Lon.Fin.&Inv.Grp. - Interim Results
February 17 2000 - 2:02AM
UK Regulatory
RNS Number:6929F
London Finance & Investment Grp.PLC
17 February 2000
TO THE MEMBERS
The directors are pleased to present the unaudited interim results of the
company for the six months ended 31st December 1999.
Results
Our profit on ordinary activities attributable to shareholders for the six
months was #228,000 compared to #131,000 for the same period in 1998 and
earnings per share were 0.89p (1998 - 0.51p), an increase of 75%
Our operating profit is substantially greater than last year because of profits
realised from the general portfolio of listed investments. The increase in
income from management services results from the recharge of additional costs
incurred in providing the level of service demanded by our clients. The
contribution to profits by our associate Western Selection for its half year to
31st December 1999 was #80,000 (1998 - #58,000) mainly because Western also
realised higher profits from its portfolio and recognised its first dividend
from its strategic investment in Creston plc.
As is our practice, we are not paying an interim dividend; the dividend paid in
October was for the 12 months ended on 30th June 1999. At 31st December 1999
our net asset value per share was 56.2p, an increase of 57% from 30th June 1999.
This is mainly due to significant increases in the market value of our
principal investments, which are held as long term fixed assets.
Investment policy and management
Our investment policy is to have strategic stakes in a few special situations,
hold a diversified general portfolio of U.K. and European listed equities.
Strategic investments are minority positions where we seek to exercise influence
over the management of the investment. Lonfin is represented on the boards of
our strategic investments and, in turn, Western is also represented on the
boards of its two strategic investments, Creston plc and The Sanctuary Group
PLC.
Our general portfolio is managed by two of our non-executive directors, Richard
Good and Michael Robotham. Decisions in relation to both our strategic and
unlisted investments are taken by the board as a whole.
Marylebone Warwick Balfour Group Plc has two operating divisions. The Business
Services division comprises rental income from asset management activities and
operating income from the Business Exchange chain of 27 serviced offices. The
Project Management division covers activities which create one-off profits or
fees, over a defined time-scale, with clearly contained risk. The group
announced profits before tax of #6,320,000 for its year ended 30th June 1999 and
dividends for the year of 2.5p per share. The reduction in profits from last
year was mainly due to the timing of property sales and refurbishments. At 30th
June 1999 the group had net assets with a book value in excess of eighty million
pounds, net assets per share of 143p (up from 71p at 30th June 1998). In
December 1999 the group raised #28.8m by way of a placing and open offer
principally to fund an expansion of activities through the ownership of
properties in the hotel sectors. We have invested a further #507,000 in the
group in the half year to 31st December 1999.
Megalomedia plc announced increased turnover and profits for its first half to
30th September 1999. Both Post Production Digital Services and Contract
Publishing, being the two main operating units, reported sound profits for the
first half, increasing to #1.7m from #0.7m for the half year to 30th September
1998.
Western Selection P.L.C., our associate strategic investment company, announced
profits before tax for the six months to 31st December 1999 of #188,900 compared
with #144,600 for the same period in the previous year. Western expects to at
least maintain its dividend for its current year. The net asset value of
Western, at market values, increased to #11,179,000 from #7,723,000. This
equates to 25.7p per share at 31st December 1999, an increase of 45% since 30th
June 1999.
Western's strategic investment, The Sanctuary Group plc, issued preliminary
results for the twelve months to 30th September 1999, reporting an increase in
turnover of 32% on an annualised basis and profits of #3,300,000 compared with a
profit for the nine months to September 1998 of #1,600,000. The full year
dividend is increased from 0.15p to 0.20p. Sanctuary raised #11 million of new
monies in October 1999, via an institutional placing, to fund further expansion
and catalogue acquisitions. Sanctuary is making substantial progress in the
development of its Heavy Metal web site and the creation of a New Media Division
specialising in internet related activities in the Group's specific niche areas
of operation. The group is currently organised into three divisions, Music;
covering management, record companies, agency and books, Facilities; covering
recording and rehearsal facilities and Screen; covering television production
and distribution.
Creston plc issued its annual report in October, announcing a 45% growth in net
asset values to 187p per share, an increase of 9% in profits, to #1,959,000 from
#1,803,000 and a dividend of 3p per share. The net asset value attributable to
our direct investment in Creston is #387,000 and indirectly through Western
Selection P.L.C. is #2,495,000. The company is in the process of realising the
value of its property portfolio and will be returning some of the funds to its
shareholders.
Outlook
The market is beginning to appreciate the underlying value of some of our
strategic investments and this is being reflected in both in their share prices
and ours. We look forward to working with these companies to unlock additional
shareholder value over the longer term.
The General Portfolio of investments has underperformed recently compared to the
market, but these are long term investments that we expect will provide a
reasonable return over time by way of both income and capital growth.
We declared a dividend for the year to 30th June 1999 of 1.0p per share, which
was paid in October. As mentioned above, it is not our intention to pay interim
dividends; and subject to unforeseen circumstances, we expect to at least
maintain our dividend for the year to 30th June 2000.
