LONDON FINANCE & INVESTMENT GROUP P.L.C.
(“Lonfin”, “the Company” or “the
Group”)
Preliminary
announcement of results for the year ended 30th
June 2015 and dividend
declaration
London Finance & Investment Group P.L.C. (LSE: LFI, JSE:
LNF), the investment company whose assets primarily consist of
Strategic Investments and a General Portfolio, today announces its
Preliminary Results for the year ended 30th June 2015.
Strategy and Business Model
Lonfin is an investment company whose objective is to generate
growth in shareholder value in real terms over the medium to long
term whilst maintaining a progressive dividend policy.
In the short term, the performance of the Company can be
influenced by overall stock market performance and to ameliorate
this short term risk, the Company has a combination of Strategic
Investments together with a General Portfolio. Strategic
Investments are significant investments in smaller U.K. quoted
companies and these are balanced by a General Portfolio, which
consists of a broad range of investments in major U.S.A., U.K. and other European companies
which provides a diversified exposure to international equity
markets.
Results
- Net assets have increased over the year by 12.1% from 44.7p per
share to 50.1p per share, and our Strategic Investments, adjusting
for additions, have increased in value over the year by 23%, due to
the increase in value of our investment in Finsbury Food Group
Plc.
- Strategic Investments are yielding 2.7%
- The General Portfolio, adjusting for changes, has increased
over the year by 1.4%
- The General Portfolio is yielding 2.9% (2014 – 2.8%)
- Net borrowings of £1,385,000 compared with £886,000 at
30th June 2014
- Operating costs were broadly in line with 2014
The Group achieved a profit for the year, before tax and the
fair value adjustments of investments, of £286,000 (2014 -
£209,000). The profit, after positive fair value adjustments,
tax and non-controlling interest was £1,968,000 (2014 - £43,000
loss after negative fair value adjustments of £339,000) giving a
profit per share of 6.3p (2014 loss per share – 0.1p).
Strategic Investments
Western Selection P.L.C.
(“Western”)
The Group owns 7,860,515 shares, being 43.8%, of the issued
share capital of Western.
On 30th September 2015,
Western announced a profit before associates and tax of £2,787,000
for its year to 30th June
2015 (2014 – £449,000). Including associates and after
exceptional items and tax, profits per share were 15.5p (2014 -
profits – 4.5p).
Western has paid an interim dividend of 1.05p and proposes an
increased final dividend of 1.05p making 2.1p for the year (2014 –
2.0p). Western’s net assets at market value as at
30th June 2015 were
£13,487,000 equivalent to 75p per share, a decrease of 26% from
102p last year.
Our share of the net assets of Western, including the value of
Western’s investments at market value, was £5.9million (2014 - £8
million). The fair value recorded in the statement of
financial position is the market value of £3.7million (2014 - £4.2
million). This represents 24% (2014 – 30%) of the net assets
of the Group. Western’s objective is to generate growth in
value for shareholders over the medium to long term and pay a
progressive dividend.
Western’s business model is to take sizeable minority stakes in
relatively small companies at a pre-IPO or IPO stage, and have
directors in common through which they can provide advice and
support for these growing companies. Their aim is that these
core holdings will then be sold over time into the market.
Companies that are targeted as core holdings will have an
experienced management team, a credible business model and also
good prospects for growth.
Mr. D. C. Marshall is the
Chairman of Western and Mr. Robotham and Mr. Beale are
non-executive directors. Western’s main core holdings are
Northbridge Industrial Services plc, Swallowfield plc, Bilby Plc
and Hartim Limited. An extract from Western’s announcement
relating to its main core holdings is set out below:
Northbridge
Industrial Services plc (“Northbridge”)
Northbridge hires and sells
specialist industrial equipment to a non-cyclical customer
base. With offices or agents in the U.K.,
U.S.A., Dubai, Germany, Belgium, France, Australia, Singapore, India, Brazil, Korea and
Azerbaijan, Northbridge has a
global customer base. This includes utility companies, the
oil and gas sector, shipping, construction and the public sector.
The product range includes loadbanks, transformers, generators,
compressors, loadcells and oil tools. Further information
about Northbridge is available on their website:
www.northbridgegroup.co.uk.
Northbridge will announce its
unaudited interim profits after tax for the six months ended
30th June 2015 on 30th September 2015.
