIOD
ATTRIBUTABLE TO:
- Equity holders of the (2.3) (2.4) (31.4)
parent
- Minority interest 0.1 (2.7) (5.3)
TOTAL RECOGNISED EXPENSE (2.2) (5.1) (36.7)
FOR THE PERIOD
CONSOLIDATED INTERIM CASH FLOW STATEMENT
Unaudited Unaudited Audited
31 March 2009 31 March 2008 30 September 2008
GBPm GBPm GBPm
CASH FLOWS FROM OPERATING
ACTIVITIES
Loss for the period - (5.5) (41.0)
Adjustments (5.1) 5.5 6.6
CASH FLOWS FROM OPERATING
ACTIVITIES
BEFORE MOVEMENTS IN (5.1) (12.5) (34.4)
WORKING CAPITAL
Change in inventories (1.3) (0.7) (0.5)
Change in trade and other (5.0) (5.8) (5.4)
receivables
Change in trade and other (5.5) 1.1 0.4
payables
CASH GENERATED FROM (16.9) (17.9) (39.9)
OPERATIONS
Interest received 6.9 0.2 7.1
Interest paid (0.7) - (2.7)
Income tax paid - - (0.2)
NET CASH FROM OPERATING (10.7) (17.7) (35.7)
ACTIVITIES
CASH FLOWS FROM INVESTING
ACTIVITIES
Acquisition of subsidiary 1.9 (2.1) (2.1)
net of cash acquired
Deposits paid in respect (2.1) - (4.4)
of property,plant and
equipment
Acquisition of property, (5.5) (8.7) (12.5)
plant and equipment
Acquisition of associates (0.7) (0.4) (1.3)
Cash inflow resulting from 0.1 - -
disposal of subsidiary
NET CASH FROM INVESTING (6.3) (11.2) (20.3)
ACTIVITIES
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from the issue of 14.6 32.8 51.9
share capital
Proceeds from issue of 1.1 - -
shares to minority
interests
Loan advance 5.5 - 0.1
Repayment of borrowings (0.9) (0.2) (1.1)
Payment of finance lease (0.1) - (0.2)
liabilities
NET CASH FROM FINANCING 20.2 32.6 50.7
ACTIVITIES
Net increase/(decrease) in 3.2 3.7 (5.3)
cash and cash equivalents
Cash and cash equivalents 9.4 15.2 14.5
at beginning of the period
Foreign exchange movement 0.2 - 0.2
CASH AND CASH EQUIVALENTS 12.8 18.9 9.4
AT END OF THE PERIOD
Notes
Note of preparation
1 The annual financial statements of the group are prepared in accordance
with IFRSs as adopted by the EU. The condensed set of financial statements
included in this half-yearly report has been prepared in accordance with
the recognition and measurement requirements of IFRSs as adopted by the EU.
The financial information is unaudited and does not constitute the
Company`s statutory accounts within the meaning of Section 240 of the
Companies Act 1985.
Statutory accounts for the year ended 30 September 2008 have been delivered
to the Registrar of Companies. The comparative figures for the financial
year ended 30 September 2008 are not the company`s statutory accounts for
that financial year. Those accounts have been reported on by the company`s
auditors and delivered to the Registrar of Companies. The report of the
auditors was (i) unqualified, (ii) did not include a reference to any
matters to which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement under
section 237(2) or (3) of the Companies Act 1985.
2 Basic and diluted earnings per share are arrived at by dividing the profit
for the period by the average number of shares in issue during the period.
3 Given the current global financial crisis, the Directors are carefully
monitoring cash resources within the Group and have instigated a number of
initiatives to ensure funding will be available for planned projects. If
such funding cannot be secured, the projects will be delayed or cancelled
to ensure that the Group can manage its cash resources for the foreseeable
future and hence the financial statements have been prepared on a going
concern basis.
Corporate Information
Secretary and registered office Registrars
J H Hughes Equiniti
C/o DSG Aspect House
Castle Chambers Spencer Road
43 Castle Street Lancing
Liverpool L2 9TL West Sussex
Tel: +44 (0) 20 7016 5105 BN99 6DA
Fax: +44 (0) 20 7016 5109 Tel: 0800 169 2608
e-mail: hughes@lonrho.com Textel: 0871 384 2255 (for the
Registered in England hard of hearing)
Number 2805337 Please be advised calls to the
textel line are charged at 8p/min
from BT landlines. Other
telephone providers` costs may
vary.
Auditors South African transfer
KPMG Audit Plc secretaries
8 Princes Parade Computershare Investor Services
Liverpool (Pty) Ltd
L3 1QH PO Box 61051
Marshalltown 2107
South Africa
Tel: +27 (0) 11 370 5000
Fax: +27 (0) 11 370 5271/2
PR Advisors Nominated Advisor
Pelham PR Beaumont Cornish Limited
12 Arthur Street 2nd Floor
London Bowman House
EC4R 9AB 29 Wilson Street
Tel: +44 (0) 20 7337 1500 London
Fax: +44 (0) 20 7337 1550 EC2M 2SJ
Tel: +44 (0) 20 7628 3396
Principal group bankers Broker
Barclays Bank Plc WH Ireland
Lord Street 24 Martin Lane
Liverpool London
L2 6PB EC4R 0DR
Tel: +44 (0) 20 7220 1666
9 June 2008
South African sponsor
Java Capital (Proprietary) Limited
Date: 09/06/2009 08:49:30 Produced by the JSE SENS Department.
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