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LAF
LOLAF
LAF - Lonrho reports a 29% increase in turnover for the 6 months ended 31
March 2011
Lonrho Plc
(Incorporated and registered in England and Wales)
(Registration number 2805337)
(Share code: LAF ISIN number: GB0002568813)
("Lonrho" or "the Company")
LONRHO REPORTS A 29% INCREASE IN TURNOVER FOR THE 6 MONTHS ENDED 31 MARCH
2011
Lonrho Plc, the conglomerate with a structured portfolio of African
investments, announces its unaudited Interim Results for the six months
ended 31 March 2011. The financial information in this statement does not
constitute the Company`s statutory accounts within the meaning of Section
434 of the Companies Act 2006.
Financial Highlights for the six months to 31 March 2011
- For the half year the revenue of GBP61.1m is 29% ahead of the first
half of FY10.
- In the first half of the financial year, the loss before tax was
GBP2.9m. When compared to the prior year, and after excluding an
exchange gain of GBP5.7m in that year (current year GBP nil), this
represents an underlying improvement of GBP4.3m.
- Net assets at 31 March 2011 stood at GBP126.4m, compared with
GBP124.5m as at 31 December 2010.
- Available cash balances in the Group at 31st March 2011 were GBP17.8m.
The interim report and financial statements are published on the Company`s
website (www.lonrho.com) today.
David Lenigas, Lonrho`s Executive Chairman, commented:
"The results for the half year are positive, showing a 29% increase in
turnover for the six months when compared to the previous year. Excluding
exchange movements, the loss before tax of GBP2.9m represented an
underlying improvement of GBP4.3m for the period.
We continue to see strong growth across all of our divisions, spear-headed
by Lonrho`s agribusiness and infrastructure businesses. We expect to see
continued growth across all sectors for the remainder of the financial
year, as we move into our typically strongest period."
Enquiries
Lonrho Plc +44 (0) 20 7016 5105
David Lenigas
Geoffrey White
David Armstrong
Pelham Bell Pottinger +44 (0) 20 7861 3126
Charles Vivian
James Macfarlane
Chief Executive`s Statement
Lonrho has delivered a strong first six months to 31 March 2011 and has
seen continued growth across all five divisions. The Company maintains its
focus on providing the support industries for the expanding oil and gas,
agricultural and mineral sectors in sub-Saharan Africa.
The five divisional operations, agriculture, infrastructure,
transportation, hotels and support services have each reported increased
sales year on year and are operating in markets that are growing rapidly as
sub-Saharan Africa continues to deliver strong economic development. The
one billion people in the Continent are creating an increasingly larger
consumer market as general levels of disposable income rise. Africa
continues to benefit from improved political stability and the Continent
now contains some of the fastest growing economies in the world. Recent
events in North Africa have had no material effect on sub-Saharan Africa.
The oil and gas and agriculture sectors in Africa are playing an
increasingly more important role, not only in developing the African
economy, but also in gaining acceptance of Africa as a strong global
emerging market. The increasing dependence of the rest of the world on sub-
Saharan Africa as a source for oil and gas, and agricultural produce
specifically, will be a positive influence in building Africa`s global
importance in the coming years. International research on emerging markets
from Ernst & Young, BCG, World Bank, McKinsey and others is already
highlighting the importance of Africa as an essential part of the global
market moving forward.
Lonrho`s strategy to support the fastest growing industrial sectors
continues. With the Company`s policy of geographical spread of operations
(Lonrho is now working in seventeen countries), and a `stand-alone`
divisional structure with no debt recourse from division to division, the
Board continues to believe Lonrho has a prudent approach to operating in
the sub-Saharan African market.
In October 2010, the Company completed the issue of US$70 million (GBP44.3
million) Guaranteed Convertible Bonds due 2015. On 20 May 2011, Lonrho
announced a placing of new ordinary shares in the capital of the Company at
16.5 pence per share to raise gross proceeds of GBP19.5 million.
Post 31 March 2011, Lonrho was admitted to the Main Market of the London
Stock Exchange as a Premium Listing on the 26th April 2011 and, upon
admission to the Main Market, the Rt. Hon Sir Richard Needham joined the
Board as an Independent Non-Executive Director.
Lonrho is well positioned to enter the second half of the financial year
and to continue the strong growth and development of the Group.
Financial Highlights for the six months to 31 March 2011
- For the half year the revenue of GBP61.1m is 29% ahead of the first
half of FY10.
- In the first half of the financial year, the loss before tax was
GBP2.9m. When compared to the prior year, and after excluding an
exchange gain of GBP5.7m in that year (current year GBP nil), this
represents an underlying improvement of GBP4.3m.
- Net assets at 31 March 2011 stood at GBP126.4m, compared with
GBP124.5m as at 31 December 2010.
- Available cash balances in the Group at 31st March 2011 were GBP17.8m.
Operational Review
Agribusiness
The agribusiness division has grown to be over 50% of Lonrho`s total
revenue and continues to see growing demand. The agribusiness division has
three distinct businesses: fruit and vegetables; fish and shellfish; and
agricultural equipment.
