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LAF
LOLAF
Lonrho Africa - Interim Results For The Six Months To 31 March 2006
Lonrho Africa Plc
(Incorporated and registered in England and Wales)
(Registration number 2805337)
(Share code: LAF; ISIN number: GB0002568813)
("Lonrho Africa" or "the Company")
INTERIM RESULTS FOR THE SIX MONTHS TO 31 MARCH 2006
HIGHLIGHTS
* David Lenigas appointed Chief Executive in December 2005 to re-establish
the Company in Africa
* New strategic focus on infrastructure; mining, oil & gas; hotel & leisure;
agribusiness
* Investment in Hotel Cardoso retained
* Emma Priestley joined the Board as Executive Director
Developments since 31 March 2006
* Investment of 8.2% in Brinkley Mining, which has significant Uranium and
Molybdenum prospects in South Africa
* Acquisition of 17% stake in Nare Diamonds, which has since recovered a rare
235 carat diamond from its Schmidtsdrift diamond mine in South Africa
* Lonrho Africa acquired 63% of Luba Freeport in Equatorial Guinea, which
acts as a logistics centre for the oil and gas industries in the Gulf of
Guinea
* David Lenigas appointed Executive Chairman
* Martin Horgan appointed Non-Executive Director
* Gerard Holden appointed Joint Executive Chairman
David Lenigas, Lonrho Africa"s Joint Executive Chairman and Chief Executive,
said:
"I am pleased to report considerable progress in our drive to position Lonrho
Africa as a significant player once again on the African Continent. The newly
adopted investment strategy focuses on the natural resources, infrastructure,
leisure and agribusiness sectors. It has already delivered three investments in
mining and infrastructure, all of which offer the potential of excellent returns
to our shareholders. These investments are illustrative of the exciting
opportunities available in Africa which, as a whole, is gaining renewed
international investor interest. I would like to thank Lonrho Africa"s Board -
present and past - for their contribution during this exciting time and look
forward to the future with confidence."
For further information, please contact:
Lonrho Africa Plc +44 (0)20 7016 5100
David Lenigas
Emma Priestley
Strand Partners Limited +44 (0)20 7409 3494
Simon Raggett / Matthew Chandler
Cardew Group +44 (0)20 7930 0777
Nadja Vetter / Eden Mendel / Emma Consett
CHAIRMAN"S STATEMENT
In the period under review Lonrho Africa made its first investment in line with
the Company"s new growth strategy, which was endorsed by shareholders at an
Extraordinary General Meeting held on 24 February 2006. The strategy will see
the Company re-establishing a significant presence on the African Continent
focusing on the natural resources, infrastructure, leisure and agribusiness
sectors.
At the time of that Meeting we also strengthened our Board with the appointment
of Emma Priestley as an Executive Director whose background in mining
engineering and expertise in the natural resources sector will greatly benefit
the Company. Emma joined Lonrho Africa from Ambrian Partners, the investment
bank where she worked as a corporate broker and adviser.
HOTEL CARDOSO SARL
Following the decision to retain our investment in the Cardoso Hotel in
Mozambique, we have decided to make a further investment in the hotel and
enhance its facilities. The hotel made a profit during the six month period
under review of which the Group"s share amounted to GBP7,000 (2005: GBP73,000
loss) as a result of improved trading conditions.
MATRIX PROPERTIES (PTY) LIMITED
The sale of the remaining industrial property in South Africa has been re-
negotiated at a considerably higher price and we anticipate completing this by
the end of the year.
Since the period end, we have continued to make considerable progress to re-
establish Lonrho Africa as a pan-African conglomerate with a diverse portfolio
of investments across the Continent.
BRINKLEY MINING PLC
On 14 March 2006, it was announced that we had agreed to invest GBP5 million in
Brinkley Mining, which has significant Uranium and Molybdenum prospects in the
Karoo region of South Africa. This was completed in May 2006. Brinkley Mining
raised further finance prior to its IPO resulting in a reduction in our holding
from 10% to 8.2%. Brinkley Mining was admitted to AIM on Monday 5 June 2006.
