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Lonrho Africa plc - Interim Results for the six months to 31 March 2004
Lonrho Africa plc
JSE Share Code: LAF
ISIN: GB0002568813
Interim Results for the six months to 31 March 2004
Interim Statement
Operating Review
During the period under review, the Group continued to follow its strategy of
disposing of the businesses and assets in Africa. At the same time, the Board
continued to investigate new business opportunities in the United Kingdom.
Hotels
The Hotel Division suffered a pre-tax loss of GBP214,000 compared with
GBP447,000 last year. The improved position resulted from an increase in
occupancy in Kenya coupled with a reduction in Head Office costs.
Kenya
Occupancy levels in the hotels in Kenya increased from 37% to 42% although it
was necessary to reduce average room rates by 10% over the period in order to
remain competitive. Costs, headcount and capital expenditure continue to be
very tightly controlled.
The Norfolk Hotel (which is celebrating its Centenary on 25th December this
year), Mount Kenya Safari Club and Mara Safari Club all featured in the top 15
African and Middle East ratings produced by The Travel & Leisure Magazine which
has a circulation of 4.6million readers.
Mozambique
The Cardoso Hotel in Mozambique had occupancy levels of 39%, down from 42% last
year, driven mainly by the oversupply of hotel rooms in Maputo. Costs continue
to be well controlled although these were adversely affected by the strength of
the South African Rand, in which currency most supplies are sourced. Headcount
and capital expenditure also continue to be strictly controlled.
Ghana
The disposal of the Group`s 55% interest in the Hotel Investments (Ghana)
Limited for a cash consideration of US$5.4million (GBP3million) was completed in
April 2004.
HIG is the owner of the Labadi Beach Hotel, which produced a pre-tax profit of
GBP39,000 in the year to 30th September 2003. At that date, the net asset value
of the Ghanaian hotel operations was GBP2.6million, of which our share was
GBP1.43million.
Ranching
Potential buyers continue to express interest in Ol Pejeta.
Property
The sale of a major part of the remaining agricultural land in Kenya, which was
signed in September 2003, still awaits regulatory approval.
Efforts to dispose of the three remaining South African industrial properties
continue.
Joint Venture
The sale of the Lonrho Africa shareholding in Kariba Minerals, Zambia, was
completed in May 2004 for a cash consideration of US$345,000.
Directorate
Bernard Asher stepped down as Non-Executive Chairman and as a Director of the
Company with effect from 31st May 2004. He was succeeded as Non-Executive
Chairman by Christopher Mills with effect from the same date.
C H B Mills
Chairman
23 June 2004
Basis of preparation of the interim financial information
The interim financial information set out on pages 4 to 9 has been prepared on
the same basis and using the same accounting policies as were applied in drawing
up the statutory accounts for the year ended 30 September 2003. The discontinued
operations constitute the results of Hotel Investments (Ghana) Limited and
Kariba Minerals Limited, the Group interest in which were sold in April and May
2004 respectively. The figures for the six months to 31 March 2004 and 31 March
2003 are unaudited. The figures for the year ended 30 September 2003 do not
constitute the statutory accounts for that year which have been filed with the
registrar of companies and on which the auditors` report was unqualified without
any statement under Section 237 of the Companies Act 1985.
Going Concern
The Directors continue to adopt the going concern basis in preparing the
financial statements as the disposal process continues in accordance with the
Board`s strategy. The Directors remain confident that further disposals will be
made this year to eliminate borrowings.
Bank facilities are now uncommitted but the principal lender has an agreed
repayment schedule based on a share of disposal proceeds. Regular meetings are
held to discuss the progress of the disposal programme and whilst this is taking
longer than anticipated, sufficient progress has been made for the Directors to
believe that the support of the principal lender will remain in place.
Asset Values
In preparing the financial statements the Directors have reviewed the carrying
values of both fixed and current assets in light of the current economic
uncertainties, and have made such adjustments as they consider reasonable and
prudent.