Rollex (100% holding), the fruit and vegetable business, is seeing
increasing demand from retailers both in South Africa and from around the
world for produce from Southern Africa. Lonrho sources product on off-take
agreements from Mozambique, Tanzania, Zimbabwe, Zambia and South Africa and
provides the vertically integrated, international standard, packing,
processing and logistics services to deliver the produce in the best
condition to the supermarket shelf, whether it be in Cape Town, London, New
York or Beijing. In the first half of this year, as planned, Rollex has
refocused its strategy around purely vertically integrated agribusiness
with less emphasis on general logistics.
A similar vertically integrated packing, processing and logistics chain is
operated for the fish and shellfish business, taking `wild caught`,
`sustainably sourced` fish and shellfish from Namibia, South Africa and
Mozambique, and preparing it and supplying it to retail clients`
requirements in South Africa and the world.
The traditional Southern African markets for both the fish and fruit and
vegetable businesses are developing strongly as South African based retail
chains are expanding the number of stores they have both in South Africa
and as they develop across Africa.
A significant market is developing in the export of fruit, vegetables, fish
and shellfish from Africa to the rest of the world. The fruit and vegetable
division of the business has seen increasing demand from Europe, the Middle
East, Far East and an initial interest from the US market for African
produce by both air and sea freight. The potential for Southern Africa to
become a significant part of the global marketplace for fruit and
vegetables is clearly apparent. Lonrho`s agribusiness division is well
positioned to partake in developing this market.
Oceanfresh (51% holding), the fish and shellfish division, has seen good
growth in sales into the South African retail chains as they expand their
operations, as well as very significant demand from the US market for
Oceanfresh products.
The US market has developed strongly with new listings for Oceanfresh
products with Costco and other large retail chains. The US market is keen
to find supplies of `wild caught` and `sustainable sourced` fish, and the
Oceanfresh SASSI (Southern African Sustainable Seafood Initiative) program,
endorsed by the WWF, has direct appeal to the requirements of the US retail
market.
Oceanfresh is in the process of relocating to bigger premises in
Johannesburg to meet forecast demand and to increase in-house capabilities.
The new facility, which will quadruple capacity, includes a 500 tonne cold
store unit, a high-care processing area and a general processing area. The
new facility will allow Oceanfresh to further increase the export and local
retail lines available for customers.
The agricultural equipment business, primarily the distribution of John
Deere tractors in Mozambique and Angola, is progressing well. The volumes
in Mozambique through Trak Auto (100% holding) have increased
substantially, stimulated by both a growing market and a strong increase in
John Deere market share. LonAgro (51% holding), the new John Deere
distributor in Angola, will be officially opened in June 2011 when the CEO
of John Deere inaugurates the project with Angolan Government officials.
Infrastructure
Luba Freeport (63% holding) continues to service the oil services logistics
market for Equatorial Guinea, Africa`s third largest oil producer. The
client base for the port is expanding and, during the first half of the
year, clients have been focused on the preparation work for new drilling
programs due to commence in 2012. The mobilisation for these programs has
geared up later than originally scheduled which has pushed back new revenue
streams for the port. The announcement of a further LNG train for
Equatorial Guinea and the coming increase in exploration of newly released
blocks will drive the business growth moving forward.
Luba Freeport took delivery of a mobile container scanner during the
period, which increases the port`s security in line with international
practices and ensures that every container landed at the Luba facility can
be scanned.
Kwikbuild (51% holding) is now benefitting from the investment made in
manufacturing capacity and additional human resources during the period.
The company has been successfully building its sales and management
expertise to generate overseas orders to diversify away from the historic
dependence on South African Government tenders.
During the period, Lonrho also announced the completion of the purchase of
the AFEX Group of companies (100% holding). AFEX`s main focus of operations
is in supplying services and secure accommodation in Juba, Southern Sudan.
Key to the AFEX business is the Riversdale Lodge accommodation base in
Juba. Since acquisition, a new 16 year lease has been signed for the site
and a further 18 new VIP containerised accommodation units have been added
bring the accommodation total to 301 units. AFEX has also been contracted
to provide a camp and support services for a seismic exploration company in
Kenya, was awarded a short term contract to erect a tented camp in Ethiopia
and has won contracts with mining companies.
Transportation
On a revenue basis, the transportation division, Lonrho Aviation (100%
holding), has had a strong start to the year with all of the major markets
showing good growth. Most pleasing is the launch of scheduled services for
Fly540 in Tanzania and in Angola.
During the period, Fly540 Kenya (49% holding + Board control) has seen a
25% increase in passenger volumes and an increase in revenues despite an
aggressive price campaign from local competitors in Kenya. Fly540 Kenya
commenced scheduled flights from Nairobi to Juba in Southern Sudan in May
2011.
Fly540 Tanzania (90% holding) is achieving very high load factors and as a
result has entered a new phase of expansion to service more destinations in
Tanzania.
