| Mon 27 Jul 2009, 8:51 | | LAF - Lonrho Plc - Trading Update For The Quarter Ended 30 June 2009 |
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LAF
LOLAF
LAF - Lonrho Plc - Trading Update For The Quarter Ended 30 June 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")
TRADING UPDATE FOR THE QUARTER ENDED 30 JUNE 2009
"Lonrho Reports 16% Increase In Like-for-like Turnover For The Quarter And
Strong Continued Growth In Its Core Activities
Lonrho PLC (AIM: LONR) today announces its unaudited trading update for the
third quarter ended 30 June 2009 ("Third Quarter").
These results (and comparative figures included therein) do not form audited
accounts nor have been extracted from audited accounts. The comparative figures
used are year on year due to the influence of seasonality within the different
businesses in the group.
THIRD QUARTER RESULTS
The third quarter of 2008/09 has seen continued growth in the Group`s core
businesses, despite depressed global markets. The Company`s strategy of
operating in five key industrial sectors inextricably linked to the growth of
Africa (Transportation, Infrastructure, Agriculture, Support Services and
Hotels) with operations in seventeen countries across Africa is demonstrably
successful and mitigates commercial risk.
These businesses are proving their commercial viability and are well positioned
for further expansion across the Continent.
HIGHLIGHTS FOR THE QUARTER INCLUDE:
Third Quarter turnover of continuing operations was GBP18.5m. This represents a
significant increase of 226% on a reported basis, and 16% increase on a like for
like basis against the prior year. The third quarter is traditionally the
Company`s slowest in trading terms due to seasonal effects.
Year to date turnover for the first nine months was GBP60.0m, this is an
increase of 257% on a reported basis against the previous year and 44% increase
on a like for like basis.
Net assets decreased to GBP82.6m from GBP86.1m at 31 March 2009.
The Company has recognised foreign exchange gains of GBP6.1m in respect of the
half year to 31 March 2009. As at 30 June 2009 the Company had unrecognised
foreign exchange losses of GBP3.1m.
Loss before tax for the first nine months on a reported basis was a loss of
GBP3.9m compared to a loss of GBP15.9m in the previous year.
EBITDA in the Third Quarter was a loss of GBP2.4m, compared to a loss of GBP8.8m
in the prior year on a reported basis.
Sterling has been subject to significant currency fluctuation against the US
Dollar and the South African Rand during the current quarter. Sterling and the
South African Rand strengthened by 14.9% and 18.8% respectively against the US
dollar. Lonrho`s turnover is predominantly reported in US Dollars and thus these
currency movements have had a negative impact on the Sterling results.
OPERATIONAL HIGHLIGHTS
Agribusiness
Rollex SA (51% holding), continues to be the central platform within Lonrho
Agriculture`s logistical division and like for like third quarter sales were up
10% year on year. The Rollex strategic focus remains the vertical integration
of the African agriculture market, taking produce from the field, processing and
packaging it and delivering it to retailers within Africa and internationally.
Lonrho believes this sector will continue to grow in importance and value as
agriculture across Africa develops.
Rollex has increased supply volumes to two large domestic supermarkets in South
Africa, Pick n Pay and Spar. Volumes supplied to Pick n Pay and Spar increased
45% from the previous quarter. Exports to Europe are being affected by a
decreased demand for fruit and vegetables as a result of global trading
conditions. However it is expected that this decline will be offset by the
opening of new distribution channels currently being established into the Middle
East and Ireland and expanding the client base for the company in Europe.
The newly opened Namibian fish processing and packing cold store benefited
during the current quarter from a highly successful Tuna season in May enabling
fishing operators to catch their full quotas. This delivered significant growth
in the export business to Europe.
Rollex Freight and Rollex Cargo continue to grow their businesses maximising the
back load efficiencies for the trucking fleet used for collecting agricultural
produce across southern Africa.
Building work continues on the John Deere distributorship for Angola (51%
holding). Located in Catete, in the Bengo Province, the new facility will
include not only John Deere showrooms, but state of the art maintenance
facilities, spare part warehousing and a training facility for agricultural
mechanics. The launch of John Deere Angola was timed to coincide with the
Angolan National Agricultural Fair (FILPA) on the 14 July 2009. The Lonrho John
Deere stand attracted great interest and significant sales enquiries. First
tractor orders are due to be delivered during the next quarter and the formal
inauguration of the new facility will be during the fourth quarter. Agricultural
development remains a primary Angolan Government objective with significant
financial incentives being made available.
