| Fri 20 Aug 2004, 14:42 | | unaudited results for the year ended 30th June 200 |
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LonFin - Preliminary unaudited results for the year ended 30th June 2004 and
dividend declaration
LONDON FINANCE & INVESTMENT GROUP P
(Incorporated in England - No. 201151)
Share code: LNF ISIN: GB0002994001
Directors Registered office
D.C. Marshall, Chairman 25 City Road
R.A. Good London, EC1Y 1BQ
Dr. F.W.A.A. Lucas
J.M. Robotham, OBE, FCA, MSI
Preliminary announcement of unaudited results for the year ended 30th June 2004
and dividend announcement
Introduction
As an investment company our target is to achieve long-term growth in
shareholder value. Our results are very heavily influenced by the overall
performance of the stock market, which has shown an upward trend after three
years of decline. The profit for the year is more than double last year and the
net asset value has increased. 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 2004, 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 Finsbury Food Group plc. Detailed comments on our
Strategic Investments are given below.
Results
The Group made a profit before tax for the year of GBP208,000 (2003 GBP113,000).
Our operating profits have increased from GBP52,000 to GBP141,000 as a result of
higher profits realised on sales of investments including the release of
investment provisions and increased dividend income. Our profit after tax and
minority interest was GBP190,000 (2003: GBP93,000) giving earnings per share of
0.74p (2003: 0.36p).
Our net assets per share have increased 8% to 35.9p at 30th June 2004 from 33.2p
last year. Our Strategic Investments have increased in value by 7% and our
General Portfolio by 9% after taking into account additions and disposals of
investments. This compares with the increase in the FTSE 100 index of 11% and
the FTSE Euro top 300 index of 17% over the year.
Strategic Investments
Western Selection P.L.C. (`Western`)
The Company owns 17,611,928 shares, being 40.48% of the issued share capital,
and 3,238,072 warrants, of Western. On 19th August 2004, Western announced a
profit after tax of GBP307,000 for its year to 30th June 2004, earnings per
share of 0.7p (2003 - 0.6p), and a 5.8% increase in dividend to 0.55p (2003 -
0.52p). Western`s net assets at market value were GBP10.1 million, equivalent
to 23.2p per share, an increase of 15% from 20.1p last year.
The market value of the Company`s investment in Western at 30th June 2004 was
GBP2.5 million and the book value was GBP4.1 million. At market value this
represents 26.6% of the net assets of Lonfin. The underlying value of the
Company`s investment in Western, valuing Western`s investments at market value,
was GBP4.1 million (2003 - GBP3.5 million).
I am the Chairman of Western and Mr. Robotham is a non-executive director.
Western has strategic investments in Creston plc, Swallowfield plc and Doctors
Direct plc. Western reclassified its investment in The Sanctuary Group PLC to
its General Portfolio during the year. 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 international marketing services group.
The results for the year to 31st March 2004 show a profit after tax of
GBP1,449,000 (2003 - GBP715,000), equivalent to earnings of 9.0p per share (2003
- 6.4p).
Swallowfield plc
Swallowfield has a long history of developing and producing aerosol, cosmetic
and toiletry products stretching back to 1950. As one of Europe`s premier
contract manufacturers of toiletries and cosmetics it offers an unrivalled
breadth of product capabilities. Its skill in design, developing and producing
gift packs and themed product ranges compliments its production capability.
Swallowfield`s latest published results were for the 28 weeks to 10th January
2004 and showed a profit of GBP263,000 (28 weeks to 11th January 2003 -
GBP480,000). This decline in profits was caused by reduced sales in both the
cosmetics and aerosol parts of the business. The Company expects to make
greater use of Far Eastern sourcing as a means of reducing production costs and
is also setting up a representative office in China. The value of the company
is underpinned by net assets in excess of GBP1 per share and we believe that the
business model, incorporating the proposed changes to product sourcing, and
driven by a committed, entrepreneurial, management team has a high likelihood of
success.
Doctors Direct plc
Doctors Direct provides a visiting General Practitioner service in the London
area to private patients and corporate clients. It is also a leading provider
of GP medical assistance to UK and international insurance groups and their
agents.
Doctors Direct`s latest published results are for the nine months to 31st March
2004 and show a loss of GBP255,000 as a result of volumes for private patient
and insurance business well below levels achieved in previous years.
Marylebone Warwick Balfour Group Plc (`MWB`)
The Company owns 3,000,000 shares in MWB, representing 2.73 percent of its
issued share capital. The market value at 30th June 2004 was GBP1.6 million,
compared with the book value of GBP2.5 million that represents 17.8 percent of
the net assets of Lonfin.
MWB is in the process of maturing and realising its assets for the benefit of
all stakeholders through an orderly disposal programme which is under constant
review.
Both Mr Robotham and I are non-executive directors of MWB.
Finsbury Food Group plc (`Finsbury Foods`)
At 30th June 2004, the Company owned 4,500,000 shares in Finsbury Foods and
3,000,000 warrants, representing 21.29% of their share capital and 47.03% of
their warrants. The market value of our holding was GBP2.5 million on 30th June
2004 (cost - GBP747,000) and represents 26.6% of the net assets of Lonfin.
Finsbury Food`s main subsidiary, Memory Lane Cakes, is a supplier of boxed
ambient cakes to most of the UK`s major supermarket chains, which include Asda,
Morrisons, Safeway, Sainsbury, Somerfield, Tesco and Waitrose. Ambient cakes
are baked cakes that have not been frozen and are generally retailed at room
temperature.