David C. Marshall
Chairman
Balance Sheet Analysis taking investments at market value
Half-Year Full-Year
Ended Ended
31st December June
1999 1998 1999
#000 #000 #000
Tangible fixed assets 517 499 505
Principal investments at market value:-
Western Selection P.L.C. * 3,811 1,566 1,502
Marylebone Warwick Balfour Group Plc 4,665 1,902 1,924
Megalomedia plc 1,253 765 810
Creston plc 365 139 218
10,094 4,372 4,454
General equity portfolio (see analysis 5,201 4,732 5,480
below)
Cash, bank balances and deposits 46 256 95
Bank overdraft (1,600) (750) (1,150)
Other net assets/(liabilities) 143 (46) (195)
Minority interests (52) (52) (52)
Net assets 14,349 9,011 9,137
Net assets per share 56.2 p 35.3 p 35.8 p
* Western Selection P.L.C., a strategic investment company, is an associate and
41% of its shares are owned by London Finance. Taking investments at market
value our holding has an asset value of approximately #4.5 million, as published
in Western's interim statement at 31st December 1998.
The general portfolio is invested in the listed equity shares of the following
undertakings:
Allied Zurich PLC Liberty International PLC
Anglo American PLC Lloyds TSB Group plc
AstraZeneca PLC Marconi plc
BAA plc Nestle S.A.
Barclays PLC Norwich Union plc
Bass PLC Novartis AG
The Boots Company PLC Prudential Corporation plc
Britannic PLC Railtrack Group PLC
British Aerospace plc Reckitt & Benckiser plc
British Telecommunications plc Reuters Group PLC
Cable and Wireless plc Roche Holdings AG
Cadbury Schweppes plc Schroders plc
Credit Suisse Group Schweiz Ruckversicherungs
De Beers Consolidated Centenary A.G. The "Shell" Transport and
Trading Company p.l.c.
Diageo plc SmithKline Beecham plc
Fortis N.V. Smiths Industries plc
Glaxo Wellcome plc Swiss Life
Hilton Group PLC UBS AG
HSBC Holdings plc Unilever PLC
ING Groep N.V. Union Transport Inc.
Johnson, Matthey plc Vodafone Airtouch PLC
Land Securities PLC
Unaudited Consolidated Profit and Loss Account
Half-Year Full-Year
Ended Ended
31st December June
1999 1998 1999
#000 #000 #000
Operating Income
Dividends received 118 151 287
Interest and sundry income 15 41 31
Profit on sales of investments 233 37 67
366 229 385
Management services income 211 174 387
577 403 772
Administrative expenses
Investment operations (153) (147) (245)
Management services (212) (167) (392)
Total administrative expenses (365) (314) (637)
Operating Profit 212 89 135
Share of result of associated 80 58 147
undertaking
Interest payable (48) (39) (74)
Profit on ordinary activities before 244 108 208
taxation
Tax on result of ordinary activities (16) 14 209
Profit on ordinary activities after 228 122 417
taxation
Minority interest - 9 10
Profit attributable to members of the 228 131 427
holding company
Proposed dividends - - (255)
Retained profit for the financial year 228 131 172
Earnings per share 0.89 p 0.51 p 0.67 p
Dividend per share Nil Nil 1.00 p
All profits arise on continuing activities
Unaudited Consolidated Balance Sheet
Half-Year
ended Year ended
31st December June
1999 1998 1999
#000 #000 #000
Fixed assets
Tangible assets 517 499 505
Investment 6,320 5,645 5,812
6,837 6,144 6,317
Current assets
Listed investments 3,565 3,119 3,724
Unlisted investments 54 43 54
Debtors 175 282 222
Cash, bank balances and deposits 46 256 95
3,840 3,700 4,095
Creditors: falling due within one year (1,773) (1,313) (1,736)
Net Current Assets 2,067 2,387 2,359
Total Assets less Current Liabilities 8,904 8,531 8,676
Provision for Liabilities and Charges
Deferred taxation - - -
8,904 8,531 8,676
Capital and reserves
Called up share capital 1,276 1,276 1,276
Share premium account 956 956 956
Reserve 361 257 361
Profit and loss account 6,259 5,990 6,031
Shareholders funds 8,852 8,479 8,624
Minority equity interests 52 52 52
8,904 8,531 8,676
Notes:-
1. Accounting policies
The results for the half-year are unaudited and have been prepared on the
basis of the accounting policies adopted in the accounts for the year ended
30th June 1999.
2. Earnings per share
Earnings per share are based on the profit after taxation and minorities,
and on the average number of shares 25,520,274 (December 1998 and June 1999
- 25,520,274), in issue during the period.
3. The financial information in this preliminary announcement of unaudited
Group results does not constitute statutory accounts within the meaning of
Section 240(5) of the Companies Act 1985. The audited accounts of the
Group for the period ended 30th June 1999 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.
END
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