Transport
Lonrho`s pan African aviation company, Fly540, has continued to build on its
reputation for reliability, safety and punctuality. Currently flying into 4
countries in East Africa, Fly540 has expanded its network operations in Angola,
Ghana, Tanzania and Zimbabwe. Fly540 remains focused on delivering the first
international standard pan-African airline that provides quality regional
distribution for international carriers flying into Africa and the ability for
passengers in Africa to travel regionally, north to south and east to west.
Significant process has been made on establishing the three strategic hubs that
will provide the backbone of the Fly540 pan African network, Kenya (established
2006 and now serving east Africa) Angola and Ghana.
540 Angola (60% holding), has during the quarter to 30th June 2009 received an
Air Services Licence (ASL) The ASL comes after a period of six months of
preparation, training, office development, systems implementation and completion
of the approvals for Fly540 to operate in Angola. The ASL is currently being
converted to an Air Operators Certificate (AOC) that will permit flight
operations to commence during Quarter 4. Initial destinations for Fly540 Angola
will include the major centres of Cabinda, Luanda, Soyo, Benguela, Huambo, and
Malanje and grow to fifteen domestic destinations. Operations are centred out of
Cabinda, (the centre of the oil industry) and Luanda. Lonrho will initially
deploy two new ATR72 aircraft to Angola to establish the primary routes
Fly 540 Ghana (60% holding), is progressing on the application for an Air
Services Licence (ASL) and the ASL is expected to be received during quarter 4.
Fly540 Ghana will be launched following the commencement of operations in
Angola, delivering all three of Fly540`s strategic hubs across the Continent,
Kenya, Angola and Ghana by year end.
Fly 540 Tanzania (90% holding), has received its Air Operators Certificate
(A.O.C) and successfully commenced operations in July 2009.
Fly 540 Zimbabwe (a LonZim company), is to commence operations in September
2009. Lonzim Air, a wholly owned subsidiary of Lonzim plc, has purchased one
ATR 42 turbo prop from the Lonrho Aviation Fleet for $4.3 million to facilitate
passenger operations in Zimbabwe. Fly 540 will earn a license fee of 2.5% of
gross turnover and a monthly management fee of US$ 35,000 for managerial
services to Fly 540 Zimbabwe.
540 Kenya (49% holding), despite lower tourist numbers the business continues
to operate profitably as a result of increased local demand, with almost 49,000
passengers carried during this quarter which is an increase of 39% against the
same period in the previous year. Revenue this quarter has grown by 51% compared
to the prior year. Advance bookings for the high season July-August are very
encouraging, (July estimated at over 20,000 pax) together with a number of
routes in the peak December period already being 100% sold out at full fare
values. The new Nairobi to Mwanza route is to commence scheduled operations
during quarter 4.
Support Services
Bytes & Pieces (65% holding), continues to grow as a result of expanding
business to existing clients as the market benefits from the continued
rejuvenation of Mozambique. Revenue has grown this quarter by 38% compared with
the same period last year.
During the current quarter Bytes and Pieces has been upgraded by Microsoft to an
Enterprise Software Advisor (ESA) for support in the licensing of Microsoft
Enterprise Agreements in Mozambique. This provides significant further
opportunities and complements the existing Dell, HP, CISCO and Tata IT
agreements.
Lonrho IT (CES, 50% holding), continues to grow its operations in Southern
Africa. In South Africa the Johannesburg and Nelspruit offices continue to grow
and the newly opened Zambian offices are performing ahead of budget. Plans
continue to take CES into the expanding Angolan market where the company can
utilise its in-house Portuguese workforce to gain a competitive advantage.
Infrastructure
At Luba Freeport (63% holding), preparations continue for the arrival of new
tenant Noble Energy which will also attract other customers to the port.
Negotiations are at an advanced level for further new clients to consolidate
their current operations and to utilise the port as a central operational base
for the Gulf of Guinea. Revenue has increased by 12% on a reported quarterly
basis against the previous year. Costs continue to be kept below budget.