Western acquired a further 25,000
Northbridge shares on 2 June 2015 for
£52,000 bringing its holding to 1,900,000 shares. Western’s
holding is 10.2% of Northbridge’s issued share capital. The
value of this investment at 30th June 2015 was £3,895,000 (2014 - £9,750,000)
being 29% (2014 - 53%) of Western’s net assets.
Mr D. C.
Marshall is a non-executive director of Northbridge.
Swallowfield plc
(“Swallowfield”)
Swallowfield is a market leader in
the development, formulation, manufacture and supply of cosmetics,
toiletries and related household products for global brands and
retailers operating in the cosmetics, personal care and household
goods market. Further information about Swallowfield is
available on their website: www.swallowfield.com.
Swallowfield announced its annual
results to 30th June 2015
on 22nd September 2015 and
recorded a profit after tax of £746,000 compared to a profit of
£157,000 for the comparable period last year. No dividends
were received from Swallowfield during the year (2014 – nil).
Profits are expected to recover further in the current year and
dividends are expected to be resumed shortly.
At the reporting date, Western owned 1,869,149 shares
which is 16.5% of Swallowfield’s issued share capital. The
market value of this investment on 30th June 2015 had increased by 11% to £2,019,000 from
the value at June 2014 of £1,813,000.
This is 15% (2014 - 10%) of Western’s net assets.
Mr E. J.
Beale is a non-executive director of Swallowfield.
Bilby Plc
(“Bilby”)
In July
2015 we invested £1,500,000 in acquiring 1,875,000 shares in
Bilby which is 5.5% of their issued share capital.
Bilby is an established, and award
winning, provider of gas installation, maintenance and general
building services to local authority and housing associations
across London and South East
England. They have a strategy of growing organically and by
acquisition. Further information about Bilby is available on
their website: www.bilbyplc.com.
Bilby announced its results for the
14 month period to 31st March 2015 on
23rd June 2015 showing a
profit after tax of £1,552,000. It has announced a dividend
of 2.32p per share payable in August which will provide us with
income of £43,500.
Hartim Limited
(“Hartim”)
Hartim is the unquoted holding company for Tudor Rose
International Limited (“TRI”) which was founded in 1984. It
works closely with a number of leading UK branded fast moving
consumer goods companies, offering a complete sales, marketing and
logistical service. Based in Stroud, Gloucestershire, TRI sells into 78 countries
worldwide including USA,
Spain, Portugal, Italy, Czech
Republic, Russia,
Turkey, South Africa, Saudi
Arabia, UAE, Malaysia,
Australia and China.
Western holds 49.5% of Hartim, which
has a 31st December year end, and which generated
trading profits before exceptional items in the year to
30th June 2015 of £68,000.
Turnover in the period was £18,022,000 (2014 - £20,448,000).
Western’s share of a loss after tax, including a charge for
disallowed tax losses, for the twelve months to 30th June 2015 was £5,000 (2014 –profit of
£382,000, after exceptional profit on former Australian subsidiary
of £337,000) and the book value of the investment at 30th June 2015 was £1,223,000 (2014 - £1,228,000)
being 9% (2014 - 7%) of Western’s assets.
Western has two nominees on the board
of Hartim: Mr E. J. Beale and Mr
L. H. Marshall (a director of City
Group P.L.C., Western’s company secretary).
Finsbury Food Group plc
(“Finsbury”)
Finsbury is one of the largest producers and suppliers of
premium cakes, bread and morning goods in the UK and currently
supplies most of the UK's major supermarket chains. Further
information about Finsbury is available on its website:
www.finsburyfoods.co.uk.
During the year Lonfin acquired 1 million additional shares in
Finsbury for a cost of £593,000. Lonfin now holds 10 million
shares, representing 7.81% of Finsbury’s share capital. The
market value of the holding was £8,000,000 as at 30th
June 2015 (cost - £2,875,000) and
represents 51% (2014 – 35%) of Lonfin’s net assets.
On 21st September 2015,
Finsbury announced audited profits on continuing operations after
tax and minority interests of £8.9 million for the year ended
28th June 2015 (2014 - £5
million).
Finsbury paid an interim dividend of 0.83p and has recommended
to its shareholders a final dividend of 1.67p per share, making
2.50p for the year (2014 – 1.00p).
