| Fri 23 Aug 2002, 0:00 | | London Finance & Investment Group P.l.c. - Prelimi |
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LONDON FINANCE & INVESTMENT GROUP P.L.C. - PRELIMINARY ANNOUNCEMENT OF UNAUDITED
RESULTS FOR THE YEAR ENDED 30TH JUNE 2002
LONDON FINANCE & INVESTMENT GROUP P.L.C.
Share Code: LNF ISIN: GB0002994001
Registered in United Kingdom No: 201151
(`the Group" or "the Company")
Preliminary announcement of unaudited results for the year ended 30th June 2002
Introduction
As an investment company our short-term results are very heavily influenced by
overall stock market performance. The results for the year are disappointing
but we continue to believe that a combination of Strategic Investments and a
General Portfolio will enable us to achieve real growth in shareholder value
over the longer term. Strategic Investments are significant investments in
smaller UK quoted companies and these are balanced by a General Portfolio which
mainly consists of investments in major U.K. and European equities.
At 30th June 2002, we held three Strategic Investments in which we have board
representation: our associated company Western Selection P.L.C., Marylebone
Warwick Balfour Group Plc and Megalomedia plc.
Results
The Group made a profit before tax for the year of GBP60,000 [R942,900]compared
with GBP1,060,000 [R12,017,432] last year. These figures include our share of
Western Selection P.L.C.`s exceptional profits of GBP219,000 [R3,441,585] this
year and GBP805,000 [R9,126,446] last year. Our operating profits have declined
by GBP329,000 [R5,170,235] to GBP27,000 [R424,305] as a result of lower dividend
income and provisions required to mark down General Portfolio investments from
cost to market value. Our profit after tax and minority interest was GBP44,000
[R691,460] (2001: GBP1,045,000 [R11,847,374]) giving earnings per share of 0.2p
[3.143c] (2001: 4.1p [46.5c]).
As explained further below, our dividend income from Strategic Investments has
fallen substantially and we do not anticipate that it will increase in the short
term, nor do we expect a significant increase in dividend income from our
General Portfolio investments. We have, therefore, decided to recommend to
shareholders a reduced dividend for the year of 0.8p [12.6c] per share (2001:
1.2p [13.6c]) so as to match anticipated net cash inflows more closely with
payments to shareholders.
Our net assets per share have fallen 31% to 37.2p [R5.84] at 30th June 2002 from
54.3p [R6.16] last year. Our Strategic Investments have fallen in value by 36%
and our General Portfolio by 23%. This compares with falls in the FTSE 100
index of 17.5% and in the FTSE Eurotop 100 index of 24.8% over the year.
Strategic Investments
Western Selection P.L.C. ("Western")
The Company owns 40.48% of the issued share capital of Western.
On 30th July 2002, Western announced a profit after tax and exceptional items of
GBP277,000 [R4,353,055] for its year to 30th June 2002, a fall in earnings per
share to 0.6p [9.4c] from 4.6p [52.2c], and a 8.7% increase in dividend to 0.50p
[7.9c] (2001 - 0.46p [5.22c]). Western`s net assets at market value were
GBP9,628,000 [R151,304,020], equivalent to 22.1p [R3.47] per share, a fall of
27% from 30.2p [R3.42] last year, mainly due to falls in the share price of
Creston plc and The Sanctuary Group plc. Extracts from Western`s announcement
on its strategic investments is set out below.
Creston plc
Creston`s objective is to build the company both organically and through
acquisition to become a substantial marketing services group, operating in the
U.K. and Europe.
The results for the year to 31st March 2002 show a profit of GBP138,000
[R2,168,670]. The directors of Creston believe the outlook remains positive and
are looking to make further acquisitions during the coming year.
The Sanctuary Group plc
Sanctuary is a diversified international media group specialising in the
ownership and commercial exploitation of Intellectual Property Rights (IPR)
within the field of entertainment.
Sanctuary`s last published results were for six months to 31st March 2002 and
showed a profit of GBP2,912,000 [R45,762,080] (31st March 2001 - GBP2,324,000
[R26,347,653]).
Swallowfield plc
Swallowfield has a long history of developing and producing aerosol, cosmetic
and toiletry products stretching back to 1950. It is one of Europe`s premier
contact manufacturers to many leading brands.
Swallowfield has changed its year end from 31st December to 30th June and its
latest published results are for the interim 12 month period to 31st December
2001 which showed a profit of GBP1,839,000 [R28,899,885] (2000 - GBP1,823,000
[R20,667,716]).
Doctors Direct plc
Doctors Direct recently announced that it was seeking to raise GBP1,000,000
[R15,715,000] and apply for its shares to be traded on OFEX. We have committed
to invest GBP350,000 [R5,500,250] in this fund raising. Further details of
Western`s involvement in Doctors Direct are included in their Prospectus.