Fly540 Angola (60% holding) commenced scheduled services on 31 January
2011. The deployment of the Angolan hub has been building as new aircraft
arrive in the country with three aircraft operating scheduled services in
May and a plan for five to be operating scheduled services by the end of
July. Regular services between Cabinda, Soyo, Benguela, Lubango, and Luanda
are working efficiently and initial flights in Angola have proved very
successful with good load factors.
Operations at Fly540 Ghana (60% holding) will commence towards the end of
this year once Angola has been fully established.
Hotels
The hotels division enjoyed a good start to the year. The Hotel Cardoso
(59% holding) saw exceptional occupancy levels, which averaged over 80% for
the period. The hotel has also seen strong room rates at a 37% increase on
the same period a year ago. The Mozambique Metical has devalued 17% against
the Pound Sterling, resulting in an adverse variance to turnover of
US$439,000 in the period.
By the end of the period, occupancy at the Grand Karavia, Lubumbashi (50%
holding + management contract) has built up to 50% and growth is expected
to continue in the second half as the hotel continues to move towards its
full business plan.
During the period Lonrho Hotels signed a new lease in the Gabon capital of
Libreville. The 5-star boutique hotel is scheduled to open in the middle of
2011 and is anticipated to trade as the top five star hotel in Gabon.
Lonrho Hotels Management Services will continue to pursue further new
projects into the second half of the year and has bolstered its management
team to support the existing hotels and expected new management contracts
for further properties.
Support Services
Bytes & Pieces (65% holding) has continued to grow during the period and
continues to benefit from the economic growth in Mozambique and has won new
projects with Banco Unico, Assoiacao Nacional de Estradas, Maputo Port
Development Corporation and Bank BCI Formento.
CES Zambia (40% holding + Board control) has had an exceptional period with
growth being driven by a number of new contract wins including KPMG,
Africonnect, FHI (USAID) and World Vision.
Lonrho Water (100% holding) is developing two sizeable projects, being a
sewage pump station in Angola and series of solar powered boreholes in
South Africa. In the corporate water bottling business, volumes are growing
and new customers are being signed.
Lonrho Projects, based in Johannesburg, continues to support the other
Lonrho divisions in a range of new project initiatives.
Other Investments
LonZim Plc (24.61% holding + management contract)
LonZim has invested in and restructured its business in Zimbabwe and each
is well placed to return to market and show rapid growth as the Zimbabwean
economy recovers. The commercial market has gained some stability during
the period and the individual LonZim businesses are seeing increasing sales
on a monthly basis.
Lonrho Mining (17.04% holding)
Lonrho Mining continues to concentrate on the exploration, sampling and
development of the Lulo diamond concession in Angola. The results from the
airborne survey of the concession are very encouraging, and initial
sampling results on the chosen targets for further exploration have been
impressive. The results from the sampling program continue to build a full
geological model of the primary targets for future commercial production.
Geoffrey White
Director & Chief Executive Officer
31 May 2011
Condensed consolidated interim income statement
Unaudited Audited
Unaudited
6 months to 6 months 12 months
31 March to to
2011 31 March 30
2010 September
2010
GBP`m GBP`m GBP`m
Not
e
Revenue 61.1 47.3
5 107.8
Cost of sales (46.4) (35.3) (79.3)
GROSS PROFIT 14.7 12.0 28.5
Gain arising on fair valuation 4.9 - 9.0
of biological assets
Other operating income 1.6 0.1 3.6
Operating costs (21.5) (17.9) (45.4)
OPERATING LOSS (0.3) (5.8) (4.3)
Finance income - 5.7 8.6
Finance expense (2.8) (0.8) (5.7)
NET FINANCE (EXPENSE)/INCOME (2.8) 4.9 2.9
Share of results of associates 0.2 (0.4) 2.3
Share of results of joint - (0.2) (0.4)
ventures
(LOSS)/PROFIT BEFORE TAX (2.9) (1.5) 0.5
Income tax charge (0.4) (0.2) (0.7)
LOSS FOR THE PERIOD (3.3) (1.7) (0.2)
ATTRIBUTABLE TO:
Owners of the Company (1.2) (1.0) 0.3
Non-controlling interests (2.1) (0.7) (0.5)
LOSS FOR THE PERIOD (3.3) (1.7) (0.2)
EARNINGS PER SHARE
Basic and diluted 3 (0.10) (0.10) 0.03
(loss)/earnings per share
(pence)
Condensed consolidated interim statement of comprehensive income
Unaudited Unaudited Audited
31 March 31 March 30
2011 2010 September
2010
GBP`m GBP`m GBP`m
ASSETS
Goodwill 15.8 14.2 15.5
Other intangible assets 5.6 2.8 4.5
Property, plant and equipment 124.0 75.3 109.2
Biological assets 15.0 - 9.0
Investments in associates and 12.9 8.7 10.3
joint ventures
