| Wed 24 Feb 2010, 9:00 | | LNF - London Finance & Investment Group P.L.C. - Interim Results For The Six |
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LNF
LOJM
LNF - London Finance & Investment Group P.L.C. - Interim Results For The Six
Month Ended 31 December 2009
London Finance & Investment Group P.L.C
(Incorporated in England - No. 201151)
Code: LNF & ISIN: GB0002994001
("Lonfin", "the Company" or "the Group")
Lonfin today announces its unaudited interim results for the six months ended
31st December 2009.
Highlights from the last six month period include:
- Profit before tax of GBP116,000 (2008 - GBP239,000 loss)
- Increase in net asset value per share of 14% since 30th June 2009
- Continues to hold three significant strategic investment: Western
Selection P.L.C., Finsbury Food Group plc and MWB Group Holdings Plc
- Interim dividend of 0.3p (2008: 0.55p)
David Marshall, Chairman of Lonfin commented:
"We have seen a strong performance from our general portfolio of investments,
however the valuations of our strategic investments remain depressed. We
strongly believe that our mix of strategic investments and our general
portfolio of quality equities is an effective way of achieving growth in
shareholder value over the medium to long term."
- Ends -
Enquiries to:
London Finance & Investment Group 020 7448 8950
P.L.C.
David Marshall/Edward Beale
Notes to Editors:
Lonfin is a strategic investment company whose assets primarily consist of
three Strategic Investments and a General Portfolio. Strategic Investments are
significant investments in smaller UK quoted companies and these are balanced
by a General Portfolio, which consists mainly of investments in major U.K. and
European equities.
Lonfin`s strategic investments comprise: Western Selection P.L.C., MWB Group
Holdings Plc and Finsbury Food Group plc. Western Selection P.L.C. has
strategic investments in Creston plc, Swallowfield plc, Northbridge Industrial
Services plc and Hartim Limited. Lonfin`s General Portfolio has material
interests in Oil, Household Leisure and Personal Goods, Food and Beverages and
Tobacco.
Chairman`s Statement
Introduction
As an investment company our target is to achieve growth in shareholder value
in real terms over the medium to long term. In the short term our results can
be influenced by overall stock market performance, particularly the
performance of our Strategic Investments. We continue to believe that a
combination of Strategic Investments and a General Portfolio is the most
effective way of achieving our aims. Strategic Investments are significant
investments in smaller UK quoted companies where we have expectations of above
average growth over the medium to longer term and these are balanced by a
General Portfolio which mainly consists of investments in major U.K. and
European equities.
At 31st December 2009, we held three Strategic Investments in which we have
board representation: our associated company Western Selection P.L.C., MWB
Group Holdings Plc and Finsbury Food Group plc. Detailed comments on our
Strategic Investments are given below.
Results
Our net assets per share increased 14% to 24.3p at 31st December 2009 from
21.3p at 30th June 2009. Our Strategic Investments decreased in value by 3%
and our General Portfolio increased by 29%. This compares with the increases
of 27% in the FTSE 100 index and 23% in AIM over the half year. At the close
of business on 19th February 2010, our net asset value was 24.36p.
The Group achieved a profit before tax for the half year of GBP114,000
compared to a loss of GBP239,000 for the same period last year. This was in
the main due to the recovery of provisions made in the previous year against
falls in value of the General Portfolio and a reduction of 13% in
administrative costs. These favourable movements were reduced by a
significant decline in dividend income. Our profit after tax and minority
interest was GBP116,000 (2008 loss: GBP232,000) giving profits per share of
0.4p (2008: losses 0.7p).
Strategic Investments
Western Selection P.L.C. ("Western")
The Group owns 7,864,412 Western shares and 3,785,820 Western 2011 Warrants
representing 43.8% of Western`s issued share capital and 49.2% of outstanding
Warrants. The 2011 Warrants are exercisable 28 days after posting of
Western`s interim and annual accounts in each of the years 2008 to 2010. We
have approval from Western`s shareholders and the Takeover Panel to increase
our holding in Western up to 48% through the exercise of warrants.
On 22nd February 2010, Western announced a profit after tax of GBP131,000 for
its half year to 31st December 2009 and a profit per share of 0.7p (2008:
0.4p). Western`s net assets at market value were GBP10,844,000 equivalent to
61p per share, an increase of 22% from 50p at 30th June 2009.
The market value of the Company`s investment in Western at 31st December 2009
was GBP2,240,000 representing 29% of the net assets of Lonfin, against a book
value of GBP4,285,000. The underlying value of the investment in Western,
valuing Western`s own investments at market value, was GBP4.7 million (30th
June 2009: GBP4.3 million).