Marylebone Warwick Balfour Group Plc ("MWB")
On 27th March 2002, MWB announced its interim results for the six months ended
31st December 2001 disclosing losses of GBP12.5 million [R196.4 million] before
exceptional, principally non-cash. write-downs of GBP92 million [R1,446
million].
As a result of the worsening business environment MWB concluded that the best
way forward was to mature and realise the full value of its assets and
businesses through an orderly disposal programme. Realisations have commenced
and MWB recently announced the profitable sales of properties in London and
Teesside. MWB intends to implement a cash distribution programme, which should
be completed by December 2005 and the company is targeting gross cash returns in
excess of 200p [R31.4] per share. In view of the changed business plan the
company will not be paying regular dividends but proposes to return capital to
shareholders in a tax efficient manner.
Megalomedia plc ("Megalomedia")
Subsequent to our year end, on 22nd July 2002, the company announced that it had
entered into conditional agreements to acquire the issued share capital of
Memory Lane Cakes Limited, a supplier of boxed ambient temperature cakes to most
of the UK`s major supermarket chains, for GBP9.5 million [R149.3 million] to be
satisfied by payments of GBP8.5 million [R133.6 million] in cash and the issue
of 3,333,333 new ordinary shares.
This acquisition has been approved by Megalomedia`s shareholders and, subject to
the fulfilment of certain requirements, it is expected that completion will take
place by 30th August 2002. Following completion, the company will be known as
Finsbury Food Group plc and will be repositioned as a speciality foods business
focused on niche markets. Its directors believe that opportunities exist to
acquire and develop profitable niche businesses.
Merrydown plc ("Merrydown")
We have re-classified Merrydown as a General Portfolio Investment. Subsequent
to the year-end, because we have not been able to reconcile management`s`
objectives for the company with our view of its future development, we sold all
of our investment in Merrydown for GBP663,000 [R10,419,045], realising a profit
of GBP124,000 [R1,948,660].
General Portfolio
The General Portfolio is dominated by four sectors: banking and insurance; food,
beverages and consumer goods; pharmaceuticals and healthcare, and oil, natural
resources and utilities. These four sectors accounted for 86% of the portfolio
by value at 30th June 2002. We believe that the companies in these sectors in
which we have invested have the potential to outperform the market in the medium
to long term.
The year ahead
Our long standing strategy is to achieve increasing value for shareholders from
a number of Strategic Investments whose quoted value may well be volatile, and a
General Portfolio of leading shares in companies which operate on a global
basis.
The outlook for both the short and medium term is uncertain and, with our low
gearing, we have positioned ourselves to take advantage of any investment
opportunities that may arise.
D.C. MARSHALL
19th August 2002 Chairman
Unaudited Consolidated Profit and Loss Account
2001 2002 For the year ended 30th June 2002 2001
R000 R000 Notes GBP000 GBP000
Operating Income
7,029 4,337 Investment operations 276 620
4,818 7,779 Management services 495 425
Administrative expenses
(3,095) (4,133) Investment operations (263) (273)
(4,716) (7,559) Management services (481) (416)
4,036 424 Operating profit 27 356
181 (1,540) Share of result of associated
undertaking - Normal (98) 16
9,126 3,442 - Exceptional 1 219 805
(1,326) (1,383) Interest payable (88) (117)
12,017 943 Profit on ordinary
activities before taxation 60 1,060
(136) (141) Tax on result of ordinary
activities (9) (12)
11,881 802 Profit on ordinary activities
after taxation 51 1,048
(34) (110) Minority interest (7) (3)
11,847 692 Profit attributable to
members of the holding company 44 1,045
(3,480) (3,222) Proposed dividend 2 (205) (307)
8,367 (2,530) Retained (loss)/profit for the
financial year (161) 738
46.37c 2.67c Earnings per share 3 0.17p 4.09p
10.66c (10.69)c Headline (Loss)/earnings
per share 3 (0.68)p 0.94p
44.56c 2.67c Fully diluted earnings
per share 3 0.17p 3.93p
Unaudited Balance
Sheets
at 30th June Company Group
2001 2002 2001 2002
R000 R000 R000 R000
Fixed Assets
Tangible assets 5,295 7,182 5,589 7,402
Investments in Group 69,769 96,286 - -
companies
Investments - - 86,242 121,650
75,064 103,468 91,831 129,052
Current Assets
Listed investments 39,034 43,106 39,034 43,106
Unlisted investments 487 676 487 676
Debtors 499 707 1,780 2,939
Bank balance and 193 314 363 408
deposits
40,213 44,803 41,664 47,129
Current Liabilities
Creditors: falling due (22,357) (24,374) (22,787) (24,877)
within one year
Net Current Assets 17,856 20,429 18,877 22,252