NARE DIAMONDS LIMITED
On 11 April 2006 we announced our second acquisition under the new investment
strategy, being the acquisition of 14.44 million shares in Nare Diamonds, which
has five diamond projects in South Africa. This is again part of a pre-IPO
funding exercise and represents a 17% holding at a cost of GBP1.5 million.
When our investment was announced I said that this would provide Lonrho Africa
with exposure to the lucrative diamond industry and offer the potential of an
excellent return to our shareholders. I had, of course, not anticipated that
within ten days of our making this investment Nare Diamonds would find a 235
carat diamond that was subsequently sold for US$2.4 million. At present, Nare
Diamonds is seeking an admission to AIM.
LUBA FREEPORT LIMITED
On 12 May 2006 we announced the acquisition of 63% of Luba Freeport, located in
Equatorial Guinea, for a cash consideration of US$2 million. As part of the
acquisition Lonrho Africa also assumed secured debt of approximately US$11.3
million. As a result, Lonrho Africa has taken control of Luba Freeport and I
have taken on the role of Chairman. This acquisition is a major step in our
involvement in infrastructure projects in Africa where the Port acts as a
logistics centre for the burgeoning oil and gas industries in the Gulf of Guinea
and services major oil companies in the region. As part of the transaction,
Lonrho Africa has agreed with the Government of Equatorial Guinea to maintain
the overall development programme for the Port facilities.
DIRECTORATE
We have made a number of significant appointments recently which will prove
invaluable to the Company"s ongoing growth strategy.
Following my appointment as Chief Executive on 21 December 2005, I was delighted
to take on the role of Chairman at the end of April 2006.
Martin Horgan was appointed as a Non-Executive Director of the Company on 15 May
2006. Martin has more than 10 years experience in the mining sector and most
recently was an Associate Director at Barclays Capital. I believe that Lonrho
Africa will benefit greatly from his extensive knowledge of the mining industry
and the raising of finance in that sector.
I was very pleased to announce that Gerard Holden had agreed to join the Board
as Joint Executive Chairman with effect from 26 May 2006. He will also take on
the role as Non-Executive Chairman of Brinkley Mining. Gerard has very
considerable experience of financing projects in the commodities sector. Most
recently he was Managing Director and Global Head of Mining and Metals at
Barclays Capital. His experience ranges from acquisition, corporate and project
financing to bond issues and advisory assignments.
I would like to take this opportunity to thank Richard Wilkinson, who stepped
down as a Director on 3 May 2006, for his services to the Company over the last
seven years.
Likewise I would like to thank Christopher Mills who stepped down as Chairman
following the conclusion of the Annual General Meeting. Christopher was a
Director for seven years and had been Chairman since 2004. During that time he
played a pivotal role in ensuring the survival of the Company by helping to
steer it through very difficult times.
David Lenigas
Joint Executive Chairman and Chief Executive
5 June 2006
This announcement was approved by the Board of Directors on 5 June 2006.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
6 6 months to 6 6 12 months
months 31.3.05 months to months to
to 31.3.05 to 30.9.05
31.3.06 31.3.05
Total Continuing Discontin Total Total
operations ued opera
tions
Note GBPm GBPm GBPm GBPm GBPm
Turnover 0.6 0.5 4.1 4.6 5.8
Net operating (1.0) (1.0) (3.6) (4.6) (5.8)
costs
Operating (0.4) (0.5) 0.5 - -
(loss)/profit
Non-operating 2 - - 0.1 0.1 1.7
exceptional
items
Interest 0.4 0.1 - 0.1 0.5
receivable
Profit/(loss) on
ordinary - (0.4) 0.6 0.2 2.2
activities
before taxation
Taxation - - (0.2) (0.2) (0.3)
Profit/(loss) on 1.9
ordinary - (0.4) 0.4 -
activities
after taxation
Minority - 0.1 - 0.1 0.1
interests
Profit/(loss) - (0.3) 0.4 0.1 2.0
for the period
Profit per share - 0.1p 1.3p
Profit per share - - 0.2p
before
exceptional
items
EARNINGS PER SHARE
Profit per share has been calculated using the profit after taxation and
minority interest applied to 157,572,088 shares.
