Lon.Fin.&Inv.Grp. - Interim Results
March 01 1999 - 2:33AM
UK Regulatory
RNS No 2623h
LONDON FINANCE & INVESTMENT GROUP PLC
1st March 1999
London Finance & Investment Group P.L.C.
Registered Office: 25 City Road, London, EC1Y 1BQ
1st March 1999
Shareholders will be aware that we adopted a new year end of 30th
June and that we issued our audited results for the six months to
30th June 1998 on 28th August 1998. The interim results now
presented cover the six months to 31st December 1998. The
comparative figures are for the equivalent period ending 31st
December 1997 and account for Western Selection P.L.C. as an
associate.
Our profit on ordinary activities attributable to shareholders for
the six months was #131,000 compared to #126,000 for the same
period in 1997 and earnings per share were 0.51p (1997 0.50p).
As is our practice, we are not paying an interim dividend; the
dividend paid from 1997 profits was for the 12 months ended on
31st December 1997.
Our operating profit is lower as compared with previous periods
mainly because we realised a lower amount of profit from our
general portfolio of listed investments. However dividends
received increased satisfactorily and interest costs were reduced
following the receipt of the proceeds of the take over of
Consolidated Metallurgical Industries Limited ("CMI"). The
contribution to profits by our associate Western Selection for its
half year to 31st December 1998 was #58,000 (half year to 30th
September 1997 - #93,000) mainly because Western also realised
lower profits from its portfolio.
At 31st December 1998 our net asset value per share was 35.31p.
This was significantly lower than a year earlier because of
disproportionate falls in the market value of our principal
investments, which are held as long term fixed assets. Details of
our investments are set out on page 4 of this report. At 31st
December 1997 the market values of our principal investments
(excluding CMI) accounted for 30.14 p per share, out of a total of
44.63p, but had fallen to 17.13p per share a year later, out of a
total of 35.31p.
Marylebone Warwick Balfour Group Plc announced profits before tax
of #10,074,000 for its year ended 30th June and a 50% increase in
dividends for the year to 3.75p per share. The group is now the
second largest operator of serviced offices in the country, with
net assets at book value in excess of forty million pounds and
fully diluted net gearing of 66%.
Megalomedia plc announced increased turnover and gross profits for
its first half to 30th September 1998. However, following a
fundamental reappraisal of the carrying value of its film post
production unit in the United States, Megalomedia made exceptional
provisions and reported a loss before tax of #5,540,000.
Framestore, the digital and special effects division was awarded
its third consecutive Emmy for its work on Merlin, an NBC/Hallmark
mini TV series and Forward Publishing is acknowledged to be one of
the most successful businesses in the growing contract publishing
sector.
Creston plc announced a 25% growth in net asset values and a 9%
increase in profits before tax to #1,803,000 from #1,657,000 for
its year ended 30th June 1998. Creston intends to return to the
dividend list after its loan stock is redeemed this year and to
continue with a share buyback programme to take advantage of the
discount to net asset value at the current market price.
Western Selection P.L.C., our associate strategic investment
company, announced profits before tax of #144,600 compared with
#91,900 for the six months to 31st December 1997 and expects to at
least maintain its dividend for its current year. The net asset
value per Western share on 31st December 1998 was 16.52p compared
with a middle market price of 8.5p on that date.
As can be seen from these reports on our principal investments, it
is your Board's view that these companies have excellent long term
potential and we are confident that the set back in the market
value of these investments reflects the general lack of interest
in small capitalisation issues rather than their current operating
performance.
We declared a dividend for the six months to 30th June 1998 of
0.50p per share, which was paid in November. As mentioned above,
it is not our intention to pay interim dividends; and subject to
unforeseen circumstances, we expect our dividend for the year to
30th June 1999 will be at least pro rata to the previous period.
Unaudited Consolidated Profit & Loss Half-year ended Half-year ended
Account 31st December 30th June
1998 1997 1998
#000 #000 #000
Operating Income
Dividends received 151 115 124
Interest and sundry income 41 33 16
Profit on sales of investments 37 116 67
229 264 207
Management services income 174 170 166
403 434 373
Administrative expenses
Investment operations (147) (104) (118)
Management services (167) (206) (163)
Total administrative expenses (314) (310) (281)
Operating Profit 89 124 92
Share of result of associated 58 93 124
undertaking
Interest payable (39) (47) (50)
Profit on ordinary activities before 108 170 166
taxation
Tax on result of ordinary activities 14 (39) 19
Profit on ordinary activities after 122 131 185
taxation
Minority interest 9 (5) (2)
Profit attributable to members of 131 126 183
the holding company
Proposed dividend - (229) (128)
Retained profit/(loss) for the 131 (103) 55
financial year
Earnings per share 0.51p 0.50p 0.72p
All profits arise on continuing activities
Unaudited abridged Consolidated Half-year ended Year ended
Balance Sheet 31st December 30th June
1998 1997 1998
#000 #000 #000
Fixed Assets
Tangible assets 499 462 511
Investments 5,645 6,226 6,424
6,144 6,688 6,935
Current Assets
Listed investments 3,119 2,800 2,991
Unlisted investments 43 43 43
Debtors 282 355 185
Cash, bank balances and deposits 256 127 30
3,700 3,325 3,249
Creditors: falling due within one (1,313) (1,599) (1,662)
year
Net Current Assets 2,387 1,726 1,587
Total Assets less Current 8,531 8,414 8,522
Liabilities
Provision for Liabilities and
Charges
Deferred taxation - (11) (8)
8,531 8,403 8,514
Capital and Reserves
Called up share capital 1,276 1,270 1,276
Share premium account 956 933 956
Reserves 257 336 361
Profit and loss account 5,990 5,804 5,859
Shareholders funds 8,479 8,343 8,452
Minority equity interests 52 60 62
8,531 8,403 8,514
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 period ended 30th June 1998.
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 1997 - 25,402,610, June 1998 - 25,448,245), 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 1998 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.
Balance Sheet Analysis taking investments at market value
31st December 30th June
1998 1997 1998
#000 #000 #000
Tangible fixed assets 499 462 511
Principal investments at market
value:-
Western Selection P.L.C. ** 1,566 2,412 2,375
Marylebone Warwick Balfour Group 1,902 2,764 2,902
Plc
Megalomedia plc 765 2,377 1,801
Creston Land & Estates plc 139 103 190
Consolidated Metallurgical - 325 623
Industries Limited
4,372 7,981 7,891
General equity portfolio (see 4,732 4,207 4,946
analysis below)
Cash, bank balances and deposits 256 127 30
Bank overdraft (750) (1,100) (1,100)
Other net liabilities (46) (279) (142)
Minority interests (52) (60) (62)
Net assets 9,011 11,33 12,07
8 4
Net assets per share 35.31 44.63 47.31
p p p
** Western Selection P.L.C., a strategic investment company, is an
associate and 41% held by London Finance. Taking investments at
market value the holding has an asset value of approximately #3
million, as published in Western's interim statement at 31st
December 1998.
END
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