Mr. Beale is a non-executive director of Finsbury.
General Portfolio
The portfolio is diverse with material interests in Food and
Beverages, Natural Resources, Chemicals and Tobacco. We
believe that the portfolio of quality companies we hold has the
potential to outperform the market in the medium to long term.
At year end the number of holdings in the General Portfolio was
26. We have decreased the amount invested in the General Portfolio
over the year by £100,000 (2014 - increased by £272,000).
Operations and Employees
All of our operations and those of our associate, Western,
except investment selection, are outsourced to our subsidiary, City
Group. City Group also provides office accommodation, company
secretarial and head office finance services to a number of other
U.K. and Jersey companies. City Group has responsibility for
the initial identification and appraisal of potential new strategic
investments for the Company and the day to day monitoring of
existing strategic investments and employs 8 people.
All 5 directors of the Company, and the 4 directors of its
subsidiaries are unchanged from last year and are male. The Group
has set a target of 25% female members of the Company’s Board and
female candidates will be considered on their merits when vacancies
arise. Excluding directors, 4 of the 6 other employees of the
Group at 30th June 2015
were female (30th June
2014 - 3 of 6).
Dividend
The Board recommend a final dividend of 0.5p per share, making a
total of 1p per share for the year (2014 – 0.9p). Subject to
shareholders’ approval at the Company’s Annual General Meeting on
2nd December 2015, the dividend will
be paid on 11th December
2015 to those shareholders on the register at the close of
business on 20th November 2015. Shareholders on the South
African register will receive their dividend in South African rand
converted from sterling at the closing rate of exchange on
29th September 2015 being
GBP1= ZAR
21.1213.
The number of shares in issue as at the declaration date is
31,207,479 and the Company’s UK Income Tax reference number is
948/L32120.
Dividend dates:
Last date to trade
(SA)
Friday 13th November
2015
Shares trade ex dividend (SA) Monday 16th
November 2015
Shares trade ex dividend (UK) Thursday 19th
November 2015
Record date (UK and
SA) Friday
20th November 2015
Pay
date
Friday 11th December
2015
The JSE Listings Requirements require disclosure of additional
information in relation to any dividend payments.
Shareholders registered on the Johannesburg register are advised that the
dividend withholding tax will be withheld from the gross final
dividend amount of 10.56065 SA cents per share at a rate of 15%
unless a shareholder qualifies for an exemption; shareholders
registered on the Johannesburg
register who do not qualify for an exemption will therefore receive
a net dividend of 8.97655 SA cents per share. The dividend is
payable in cash as a ‘Dividend’ (as defined in the South African
Income Tax Act, 58 of 1962, as amended) by way of a reduction of
income reserves. The dividend withholding tax and the
information contained in this paragraph is only of direct
application to shareholders registered on the Johannesburg register, who should direct any
questions about the application of the new dividend withholding tax
to Computershare Investor Services (Pty) Limited, Tel: +27 11
373-0004.
Share certificates may not be dematerialised or rematerialised
between Monday 16th November
2015 and Friday 20th November 2015, both days inclusive. Shares
may not be transferred between the registers in London and South
Africa during this period either.
Outlook
We believe our mix of Strategic Investments and a General
Portfolio gives us every chance of outperforming the broader market
in the medium to long term notwithstanding any short term
volatility in markets, currencies and commodities.
By Order of the Board
City Group P.L.C.
