TIDMLONR
RNS Number : 5609H
Lonrho PLC
31 May 2011
31 May 2011
Lonrho Plc
("Lonrho" or the "Company")
Lonrho reports a 29% increase in turnover for the 6 months ended
31 March 2011
Lonrho Plc, the conglomerate with a structured portfolio of
African investments, announces its unaudited Interim Results for
the six months ended 31 March 2011. The financial information in
this statement does not constitute the Company's statutory accounts
within the meaning of Section 434 of the Companies Act 2006.
Financial Highlights for the six months to 31 March 2011
-- For the half year the revenue of GBP61.1m is 29% ahead of the
first half of FY10.
-- In the first half of the financial year, the loss before tax
was GBP2.9m. When compared to the prior year, and after excluding
an exchange gain of GBP5.7m in that year (current year GBPnil),
this represents an underlying improvement of GBP4.3m.
-- Net assets at 31 March 2011 stood at GBP126.4m, compared with
GBP124.5m as at 31 December 2010.
-- Available cash balances in the Group at 31st March 2011 were
GBP17.8m.
The interim report and financial statements are published on the
Company's website (www.lonrho.com) today.
David Lenigas, Lonrho's Executive Chairman, commented:
"The results for the half year are positive, showing a 29%
increase in turnover for the six months when compared to the
previous year. Excluding exchange movements, the loss before tax of
GBP2.9m represented an underlying improvement of GBP4.3m for the
period.
We continue to see strong growth across all of our divisions,
spear-headed by Lonrho's agribusiness and infrastructure
businesses. We expect to see continued growth across all sectors
for the remainder of the financial year, as we move into our
typically strongest period."
Enquiries
Lonrho Plc +44 (0) 20 7016 5105
David Lenigas
Geoffrey White
David Armstrong
Pelham Bell Pottinger +44 (0) 20 7861 3126
Charles Vivian
James Macfarlane
Chief Executive's Statement
Lonrho has delivered a strong first six months to 31 March 2011
and has seen continued growth across all five divisions. The
Company maintains its focus on providing the support industries for
the expanding oil and gas, agricultural and mineral sectors in
sub-Saharan Africa.
The five divisional operations, agriculture, infrastructure,
transportation, hotels and support services have each reported
increased sales year on year and are operating in markets that are
growing rapidly as sub-Saharan Africa continues to deliver strong
economic development. The one billion people in the Continent are
creating an increasingly larger consumer market as general levels
of disposable income rise. Africa continues to benefit from
improved political stability and the Continent now contains some of
the fastest growing economies in the world. Recent events in North
Africa have had no material effect on sub-Saharan Africa.
The oil and gas and agriculture sectors in Africa are playing an
increasingly more important role, not only in developing the
African economy, but also in gaining acceptance of Africa as a
strong global emerging market. The increasing dependence of the
rest of the world on sub-Saharan Africa as a source for oil and
gas, and agricultural produce specifically, will be a positive
influence in building Africa's global importance in the coming
years. International research on emerging markets from Ernst &
Young, BCG, World Bank, McKinsey and others is already highlighting
the importance of Africa as an essential part of the global market
moving forward.
Lonrho's strategy to support the fastest growing industrial
sectors continues. With the Company's policy of geographical spread
of operations (Lonrho is now working in seventeen countries), and a
'stand-alone' divisional structure with no debt recourse from
division to division, the Board continues to believe Lonrho has a
prudent approach to operating in the sub-Saharan African
market.
In October 2010, the Company completed the issue of US$70
million (GBP44.3 million) Guaranteed Convertible Bonds due 2015. On
20 May 2011, Lonrho announced a placing of new ordinary shares in
the capital of the Company at 16.5 pence per share to raise gross
proceeds of GBP19.5 million.
Post 31 March 2011, Lonrho was admitted to the Main Market of
the London Stock Exchange as a Premium Listing on the 26th April
2011 and, upon admission to the Main Market, the Rt. Hon Sir
Richard Needham joined the Board as an Independent Non-Executive
Director.
Lonrho is well positioned to enter the second half of the
financial year and to continue the strong growth and development of
the Group.
Financial Highlights for the six months to 31 March 2011
-- For the half year the revenue of GBP61.1m is 29% ahead of the
first half of FY10.
-- In the first half of the financial year, the loss before tax
was GBP2.9m. When compared to the prior year, and after excluding
an exchange gain of GBP5.7m in that year (current year GBPnil),
this represents an underlying improvement of GBP4.3m.
-- Net assets at 31 March 2011 stood at GBP126.4m, compared with
GBP124.5m as at 31 December 2010.
-- Available cash balances in the Group at 31st March 2011 were
GBP17.8m.