Other investments 0.2 0.5 0.6
Deferred tax 0.7 0.1 0.7
TOTAL NON-CURRENT ASSETS 174.2 101.6 149.8
Inventories 6.7 4.8 4.9
Trade and other receivables 45.8 43.8 33.9
Cash and cash equivalents 23.9 17.0 7.8
TOTAL CURRENT ASSETS 76.4 65.6 46.6
TOTAL ASSETS 250.6 167.2 196.4
EQUITY
Share capital 11.8 10.5 11.7
Share premium account 138.4 126.1 138.0
Revaluation reserve 3.9 4.3 3.3
Share option reserve 4.6 2.5 4.7
Translation reserve (9.2) (4.2) (8.7)
Other reserves (4.5) - (5.5)
Retained earnings (37.4) (40.2) (36.1)
TOTAL EQUITY ATTRIBUTABLE TO 107.6 99.0 107.4
EQUITY
HOLDERS OF THE COMPANY
NON-CONTROLLING INTERESTS 18.8 2.3 20.3
TOTAL EQUITY 126.4 101.3 127.7
LIABILITIES
Financial liabilities - 0.3 -
Loans and borrowings 63.0 14.3 24.6
Deferred tax 3.0 2.3 3.0
Obligations under finance leases 10.8 1.1 1.8
Trade and other payables 3.3 - 2.5
TOTAL NON-CURRENT LIABILITIES 80.1 18.0 31.9
Bank overdraft 4.7 0.9 3.9
Loans and borrowings 3.9 9.2 4.6
Obligations under finance leases 0.9 0.2 1.0
Trade and other payables 34.3 37.6 27.0
Tax liability 0.3 - 0.3
TOTAL CURRENT LIABILITIES 44.1 47.9 36.8
TOTAL LIABILITIES 124.2 65.9 68.7
TOTAL EQUITY AND LIABILITIES 250.6 167.2 196.4
Condensed consolidated interim statement of financial position
Unaudited Unaudited Audited
31 March 31 March 30
2011 2010 September
2010
GBP`m GBP`m GBP`m
Foreign exchange translation 0.8 (2.2) (8.7)
differences
Revaluation of property, plant and - 0.2 -
equipment
Total other comprehensive income and 0.8 (2.0) (8.7)
expense
Loss (3.3) (1.7) (0.2)
Total comprehensive income and (2.5) (3.7) (8.9)
expense
ATTRIBUTABLE TO:
Owners of the Company (1.1) (3.0) (7.2)
Non-controlling interests (1.4) (0.7) (1.7)
Total comprehensive income and (2.5) (3.7) (8.9)
expense
Condensed consolidated interim cash flow statement
Unaudite Unaudite Audited
d d
31 March 31 March 30
2011 2010 September
2010
GBP`m GBP`m GBP`m
CASH FLOWS FROM OPERATING ACTIVITIES
Loss (3.3) (1.7) (0.2)
Adjustments 1.8 (0.2) (3.7)
CASH FLOWS FROM OPERATING ACTIVITIES
BEFORE MOVEMENTS IN WORKING CAPITAL (1.5) (1.9) (3.9)
Change in inventories (1.5) (1.4) (0.1)
Change in trade and other receivables (12.3) (13.0) 1.0
Change in trade and other payables 2.9 1.1 (10.4)
CASH GENERATED FROM OPERATIONS (12.4) (15.2) (13.4)
Interest received - - 0.1
Interest paid (2.8) (0.8) (2.3)
Income tax paid (0.6) - (0.4)
NET CASH FROM OPERATING ACTIVITIES (15.8) (16.0) (16.0)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant - - 0.4
and equipment
Acquisition of subsidiary, net of cash (1.3) - (3.2)
acquired
Acquisition of property, plant and (13.6) (4.5) (6.8)
equipment
Acquisition of associates and joint (1.2) - (0.1)
ventures
Acquisition of investment - - (0.4)
NET CASH FROM INVESTING ACTIVITIES (16.1) (4.5) (10.1)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issue of shares 0.3 23.9 23.6
Loan advance 49.5 7.2 3.7
Repayment of borrowings (1.3) (0.5) (2.1)
Payment of finance lease liabilities (1.4) (0.1) (0.9)
Minority dividends paid - - (0.4)
NET CASH FROM FINANCING ACTIVITIES 47.1 30.5 23.9
Net increase/(decrease) in cash and 15.2 10.0 (2.2)
cash equivalents
Cash and cash equivalents at beginning 3.9 6.0 6.0
of the period
Foreign exchange movements 0.1 0.1 0.1
CASH AND CASH EQUIVALENTS AT END OF 19.2 16.1 3.9
THE PERIOD
Condensed consolidated interim statement of changes in equity
Owners Non- Total
of the controll
Company ing
interest
s
GBP`m GBP`m GBP`m
AUDITED
Balance at 1 October 2009 78.1 3.0 81.1
Profit/(loss) 0.3 (0.5) (0.2)
Foreign exchange translation (7.5) (1.2) (8.7)
differences
Total comprehensive income and expense (7.2) (1.7) (8.9)
Issue of shares 37.0 - 37.0
Issue of share options (net) 2.2 - 2.2
Purchase of non-controlling interests (5.5) (4.1) (9.6)
Subsidiaries acquired - (0.1) (0.1)
Non-controlling interests contribution - 25.5 25.5
Minority dividends - (0.4) (0.4)
Transfer from joint venture to - 0.9 0.9
subsidiary
Transfer between accounts 2.8 (2.8) -
BALANCE AT 30 SEPTEMBER 2010 107.4 20.3 127.7
UNAUDITED
Balance at 1 October 2010 107.4 20.3 127.7
Loss (1.2) (2.1) (3.3)
Foreign exchange translation 0.1 0.7 0.8
differences
Total comprehensive income and expense (1.1) (1.4) (2.5)
Issue of shares 0.3 - 0.3
Subsidiaries disposed - (0.1) (0.1)
Equity portion of convertible bond 1.0 - 1.0
BALANCE AT 31 MARCH 2011 107.6 18.8 126.4
UNAUDITED
Balance at 1 October 2009 78.1 3.0 81.1
Loss (1.0) (0.7) (1.7)
Foreign exchange translation (2.2) - (2.2)
differences
Revaluation of property, plant and 0.2 - 0.2
equipment
Total comprehensive income and expense (3.0) (0.7) (3.7)
Issue of shares 23.9 - 23.9
BALANCE AT 31 MARCH 2010 99.0 2.3 101.3
Notes
Note of preparation
1. Basis of preparation
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
IAS 34 and the recognition and measurement requirements of IFRSs as adopted
by the EU.