Company Secretary
29th September 2015
Johannesburg Sponsor: Sasfin Capital (a division of Sasfin
Bank Limited)
Consolidated Statement of Total
Comprehensive Income
For the year ended 30th June
|
|
2015 |
|
2014 |
|
|
£000 |
|
£000 |
|
|
|
|
|
Dividends - Listed
investments |
|
487 |
|
393 |
Interest
receivable |
|
- |
|
- |
Rental and other
income |
|
82 |
|
82 |
Profits realised on
sales of investments |
|
175 |
|
205 |
Management services
fees |
|
233 |
|
205 |
Operating
income |
|
977 |
|
885 |
|
|
|
|
|
Administration
expenses |
|
(643) |
|
(651) |
Operating
profit |
|
334 |
|
234 |
|
|
|
|
|
Unrealised changes in
the carrying value of investments |
|
2,049 |
|
(339) |
Interest payable |
|
(48) |
|
(25) |
Profit/(Loss) on
ordinary activities before taxation |
|
2,335 |
|
(130) |
|
|
|
|
|
Tax on result of
ordinary activities |
|
(357) |
|
71 |
Profit/(Loss) on
ordinary activities after taxation |
|
1,978 |
|
(59) |
|
|
|
|
|
Non-controlling
interest |
|
(10) |
|
16 |
Profit/(Loss) for
the financial year attributable to members of the holding
company |
|
1,968 |
|
(43) |
|
|
|
|
|
Other comprehensive
income |
|
- |
|
- |
|
|
|
|
|
Total comprehensive income
attributable to shareholders |
|
1,968 |
|
(43) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of headline
earnings |
|
|
|
|
|
|
|
|
|
Basic (loss)/profit
per share |
|
6.3p |
|
(0.1)p |
Adjustment for the unrealised
changes in the carrying value of investments, net of tax |
|
(5.5)p |
|
0.8p |
Headline profit per
share |
|
0.8p |
|
0.7p |
All profits and losses are on continuing activities.
Consolidated Statement of Changes in
Shareholders’ Equity
|
|
|
|
Share of |
Retained |
|
|
|
|
Ordinary |
Share |
Unrealised |
undistributed |
realised |
|
Non- |
|
|
Share |
premium |
profits/(losses) |
results of |
profits
& |
|
Controlling |
Total |
|
Capital |
account |
on
investments |
Subsidiaries |
losses |
Total |
interests |
equity |
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
|
|
Year ended 30th June
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at 1st July
2013 |
1,560 |
2,320 |
4,831 |
(499) |
6,046 |
14,258 |
81 |
14,339 |
Total comprehensive
income |
- |
- |
(246) |
205 |
(2) |
(43) |
(16) |
(59) |
Dividends paid |
- |
- |
- |
- |
(265) |
(265) |
- |
(265) |
Total transactions with
shareholders |
- |
- |
- |
- |
(265) |
(265) |
- |
(265) |
Balances at 30th June
2014 |
1,560 |
2,320 |
4,585 |
(294) |
5,779 |
13,950 |
65 |
14,015 |
Year ended
30th June 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at
1st July 2014 |
1,560 |
2,320 |
4,585 |
(294) |
5,779 |
13,950 |
65 |
14,015 |
Total comprehensive
income |
- |
- |
1,719 |
320 |
(71) |
1,968 |
10 |
1,978 |
Dividends
paid |
- |
- |
- |
- |
(296) |
(296) |
- |
(296) |
Total transactions
with shareholders |
- |
- |
- |
- |
(296) |
(296) |
- |
(296) |
Balances at
30th June 2015 |
1,560 |
2,320 |
6,304 |
26 |
5,412 |
15,622 |
75 |
15,697 |
Consolidated Statement of Financial
Position
At 30th
June |
|
2015 |
|
2014 |
|
|
£000 |
|
£000 |
Non-current
Assets |
|
|
|
|
Tangible assets |
|
31 |
|
39 |
Investments |
|
11,694 |
|
9,026 |
|
|
11,725 |
|
9,065 |
Current
Assets |
|
|
|
|
Listed
investments |
|
5,801 |
|
5,927 |
Trade and other
receivables |
|
218 |
|
245 |
Cash at bank |
|
115 |
|
39 |
|
|
6,134 |
|
6,211 |
|
|
|
|
|
Current
Liabilities |
|
|
|
|
Trade and other
payables: falling due within one year |
|
(1,720) |
|
(1,150) |
|
|
|
|
|
Net Current
Assets |
|
4,414 |
|
5,061 |
|
|
|
|
|
Deferred
taxation |
|
(442) |
|
(111) |
Total Assets less
Current Liabilities |
|
15,697 |
|
14,015 |
|
|
|
|
|
Capital and
Reserves |
|
|
|
|
Called up share
capital |
|
1,560 |
|
1,560 |
Share premium
account |
|
2,320 |
|
2,320 |
Unrealised profits and
losses on investments |