Operational Review
Agribusiness
The agribusiness division has grown to be over 50% of Lonrho's
total revenue and continues to see growing demand. The agribusiness
division has three distinct businesses: fruit and vegetables; fish
and shellfish; and agricultural equipment.
Rollex (100% holding), the fruit and vegetable business, is
seeing increasing demand from retailers both in South Africa and
from around the world for produce from Southern Africa. Lonrho
sources product on off-take agreements from Mozambique, Tanzania,
Zimbabwe, Zambia and South Africa and provides the vertically
integrated, international standard, packing, processing and
logistics services to deliver the produce in the best condition to
the supermarket shelf, whether it be in Cape Town, London, New York
or Beijing. In the first half of this year, as planned, Rollex has
refocused its strategy around purely vertically integrated
agribusiness with less emphasis on general logistics.
A similar vertically integrated packing, processing and
logistics chain is operated for the fish and shellfish business,
taking 'wild caught', 'sustainably sourced' fish and shellfish from
Namibia, South Africa and Mozambique, and preparing it and
supplying it to retail clients' requirements in South Africa and
the world.
The traditional Southern African markets for both the fish and
fruit and vegetable businesses are developing strongly as South
African based retail chains are expanding the number of stores they
have both in South Africa and as they develop across Africa.
A significant market is developing in the export of fruit,
vegetables, fish and shellfish from Africa to the rest of the
world. The fruit and vegetable division of the business has seen
increasing demand from Europe, the Middle East, Far East and an
initial interest from the US market for African produce by both air
and sea freight. The potential for Southern Africa to become a
significant part of the global marketplace for fruit and vegetables
is clearly apparent. Lonrho's agribusiness division is well
positioned to partake in developing this market.
Oceanfresh (51% holding), the fish and shellfish division, has
seen good growth in sales into the South African retail chains as
they expand their operations, as well as very significant demand
from the US market for Oceanfresh products.
The US market has developed strongly with new listings for
Oceanfresh products with Costco and other large retail chains. The
US market is keen to find supplies of 'wild caught' and
'sustainable sourced' fish, and the Oceanfresh SASSI (Southern
African Sustainable Seafood Initiative) program, endorsed by the
WWF, has direct appeal to the requirements of the US retail
market.
Oceanfresh is in the process of relocating to bigger premises in
Johannesburg to meet forecast demand and to increase in-house
capabilities. The new facility, which will quadruple capacity,
includes a 500 tonne cold store unit, a high-care processing area
and a general processing area. The new facility will allow
Oceanfresh to further increase the export and local retail lines
available for customers.
The agricultural equipment business, primarily the distribution
of John Deere tractors in Mozambique and Angola, is progressing
well. The volumes in Mozambique through Trak Auto (100% holding)
have increased substantially, stimulated by both a growing market
and a strong increase in John Deere market share. LonAgro (51%
holding), the new John Deere distributor in Angola, will be
officially opened in June 2011 when the CEO of John Deere
inaugurates the project with Angolan Government officials.
Infrastructure
Luba Freeport (63% holding) continues to service the oil
services logistics market for Equatorial Guinea, Africa's third
largest oil producer. The client base for the port is expanding
and, during the first half of the year, clients have been focused
on the preparation work for new drilling programs due to commence
in 2012. The mobilisation for these programs has geared up later
than originally scheduled which has pushed back new revenue streams
for the port. The announcement of a further LNG train for
Equatorial Guinea and the coming increase in exploration of newly
released blocks will drive the business growth moving forward.
Luba Freeport took delivery of a mobile container scanner during
the period, which increases the port's security in line with
international practices and ensures that every container landed at
the Luba facility can be scanned.
Kwikbuild (51% holding) is now benefitting from the investment
made in manufacturing capacity and additional human resources
during the period. The company has been successfully building its
sales and management expertise to generate overseas orders to
diversify away from the historic dependence on South African
Government tenders.
During the period, Lonrho also announced the completion of the
purchase of the AFEX Group of companies (100% holding). AFEX's main
focus of operations is in supplying services and secure
accommodation in Juba, Southern Sudan. Key to the AFEX business is
the Riversdale Lodge accommodation base in Juba. Since acquisition,
a new 16 year lease has been signed for the site and a further 18
new VIP containerised accommodation units have been added bring the
accommodation total to 301 units. AFEX has also been contracted to
provide a camp and support services for a seismic exploration
company in Kenya, was awarded a short term contract to erect a
tented camp in Ethiopia and has won contracts with mining
companies.
Transportation
On a revenue basis, the transportation division, Lonrho Aviation
(100% holding), has had a strong start to the year with all of the
major markets showing good growth. Most pleasing is the launch of
scheduled services for Fly540 in Tanzania and in Angola.