I am the Chairman of Western and Mr. Robotham is a non-executive director.
Western has strategic investments in Creston plc, Northbridge Industrial
Services PLC, Swallowfield plc. and Hartim Limited. Extracts from Western`s
announcement on its strategic investments are set out below:
Creston plc
Creston is a marketing services group with a strategy to grow within its
sector to become a substantial, diversified international marketing services
group. Creston`s results for the half-year to 30th September 2009 show a
profit after tax of GBP435,00 (2008: GBP2,951,000). The results of the six
month period are after charging the costs relating to the closure of two
divisions and the associated goodwill of GBP4.4m, against which no tax relief
has been provided. Net debt has been reduced by GBP6.9m (17%) from a 51%
increase in cash inflows.
Western owns 3,000,000 shares in Creston (4.9%) with a market value at 31st
December 2009 of GBP2,377,000 (30th June 2009: GBP1,920,000), being 22% of
Western`s assets.
Northbridge Industrial Services PLC
Northbridge was formed for the purpose of acquiring companies that hire and
sell specialist industrial equipment such as electrical load banks and
generators. Northbridge`s first acquisition was Crestchic Limited, one of the
largest specialist load bank equipment manufacturers in the world, located in
Burton-on-Trent, selling and hiring to a national and international customer
base. Northbridge has recently added to its interests in Dubai by increasing
its fleet of power and other electrical equipment.
Northbridge`s latest results, for the half year to 30th June 2009, showed
profit of GBP606,000 (2008: GBP748,000) after exchange losses of GBP200,000
(2008: nil).
Western owns 1,875,000 shares, representing 20.3% of Northbridge`s share
capital. The value of this investment at 31st December 2009 was GBP2,475,000
(30th June 2009: GBP2,156,000), representing 23% of Western`s assets.
Swallowfield plc
Swallowfield is a full service provider for global and household brands
operating in the cosmetics and personal care and household goods marketplace.
It offers a flexible and tailored service including: contract filling market
analysis, design, formulation and testing of products, packaging design and
sourcing and distribution of stock.
Swallowfield`s latest results, for the year to 30th June 2009, showed profit,
before exceptional items and tax, of GBP1,313,000 (30th June 2008:
GBP1,319,000).
At 31st December 2009, Western owned 1,421,800 shares in Swallowfield (12.6%
of their issued share capital) having increased the holding by 90,300 shares
at a cost of GBP106,000. The market value of Western`s holding in
Swallowfield on 31st December 2009 was GBP1,766,000 (30th June 2009:
GBP999,000) representing 16% of Western`s assets.
Hartim Limited
Hartim offers a complete sales, marketing and logistical services to a number
of UK branded fast moving consumer goods companies. This investment was
acquired on 28th March 2009 and is accounted for as an associated company.
Hartim`s estimated results for the year ended 31st December 2009 is a profit
of GBP327,000 after tax. This is down from the very high profits of
GBP443,000 achieved last year, but still represents a very good return on our
investment.
At 31st December 2009, Western owned 49.5% of Hartim. The carrying value of
the Company`s investment in Hartim on 31st December 2009 was GBP1,124,000
(30th June 2009: GBP979,000) representing 10% of Western`s assets.
Finsbury Food Group plc ("Finsbury Food")
The Group owns 8,000,000 shares in Finsbury Food, representing 15.2% of their
share capital. The market value of our holding was GBP1,620,000 on 31st
December 2009 compared to a cost of GBP1,893,000; this represents 21% of the
net assets of Lonfin.
Finsbury Food is a supplier of ambient cakes to most of the UK`s major
supermarket chains and speciality breads to Waitrose including gluten-free and
low fat products. Finsbury has recently announced the appointment of a new
Finance Director and that the company is trading in line with market
expectations.
I stood down as chairman of Finsbury Food at the last AGM and I am now a non-
executive director.
MWB Group Holdings Plc ("MWB")
The Group owns 2,000,000 shares, representing 1.2% of MWB`s issued share
capital. The market value of the holding at 31st December, 2009 was
GBP780,000, compared with a book value of GBP1,681,000, which represents 10%
of the net assets of Lonfin.
MWB is a hotel, serviced offices and retail group that is in the process of
realising its assets through an orderly disposal programme. MWB completed a
fund raising on 12th January 2010 and issued a trading statement on 14th
January 2010. In the trading statement, MWB reported strong cash generation
from its Malmaison and Hotel du Vin division and continuing organic and
acquisition driven growth in MWB Business Exchange.