The financial information is unaudited and has not been reviewed by the
Company`s auditors and does not constitute the Company`s statutory accounts
within the meaning of Section 434 of the Companies Act 2006.
Statutory accounts for the year ended 30 September 2010 have been delivered
to the Registrar of Companies. The comparative figures for the financial
year ended 30 September 2010 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 498 (2) or (3) of the Companies Act 2006.
2. Significant accounting policies
The accounting policies applied by the Group in these condensed
consolidated interim financial statements are substantially the same as
those applied by the Group in its consolidated financial statements for the
year ended 30 September 2010. Whilst there have been changes to standards
which become applicable for the year ending 30 September 2011, none have
been assessed as having a significant impact on the Group.
3. Earnings per share
Basic and diluted earnings per share are arrived at by dividing the
loss/profit for the period by the average number of shares in issue during
the period.
Headline earnings per share are equal to basic earnings per share as there
are no reconciling items.
4. Capital management
Given the ongoing 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. As
referred to in the Chief Executive`s Statement, in October 2010 the Company
completed the issue of US$70 million (GBP44.3 million) Guaranteed
Convertible Bonds due 2015. On 20 May 2011, Lonrho announced a placing of
new ordinary shares in the capital of the Company at 16.5 pence per share
to raise gross proceeds of GBP19.5 million.
5. Segmental reporting
The Chief Operating Decision Maker is deemed to be the Executive Committee
which monitors the results of the business segments to assess performance
and make decisions about the allocation of revenues. Segment performance is
evaluated on both revenue and operating profit/(loss).
Segment results, assets and liabilities include items directly attributable
to a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly interest earning assets, interest-bearing
loans, borrowings and expenses, and corporate assets and expenses.
Segment capital expenditure is the total cost incurred during the period to
acquire segment assets that are expected to be used for more than one
period.
There is no inter-segment revenue.
Business segments
The Group has five continuing reportable segments which are organised
around the basis of products and services which they provide:
- Agribusiness
- Infrastructure
- Transportation
- Support services
- Hotels
The Group has not aggregated any operating segment in arriving at this
analysis.
6 months to 31 March 2011
Agri- Infra- Trans-
business structure portation
GBP`m GBP`m GBP`m
EXTERNAL REVENUE 31.6 7.4 10.1
Segment result 7.1 (0.6) (2.7)
Unallocated
expenses
OPERATING LOSS
Net finance
income
Share of results
of associates
Income tax charge
LOSS FOR THE
PERIOD
Table continues:...
Support Hotels Consolidated
services continuing
operations
GBP`m GBP`m GBP`m
EXTERNAL REVENUE 7.8 4.2 61.1
Segment result 0.3 0.0 4.1
Unallocated (4.4)
expenses
OPERATING LOSS (0.3)
Net finance (2.8)
income
Share of results 0.2
of associates
Income tax charge (0.4)
LOSS FOR THE (3.3)
PERIOD
6 months to 31 March 2010
Agri- Infra- Trans-
business structure portation
GBP`m GBP`m GBP`m
EXTERNAL REVENUE 23.9 6.4 9.8
Segment result 0.8 0.2 (2.9)
Unallocated
expenses
OPERATING LOSS
Net finance
income
Share of results
of associates
Share of result
of joint ventures
Income tax charge
LOSS FOR THE
PERIOD
Table continues:...
Support Hotels Consolidated
services continuing
operations
GBP`m GBP`m GBP`m
EXTERNAL REVENUE 4.9 2.3 47.3
Segment result 0.0 0.7 (1.2)
Unallocated (4.6)
expenses
OPERATING LOSS (5.8)
Net finance 4.9
income
Share of results (0.4)
of associates
Share of result (0.2)
of joint ventures
Income tax charge (0.2)
LOSS FOR THE (1.7)
PERIOD
12 months to 30 September 2010
Agri- Infra- Trans-
business structure portation
GBP`m GBP`m GBP`m
EXTERNAL REVENUE 55.3 14.0 21.5
Segment result 7.9 4.1 (7.6)
Unallocated
expenses
OPERATING LOSS
Net finance
income
Share of results
of associates
Share of result
of joint
ventures
Income tax
charge
LOSS FOR THE
YEAR
Table Continues:...