During the period, Fly540 Kenya (49% holding + Board control)
has seen a 25% increase in passenger volumes and an increase in
revenues despite an aggressive price campaign from local
competitors in Kenya. Fly540 Kenya commenced scheduled flights from
Nairobi to Juba in Southern Sudan in May 2011.
Fly540 Tanzania (90% holding) is achieving very high load
factors and as a result has entered a new phase of expansion to
service more destinations in Tanzania.
Fly540 Angola (60% holding) commenced scheduled services on 31
January 2011. The deployment of the Angolan hub has been building
as new aircraft arrive in the country with three aircraft operating
scheduled services in May and a plan for five to be operating
scheduled services by the end of July. Regular services between
Cabinda, Soyo, Benguela, Lubango, and Luanda are working
efficiently and initial flights in Angola have proved very
successful with good load factors.
Operations at Fly540 Ghana (60% holding) will commence towards
the end of this year once Angola has been fully established.
Hotels
The hotels division enjoyed a good start to the year. The Hotel
Cardoso (59% holding) saw exceptional occupancy levels, which
averaged over 80% for the period. The hotel has also seen strong
room rates at a 37% increase on the same period a year ago. The
Mozambique Metical has devalued 17% against the Pound Sterling,
resulting in an adverse variance to turnover of US$439,000 in the
period.
By the end of the period, occupancy at the Grand Karavia,
Lubumbashi (50% holding + management contract) has built up to 50%
and growth is expected to continue in the second half as the hotel
continues to move towards its full business plan.
During the period Lonrho Hotels signed a new lease in the Gabon
capital of Libreville. The 5-star boutique hotel is scheduled to
open in the middle of 2011 and is anticipated to trade as the top
five star hotel in Gabon.
Lonrho Hotels Management Services will continue to pursue
further new projects into the second half of the year and has
bolstered its management team to support the existing hotels and
expected new management contracts for further properties.
Support Services
Bytes & Pieces (65% holding) has continued to grow during
the period and continues to benefit from the economic growth in
Mozambique and has won new projects with Banco Unico, Assoiacao
Nacional de Estradas, Maputo Port Development Corporation and Bank
BCI Formento.
CES Zambia (40% holding + Board control) has had an exceptional
period with growth being driven by a number of new contract wins
including KPMG, Africonnect, FHI (USAID) and World Vision.
Lonrho Water (100% holding) is developing two sizeable projects,
being a sewage pump station in Angola and series of solar powered
boreholes in South Africa. In the corporate water bottling
business, volumes are growing and new customers are being
signed.
Lonrho Projects, based in Johannesburg, continues to support the
other Lonrho divisions in a range of new project initiatives.
Other Investments
LonZim Plc (24.61% holding + management contract)
LonZim has invested in and restructured its business in Zimbabwe
and each is well placed to return to market and show rapid growth
as the Zimbabwean economy recovers. The commercial market has
gained some stability during the period and the individual LonZim
businesses are seeing increasing sales on a monthly basis.
Lonrho Mining (17.04% holding)
Lonrho Mining continues to concentrate on the exploration,
sampling and development of the Lulo diamond concession in Angola.
The results from the airborne survey of the concession are very
encouraging, and initial sampling results on the chosen targets for
further exploration have been impressive. The results from the
sampling program continue to build a full geological model of the
primary targets for future commercial production.
