Trading Update
March 24 2009 - 3:00AM
UK Regulatory
TIDMLONR
RNS Number : 3385P
Lonrho PLC
24 March 2009
24 March 2009
LONRHO PLC
("Lonrho" or the "Company")
Trading Update for the Quarter Ended 31 December 2008
Lonrho PLC (AIM: LONR) today announces its unaudited trading update for the
first quarter ended 31 December 2008 ("First Quarter") and an update with regard
to the unaudited results for the year ended 30 September 2008. The Board of
Lonrho has resolved to henceforth issue quarterly trading updates on the
progress of the Group to ensure that shareholders remain fully informed of
developments and progress.
Both sets of results (and comparative figures included therein) do not form
audited accounts nor have been extracted from audited accounts and they have not
been filed with Companies House. As set out below the company's intention is to
release and post its annual results on or before 31 March 2009
Trading Update - 3 months to 31 December 2008
The Group is delivering significant revenue growth in its continuing operations
as investments made during the past three years are now producing tangible
results. During the past two years Lonrho has created in excess of one thousand
direct and indirect new jobs from its operations in Africa.
The first quarter of 2008/09 has seen Lonrho's investments across Africa
continue to report strong operational performances in all of the five strategic
sectors of Lonrho's operations. (Transportation, Infrastructure, Agriculture,
Support Services and Hotels). Lonrho has built a stable of businesses
geographically distributed across Africa's strongest emerging markets. Lonrho
believes these businesses are well positioned to capitalise on further growth
opportunities.
First Quarter turnover was GBP21.9m. This represents a significant increase of
132% on a reported basis, and 53% increase on a like for like basis against the
prior year.
EBITDA in the First Quarter to 31 December 2008 was a loss of GBP1.9m compared
to a loss of GBP3.6m in the prior year on a reported basis, this is a 45%
improvement against last year. Operating loss on a reported basis in the first
quarter was GBP2.7m compared to a loss of GBP3.4m in the previous year, which is
a 22% improvement. The First Quarter loss includes rollout costs and operating
losses connected to the expansion of Lonrho's aviation subsidiary, Fly 540, into
new countries of GBP1.7m (Nil Q1 08/07).
As at 31 December 2008, the Group also had unrecognised foreign exchange gains
of GBP10.6m in respect of the first quarter. Net assets stood at GBP87.0m up
from GBP74.9m at 30 September 2008.
Trading Highlights
* The acquisition of 51% of Rollex SA was completed with effect from 1 October
2008. Rollex is the central company within Lonrho Agriculture's logistical
division and like for like Quarter 1 sales were up 49% year on year driven by a
new cold store and export processing facility in Windhoek, Namibia and expansion
and growth of the base operations airside at Johannesburg airport. The fruit
salad processing line at the Johannesburg facility is now delivering processed
fruit salad in South Africa and opening lucrative export markets in Europe.
* Lonrho's pan African aviation company, branded Fly540, has continued to expand
its operations to include Uganda and Tanzania. Over 25,000 passengers were
carried in December alone and the Kenya airline (49% holding) continues to
operate profitably. The roll out plans for Angola and Ghana are well advanced.
* The Luba Freeport (63% holding) quay extension has been completed delivering
300m of usable quay. Revenue has increased by 14% on a reported quarterly basis
against the previous year. Costs have been kept below budget and negotiations
are proceeding well for new clients to utilise the port as a central operational
base as the Gulf of Guinea oil exploration market continues to deliver strong
growth.
* Kwikbuild Corporation Limited's (62% holding) South African subsidiary
e-Kwikbuild opened a new production facility on time and on budget in Port
Elizabeth in November 2008 almost tripling its capacity. This has enabled it to
win its first export orders to Angola. Significant pan African export
opportunities are developing for the Company through Lonrho's extensive African
network.
* Hotel Cardoso in Mozambique (59% holding + Management Contract ) continued with
the hotel refurbishment and upgrade and is due to complete works on schedule in
the second quarter.
* Hotel Grand Karavia in Lubumbashi, DRC, (50% holding + Management Contract)
continues with its US$ 20 million refurbishment program of which Lonrho is
committed for a maximum of US$ 2.5 million, the balance being funded by DBSA for
US$ 10 million and local joint venture partners and banks. The hotel is
scheduled to re-open in the Summer of 2009.
* Lonrho IT, (CES, 50% holding) continues to grow its operations in South Africa
and intends to establish new branches in Zambia and Angola in the coming
quarter.