There has been a three month manufacturer delay with the delivery of the new
fixed container scanner which is now due to arrive in the fourth quarter. When
operational, the scanner will provide the foremost security service in
Equatorial Guinea and be a major asset for the port.
Luba is in negotiations with CCEI bank for a US$ 20 million stand alone credit
facility to the port to facilitate the further development of infrastructure and
facilities for the continued growth of the port secured against the ports
existing assets.
Kwikbuild Corporation Limited (62% holding) and the South African subsidiary e-
Kwikbuild (51% holding) has reported that turnover has been materially lower
than expectations for the quarter. Current revenues are primarily generated from
the South African Government (e.g. Classrooms, clinics, offices) and for the
three months prior to the elections held on the 22nd April 2009 and since, the
Government order process practically stopped functioning. As a result, during
the quarter, Kwikbuild has built inventory levels to meet significant contracts
that are expected to be released during the fourth quarter as the new Government
moves forward.
Hotels
At the Hotel Cardoso in Mozambique (59% holding + Management Contract),
Occupancy continues in line with expectations and exceeded 80% during June with
an average room rate of US$100 per night compared with a room rate of US$66 per
night in June 2008. The newly refurbished restaurant and park have firmly re-
established the Hotel Cardoso at the premier end of the Maputo hotel market.
Hotel Grand Karavia in Lubumbashi, DRC, (50% holding + Management Contract)
continues on schedule with its US$20m refurbishment. The hotel is scheduled to
re-open in autumn of 2009 and will provide the only quality accommodation in
Lubumbashi. The copper belt of the DRC has seen improved economic activity with
mines that had gone on care and maintenance recommencing production as commodity
prices rise - the copper price has risen by over 25% during the quarter and the
mining industry reported US$ 10 billion FDI into the DRC copper belt is
demonstrably back on track.
Other
Lonzim PLC, (LonZim) in which Lonrho has a 24.53% shareholding, has previously
announced that AMB Capital (Ireland) Limited ("AMB"), a company that as at 30
June 2009 had acquired 22.12% of Lonzim acting in concert with Damille Partners
(Damille) who had acquired 6.7% of LonZim, had requisitioned an Extraordinary
General Meeting ("EGM") of its shareholders to remove the executive board of
LonZim, appoint new Executive Directors and dispose of the Company`s assets. The
EGM has been convened for 30th July 2009. Subsequent to the requisition of the
EGM, AMB has sold the majority of its stake in LonZim as has Damille.
In May 2009 LonZim announced that it had established a pharmaceutical
distribution company to provide quality, chilled logistics for the delivery and
distribution of medicines, vaccines and medical supplies to Zimbabwe and act as
logistics agent for major pharmaceutical suppliers.
LonZim also announced that following a review by the non executive directors
which also included consultation with the LonZim`s nominated advisor W.H.
Ireland Limited, it has appointed Lonrho Hotels to manage the refurbishment and
operations of the recently acquired iconic Leopard Rock Hotel in Zimbabwe.
At the beginning of July 2009 Lonzim Plc announced that it is to commence
operations for a Fly540 airline based in Zimbabwe to service both the domestic
and regional markets and emerging local and connecting traffic. Flights are
scheduled to start from September 2009.
CURRENT TRADING AND FUTURE OUTLOOK
Each of the Company`s core businesses continued to perform to expectations
during the third quarter. The impact of the global recession on the African
continent is less severe and the majority of economic forecasts expect sub
Saharan growth in GDP to continue in 2009 albeit at a slower rate.
The Lonrho strategy has proven to be resilient and the company focuses on the
industry sectors and specific countries which it believes will continue to
provide the strongest growth in Africa.
The fourth quarter is set to be positive for the group with 540 Angola
commencing flight operations, 540 Ghana`s establishment, Rollex`s continued
expansion and the addition of major new clients to Luba. However trading
conditions remain challenging as a result of the global economic climate and
fluctuations in the currency markets.
It is intended that the next quarterly update for the company will be released
in October 2009.
David Lenigas, Lonrho`s Executive Chairman commented:
"Lonrho has once again been able to deliver solid financial results, with
revenues increasing 16% on a like for like basis against the same period last
year. The company has built a solid commercial foundation across Africa in the
key strategic sectors inherent to Africa`s economic development.