Support Hotels Consolidated
services continuing
operations
GBP`m GBP`m GBP`m
EXTERNAL REVENUE 11.1 5.9 107.8
Segment result 0.1 0.2 4.7
Unallocated (9.0)
expenses
OPERATING LOSS (4.3)
Net finance 2.9
income
Share of results 2.3
of associates
Share of result (0.4)
of joint
ventures
Income tax (0.7)
charge
LOSS FOR THE (0.2)
YEAR
6 months to 31 March 2011
Agri- Infra- Trans- Support
business structure portation service
s
GBP`m GBP`m GBP`m
GBP`m
Segment 58.8 83.4 33.5 12.5
operating assets
Investment in - - - -
associates
Unallocated - - - -
assets/interest
bearing assets
TOTAL ASSETS 58.8 83.4 33.5 12.5
Segment 22.2 15.2 19.3 6.8
operating
liabilities
Unallocated - - - -
liabilities/inte
rest bearing
liabilities
TOTAL 22.2 15.2 19.3 6.8
LIABILITIES
Depreciation of 0.7 1.6 0.2 0.1
segment assets
Amortisation of 0.3 - - 0.1
segment assets
Capital 1.2 0.8 13.2 0.2
expenditure
Table Continues:...
Hotels Other Consolidated
continuing
operations
GBP`m GBP`m GBP`m
Segment 25.0 - 213.2
operating assets
Investment in - 12.9 12.9
associates
Unallocated - 24.5 24.5
assets/interest
bearing assets
TOTAL ASSETS 25.0 37.4 250.6
Segment 11.0 - 74.5
operating
liabilities
Unallocated - 49.7 49.7
liabilities/inte
rest bearing
liabilities
TOTAL 11.0 49.7 124.2
LIABILITIES
Depreciation of 0.6 0.1 3.3
segment assets
Amortisation of - - 0.4
segment assets
Capital 0.3 0.1 15.8
expenditure
6 months to 31 March 2010
Agri- Infra- Trans- Support
business structu portati service
re on s
GBP`m
GBP`m GBP`m GBP`m
Segment operating 36.1 65.4 18.2 4.7
assets
Investment in - - - -
associates
Unallocated - - - -
assets/interest
bearing assets
TOTAL ASSETS 36.1 65.4 18.2 4.7
Segment operating 26.7 25.6 7.1 1.6
liabilities
Unallocated
liabilities/inter - - - -
est bearing
liabilities
TOTAL LIABILITIES 26.7 25.6 7.1 1.6
Depreciation of 1.5 1.4 0.4 0.1
segment assets
Amortisation of 0.2 - - 0.1
segment assets
Capital 0.3 3.2 0.3 -
expenditure
Table continues:...
Hotels Other Consolidated
continuing
operations
GBP`m GBP`m GBP`m
Segment operating 13.6 - 138.0
assets
Investment in 1.3 7.4 8.7
associates
Unallocated - 20.5 20.5
assets/interest
bearing assets
TOTAL ASSETS 14.9 27.9 167.2
Segment operating 1.0 - 62.0
liabilities
Unallocated
liabilities/inter - 3.9 3.9
est bearing
liabilities
TOTAL LIABILITIES 1.0 3.9 65.9
Depreciation of 0.2 - 3.6
segment assets
Amortisation of - - 0.3
segment assets
Capital 0.2 - 4.0
expenditure
12 months to 30 September 2010
Agri- Infra- Trans- Support
business structure portatio services
n
GBP`m GBP`m GBP`m
GBP`m
Segment operating 51.1 82.9 16.4 3.9
assets
Investment in - - - -
associates
Unallocated
assets/interest - - - -
bearing assets
TOTAL ASSETS 51.1 82.9 16.4 3.9
Segment operating 28.8 14.5 7.4 1.2
liabilities
Unallocated
liabilities/interest - - - -
bearing liabilities
TOTAL LIABILITIES 28.8 14.5 7.4 1.2
Depreciation of 1.5 3.0 0.6 0.1
segment assets
Amortisation of 0.5 - 0.1 0.2
segment assets
Capital expenditure 2.9 3.7 0.8 -
Table continues:...
Hotels Other Consolidated
continuing
operations
GBP`m GBP`m GBP`m
Segment operating 23.3 - 177.6
assets
Investment in - 10.3 10.3
associates
Unallocated
assets/interest - 8.5 8.5
bearing assets
TOTAL ASSETS 23.3 18.8 196.4
Segment operating 9.9 - 61.8
liabilities
Unallocated
liabilities/interes - 6.9 6.9
t bearing
liabilities
TOTAL LIABILITIES 9.9 6.9 68.7
Depreciation of 0.6 0.1 5.9
segment assets
Amortisation of - - 0.8
segment assets
Capital expenditure 1.4 0.3 9.1
6. Acquisition of subsidiaries
AFEX
On 1 January 2011, the Group acquired 100% of the issued share capital of
AFEX Group of companies for an initial consideration of US$3 million
(GBP1.9 million). Further payments of up to US$5 million (GBP3.1 million)
will be payable over two years based on an EBIT related earn-out formula.