Consolidated profit and loss account
6 6 months 6 6 6 6 12
months months months months months months
to to to to to to to
31.3.04 31.3.04 31.3.04 31.3.03 31.3.03 31.3.03 30.9.03
Conti- Discon- Conti- Discon-
nuing tinued nuing tinued
Opera- Opera- Total Opera- Opera- Total Total
tions tions tions tions
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Turnover
Group 4.0 1.2 5.2 4.5 1.3 5.8 10.3
Joint
ventures - 0.1 0.1 - 0.2 0.2 0.5
4.0 1.3 5.3 4.5 1.5 6.0 10.8
Group net
operating
costs (4.6) (1.2) (5.8) (5.2) (1.3) (6.5) (12.2)
Operating
loss
Group (0.6) - (0.6) (0.7) - (0.7) (1.9)
Joint
ventures - - - - 0.1 0.1 0.1
(0.6) - (0.6) (0.7) 0.1 (0.6) (1.8)
(Loss)/
profit on
sale or
termina-
tion of
opera-
tions 2 - (0.5) (0.5) - 1.6 1.6 3.4
Net
finance
costs (0.1) - (0.1) (0.1) - (0.1) (0.2)
(Loss)/
profit
before
taxation (0.7) (0.5) (1.2) (0.8) 1.7 0.9 1.4
Taxation - - - (0.1) - (0.1) 0.2
(Loss)/
profit
after
taxation (0.7) (0.5) (1.2) (0.9) 1.7 0.8 1.6
Minority
interests 0.2 - 0.2 0.1 - 0.1 0.2
Retained
(loss)/
profit (0.5) (0.5) (1.0) (0.8) 1.7 0.9 1.8
Loss/
(profit)
per share
(basic
and
diluted) (0.6)p 0.6p 1.1p
Loss per
share
before
Excep-
tional
items
(basic
and
diluted) (0.3)p (0.4)p (0.7)p
Earnings per share
Loss per share (basic and diluted of (0.6)p (2003 - profit 0.6p)) has been
calculated using the loss after taxation and minority interest of GBP(1.0)
million (2003 - profit GBP0.9 million) applied to 157,572,088 shares.
Loss per share excluding exceptional items of (0.3)p (2003 - (0.4)p) has been
calculated on the loss after taxation and minority interest but before
exceptional items applied to 157,572,088 shares.
Note: The figures for the six months ended 31 March 2003 have been restated to
reflect operations that have been discontinued since 31 March 2003.
Group balance sheet
31 March 31 March 30 September
2004 2003 2003
As
restated
GBPm GBPm GBPm
Fixed assets
Tangible 23.8 31.1 26.8
Investments :
Joint ventures 0.2 0.3 0.3
24.0 31.4 27.1
Current assets
Stocks 1.9 1.9 1.9
Debtors
Amounts falling due within 3.9 3.7 3.9
one year
Amounts falling due after 0.4 0.4 0.4
one year
4.3 4.1 4.3
Cash at bank 1.3 3.5 3.2
7.5 9.5 9.4
Creditors: amounts falling due
within one year
Overdrafts (6.2) (6.3) (6.4)
Other creditors (2.8) (4.3) (2.6)
Net current (1.5) (1.1) 0.4
(liabilities)/assets
Total assets less current 22.5 30.3 27.5
liabilities
Provisions for liabilities and (3.8) (5.4) (4.8)
charges
Net assets 18.7 24.9 22.7
Capital and reserves
Called up share capital 31.5 31.5 31.5
Revaluation reserve 11.6 16.0 13.1
Other reserves 66.7 68.2 67.6
Profit and loss account (94.8) (95.6) (93.8)
Shareholders` funds (equity) 15.0 20.1 18.4
Minority interests (equity) 3.7 4.8 4.3
18.7 24.9 22.7
Note: In 2003 a prior year adjustment in respect of the implementation of FRS17
Retirement Benefits was made. The
comparative figures for the period ended 31st March 2003 have been restated
accordingly.