"Our investment philosophy of five strategic industries operating in seventeen
countries is a sound approach to the emerging African market. We remain
extremely positive about Lonrho`s prospects in our chosen countries of operation
and specific market sectors across Africa."
LONRHO GROUP
GROUP TURNOVER
1 APRIL to 30 JUNE 2009
GBP`000S
TURNOVER on a reported basis
3 Months 3 Months
to to
30 JUNE 2009 30 JUNE 2008 Variance Var %
Agri Processing
Rollex 9,845 0 9,845 100%
Transport
540 Group 3,882 2,235 1,647 74%
Support Services
Bytes & Pieces 1,574 1,140 433 38%
Other 382 184 198 108%
Infrastructure
Luba Freeport 1,861 1,660 201 12%
E-Kwikbuild 106 0 106 100%
Hotels
Hotel Cardoso 861 460 401 87%
Continuing operations 18,510 5,678 12,832 226%
Shipping -Discontinued
SAILS 0 6,966 (6,966) -100%
Discontinued operations 0 6,966 (6,9660) -100%
Total Turnover 18,510 12,645 5,865 46%
LIKE FOR LIKE TURNOVER
3 Months 3 Months
to to
30 JUNE 2009 30 JUNE 2008 Variance Var %
Agri Processing
Rollex 9,845 8,978 867 10%
Transport
540 Group 3,882 2,235 1,647 74%
Support Services
Bytes & Pieces 1,574 1,140 433 38%
Other 382 184 198 108%
Infrastructure
Luba Freeport 1,861 1,660 201 12%
E-Kwikbuild 106 1,316 (1,210) -92%
Hotels
Hotel Cardoso 861 460 401 87%
Continuing operations 18,510 15,973 2,537 16%
Shipping -Discontinued
SAILS 0 6,966 (6,966) -100%
Discontinued operations 0 6,966 (6,9660 -100%
Total Turnover 18,510 22,939 (4,429) -19%
1 Including Rollex and E-Kwikbuild and removal of Sails from 2008 results
Results sourced from June 2009 management accounts
LONRHO GROUP
GROUP TURNOVER
NINE MONTHS to 30 JUNE 2009
GBP`000S
TURNOVER on a reported basis
9 Months 9 Months
to to
30 JUNE 2009 30 JUNE 2008 Variance Var %
Agri Processing
Rollex 32,704 0 32,704 100%
Transport
540 Group 11,895 5,860 6,035 103%
Support Services
Bytes & Pieces 5,141 3,889 1,251 32%
Other 1,118 587 531 90%
Infrastructure
Luba Freeport 6,024 5,159 865 17%
E-Kwikbuild 959 0 959 100%
Hotels
Hotel Cardoso 2,173 1,318 855 65%
Continuing operations 60,013 16,813 43,200 257%
Shipping -Discontinued
SAILS 1,187 14,354 (13,167) -92%
Discontinued operations 1,187 14,354 (13,167) -92%
Total Turnover 61,200 31,167 30,033 96%
LIKE FOR LIKE TURNOVER
9 Months 9 Months
to to Var %
30 JUNE 2009 30 JUNE 2008 Variance
Agri Processing
Rollex 32,704 22,786 9,918 44%
Transport
540 Group 11,895 5,860 6,035 103%
Support Services
Bytes & Pieces 5,141 3,889 1,251 32%
Other 1,118 587 531 90%
Infrastructure
Luba Freeport 6,024 5,159 865 17%
E-Kwikbuild 959 2,071 (1,112) -54%
Hotels
Hotel Cardoso 2,173 1,318 855 65%
Continuing operations 60,013 41,670 18,343 44%
Shipping -Discontinued
SAILS 1,187 14,354 (13,167) -92%
Discontinued operations 1,187 14,354 (13,167) -92%
Total Turnover 61,200 56,024 5,176 9%
1 Including Rollex and E-Kwikbuild and removal of Sails from 2008 results
Results sourced from June 2009 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
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
27th July 2009
South African sponsor
Java Capital (Proprietary) Limited
Date: 27/07/2009 08:51:30 Produced by the JSE SENS Department.
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