AFEX`s main focus of current operations is in supplying secure
accommodation in Juba in the Southern Sudan. This infrastructure is in
great demand from corporate clients, NGO`s, and Government Aid Agencies
working in Southern Sudan.
The transaction has been accounted for by the purchase method of
accounting. The fair value of the net assets at 1 January 2011 is set out
below:
Pre- Fair Values
acquisition valuation recognised
carrying adjustment on
value on acquisition
acquisition GBP`m
GBP`m GBP`m
Property, plant and equipment 2.9 0.7 3.6
Inventory 0.1 - 0.1
Trade and other receivables 1.6 - 1.6
Cash and cash equivalents 0.6 - 0.6
Trade and other payables (3.3) - (3.3)
Intangible related to customer - 1.5 1.5
relationships
NET IDENTIFIABLE ASSETS AND 1.9 2.2 4.1
LIABILITIES
Consideration paid 1.9
Contingent consideration 2.5
GOODWILL ON ACQUISITION 0.3
The transaction costs incurred to acquire the company were GBP0.1 million
and have been expensed in the income statement.
The goodwill arising on the acquisition of AFEX is attributable to the
anticipated profitability of the distribution of the company`s services to
new customers.
AFEX contributed GBP1.8 million to revenue and GBP0.2 million profit to the
Group`s profit before tax for the period between the date of acquisition
and the reporting date.
7. Interest bearing loans and borrowings
This note provides information about the contractual terms of the Group`s
interest-bearing loans and borrowings.
6 months 6 months to 12 months to
to 31 March 30 September
31 March 2010 2010
2011 GBP`m GBP`m
GBP`m
NON CURRENT LIABILITIES
Finance lease liabilities 10.8 1.1 1.8
Unsecured bank loan 17.4 11.8 20.3
Convertible bonds (note 7a) 42.6 - -
Shareholder loans 3.0 2.5 2.5
Other loan - - 1.8
73.8 15.4 26.4
CURRENT LIABILITIES
Unsecured bank loans 3.9 9.2 2.8
Current portion of finance lease 0.9 0.2 1.0
liabilities
Other loan - - 1.8
Bank overdraft 4.7 0.9 3.9
9.5 10.3 9.5
7a. In October 2010, Lonrho Plc successfully completed the offering of
US$60m (GBP38.0m) Guaranteed Convertible Bonds due 2015 ("Bonds") via a
wholly owned subsidiary company LAH (Jersey) Limited. Lonrho has then
further placed US$10m (GBP6.3m) of additional Bonds, which were fully
subscribed. The net proceeds of the offering will be used to allow the
Company and its subsidiaries to repay certain existing indebtedness, to
fund general working capital and to accelerate growth in its operations. A
copy of the Offering Circular in relation to the Bonds is available on the
Company`s website: www.lonrho.com. On initial recognition GBP1.0 million of
the total liability under the convertible bonds has been transferred to
other reserves, representing the equity portion of the bonds at the date of
initial recognition.
8. Net finance income
6 months 6 months to 12 months to
to 31 March 30 September
31 March 2010 2010
2011 GBP`m GBP`m
GBP`m
Bank interest receivable - - 0.1
Foreign exchange gain - 5.7 8.5
FINANCE INCOME - 5.7 8.6
Loans repayable within five years (2.7) (0.8) (2.1)
and overdrafts
Foreign exchange loss - - (3.4)
Finance leases (0.1) - (0.2)
FINANCE EXPENSE (2.8) (0.8) (5.7)
NET FINANCE INCOME (2.8) 4.9 2.9
9. Note to the cash flow statement
6 months 6 months 12 months to
to to 30 September
31 March 31 March 2010
2011 2010 GBP`m
GBP`m GBP`m
Depreciation of property, plant and 3.3 3.6 5.9
equipment
Amortisation of intangible assets 0.4 0.3 0.8
Impairment of investment - - 0.4
Share based payment expense - - 2.3
Finance income 2.8 (4.9) (2.9)
Share of profit of associates and (0.2) 0.6 (1.9)
joint ventures
Gain arising on fair valuation of (4.9) - (9.0)
biological assets
Income tax expense 0.4 0.2 0.7
ADJUSTMENTS TO LOSS FOR THE PERIOD 1.8 (0.2) (3.7)
10. Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in
this note.
Full details of the Group`s other related party transactions and balances
are given in the Group`s financial statement for the year ended 30
September 2010. The only material change in these relationships in the half
year to 31 March 2011 is Lonrho`s participation in a placing of shares by
LonZim Plc, in which Lonrho participated to maintain its percentage
shareholding of 24.61% by subscribing for 4,384,011 new LonZim shares at a
cost of GBP1,227,523.