Geoffrey White
Director & Chief Executive Officer
31 May 2011
Condensed consolidated interim income statement
Unaudited Unaudited Audited
12 months
to
6 months to 6 months to 30 September
31 March 2011 31 March 2010 2010
Note GBPm GBPm GBPm
------------------------- ---- -------------- -------------- -------------
Revenue 5 61.1 47.3 107.8
Cost of sales (46.4) (35.3) (79.3)
------------------------- ---- -------------- -------------- -------------
GROSS PROFIT 14.7 12.0 28.5
------------------------- ---- -------------- -------------- -------------
Gain arising on fair
valuation of biological
assets 4.9 - 9.0
Other operating income 1.6 0.1 3.6
Operating costs (21.5) (17.9) (45.4)
------------------------- ---- -------------- -------------- -------------
OPERATING LOSS (0.3) (5.8) (4.3)
------------------------- ---- -------------- -------------- -------------
Finance income - 5.7 8.6
Finance expense (2.8) (0.8) (5.7)
------------------------- ---- -------------- -------------- -------------
NET FINANCE
(EXPENSE)/INCOME (2.8) 4.9 2.9
------------------------- ---- -------------- -------------- -------------
Share of results of
associates 0.2 (0.4) 2.3
Share of results of joint
ventures - (0.2) (0.4)
------------------------- ---- -------------- -------------- -------------
(LOSS)/PROFIT BEFORE TAX (2.9) (1.5) 0.5
Income tax charge (0.4) (0.2) (0.7)
LOSS FOR THE PERIOD (3.3) (1.7) (0.2)
------------------------- ---- -------------- -------------- -------------
ATTRIBUTABLE TO:
Owners of the Company (1.2) (1.0) 0.3
Non-controlling interests (2.1) (0.7) (0.5)
------------------------- ---- -------------- -------------- -------------
LOSS FOR THE PERIOD (3.3) (1.7) (0.2)
------------------------- ---- -------------- -------------- -------------
EARNINGS PER SHARE
Basic and diluted
(loss)/earnings per
share (pence) 3 (0.10) (0.10) 0.03
Condensed consolidated interim statement of financial
position
Unaudited Unaudited Audited
30 September
31 March 2011 31 March 2010 2010
GBPm GBPm GBPm
---------------------------------- ------------- ------------- ------------
ASSETS
Goodwill 15.8 14.2 15.5
Other intangible assets 5.6 2.8 4.5
Property, plant and equipment 124.0 75.3 109.2
Biological assets 15.0 - 9.0
Investments in associates and
joint ventures 12.9 8.7 10.3
Other investments 0.2 0.5 0.6
Deferred tax 0.7 0.1 0.7
---------------------------------- ------------- ------------- ------------
TOTAL NON-CURRENT ASSETS 174.2 101.6 149.8
---------------------------------- ------------- ------------- ------------
Inventories 6.7 4.8 4.9
Trade and other receivables 45.8 43.8 33.9
Cash and cash equivalents 23.9 17.0 7.8
TOTAL CURRENT ASSETS 76.4 65.6 46.6
---------------------------------- ------------- ------------- ------------
TOTAL ASSETS 250.6 167.2 196.4
---------------------------------- ------------- ------------- ------------
EQUITY
Share capital 11.8 10.5 11.7
Share premium account 138.4 126.1 138.0
Revaluation reserve 3.9 4.3 3.3
Share option reserve 4.6 2.5 4.7
Translation reserve (9.2) (4.2) (8.7)
Other reserves (4.5) - (5.5)
Retained earnings (37.4) (40.2) (36.1)
---------------------------------- ------------- ------------- ------------
TOTAL EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE COMPANY 107.6 99.0 107.4
---------------------------------- ------------- ------------- ------------
NON-CONTROLLING INTERESTS 18.8 2.3 20.3
---------------------------------- ------------- ------------- ------------
TOTAL EQUITY 126.4 101.3 127.7
---------------------------------- ------------- ------------- ------------
LIABILITIES
Financial liabilities - 0.3 -
Loans and borrowings 63.0 14.3 24.6
Deferred tax 3.0 2.3 3.0
Obligations under finance leases 10.8 1.1 1.8
Trade and other payables 3.3 - 2.5
---------------------------------- ------------- ------------- ------------
TOTAL NON-CURRENT LIABILITIES 80.1 18.0 31.9
---------------------------------- ------------- ------------- ------------
Bank overdraft 4.7 0.9 3.9
Loans and borrowings 3.9 9.2 4.6
Obligations under finance leases 0.9 0.2 1.0
Trade and other payables 34.3 37.6 27.0
Tax liability 0.3 - 0.3
TOTAL CURRENT LIABILITIES 44.1 47.9 36.8
---------------------------------- ------------- ------------- ------------
TOTAL LIABILITIES 124.2 65.9 68.7
---------------------------------- ------------- ------------- ------------
TOTAL EQUITY AND LIABILITIES 250.6 167.2 196.4
---------------------------------- ------------- ------------- ------------
Condensed consolidated interim statement of comprehensive
income
Unaudited Unaudited Audited
30 September
31 March 2011 31 March 2010 2010
GBPm GBPm GBPm
---------------------------------- ------------- ------------- ------------
Foreign exchange translation
differences 0.8 (2.2) (8.7)
Revaluation of property, plant and
equipment - 0.2 -
---------------------------------- ------------- ------------- ------------
Total other comprehensive income
and expense 0.8 (2.0) (8.7)
Loss (3.3) (1.7) (0.2)
---------------------------------- ------------- ------------- ------------
Total comprehensive income and
expense (2.5) (3.7) (8.9)
---------------------------------- ------------- ------------- ------------
ATTRIBUTABLE TO:
Owners of the Company (1.1) (3.0) (7.2)
