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LNF
LOJM
LNF - London Finance & Investment Group P.l.c. - Preliminary
announcement of unaudited results for the year ended 30 June 2011
LONDON FINANCE & INVESTMENT GROUP P.L.C.
("Lonfin", "the Company" or "the Group")
(Incorporated in England - Registration No. 201151 (UK))
JSE Code: LNF ISIN: GB0002994001
("Lonfin")
PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS FOR THE YEAR ENDED 30 JUNE
2011
London Finance & Investment Group P.L.C. (LSE: LFI, JSE: LNF), the
investment company whose assets primarily consist of three Strategic
Investments and a General Portfolio, today announces its Preliminary
Results for the year ended 30 June 2011.
CHAIRMAN`S STATEMENT
Lonfin is an investment company whose assets primarily consist of three
Strategic Investments and a General Portfolio. Strategic Investments
are significant investments in smaller U.K. quoted companies and these
are balanced by a General Portfolio, which consists mainly of
investments in major U.K. and European equities.
At 30 June 2011, the three Strategic Investments, in which we have
directors in common, were our associated company Western Selection
P.L.C. and MWB Group Holdings Plc and Finsbury Food Group plc. Detailed
comments on our Strategic Investments are given below.
Our objective is to achieve capital growth in real terms over the medium
term, while maintaining a progressive dividend policy.
- Net assets including our investment property at its latest valuation
net of tax have increased by 29% from 27.1p per share to 35.0p per share
- The General Portfolio is yielding 3.1 % (2010 - 2.9%) up 7%
- Borrowings are 17% (2010 - 23%) of the value of liquid stock market
investments
- Operating costs have been reduced.
Results
Our net assets per share as recorded in the statement of financial
position have increased 26% to 29p from 23p last year, reflecting the
recovery in the associated company and Strategic Investments values.
These increased in value by 29% and 24% respectively, after taking into
account additions and disposals of investments. The General Portfolio
increased by 23% outperforming the markets. These movements compare
with the increases in the FTSE 100 index of 21% and 13% in the FTSE
Eurofirst 300 index over the year. In addition our investment property
has been revalued from GBP1,575,000 to GBP2,150,000 (from GBP1,575,000
to GBP2,093,000 net of tax), but accounting standards do not permit us
to include these values in the statement of financial position.
The Group achieved a profit before tax for the year of GBP2,145,000
(2010 - GBP705,000). The profit after tax and non-controlling interest
was GBP2,118,000 (2010 - GBP693,000) giving a profit per share of 6.8p
(2010 -2.2p).
Strategic Investments
Western Selection P.L.C. ("Western")
The Group owns 7,864,412 shares, being 43.8% of the issued share capital
of Western.
On 6 September 2011, Western announced a profit before associates and
tax of GBP136,000 for its year to 30 June 2011 (2010 - GBP128,000).
Including associates and after exceptional items and tax, profits per
share were 2.6p (2010 - 1.4p).
Western has paid an interim dividend of 0.65p and proposes an increased
final dividend of 0.85p (2010 - 0.65p). Western`s net assets at market
value were GBP15,022,000, equivalent to 84p per share, an increase of
38% from 61p last year.
Our share of the net assets of Western including the value of Western`s
investments at market value, was GBP6.6 million (2010 - GBP4.8 million).
The fair value recorded in the statement of financial position is the
market value of GBP3,458,000 (2010 - GBP2,672,000). This represents 37%
of the net assets of the Group.
Mr. D. C. Marshall is the Chairman of Western and Mr. Robotham and Mr.
Beale, the chief executive of our subsidiary company (City Group
P.L.C.), are non-executive directors. Western has strategic investments
in Creston plc, Northbridge Industrial Services plc, Swallowfield plc
and Hartim Limited. An extract from Western`s announcement of its
strategic investments is set out below:
Creston plc
Creston is a marketing services group whose strategy is to grow within
its sector both by organic growth and through selective acquisition to
become a substantial, diversified marketing services group. The audited
results for the year to 31st March 2011, show a profit after tax of
GBP10,400,000 (2010 - GBP5,133,000), equivalent to fully diluted
earnings of 12.39p per share (2010 - 8.74p). Western maintained it`s
holding of 3,000,000 shares in Creston (4.9%) with a value at 30th June
2011 of GBP3,390,000 (2010 - GBP2,752,000) being 23% (2010 - 25%) of
Western`s assets.