|
6,304 |
|
4,585 |
Share of retained
realised profits and losses of subsidiaries |
|
26 |
|
(294) |
Company’s retained
realised profits and losses |
|
5,412 |
|
5,779 |
|
|
15,622 |
|
13,950 |
Non-controlling equity
interests |
|
75 |
|
65 |
|
|
15,697 |
|
14,015 |
Company Statement of Financial
Position
at 30th June
|
|
2015 |
|
2014 |
|
|
£000 |
|
£000 |
Non-current
Assets |
|
|
|
|
Investments in Group
companies |
|
6,203 |
|
5,923 |
|
|
6,203 |
|
5,923 |
Current
Assets |
|
|
|
|
Listed
investments |
|
5,801 |
|
5,927 |
Trade and other
receivables |
|
19 |
|
25 |
Bank balance |
|
71 |
|
12 |
|
|
5,891 |
|
5,964 |
|
|
|
|
|
Current Liabilities |
|
|
|
|
Trade and other
payables: falling due within one year |
|
(1,597) |
|
(997) |
Net Current
Assets |
|
4,294 |
|
4,967 |
|
|
|
|
|
Deferred
taxation |
|
(442) |
|
(111) |
Total Assets less
Current Liabilities |
|
10,055 |
|
10,779 |
|
|
|
|
|
Capital and
Reserves |
|
|
|
|
Called up share
capital |
|
1,560 |
|
1,560 |
Share premium
account |
|
2,320 |
|
2,320 |
Unrealised profits and
losses on investments |
|
763 |
|
1,120 |
Realised profits and
losses |
|
5,412 |
|
5,779 |
Equity
shareholders' funds |
|
10,055 |
|
10,779 |
Consolidated Statement of Cash
Flow
For the year ended 30th June
|
|
2015 |
|
2014 |
|
|
£000 |
|
£000 |
Cash flows from
operating activities |
|
|
|
|
Profit/(Loss) before
tax |
|
2,335 |
|
(130) |
Adjustments for
non-cash and non-operating activities - |
|
|
|
|
Finance expense |
|
48 |
|
25 |
Depreciation
charges |
|
8 |
|
3 |
Unrealised changes in the fair value of investments |
|
(2,049) |
|
339 |
|
|
342 |
|
237 |
|
|
|
|
|
Taxes paid |
|
(26) |
|
(22) |
|
|
|
|
|
Changes in working
capital |
|
|
|
|
Decrease/(increase) in
trade and other receivables |
|
27 |
|
11 |
(Decrease)/increase in trade and other payables |
|
(5) |
|
23 |
Decrease/(increase) in current asset investments |
|
100 |
|
(272) |
|
|
122 |
|
(238) |
|
|
|
|
|
Addition to
non-current tangible assets |
|
- |
|
(39) |
Cash flows from
tangible non-current assets |
|
- |
|
(39) |
|
|
|
|
|
Cash flows from investment activity |
|
|
|
|
Purchase of strategic
investments |
|
(593) |
|
- |
Net cash outflow
from investment activity |
|
(593) |
|
- |
|
|
|
|
|
Cash flows from
financing |
|
|
|
|
Interest paid |
|
(48) |
|
(25) |
Equity dividends
paid |
|
(296) |
|
(265) |
Net
drawdown/(repayment) of loan facilities |
|
575 |
|
275 |
Net cash
inflow/(outflow) from financing |
|
231 |
|
(15) |
|
|
|
|
|
Decrease in cash
and cash equivalents |
|
76 |
|
(77) |
|
|
|
|
|
Cash and cash
equivalents at the beginning of the year |
|
39 |
|
116 |
Cash and cash
equivalents at end of the year |
|
115 |
|
39 |
Notes
- Earnings per share are based on the profit on ordinary
activities after taxation and non controlling interests and on
31,207,479 shares (2014 – 31,207,479) being the weighted average of
the number of shares in issue during the year.
- The financial information in this preliminary announcement of
audited group results does not constitute the company’s statutory
accounts for the years ended 30th June 2015 or 30th June 2014 but is derived from those
accounts. The accounts have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS. The accounts
are prepared on the historical cost bases, except for certain
assets and liabilities which are measured at fair value, in
accordance with IFRS and comply with IAS 34. The audited
accounts for the group for the year ended 30th
June 2014 were reported on with an
unqualified audit report and have been delivered to the Registrar
of Companies.
Enquiries to:
London Finance & Investment Group
P.L.C.:
020 7796 9060
David Marshall/Edward Beale
30th September 2015
Johannesburg Sponsor: Sasfin Capital (a division of Sasfin
Bank Limited)