Non-controlling interests (1.4) (0.7) (1.7)
---------------------------------- ------------- ------------- ------------
Total comprehensive income and
expense (2.5) (3.7) (8.9)
---------------------------------- ------------- ------------- ------------
Condensed consolidated interim cash flow statement
Unaudited Unaudited Audited
31 March 31 March 30 September
2011 2010 2010
GBPm GBPm GBPm
------------------------------------------ --------- --------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Loss (3.3) (1.7) (0.2)
Adjustments 1.8 (0.2) (3.7)
------------------------------------------ --------- --------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
BEFORE MOVEMENTS IN WORKING CAPITAL (1.5) (1.9) (3.9)
Change in inventories (1.5) (1.4) (0.1)
Change in trade and other receivables (12.3) (13.0) 1.0
Change in trade and other payables 2.9 1.1 (10.4)
------------------------------------------ --------- --------- ------------
CASH GENERATED FROM OPERATIONS (12.4) (15.2) (13.4)
Interest received - - 0.1
Interest paid (2.8) (0.8) (2.3)
Income tax paid (0.6) - (0.4)
NET CASH FROM OPERATING ACTIVITIES (15.8) (16.0) (16.0)
------------------------------------------ --------- --------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant
and equipment - - 0.4
Acquisition of subsidiary, net of cash
acquired (1.3) - (3.2)
Acquisition of property, plant and
equipment (13.6) (4.5) (6.8)
Acquisition of associates and joint
ventures (1.2) - (0.1)
Acquisition of investment - - (0.4)
------------------------------------------ --------- --------- ------------
NET CASH FROM INVESTING ACTIVITIES (16.1) (4.5) (10.1)
------------------------------------------ --------- --------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issue of shares 0.3 23.9 23.6
Loan advance 49.5 7.2 3.7
Repayment of borrowings (1.3) (0.5) (2.1)
Payment of finance lease liabilities (1.4) (0.1) (0.9)
Minority dividends paid - - (0.4)
------------------------------------------ --------- --------- ------------
NET CASH FROM FINANCING ACTIVITIES 47.1 30.5 23.9
------------------------------------------ --------- --------- ------------
Net increase/(decrease) in cash and cash
equivalents 15.2 10.0 (2.2)
Cash and cash equivalents at beginning
of the period 3.9 6.0 6.0
Foreign exchange movements 0.1 0.1 0.1
------------------------------------------ --------- --------- ------------
CASH AND CASH EQUIVALENTS AT END OF THE
PERIOD 19.2 16.1 3.9
------------------------------------------ --------- --------- ------------
Condensed consolidated interim statement of changes in
equity
Owners
of the Non-controlling
Company interests Total
GBPm GBPm GBPm
----------------------------------------- --------- ---------------- ------
AUDITED
Balance at 1 October 2009 78.1 3.0 81.1
----------------------------------------- --------- ---------------- ------
Profit/(loss) 0.3 (0.5) (0.2)
Foreign exchange translation differences (7.5) (1.2) (8.7)
----------------------------------------- --------- ---------------- ------
Total comprehensive income and expense (7.2) (1.7) (8.9)
Issue of shares 37.0 - 37.0
Issue of share options (net) 2.2 - 2.2
Purchase of non-controlling interests (5.5) (4.1) (9.6)
Subsidiaries acquired - (0.1) (0.1)
Non-controlling interests contribution - 25.5 25.5
Minority dividends - (0.4) (0.4)
Transfer from joint venture to
subsidiary - 0.9 0.9
Transfer between accounts 2.8 (2.8) -
----------------------------------------- --------- ---------------- ------
BALANCE AT 30 SEPTEMBER 2010 107.4 20.3 127.7
----------------------------------------- --------- ---------------- ------
UNAUDITED
Balance at 1 October 2010 107.4 20.3 127.7
----------------------------------------- --------- ---------------- ------
Loss (1.2) (2.1) (3.3)
Foreign exchange translation differences 0.1 0.7 0.8
----------------------------------------- --------- ---------------- ------
Total comprehensive income and expense (1.1) (1.4) (2.5)
Issue of shares 0.3 - 0.3
Subsidiaries disposed - (0.1) (0.1)
Equity portion of convertible bond 1.0 - 1.0
----------------------------------------- --------- ---------------- ------
BALANCE AT 31 MARCH 2011 107.6 18.8 126.4
----------------------------------------- --------- ---------------- ------
UNAUDITED
Balance at 1 October 2009 78.1 3.0 81.1
----------------------------------------- --------- ---------------- ------
Loss (1.0) (0.7) (1.7)
Foreign exchange translation differences (2.2) - (2.2)
Revaluation of property, plant and
equipment 0.2 - 0.2
----------------------------------------- --------- ---------------- ------
Total comprehensive income and expense (3.0) (0.7) (3.7)
Issue of shares 23.9 - 23.9
----------------------------------------- --------- ---------------- ------
BALANCE AT 31 MARCH 2010 99.0 2.3 101.3
----------------------------------------- --------- ---------------- ------
Notes
Note of preparation
1. Basis of preparation
The annual financial statements of the Group are prepared in
accordance with IFRSs as adopted by the EU. The condensed set of
financial statements included in this half yearly report has been
prepared in accordance with IAS 34 and the recognition and
measurement requirements of IFRSs as adopted by the EU.