Northbridge Industrial Services PLC
Northbridge was formed for the purpose of acquiring companies that hire
and sell specialist industrial equipment supplying a non-cyclical
customer base including utility companies, the public sector and the oil
and gas industries. In particular it will seek to acquire specialist
businesses that have the potential for expansion into complete
outsourcing providers. Sales are made to the U.K., U.S.A., Brazil,
Singapore, Germany, UAE and Korea; Northbridge also has subsidiaries
operating in Perth, Dubai and Azerbaijan.
Swallowfield plc
Swallowfield is involved in the development, formulation, manufacture
and supply of cosmetics, toiletries and related household products for
global brands and retailers operating in the cosmetics, personal care
and household goods market. Swallowfield announced its interim results
to January 2011 showing a profit after tax of GBP519,000 compared to
GBP533,000 for the comparable period last year. Dividends of GBP116,000
(2010 - GBP87,000) were received from Swallowfield during the year.
Investments in Associates
Hartim Limited
Hartim is the unquoted holding company for Tudor Rose International
Limited ("TRI") which was founded in 1984. It works closely with a
number of leading UK branded fast moving consumer goods companies,
offering a complete sales, marketing and logistical service. Based in
Stroud, Gloucestershire, TRI sells into 78 countries worldwide including
USA, Spain, Portugal, Italy, Czech Republic, Russia, Turkey, South
Africa, Saudi Arabia, UAE, Malaysia, Australia and China. Hartim has
recently acquired a distribution business in Australia to improve the
service that it can offer to principals
MWB Group Holdings Plc ("MWB")
The Group holding in MWB was unchanged from the 2 million shares held at
June 2011, representing 1.22% of MWB`s issued share capital. The market
value at 30th June 2011 was GBP775,000 (2010 - GBP795,000), compared
with the book value of GBP1,681,000, and represents 8% (2010 - 11%) of
the net assets of the Group.
MWB is in the process of maturing and realising its assets for the
benefit of all stakeholders through an orderly disposal programme.
Mr. D.C. Marshall is a non-executive director of MWB.
Finsbury Food Group plc ("Finsbury")
The Group holding in Finsbury remains at 8 million shares, representing
15.18% of their share capital. The market value of the holding was
GBP1,700,000 on 30th June 2011 (cost - GBP1,893,000) and represents 18%
of the net assets of the Group.
Finsbury is one of the largest producers and suppliers of premium cakes,
bread and morning goods in the UK. The Group currently supplies most of
the UK`s major supermarket chains, including Asda, Co-op, Morrisons,
Sainsbury, Somerfield, Tesco and Waitrose.
Mr. D.C. Marshall and Mr. Beale, the Chief Executive of our subsidiary
company City Group P.L.C., are non-executive directors of Finsbury.
General Portfolio
The investments comprising the General Portfolio at 30th June 2011 are
listed on page 10. The General Portfolio is well spread with material
interests in Food and Beverages, Oil, Natural Resources, Chemicals, and
Tobacco. We believe that the portfolio of quality companies we hold has
the potential to outperform the market in the medium to long term,
especially in respect of our Western European holdings.
The number of holdings in the General Portfolio has decreased to 23 from
25. We have decreased the amount invested in the General Portfolio by
GBP464,000 (2010: decreased by GBP669,000) over the year.
We have a GBP2 million bank facility, and at 30 June 2011 had net
borrowings of GBP1.8 million. This leaves GBP200,000 available for
further investment when the Board feels appropriate. The increase in
value of our investments over the period has decreased borrowings as a
percentage of the market value of all stock market investments from 23%
to 17 %.
Operations & Employees
All of our operations and those of our associate, Western, except
investment selection, are outsourced to our subsidiary, City Group
P.L.C. City Group also provides office accommodation, company
secretarial and head office finance services to a number of other U.K.,
Jersey and Luxembourg clients. City Group has responsibility for the
initial identification and appraisal of potential new strategic
investments for the Group and the day to day monitoring of existing
strategic investments.