Consolidated cash flow statement
6 6 12
months months months
to to to
31.3.04 31.3.03 30.9.03
Note GBPm GBPm GBPm GBPm GBPm GBPm
Net cash flow from
operating activities
- continuing (1.0) (0.1) (1.3)
operations
- discontinued (0.1) (0.3) -
operations
_____ ____ ____
1 (1.1) (0.4) (1.3)
Return on investments
and servicing of finance
- interest received - - -
- interest paid (0.2) (0.1) (0.3)
Tax paid - overseas - (0.1) (0.4)
Net cash outflow before (1.3) (0.6) (2.0)
investing activities
Net capital receipts 1 - 0.1 0.6
Net proceeds from 1 (0.2) (0.1) 0.7
disposal of subsidiaries
Decrease in cash (1.5) (0.6) (0.7)
Movement in net borrowings
for the six months to 31 March 2004
1 October Net cash Exchange 31 March
2003 flows Movement 2004
GBPm GBPm GBPm GBPm
Cash 3.2 (1.7) (0.2) 1.3
Overdrafts (6.4) 0.2 - (6.2)
Net borrowings (3.2) (1.5) (0.2) (4.9)
Statement of total recognised gains and losses
6 months 6 months 12 months
to 31.3.04 to 31.3.03 to 30.9.03
As restated
GBPm GBPm GBPm
(Loss)/profit for the period (1.0) 0.9 1.8
Exchange adjustments (2.4) (0.3) (2.9)
Total recognised gains and (3.4) 0.6 (1.1)
losses in the period
Prior year adjustment (see - (7.7) (7.7)
note below)
Total recognised gains and (3.4) (7.1) (8.8)
losses
Reconciliation of movements in shareholders` funds
6 months 6 months 12 months
to 31.3.04 to 31.3.03 to 30.9.03
As restated
GBPm GBPm GBPm
Recognised (losses)/gains (3.4) 0.6 (1.1)
relating to the period
At beginning of period (2003 18.4 19.5 19.5
figures restated)
At end of period 15.0 20.1 18.4
Historical cost profits and losses
6 months 6 months 12 months
to 31.3.04 to 31.3.03 to 30.9.03
GBPm GBPm GBPm
Historical cost
(loss)/profit before
taxation
Reported (loss)/profit (1.2) 0.9 1.4
before taxation
Difference between
historical cost
depreciation charge
and the actual depreciation
charge calculated
on the revalued amount 0.1 0.1 0.1
Realisation of property - 0.3 1.9
revaluation gains
Historical cost (1.1) 1.3 3.4
(loss)/profit before
taxation
Historical cost
(loss)/profit after
taxation and
minority interests (0.9) 1.3 3.8
Note: In 2003 a prior year adjustment in respect of the implementation of FRS17
Retirement Benefits was made. The comparative figures for the period ended 31st
March 2003 have been restated accordingly.
Notes to the half year accounts
1 Consolidated cash
. flow statement
6 months 6 months 6 months 6 months 6 months 6 months 12
months
to to to to to to to
31.3.04 31.3.04 31.3.04 31.3.03 31.3.03 31.3.03 30.9.03
Conti- Discon- Conti- Discon-
nuing tinued nuing tinued
Opera- Opera- Total Opera- Opera- Total Total
tions tions tions tions
Net cash
flow from GBPm GBPm GBPm GBPm GBPm GBPm GBPm
operating
activities
Operating (0.6) - (0.6) (0.7) - (0.7) (1.9)
loss
Depreciati 0.4 0.1 0.5 0.4 0.1 0.5 1.0
on charge
Current
cost of - - - - - - 0.1
servicing
pension
Decrease/( (0.1) - (0.1) (0.1) - (0.1) 0.1
increase)
in stocks
Decrease/( (0.3) (0.1) (0.4) 0.1 1.0 1.1 1.8
increase)
in debtors
(Decrease) (0.4) (0.1) (0.5) 0.2 (1.4) (1.2) (2.4)
/increase
in
creditors
Net cash
(outflow)/ (1.0) (0.1) (1.1) (0.1) (0.3) (0.4) (1.3)
inflow
from
operating
activities
6 months 6 months 12 months
to to to
31.3.04 31.3.03 30.9.03
Net capital GBPm GBPm GBPm
receipts
Purchase of - (0.1) (0.2)
tangible fixed
assets
Sale of tangible - 0.2 0.8
fixed assets
- 0.1 0.6
6 months 6 months 12 months
to to to
31.3.04 31.3.03 30.9.03
Net proceeds from GBPm GBPm GBPm
disposal of
subsidiaries
Disposal and (0.2) (0.4) 0.4
closure costs
Sale of - 0.3 0.3
subsidiaries
(0.2) (0.1) 0.7
6 months 6 months 12 months
to to 31.3.03 to 30.9.03
31.3.04
Reconciliation of net cash GBPm GBPm GBPm
flow to movement in net
borrowings
Decrease in cash in the (1.5) (0.6) (0.7)
period
Exchange rate movements (0.2) (0.1) (0.4)
Movement in net borrowings (1.7) (0.7) (1.1)
Balance at beginning of (3.2) (2.1) (2.1)
period
Net borrowings (4.9) (2.8) (3.2)
Notes to the half year accounts
2 Non operating
. exceptionals
6 months 6 months
to 31.3.04 to 31.3.03 12 months
Discontinued Discontinued to 30.9.03
operations operations
Total Total Total
GBPm GBPm GBPm
Profit on disposal :
Motors - 0.2 0.3
Exchange
(losses)/gains on (0.1) 1.2 1.4
discontinued
activities
(Charge)/recovery
for disposal and (0.4) 0.2 1.7
closure costs
(0.5) 1.6 3.4
24 June 2004
Date: 24/06/2004 08:00:24 AM Produced by the JSE SENS Department
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