I am a non-executive director of MWB.
General Portfolio
The General Portfolio is diverse and consists of U.K. and European blue chip
equities, most of which have significant international exposure. The list of
these investments is set out at the end of this announcement.
Dividends
The board has declared an interim of 0.30p payable on Thursday, 1 April 2010
to shareholders on the register at the close of business on Friday 12th March
2010.
Outlook
World stock markets have rebounded considerably over the last six months,
however we remain cautious about the outlook for 2010 and have positioned the
general portfolio accordingly. We will be looking to reduce debt slightly
over the next six months, as and when selling opportunities arise.
David C. Marshall
Chairman
Interim dividend
The interim dividend is 0.30p per share (2008 - 0.55p) and will be paid on
Thursday, 1 April 2010 to those members registered at the close of business on
Friday 12th March 2010. Shareholders on the South African register will
receive their dividend in South African Rand converted from sterling at the
closing rate of exchange on Monday 22nd February 2010.
Salient dates for dividend
Last day to trade (SA) Friday 5th March 2010
Shares trade ex dividend (SA) Monday 8th March 2010
Shares trade ex dividend (UK) Wednesday 10th March 2010
Record date (UK & SA) Friday 12th March 2010
Pay date Thursday, 1 April 2010
Shareholders are hereby advised that the exchange rate to be used will be GBP
1 = ZAR 11.9862. This has been calculated as the average of the bid/ask
spread at 16.00 (United Kingdom time) being the close of business on Monday
22nd February 2010. Consequently the dividend of 0.30p will be equal to
3.59586 South African cents.
No dematerialisation or rematerialisation of share certificates, nor transfer
of shares between the registers in London and South Africa will take place
between Monday 8th March 2010 and Friday 12th March 2010, both dates
inclusive.
Unaudited Consolidated Income Statement
Half year Half year Year
ended 31 ended 31 ended
Dec 2009 Dec 2008 30 June
2009
GBP000 GBP000 GBP000
Operating Income
Dividends received 29 223 332
Interest and sundry income 20 17 35
Profit on sales of investments, 227 -231 -263
including provisions
276 9 104
Management services income 225 231 468
501 240 572
Administrative expenses
Investment operations -146 -185 -359
Management services -231 -247 -492
Total administrative expenses -377 -432 -851
Operating profit/(loss) 124 -192 -279
Share of result of associated
undertaking
Operating profit 6 40 -138
Exceptional income/expense 51 - -239
Interest payable -67 -87 -151
Profit/(Loss) on ordinary activities 114 -239 -807
before taxation
Tax on result of ordinary activities -1 - -
Profit/(Loss) on ordinary activities 113 -239 -807
after taxation
Minority interest 3 7 11
Profit/(Loss) attributable to 116 (232) -796
members of the holding company
Reconciliation of headline earnings
Earnings/(Loss) per share 0.4p (0.7)p (2.6)p
Adjustment for exceptional items, (0.2)p - 0.8p
net of tax
Headline earnings/(loss) per share 0.2p (0.7)p (1.8)p
Interim dividend 0.30p 0.55p 0.55p
Final dividend - -
Total in respect of the year 0.55p 0.55p
Unaudited Consolidated Statement of Comprehensive Income
Profit/(Loss)attributable to 116 (232) (796)
shareholders
Costs of warrant issue - (9) (10)
Unrealised profits/(losses) on listed 815 (5,672) (4,224)
undertakings
Total comprehensive income/(expense) 931 (5,913) (5,030)
Unaudited Consolidated Changes in Shareholders` Equity
Total comprehensive income/(expense) 931 (5,913) (5,030)
Dividends paid to equity shareholders - (203) (374)
931 (6,116) (5,404)
Equity shareholders` funds at start 6,656 12,060 12,060
of period
Equity shareholders` funds at end of 7,587 5,944 6,656
period
Unaudited Consolidated Statement of Financial Position
31 Dec 31 Dec 30June
2009 2008 2009
GBP000 GBP000 GBP000
Non-current assets
Tangible assets 383 397 390
Principle investments:-
MWB Group Holdings Plc 780 595 980
Finsbury Food Group plc 1,620 940 1,640
Western Selection P.L.C. 2,240 2,076 2,174
5,023 4,008 5,184
Current assets