Dividend
The Company will be recommending a final dividend for the year ended 30
June 2011 and further details will be announced shortly.
Outlook
The outlook for stock markets remains very uncertain. We will continue
to adopt a cautious stance, with our general portfolio invested in the
best European companies.
By Order of the Board
CITY GROUP P.L.C.
Secretaries
29 September 2011
Unaudited Consolidated Comprehensive Income Statement
For the year ended 30 June 2011 2010
GBP000 GBP000
Dividends - Listed investments 251 174
Interest receivable - 1
Rental and other income 94 86
Profits realised on sales of investments 266 119
Management services fees 398 405
------ ------
Operating income 1,009 785
Administration expenses (749) (757)
------ ------
Operating profit 260 28
Unrealised changes in the carrying value of 1,995 791
investments
Interest payable (110) (114)
------ ------
Profit on ordinary activities before taxation 2,145 705
Tax on result of ordinary activities (19) (18)
------ ------
Profit on ordinary activities after taxation 2,126 687
Non-controlling interest (8) 6
------ ------
Profit for the financial year attributable to 2,118 693
members of the holding company
Other comprehensive income - -
------ -----
Total comprehensive income attributable to 2,118 693
shareholders
====== ======
Reconciliation of headline earnings
Basic profit per share 6.8 p 2.2 p
Adjustment for the unrealised changes in the (6.4)p (2.5)p
carrying value of investments, net of tax
------ ------
Headline profit/(loss) per share 0.4 p (0.3)p
====== ======
All profits and losses are on continuing activities.
Unaudited Consolidated Statement of Changes in Shareholders` Equity
Ordinary Share Unrealised
Share premium Revaluation profits/(l
osses)
Capital account Reserve on
investment
s
GBP000 GBP000 GBP000 GBP000
Year ended 30
June 2010
Balances at 1,560 2,318 330 (4,538)
1st July 2009
Total - - - 791
comprehensive
income
------- ------- ------- -------
Interim - - - -
dividend paid
------- ------- ------- -------
Total - - - -
transactions
with
shareholders
------- ------- ------- -------
Balances at 1,560 2,318 330 (3,747)
30th June 2010
------- ------- ------- -------
Year ended 30
June 2011
Balances at 1,560 2,318 330 (3,747)
1st July 2010
------- ------- ------- -------
Total - - - 1,997
comprehensive
income
------- ------- ------- -------
Shares issued - 2 - -
Dividends paid - - - -
------- ------- ------- -------
Total - 2 - -
transactions
with
shareholders
------- ------- ------- -------
Balances at 1,560 2,320 330 (1,750)
30th June 2011
------- ------- ------- -------
Share of
undistribute Retained
d
results of realised Non-
Subsidiaries profits & Controlling Total
and losses Total interests equity
associates
GBP000 GBP000 GBP000 GBP000 GBP000
Year ended 30
June 2010
Balances at 747 6,239 6,656 90 6,746
1st July 2009
Total 44 (142) 693 (6) 687
comprehensive
income
------- ------- ---- ------- -----
Interim - (93) (93) - (93)
dividend paid
-------- ------- ---- ------- -----
Total - (93) (93) - (93)
transactions
with
shareholders
------- ------- ---- ------- -----
Balances at 791 6,004 7,256 84 7,340
30th June
2010
------- ------- ---- ------- -----
Year ended 30
June 2011
Balances at 791 6,004 7,256 84 7,340
1st July 2010
------- ------- ---- ------- -----
Total 113 8 2,118 8 2,126
comprehensive
income
------- ------- ---- ------- -----
Shares issued - - 2 - 2
Dividends - (187) (187) - (187)
paid
------- ------- ---- ------- -----
Total - (187) (185) (185)
transactions
with
shareholders
------- ------- ---- ------- -----
Balances at 904 5,825 9,189 92 9,281
30th June
2011
------- ------- ---- ------- -----
Unaudited Consolidated Statement of Financial Position
At 30 June 2011 2010
GBP000 GBP000
Non-current Assets
Tangible assets 367 377
Investments 5,933 4,667
------ ------
- -
6,300 5,044
------ ------
- -
Current Assets
Listed investments 4,668 4,225
Trade and other receivables 260 294
Bank balance and deposits 21 17
------ ------
- -
4,949 4,536
Current Liabilities
Trade and other payables: falling due within one (1,968 (2,240