The financial information is unaudited and has not been reviewed
by the Company's auditors and does not constitute the Company's
statutory accounts within the meaning of Section 434 of the
Companies Act 2006.
Statutory accounts for the year ended 30 September 2010 have
been delivered to the Registrar of Companies. The comparative
figures for the financial year ended 30 September 2010 are not the
Company's statutory accounts for that financial year. Those
accounts have been reported on by the Company's auditors and
delivered to the Registrar of Companies. The report of the auditors
was (i) unqualified, (ii) did not include a reference to any
matters to which the auditors drew attention by way of emphasis
without qualifying their report, and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act
2006.
2. Significant accounting policies
The accounting policies applied by the Group in these condensed
consolidated interim financial statements are substantially the
same as those applied by the Group in its consolidated financial
statements for the year ended 30 September 2010. Whilst there have
been changes to standards which become applicable for the year
ending 30 September 2011, none have been assessed as having a
significant impact on the Group.
3. Earnings per share
Basic and diluted earnings per share are arrived at by dividing
the loss/profit for the period by the average number of shares in
issue during the period.
Headline earnings per share are equal to basic earnings per
share as there are no reconciling items.
4. Capital management
Given the ongoing global financial crisis, the Directors are
carefully monitoring cash resources within the Group and have
instigated a number of initiatives to ensure funding will be
available for planned projects. As referred to in the Chief
Executive's Statement, in October 2010 the Company completed the
issue of US$70 million (GBP44.3 million) Guaranteed Convertible
Bonds due 2015. On 20 May 2011, Lonrho announced a placing of new
ordinary shares in the capital of the Company at 16.5 pence per
share to raise gross proceeds of GBP19.5 million.
5. Segmental reporting
The Chief Operating Decision Maker is deemed to be the Executive
Committee which monitors the results of the business segments to
assess performance and make decisions about the allocation of
revenues. Segment performance is evaluated on both revenue and
operating profit/(loss).
Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis. Unallocated items comprise mainly interest
earning assets, interest-bearing loans, borrowings and expenses,
and corporate assets and expenses.
Segment capital expenditure is the total cost incurred during
the period to acquire segment assets that are expected to be used
for more than one period.
There is no inter-segment revenue.
Business segments
The Group has five continuing reportable segments which are
organised around the basis of products and services which they
provide:
-- Agribusiness
-- Infrastructure
-- Transportation
-- Support services
-- Hotels
The Group has not aggregated any operating segment in arriving
at this analysis.
6 months to 31 March
2011
Consolidated
Support continuing
Agri-business Infra-structure Trans-portation services Hotels operations
GBPm GBPm GBPm GBPm GBPm GBPm
------------- -------------- ---------------- ---------------- --------- ------- -------------
EXTERNAL
REVENUE 31.6 7.4 10.1 7.8 4.2 61.1
------------- -------------- ---------------- ---------------- --------- ------- -------------
Segment
result 7.1 (0.6) (2.7) 0.3 0.0 4.1
Unallocated
expenses (4.4)
------------- -------------- ---------------- ---------------- --------- ------- -------------
OPERATING
LOSS (0.3)
------------- -------------- ---------------- ---------------- --------- ------- -------------
Net finance
income (2.8)
Share of
results of
associates 0.2
Income tax
charge (0.4)
------------- -------------- ---------------- ---------------- --------- ------- -------------
LOSS FOR THE
PERIOD (3.3)
------------- -------------- ---------------- ---------------- --------- ------- -------------
6 months to 31 March
2010
Consolidated
Support continuing
Agri-business Infra-structure Trans-portation services Hotels operations
GBPm GBPm GBPm GBPm GBPm GBPm
------------- -------------- ---------------- ---------------- --------- ------- -------------
EXTERNAL
REVENUE 23.9 6.4 9.8 4.9 2.3 47.3
------------- -------------- ---------------- ---------------- --------- ------- -------------
Segment
result 0.8 0.2 (2.9) 0.0 0.7 (1.2)
Unallocated
expenses (4.6)