Listed investments 5,036 4,522 3,976
Debtors 254 408 309
Cash, bank balances and deposits 49 73 114
5,339 5,003 4,399
Total Assets 10,362 9,011 9,583
Capital and Reserves
Called up share capital 1,560 1,560 1,560
Share premium account 2,318 2,318 2,318
Revaluation reserve 330 330 330
Unrealised profits and losses on (1,244 (3,089 (2,071
investments ) ) )
Share of undistributed profits and 6 232 (51)
losses of subsidiaries and associates
Company`s retained realised profits 4,629 4,593 4,570
and losses
Equity shareholders funds 7,599 5,944 6,656
Creditors falling due within one year 2,676 2,973 2,837
Minority equity interest 87 94 90
10,362 9,011 9,583
Consolidated Cash Flow Statement
Half Half Year
year year ended 30
ended 31 ended 31 June
Dec 2009 Dec 2008 2009
GBP000 GBP000 GBP000
Cash inflow on operating activities 30 233 438
Returns on investments and servicing
of finance
Dividends received 29 427 537
Net interest paid (67) (87) (145)
Net cash (outflow)/inflow from returns (38) 340 392
on investments and servicing of
finance
Taxation paid (1) - -
Net cash flow from investment - - -
activities
Equity dividends paid - Company - (203) (374)
Financing
Cost of warrants issue - (9) (10)
Net repayment of loan facility (56) (324) (368)
Net cash outflow from financing (56) (333) (378)
(Decrease)/Increase in cash (65) 37 78
(a) Reconciliation of operating profit to net cash flow from operating
activities
31 Dec 31 Dec 30 June
2009 2008 2009
GBP000 GBP000 GBP000
Profit/(Loss) before taxation 114 (238) (807)
Dividends receivable (29) (223) (332)
Share of associate (57) (40) 377
Depreciation charges 7 7 13
Investment provisions (297) - 219
Net interest paid 67 87 145
(Decrease)/Increase in debtors 55 (110) 10
(Decrease)/Increase in creditors (161) 196 98
(Increase /Decrease/(Increase) in 331 554 715
current asset investments
30 233 438
(b) Reconciliation of net cash flow to movement in net debt
At start Cash At end
of flow of
period
Half year ended 31st December GBP000 GBP000 GBP000
2009
Cash at bank 114 (65) 49
Bank loan (2,556) 56 (2,500)
(2,442) (9) (2,451)
2008
Cash at bank 36 37 73
Bank loan (2,924) 324 (2,600)
(2,888) 361 (2,527)
Year ended 30th June 2009
Cash at bank 36 78 114
Bank loan (2,924) 368 (2,556)
(2,888) 446 (2,442)
Market Value of General Portfolio
31 December 2009 Current
Value
GBP %
Nestle 271 5.37
L`Oreal 236 4.68
British American Tobacco 222 4.41
Royal Dutch Shell 217 4.32
BHP Billiton 215 4.28
Schindler-Holdings 211 4.19
Heineken 191 3.79
Imperial Tobacco Group 195 3.87
Henkel KGAA 189 3.76
Reckitt Benckiser 195 3.87
Holcim 197 3.92
BASF 187 3.70
Total 189 3.75
Pernod-Ricard 180 3.58
Beiersdorf 184 3.65
Investor 186 3.70
BP 180 3.57
Novartis 176 3.49
DSM 168 3.34
Unilever 175 3.48
Carlsberg 165 3.28
Roche Holdings 158 3.14
Diageo 160 3.02
Danone 152 3.02
ABB 158 3.14
Lafarge 147 2.93
Johnson Matthey 130 2.58
5,036 100.00
Notes:-
1. The results for the half-year are unaudited. The information contained in
this report does not constitute statutory accounts within the meaning of the
Companies Act 2006. The statutory accounts of the Group for the year ended
30th June 2009 have been reported on by the Company`s auditors and have been
delivered to the Registrar of Companies. The report of the auditors was
unqualified.
2. This report has been prepared in accordance with the accounting policies
contained in the Company`s Annual Report and Accounts 2009, International
Financial Reporting Standards,and comply with IAS34.
3. The amendment to presentation, under IAS 1, which is mandatory for periods
beginning 1st April 2009, has been adopted. This amendment requires the
presentation of comprehensive income, which the company has opted to present
in two statements - an income statement and a statement of comprehensive
income.
4. The calculation of earnings per share is based on the weighted average
number of shares in issue for the period and the profit on ordinary activities
after tax.
24 February 2010
Sponsor
Sasfin Capital (a division of Sasfin Bank)
Date: 24/02/2010 09:00:02 Produced by the JSE SENS Department.
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