year ) )
------ ------
- -
Net Current Assets 2,981 2,296
------ ------
- -
Total Assets less Current Liabilities 9,281 7,340
===== =====
Capital and Reserves
Called up share capital 1,560 1,560
Share premium account 2,320 2,318
Revaluation reserve 330 330
Unrealised profits and losses on investments (1,750 (3,747
) )
Share of retained realised profits and losses of 904 791
subsidiaries and associates
Company`s retained realised profits and losses 5,825 6,004
------ ------
- -
9,189 7,256
Non-controlling equity interests 92 84
------ ------
- -
9,281 7,340
====== ======
Unaudited Company Statement of Financial Position
at 30 June 2011 2010
GBP00 GBP00
0 0
Non-current Assets
Tangible assets 367 377
Investments in Group companies 7,726 7,832
----- -----
-- --
8,093 8,209
----- -----
-- --
Current Assets
Listed investments 4,668 4,225
Trade and other receivables 38 58
Bank balance - -
----- -----
-- --
4,706 4,283
Current Liabilities
Trade and other payables: falling due within (1,91 (2,15
one year 5) 9)
----- -----
-- --
Net Current Assets 2,791 2,124
----- -----
-- --
Total Assets less Current Liabilities 10,88 10,33
4 3
Deferred taxation - -
----- -----
-- --
10,88 10,33
4 3
===== =====
= =
Capital and Reserves
Called up share capital 1,560 1,560
Share premium account 2,320 2,318
Revaluation reserve 330 330
Unrealised profits and losses on investments 849 121
Realised profits and losses 5,825 6,004
----- -----
-- --
Equity shareholders` funds 10,88 10,33
4 3
===== =====
= =
Consolidated Statement of Cash Flow
For the year ended 30 June 2011 2010
GBP000 GBP000
Cash flows from operating activities
Profit before tax 2,145 705
Adjustments for non-cash and non-operating ------ ------
activities - - -
Finance expense 110 114
Depreciation charges 10 13
Unrealised changes in the fair value of (1,995 (791)
investments )
------ ------
- -
(1,875 (664)
)
------ ------
- -
Taxes paid (19) (18)
------ ------
- -
Changes in working capital
Decrease in trade and other receivables 34 15
(Decrease) in trade and other payables (6) (122)
Decrease in current asset investments 285 669
------ ------
- -
313 562
------ ------
- -
Net cash inflow from operating activities 564 585
Cash flows from financing
Shares issued 2 -
Interest paid (110) (114)
Equity dividends paid (187) (93)
Net repayment of loan facilities (265) (475)
------ ------
- -
Net cash outflow from financing (560) (682)
------ ------
- -
Increase/(Decrease) in cash and cash 4 (97)
equivalents
Cash and cash equivalents at the beginning of 17 114
the year
------ ------
- -
Cash and cash equivalents at end of the year 21 17
====== ======
Notes
1. Earnings per share are based on the profit on ordinary activities
after taxation and non controlling interests and on 31,205,694 shares
(2010 - 31,201,466) being the weighted average of the number of shares
in issue during the year.
2. The net assets attributable to shareholders, taking investments at
market value, are before providing for any tax that may arise on
realisation.
3. The financial information in this preliminary announcement of
unaudited group results does not constitute the company`s statutory
accounts for the years ended 30 June 2011 or 30 June 2010 but is derived
from those accounts. The accounts have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the
European Union and with those parts of the Companies Act 2006 applicable
to companies reporting under IFRS. The accounts are prepared on the
historical cost basis, except for certain assets and liabilities which
are measured at fair value, in accordance with IFRS and comply with IAS
34. The audited accounts of the group for the year ended 30th June 2010
were reported on with an unqualified audit report and have been
delivered to the Registrar of Companies.
Enquiries to:
London Finance & Investment Group
020 7448 8950 David Marshall / Edward Beale
London
29 September 2011
Sponsor: Sasfin Capital (a division of Sasfin Bank Limited)
Date: 29/09/2011 11:37:25 Produced by the JSE SENS Department.
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