------------- -------------- ---------------- ---------------- --------- ------- -------------
OPERATING
LOSS (5.8)
------------- -------------- ---------------- ---------------- --------- ------- -------------
Net finance
income 4.9
Share of
results of
associates (0.4)
Share of
result of
joint
ventures (0.2)
Income tax
charge (0.2)
------------- -------------- ---------------- ---------------- --------- ------- -------------
LOSS FOR THE
PERIOD (1.7)
------------- -------------- ---------------- ---------------- --------- ------- -------------
12 months to 30 September
2010
Consolidated
Support continuing
Agri-business Infra-structure Trans-portation services Hotels operations
GBPm GBPm GBPm GBPm GBPm GBPm
------------- -------------- ---------------- ---------------- ---------- ------- -------------
EXTERNAL
REVENUE 55.3 14.0 21.5 11.1 5.9 107.8
------------- -------------- ---------------- ---------------- ---------- ------- -------------
Segment
result 7.9 4.1 (7.6) 0.1 0.2 4.7
Unallocated
expenses (9.0)
------------- -------------- ---------------- ---------------- ---------- ------- -------------
OPERATING
LOSS (4.3)
------------- -------------- ---------------- ---------------- ---------- ------- -------------
Net finance
income 2.9
Share of
results of
associates 2.3
Share of
result of
joint
ventures (0.4)
Income tax
charge (0.7)
------------- -------------- ---------------- ---------------- ---------- ------- -------------
LOSS FOR THE
YEAR (0.2)
------------- -------------- ---------------- ---------------- ---------- ------- -------------
6 months to 31 March
2011
Consolidated
Support continuing
Agri-business Infra-structure Trans-portation services Hotels Other operations
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- -------------- ---------------- ---------------- --------- ------- ------ -------------
Segment operating
assets 58.8 83.4 33.5 12.5 25.0 - 213.2
Investment in
associates - - - - - 12.9 12.9
Unallocated
assets/interest
bearing assets - - - - - 24.5 24.5
---------------------- -------------- ---------------- ---------------- --------- ------- ------ -------------
TOTAL ASSETS 58.8 83.4 33.5 12.5 25.0 37.4 250.6
---------------------- -------------- ---------------- ---------------- --------- ------- ------ -------------
Segment operating
liabilities 22.2 15.2 19.3 6.8 11.0 - 74.5
Unallocated
liabilities/interest
bearing liabilities - - - - - 49.7 49.7
---------------------- -------------- ---------------- ---------------- --------- ------- ------ -------------
TOTAL LIABILITIES 22.2 15.2 19.3 6.8 11.0 49.7 124.2
---------------------- -------------- ---------------- ---------------- --------- ------- ------ -------------
Depreciation of
segment assets 0.7 1.6 0.2 0.1 0.6 0.1 3.3
Amortisation of
segment assets 0.3 - - 0.1 - - 0.4
Capital expenditure 1.2 0.8 13.2 0.2 0.3 0.1 15.8
---------------------- -------------- ---------------- ---------------- --------- ------- ------ -------------
6 months to 31 March
2010
Consolidated
Support continuing
Agri-business Infra-structure Trans-portation services Hotels Other operations
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- -------------- ---------------- ---------------- --------- ------- ------ -------------
Segment operating
assets 36.1 65.4 18.2 4.7 13.6 - 138.0
Investment in
associates - - - - 1.3 7.4 8.7
Unallocated
assets/interest
bearing assets - - - - - 20.5 20.5
---------------------- -------------- ---------------- ---------------- --------- ------- ------ -------------
TOTAL ASSETS 36.1 65.4 18.2 4.7 14.9 27.9 167.2
---------------------- -------------- ---------------- ---------------- --------- ------- ------ -------------
Segment operating
liabilities 26.7 25.6 7.1 1.6 1.0 - 62.0
Unallocated
liabilities/interest
bearing liabilities - - - - - 3.9 3.9
---------------------- -------------- ---------------- ---------------- --------- ------- ------ -------------
TOTAL LIABILITIES 26.7 25.6 7.1 1.6 1.0 3.9 65.9
---------------------- -------------- ---------------- ---------------- --------- ------- ------ -------------
Depreciation of
segment assets 1.5 1.4 0.4 0.1 0.2 - 3.6
Amortisation of
segment assets 0.2 - - 0.1 - - 0.3
Capital expenditure 0.3 3.2 0.3 - 0.2 - 4.0
---------------------- -------------- ---------------- ---------------- --------- ------- ------ -------------
12 months to 30 September
2010
Consolidated
Support continuing
Agri-business Infra-structure Trans-portation services Hotels Other operations
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- -------------- ---------------- ---------------- ---------- ------- ------ -------------