* Bytes & Pieces, (65% holding) continues to perform to expectations.
* Lonrho Springs (100% holding) continues its operations in Mozambique (100%
holding) and Kinshasa, DRC (21.4% holding) and new developments previously
announced in Angola (51% holding) and Lubumbashi (51% holding) and South Africa
(90%) remain under development.
* Lonrho Mining. Lonrho's holding in Lonrho Mining, listed on the Australian Stock
Exchange currently stands at 25.59% holding.
* Lonrho announced its withdrawal from shipping, and the liquidation of its
shipping line (SAILS) to focus on its other core African businesses
Financing Activities
In December 2008, foreseeing significant difficulties in world markets in 2009,
the Company raised GBP15.4 million before costs (US$ 24.4 million) to ensure the
continued development of its core businesses. The placing was made following
consultation with major institutional investors, by means of the issue of some
308 million new ordinary shares in the Company at 5 pence per Ordinary Share.
The Company has no debt at Plc level. The net proceeds of the Placing have
significantly reduced the Company's exposure to further insecurity in world
financial markets.
Key Developments Announced
During the First Quarter, Lonrho announced some key developments:
* Agreement to develop a 75 hectare aggregate project in Angola to meet the
ongoing and increasing demand for construction aggregates in Angola
* Signed an agreement for 25,000 hectares of agricultural projects in Angola for
the domestic market
* Signed an agreement to become the John Deere tractor and agricultural equipment
distributor for Angola
* Undertaking feasibility studies of 25,000 hectares of agricultural land in
Malawi
* Undertaking feasibility studies for a five year scheduled development of up to
100,000 hectares in the Niger floodplain in Mali for the domestic and North
African market
Appointment of new Finance Director
The Company was pleased to announce the appointment of David Armstrong as
Finance Director. Mr Armstrong (FCA) brings extensive experience of operating
throughout Africa. With Mr Armstrong's appointment, Ms Jean Ellis stood down as
the Company's Finance Director and has assumed the role of a non-executive
director of the Company.
Current Trading and Future Outlook
Each of the Company's core businesses has continued to perform to expectations
in the first 8 weeks of 2009. Although the impact of the global recession is
being felt across Africa, the impact on the African continent is less severe and
forecasts expect sub Saharan growth in GDP to continue in 2009 albeit at a
slower rate. The board remains confident that the Company is focused on market
sectors and specific countries that will continue to see growth.
It is intended that the next quarterly update for the company will be released
in April 2009.
Results for the year ended 30 September 2008
It is the Company's intention to issue and post its audited financial statements
for the year ended 30 September 2008 on or before 31 March 2009.The unaudited
results to 30 September 2008, (which are still subject to review for final
adjustments and foreign exchange movements), are expected to show a Turnover of
GBP42.0m, an attributable loss after tax to Lonrho's equity shareholders of
(GBP33.3m) and net assets of GBP69.7m (2007: GBP42.7m). The attributable loss to
Lonrho's equity shareholders in the year ended 30 September 2008 includes the
operating losses and write off of SAILS (GBP29.1m) (in which Lonrho held a 67%
shareholding) in the current financial year. SAILS contributed Turnover of
GBP18.3m in the year. In light of the current world financial markets, and with
cogniscence of a global economic slowdown affecting the shipping market, the
board felt it was prudent to review its ongoing support for SAILS and announced
the liquidation of SAILS on the 15th October 2008. Closure costs in respect of
SAILS are not expected to be material in the current financial year.
David Lenigas, Lonrho's Executive Chairman commented:
"The announcement of the first quarter results marks a tangible coming of age
for Lonrho. We now have businesses operating across five strategic sectors in
seventeen countries in Africa with reported revenues increasing 53% on a like
for like basis against the same period last year."
"We expect Lonrho's operations to continue to deliver strong quarterly trading
performances in 2009, and we are focusing on strengthening our core businesses.
We remain extremely positive about Lonrho's prospects in our chosen countries of
operation and specific market sectors across Africa."