11. Post balance sheet events
On 26 April 2011, Lonrho successfully transferred the listing of its
ordinary share capital from AIM to the premium listing segment of the
Official List of the UK Listing Authority and to trading on the London
Stock Exchange plc`s main market for listed securities under the ticker
"LONR". Trading in the Company`s shares on AIM was cancelled simultaneously
with Admission.
Also on 26 April 2011, Lonrho also announced the appointment of the Rt.
Hon. Sir Richard Needham as an Independent Non-Executive Director of the
Company. Sir Richard had a distinguished career in Parliament culminating
in his time as Britain`s longest serving Minister in Northern Ireland from
1985 - 1992 and as Minister of Trade from 1992 - 1995.
On 10 May 2011, Lonrho announced that the Johannesburg Stock Exchange had
formally approved the transfer of the secondary listing of the Company from
the Venture Capital Market to the AltX of the JSE with effect from the
commencement of business on 17 May 2011.
On 20 May 2011, Lonrho announced a placing of new ordinary shares in the
capital of the Company at 16.5 pence per share to raise gross proceeds of
GBP19.5 million. The placing was limited to 118,000,000 new shares in the
capital of Lonrho and represented approximately 9.99% of the issued share
capital of Lonrho. On 25 May 2011 Lonrho announced that 118,000,000 shares
had been placed. The shares were admitted to trading on 26 May 2011.
12. Cautionary statements
The interim results announcement contains forward looking statements. These
have been made by the Directors in good faith based on the information
available to them up to the time of their approval of this report. The
Directors can give no assurance that these expectations will prove to have
been correct. Due to the inherent uncertainties, including both economic
and business risk factors underlying such forward looking information,
actual results may differ materially from those expressed or implied by
these forward looking statements. The Directors undertake no obligation to
update any forward looking statements whether as a result of new
information, future events or otherwise.
There are a number of potential risks and uncertainties which could have a
material impact on the Group`s performance over the remainder of the
financial year and could cause actual results to differ materially from
expected and historical results. These include but are not limited to,
competitor activity and competition risk, changes in foreign exchange and
commodity prices and the political and economic risks of operating in
Africa. Details of the key risks facing the Group`s businesses at an
operational level are included on pages 11 to 24 of the Group`s listing
prospectus which is available on the Group`s website (www.lonrho.com).
Details of further potential risks and uncertainties arising since the
issue of that document are included within the operating review as
appropriate.
13. Responsibility statement
The interim results announcement complies with the Disclosure and
Transparency Rules ("the DTR") of the Financial Services Authority in
respect of the requirement to produce a half yearly financial report.
The Directors confirm that to the best of their knowledge:
- this financial information has been prepared in accordance with IAS 34
as adopted by the EU;
- this interim results announcement includes a fair review of the
important events during the first half and their impact on the
financial information, and a description of the principle risks and
uncertainties for the remaining half of the year as required by DTR
4.2.7R; and
- this interim results announcement includes a fair review of the
disclosure of related party transactions and changes therein as
required by DTR 4.2.8R.
Geoffrey White
Director & Chief Executive Officer
31 May 2011
On behalf of the Board
Corporate information
Directors
David Lenigas Chairman
Geoffrey White Director & Chief Executive
Officer
David Armstrong Finance Director
Emma Priestley Executive Director
Ambassador Frances Cook Senior Independent Director
The Rt, Hon. Sir Richard Needham Non-Executive Director
Jean Ellis Non-Executive Director
Kiran Morzaria Non-Executive Director
Secretary and Registered Office Registrars
J H Hughes Equiniti
Level 2 Aspect House
25 Berkeley Square Spencer Road
London Lancing
W1J 6HB West Sussex
Tel: +44 (0) 20 7016 5105 BN99 6DA
Fax: +44 (0) 20 7016 5109 Tel: 0800 169 2608 (if calling from UK)
e-mail: hughes@lonrho.com Tel: +44 121 415 7047 (if calling from
Registered in England overseas)
Number 2805337 Textel: 0871 384 2255 (for the hard of
hearing)
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 Secretaries
KPMG Audit Plc Computershare Investor Services (Pty)
15 Canada Square Ltd
Canary Wharf PO Box 61051
London Marshalltown 2107
E14 5GL South Africa
Tel: +27 (0) 11 370 5000
Fax: +27 (0) 11 370 5271/2
PR Advisors Stockbrokers
Pelham Bell Pottinger Panmure Gordon (UK) Ltd
5th Floor WH Ireland Ltd
Holborn Gate Java Capital (Pty) Ltd
330 High Holborn
London
WC1V 7QD Principal Group Bankers
Tel: +44 (0) 20 7861 3232 Barclays Bank Plc
Fax: +44 (0) 20 7861 3233 Lord Street
Liverpool
South African Sponsor
Java Capital Trustees & Sponsor
(Pty) Limited
2 Arnold Road
Rosebank
2196 South Africa
31 May 2011
Date: 31/05/2011 17:10:01 Produced by the JSE SENS Department.
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