Profit per share excluding exceptional items has been calculated on the profit
after taxation and minority interest but before exceptional items applied to
157,572,088 shares.
GROUP BALANCE SHEET
31 March 2006 31 March 30 September
2005 2005
Note GBPm GBPm GBPm
Fixed assets
Tangible 2.6 17.5 2.6
Current assets
Stocks 0.3 0.6 0.3
Debtors
Amounts falling due within 1.2 3.7 1.8
one year
Cash at bank 20.9 6.9 20.3
22.4 11.2 22.4
Creditors: amounts falling due (0.8) (2.3) (0.6)
within one year
Net current assets 21.6 8.9 21.8
Total assets less current 24.2 26.4 24.4
liabilities
Provisions for liabilities and (2.2) (3.6) (2.5)
charges
Net assets 22.0 22.8 21.9
Capital and reserves
Called up share capital 1.6 31.5 1.6
Merger reserve 96.1 96.1 96.1
Revaluation reserve 0.9 7.7 0.8
Profit and loss account (77.8) (115.2) (77.7)
Other reserve 3 0.1 - -
Shareholders" funds (equity) 20.9 20.1 20.8
Minority interests (equity) 1.1 2.7 1.1
22.0 22.8 21.9
CONSOLIDATED CASH FLOW STATEMENT
6 months 6 months 12 months
to to to
31.3.06 31.3.05 30.9.05
Note GBPm GBPm GBPm GBPm GBPm GBPm
Net cash flow from
operating activities
- continuing operations 0.2 (0.9) (0.8)
- discontinued - 2.3 3.1
operations
____ ____ ____
1 0.2 1.4 2.3
Return on investments
and servicing of finance
- interest received 0.4 0.1 0.5
Tax paid - overseas - (0.5) (0.6)
Net cash inflow before 0.6 1.0 2.2
investing activities
Net capital payments 1 - (0.1) (0.1)
Net proceeds from 1 - - 13.7
disposal of subsidiaries
Demerger dividend - - (1.6)
Increase in cash 0.6 0.9 14.2
MOVEMENT IN NET CASH
FOR THE SIX MONTHS TO 31 MARCH 2006
1 October Net cash 31
March
2005 flows 2006
GBPm GBPm GBPm
Cash 20.3 0.6 20.9
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
6 months 6 months 12 months
to to 31.3.05 to 30.9.05
31.3.06
GBPm GBPm GBPm
Profit for the period - 0.1 2.0
Increase/(decrease) 0.1
arising on revaluation - (0.1)
of assets
Exchange adjustments (0.1) 0.6 1.1
Total recognised gains - 0.7 3.0
and losses in the period
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS" FUNDS
6 months 6 months 12 months
to to 31.3.05 to 30.9.05
31.3.06
Note GBPm GBPm GBPm
Recognised gains and
losses relating to the - 0.7 3.0
period
Reserve arising on grant
of share options in the 3 0.1 - -
period
Demerger dividend - - (1.6)
Net increase in 0.1 0.7 1.4
shareholder funds
At beginning of period 20.8 19.4 19.4
At end of period 20.9 20.1 20.8
HISTORICAL COST PROFITS AND LOSSES
6 months 6 months 12 months
to to 31.3.05 to 30.9.05
31.3.06
GBPm GBPm GBPm
Historical cost profit before
taxation
Reported profit before taxation - 0.2 2.2
Difference between historical cost
depreciation charge
and the actual depreciation charge
calculated
on the revalued amount - 0.1 0.1
Historical cost profit before - 0.3 2.3
taxation
Historical cost profit after
taxation and
minority interests - 0.2 2.1
BASIS OF PREPARATION OF THE INTERIM FINANCIAL INFORMATION
The interim financial information 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 2005. The figures for the six months to