LONRHO GROUP
GROUP TURNOVER YTD - UNAUDITED
DECEMBER 2008
GBP'000S
+-------------------------------------------------+----------+--------------+--------------+-------+
| | TURNOVER on a reported basis |
+-------------------------------------------------+------------------------------------------------+
| | 3 Months | 3 Months | | Var % |
| | to | to | Variance | |
| | 31 DEC | 31 DEC | | |
| | 2008 | 2007 | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Agri Processing | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Rollex | 12,189 | 0 | 12,189 | 100% |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Transport | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| 540 | 4,206 | 1,805 | 2,401 | 133% |
| Group | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Other | 0 | 166 | (166) | -100% |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Support Services | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Bytes | 1,925 | 1,369 | 556 | 41% |
| & | | | | |
| Pieces | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Other | 438 | 246 | 192 | 78% |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Infrastructure | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Luba | 2,111 | 1,854 | 257 | 14% |
| Freeport | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| E-Kwikbuild | 377 | 0 | 377 | 100% |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Hotels | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Hotel | 700 | 485 | 215 | 44% |
| Cardoso | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Continuing | 21,946 | 5,925 | 16,021 | 270% |
| operations | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Shipping | | | | |
| -Discontinued | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| SAILS | 0 | 3,522 | (3,522) | -100% |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Discontinued | 0 | 3,522 | (3,522) | -100% |
| operations | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Total Turnover | 21,946 | 9,447 | 12,499 | 132% |
+-------------------------------------------------+----------+--------------+--------------+-------+
+-------------------------------------------------+----------+--------------+--------------+-------+
| | TURNOVER on a like-for-like basis* |
| | |
+-------------------------------------------------+------------------------------------------------+
| | 3 Months | 3 Months | Variance | Var % |
| | to | to | | |
| | 31 DEC | 31 DEC | | |
| | 2008 | 2007 | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Agri Processing | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Rollex | 12,189 | 8,166 | 4,023 | 49% |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Transport | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| 540 | 4,206 | 1,805 | 2,401 | 133% |
| Group | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Other | 0 | 166 | (166) | -100% |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Support Services | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Bytes | 1,925 | 1,369 | 556 | 41% |
| & | | | | |
| Pieces | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Other | 438 | 246 | 192 | 78% |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Infrastructure | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Luba | 2,111 | 1,854 | 257 | 14% |
| Freeport | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| E-Kwikbuild | 377 | 248 | 129 | 52% |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Hotels | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Hotel | 700 | 485 | 215 | 44% |
| Cardoso | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Continuing | 21,946 | 14,340 | 7,607 | 53% |
| operations | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Shipping | | | | |
| -Discontinued | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| SAILS | 0 | 0 | 0 | 0% |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Discontinued | 0 | 0 | 0 | 0% |
| operations | | | | |
+-------------------------------------------------+----------+--------------+--------------+-------+
| Total Turnover | 21,946 | 14,340 | 7,607 | 53% |
+-------------------------------------------------+----------+--------------+--------------+-------+
* Including Rollex and E-Kwikbuild and removal of Sails and Norse Air from 2007
Results sourced from December 2008 management accounts
Enquiries
+----------------------------------------------+--------------------------+
| Lonrho Plc | |
+----------------------------------------------+--------------------------+
| David Lenigas, Executive | +44 |
| Chairman | (0) |
| | 20 |
| | 7016 |
| | 5105 |
+----------------------------------------------+--------------------------+
| Geoffrey White, Chief | +44 |
| Executive Officer | (0) |
| | 20 |
| | 7016 |
| | 5105 |
+----------------------------------------------+--------------------------+
| David Armstrong, Finance | +44 |
| Director | (0) |
| | 20 |
| | 7016 |
| | 5105 |
+----------------------------------------------+--------------------------+
| Emma Priestly, Executive | +44 |
| Director | (0) |
| | 20 |
| | 7016 |
| | 5105 |
+----------------------------------------------+--------------------------+
| | |
+----------------------------------------------+--------------------------+
| Pelham PR | |
+----------------------------------------------+--------------------------+
| Charles Vivian | +44 |
| | (0) |
| | 20 |
| | 7337 |
| | 1538 |
+----------------------------------------------+--------------------------+
| | +44 |
| | (0) |
| | 7977 |
| | 297903 |
+----------------------------------------------+--------------------------+
| James MacFarlane | +44 |
| | (0) |
| | 20 |
| | 7337 |
| | 1527 |
+----------------------------------------------+--------------------------+
| | +44 |
| | (0) |
| | 7841 |
| | 672831 |
+----------------------------------------------+--------------------------+
| | |
+----------------------------------------------+--------------------------+
| Collins Stewart | |
| Europe (Nomad) | |
+----------------------------------------------+--------------------------+
| Hugh Field | +44 |
| | (0) |
| | 20 |
| | 7523 |
| | 8350 |
+----------------------------------------------+--------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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