Total Assets less 92,920 123,897 110,708 151,304
Current Liabilities
Capital and Reserves
Called up share 14,478 20,131 14,478 20,131
capital
Share premium account 10,906 15,322 10,906 15,322
Reserves 5,442 7,543 4,093 5,673
Profit and loss 62,094 80,901 80,596 109,188
account
Equity shareholders` 92,920 123,897 110,073 150,314
funds
Minority equity - - 635 990
interests
92,920 123,897 110,708 151,304
Unaudited Balance Group Company
Sheets
Company
2002 2001 2002 2001
GBP000 GBP000 GBP000 GBP000
Fixed Assets
Tangible assets 471 493 457 467
Investments in Group - - 6,127 6,154
companies
Investments 7,741 7,607 - -
8,212 8,100 6,584 6,621
Current Assets
Listed investments 2,743 3,443 2,743 3,443
Unlisted investments 43 43 43 43
Debtors 187 157 45 44
Bank balance and 26 32 20 17
deposits
2,999 3,675 2,851 3,547
Current Liabilities
Creditors: falling due (1,583) (2,010) (1,551) (1,972)
within one year
Net Current Assets 1,416 1,665 1,300 1,575
Total Assets less 9,628 9,765 7,884 8,196
Current Liabilities
Capital and Reserves
Called up share capital 1,281 1,277 1,281 1,277
Share premium account 975 962 975 962
Reserves 361 361 480 480
Profit and loss account 6,948 7,109 5,148 5,477
Equity shareholders` 9,565 9,709 7,884 8,196
funds
Minority equity 63 56 - -
interests
9,628 9,765 7,884 8,196
Consolidated Cash Flow Statement
2001 2002 For the year ended 30th June 2002 2001
R000 R000 GBP000 GBP000
10,067 (1,116) Cash (outflow)/inflow on operating (71) 888
activities
Returns on investments and
servicing of finance
4,240 3,819 Dividends received 243 374
(1,190) (1,226) Interest paid (78) (105)
3,050 2,593 Net cash inflow from returns on 165 269
investments and servicing of
finance
(68) (78) Taxation (5) (6)
Investing activities
(34) - Tangible fixed assets - - (3)
purchased
(6,031) (1,681) Fixed asset investments - (107) (532)
purchased
2,698 47 - proceeds on disposal 3 238
(3,367) (1,634) Net cash outflow from investment (104) (297)
activities
(3,186) (4,825) Equity dividend paid - Company (307) (281)
Financing
68 251 Share capital issued 16 6
(6,802) 4,715 Net drawdown/(repayment) of loan 300 (600)
facility
(6,734) 4,966 Net cash inflow/(outflow) from 316 (594)
financing
(238) (94) Decrease in cash (6) (21)
Notes
Notes
1. The exceptional item comprises the Company`s share of Western Selection
P.L.C.`s profits for its year to 30th June 2002.
2. The dividend for the year of 0.80p per share (2001 - 1.20p) will be paid on
4th October 2002 to shareholders on the register on 13th September 2002
3. Earnings per share are based on the result of ordinary activities after
taxation and minority interests and on 25,592,026 (2001 - 25,540,767) being the
weighted average of the number of shares in issue during the year.
4. The net assets attributable to shareholders, taking investments at market
value, are before providing for any tax that may arise on realisation
5. The financial information in this preliminary announcement of unaudited
group results, which has been reviewed and agreed by the auditors, does not
constitute statutory accounts within the meaning of section 240(5) of the
Companies Act 1985. The accounts have been prepared in accordance with the
Accounting Standards of the Auditing Practices Board of the United Kingdom and
are consistent with those applied in the previous financial year. The audited
accounts of the group for the year ended 30th June 2001 have been reported on
with an unqualified audit report in accordance with section 235 of the Companies
Act 1985 and have been delivered to the Registrar of Companies.
6. Reconciliation of movement in equity
2001 2002 2002 2001
R000 R000 GBP000 GBP000
11,847 692 Profit for the 44 1,045
financial year
(3,480) (3,222) Proposed dividend (205) (307)
68 267 Shares issued during 17 6
the year
8,435 (2,263) (144) 744
101,638 152,577 Opening equity 9,709 8,965
shareholders` funds
110,073 150,314 Closing equity 9,565 9,709
shareholders` funds
7. Declaration of dividend
The directors have declared a dividend of 0.80p per share in respect of the year
ended 30 June 2002. The exchange rate for the South African register will be
fixed at the close of business Thursday, 29 August 2002 and announced Friday, 30
August 2002. The last date to trade in the Company`s shares on the JSE
Securities Exchange South Africa for purposes of entitlement to the dividend
will be Friday, 6 September 2002. The shares will commence trading ex-dividend
on the JSE Securities Exchange South Africa from Monday, 9 September 2002 and on
the London Stock Exchange from Wednesday, 11 September 2002. The record date
will be Friday, 13 September 2002. The dividend will be paid on Friday, 4
October 2002. Share certificates may not be dematerialised or rematerialised
from Monday, 9 September 2002 to Friday, 13 September 2002, both days inclusive.
Date: 23/08/2002 08:00:00 AM Produced by the JSE SENS Department