Finsbury Food has now repositioned itself as a speciality foods business focused
on niche markets. Its directors believe that the UK food sector is increasingly
polarised between substantial manufacturers and a large number of smaller
independent businesses and that, in this environment, opportunities exist to
acquire and develop profitable niche businesses. Finsbury Food`s directors, of
which I am one, continue to monitor the sector and seek further suitable
acquisitions.
General Portfolio
The General Portfolio has material interests in Oil, Natural Resources and
Utilities, Pharmaceuticals and Healthcare, Banking, Food and Beverages. These
sectors accounted for 76% of the portfolio by value at 30th June 2004 (57% at
30th June 2003). 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 number of holdings in the General Portfolio has remained unchanged at 36: we
have invested GBP124,000 in the General Portfolio over the year and increased
the average value of holdings.
We have a GBP2 million bank facility and at 30th June 2004 had drawn down GBP1.3
million. This leaves GBP700,000 available for further investment when the Board
feels confident in the prospects for the World economies.
The year ahead
There is a great deal of uncertainty at present and major political elections
will take place over the next 12 months in both the U.S.A. and the United
Kingdom. We will continue to watch events carefully and hope we will be able to
achieve another satisfactory year.
Dividend announcement
To reflect the improvement in the earnings and our progressive dividend policy,
the Board has decided to increase the dividend for the year to 0.90p per share
(2003: 0.85p).
Annual General Meeting - Wednesday 29 September 2004
Last date to trade cum dividend - Friday 27 August 2004
-
Date on which shares commence trading
ex-dividend in South Africa - Monday 30 August 2004
Date on which shares commence trading
ex-dividend in London - Wednesday 1 September 2004
Record date - Friday 3 September 2004
Paydate - Friday 1 October 2004
No dematerialisation or rematerialisation of share certificates, nor transfer of
shares between the registers in London and South Africa between 30 August 2004
and 3 September 2004, both dates inclusive.
D.C. MARSHALL
Chairman
20th August 2004
Consolidated Profit and Loss Account
For the year ended 30th June
2004 2003
GBP000 GBP000
Operating Income
Investment operations 407 314
Management services 533 520
Administrative expenses
Investment operations (281) (277)
Management services (518) (505)
Operating profit 141 52
Share of result of associated undertaking 139 124
Interest payable (72) (63)
Profit on ordinary activities before taxation 208 113
Tax on result of ordinary activities (9) (10)
Profit on ordinary activities after taxation 199 103
Equity minority interest (9) (10)
Profit attributable to members of the holding 190 93
company
Proposed dividend (233) (218)
Retained (loss) for the financial year (43) (125)
Earnings per share 0.74p 0.36p
Headline earnings per share 0.74p 0.36p
Fully diluted earnings per share 0.73p 0.36p
There are no recognised gains or losses other than the above profits and
accordingly no separate statement of recognised gains and losses is shown.
All profits and losses are on continuing activities.
There is no difference in either year between the above profit and the profit on
an historical cost basis.
Balance Sheets
at 30th June
2004 2003 2004 2003
GBP000 GBP000 GBP000 GBP000
Fixed Assets
Tangible assets 437 451 437 447
Investments in Group companies - - 5,855 5,755
Investments 7,390 7,358 - -
7,827 7,809 6,292 6,202
Current Assets
Listed investments 3,077 2,685 3,077 2,685
Debtors 272 167 43 79
Bank balance and deposits 30 28 25 27
3,379 2,880 3,145 2,791
Current Liabilities
Creditors: falling due within one (1,655) (1,176) (1,591) (1,198)
year
Net Current Assets 1,724 1,704 1,554 1,593
Total Assets less Current 9,551 9,513 7,846 7,795
Liabilities
Capital and Reserves
Called up share capital 1,295 1,281 1,295 1,281
Share premium account 1,033 975 1,033 975
Reserves 361 361 480 480
Profit and loss account 6,780 6,823 5,038 5,059
Equity shareholders` funds 9,469 9,440 7,846 7,795
Minority equity interests 82 73 - -
9,551 9,513 7,846 7,795
Consolidated Cash Flow Statement
For the year ended 30th June 2004 2003
GBP000 GBP000
Cash outflow on operating activities (479) (74)
Returns on investments and servicing of finance
Dividends received 246 211
Interest paid (60) (47)
Net cash inflow from returns on investments and 186 164
servicing of finance
Taxation (9) (7)
Investing activities
Fixed asset investments - purchased - (138)
- proceeds on disposal - 662
Net cash inflow/(outflow) from investment - 524
activities
Equity dividend paid - Company (218) (205)
Financing
Share capital issued 72 -
Net draw down/(repayment) of loan facility 450 (400)
Net cash inflow/(outflow) from financing 522 (400)
Increase in cash 2 2
Notes
1. The dividend for the year of 0.90p per share (2003 - 0.85p) will be paid on
1st October 2004 to shareholders on the register on 3rd September 2004.
2. Earnings per share are based on the result of ordinary activities after
taxation and minority interests and on 25,809,406 (2003 - 25,615,862) being
the weighted average of the number of shares in issue during the year.
3. The net assets attributable to shareholders, taking investments at market
value, are before providing for any tax that may arise on realisation
4. 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 2003 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.
5 Changes in Equity 2004 2003
GBP000 GBP000
Profit for the financial year 190 93
Proposed dividend (233) (218)
Shares issued during the year 72 -
29 (125)
Opening equity shareholders` funds 9,440 9,565
Closing equity shareholders` funds 9,469 9,440
Date: 20/08/2004 02:30:09 PM Produced by the JSE SENS Department