31 March 2006 and 31 March 2005 are unaudited. The figures for the year ended
30 September 2005 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.
NOTES TO THE HALF YEAR ACCOUNTS
1. Consolidated cash
flow statement
6 6 6 6 months 12
months months months months
to to to to 31.3.05 to
31.3.06 31.3.0 31.3.0 30.9.05
5 5
Contin Discon
uing tinued
Total operat operat Total Total
ions ions
Net cash flow from
operating activities Note GBPm GBPm GBPm GBPm GBPm
Operating (0.4) (0.5) 0.5 - -
(loss)/profit for the
period
Depreciation charge 0.1 0.1 0.2 0.3 0.4
Charge in respect of 3 0.1 - - - -
share options granted
Decrease in stocks - - 0.1 0.1 0.1
Decrease/(increase) in 0.4 (0.5) 0.5 - 1.6
debtors
Increase in creditors - - 1.0 1.0 0.2
Net cash
inflow/(outflow) from 0.2 (0.9) 2.3 1.4 2.3
operating activities
6 months 6 months 12 months
to 31.3.06 to 31.3.05 to 30.9.05
Net capital payments GBPm GBPm GBPm
Purchase of tangible fixed - (0.1) (0.1)
assets
- (0.1) (0.1)
6 months 6 months 12 months
to 31.3.06 to 31.3.05 to 30.9.05
Net proceeds from disposal GBPm GBPm GBPm
of subsidiaries
Sale of subsidiaries - - 15.2
Disposal and closure costs - - (1.0)
Costs of demerger - - (0.5)
- - 13.7
6 months 6 months 12 months
to 31.3.06 to 31.3.05 to 30.9.05
Reconciliation of net cash GBPm GBPm GBPm
flow to movement in net cash
Increase in cash in the 0.6 0.9 14.2
period
Exchange rate movements - - 0.1
Movement in net cash 0.6 0.9 14.3
Balance at beginning of 20.3 6.0 6.0
period
Net cash 20.9 6.9 20.3
NOTES TO THE HALF YEAR ACCOUNTS
2. Non-operating exceptionals
6 months 6 months
to 31.3.06 to 31.3.05 12 months
Discontinued Discontinued to 30.9.05
operations operations
Total Total Total
GBPm GBPm GBPm
Profit on disposal :
Hotels - - 2.7
Property in South Africa - 0.1 0.5
Disposal and closure costs - - (1.0)
Demerger costs - - (0.5)
- 0.1 1.7
3. Share options
The following share options over 1p ordinary shares were granted
under an Unapproved Share Option scheme during the period:
Number of Market
Date share Exercise Period price
granted options price during per share
granted which at date of
exercisable grant
David Lenigas 25.01.06 3,500,000 17p 25.01.06 - 15.5p
24.01.11
James Hughes 25.01.06 1,000,000 17p 25.01.06 - 15.5p
24.01.11
Michael Wilson 30.03.06 1,000,000 17p 30.03.06 - 20.75p
24.01.11
Richard Wilkinson 30.03.06 500,000 17p 30.03.06 - 20.75p
24.01.11
The agreement on 25 January 2006 to grant options to Michael Wilson and Richard
Wilkinson was approved by shareholders on 24 February 2006. However, as the
Company was then in a close period the grant of these options took place on 30
March 2006 following the publication of the Company"s results for the year ended
30 September 2005.
Therefore, there is a charge to the profit and loss account of GBP56,250 in
respect of the difference between the exercise price of options granted to
Michael Wilson and Richard Wilkinson and the market price at 24 February 2006.
This charge has been included in operating costs and a corresponding credit has
been made in the balance sheet to "Other reserve".
The market price per share as at 31 March 2006 was 21.75p - 22.25p.
The range of market prices per share over the six months ended 31 March 2006
were 11.5p - 23.75p.
6 June 2006
South African sponsor to Lonrho Africa Plc
Java Capital (Proprietary) Limited
Date: 06/06/2006 09:28:41 AM Produced by the JSE SENS Department
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