Segment operating
assets 51.1 82.9 16.4 3.9 23.3 - 177.6
Investment in
associates - - - - - 10.3 10.3
Unallocated
assets/interest
bearing assets - - - - - 8.5 8.5
---------------------- -------------- ---------------- ---------------- ---------- ------- ------ -------------
TOTAL ASSETS 51.1 82.9 16.4 3.9 23.3 18.8 196.4
---------------------- -------------- ---------------- ---------------- ---------- ------- ------ -------------
Segment operating
liabilities 28.8 14.5 7.4 1.2 9.9 - 61.8
Unallocated
liabilities/interest
bearing liabilities - - - - - 6.9 6.9
---------------------- -------------- ---------------- ---------------- ---------- ------- ------ -------------
TOTAL LIABILITIES 28.8 14.5 7.4 1.2 9.9 6.9 68.7
---------------------- -------------- ---------------- ---------------- ---------- ------- ------ -------------
Depreciation of
segment assets 1.5 3.0 0.6 0.1 0.6 0.1 5.9
Amortisation of
segment assets 0.5 - 0.1 0.2 - - 0.8
Capital expenditure 2.9 3.7 0.8 - 1.4 0.3 9.1
---------------------- -------------- ---------------- ---------------- ---------- ------- ------ -------------
6. Acquisition of subsidiaries
AFEX
On 1 January 2011, the Group acquired 100% of the issued share
capital of AFEX Group of companies for an initial consideration of
US$3 million (GBP1.9 million). Further payments of up to US$5
million (GBP3.1 million) will be payable over two years based on an
EBIT related earn-out formula. AFEX's main focus of current
operations is in supplying secure accommodation in Juba in the
Southern Sudan. This infrastructure is in great demand from
corporate clients, NGO's, and Government Aid Agencies working in
Southern Sudan.
The transaction has been accounted for by the purchase method of
accounting. The fair value of the net assets at 1 January 2011 is
set out below:
Pre-acquisition Fair valuation
carrying adjustment Values recognised
value on acquisition on acquisition
GBPm GBPm GBPm
---------------------- ---------------- ---------------- ------------------
Property, plant and
equipment 2.9 0.7 3.6
Inventory 0.1 - 0.1
Trade and other
receivables 1.6 - 1.6
Cash and cash
equivalents 0.6 - 0.6
Trade and other
payables (3.3) - (3.3)
Intangible related to
customer
relationships - 1.5 1.5
---------------------- ---------------- ---------------- ------------------
NET IDENTIFIABLE
ASSETS AND
LIABILITIES 1.9 2.2 4.1
---------------------- ---------------- ---------------- ------------------
Consideration paid 1.9
Contingent
consideration 2.5
---------------------- ---------------- ---------------- ------------------
GOODWILL ON
ACQUISITION 0.3
---------------------- ---------------- ---------------- ------------------
The transaction costs incurred to acquire the company were
GBP0.1 million and have been expensed in the income statement.
The goodwill arising on the acquisition of AFEX is attributable
to the anticipated profitability of the distribution of the
company's services to new customers.
AFEX contributed GBP1.8 million to revenue and GBP0.2 million
profit to the Group's profit before tax for the period between the
date of acquisition and the reporting date.
7. Interest bearing loans and borrowings
This note provides information about the contractual terms of
the Group's interest-bearing loans and borrowings.
6 months
to 12 months to
31 March 6 months to 30 September
2011 31 March 2010 2010
GBPm GBPm GBPm
--------------------------------- ---------- --------------- --------------
NON CURRENT LIABILITIES
Finance lease liabilities 10.8 1.1 1.8
Unsecured bank loan 17.4 11.8 20.3
Convertible bonds (note 7a) 42.6 - -
Shareholder loans 3.0 2.5 2.5
Other loan - - 1.8
--------------------------------- ---------- --------------- --------------
73.8 15.4 26.4
--------------------------------- ---------- --------------- --------------
CURRENT LIABILITIES
Unsecured bank loans 3.9 9.2 2.8
Current portion of finance lease
liabilities 0.9 0.2 1.0
Other loan - - 1.8
Bank overdraft 4.7 0.9 3.9
--------------------------------- ---------- --------------- --------------
9.5 10.3 9.5
--------------------------------- ---------- --------------- --------------
7a. In October 2010, Lonrho Plc successfully completed the
offering of US$60m (GBP38.0m) Guaranteed Convertible Bonds due 2015
("Bonds") via a wholly owned subsidiary company LAH (Jersey)
Limited. Lonrho has then further placed US$10m (GBP6.3m) of
additional Bonds, which were fully subscribed. The net proceeds of
the offering will be used to allow the Company and its subsidiaries
to repay certain existing indebtedness, to fund general working
capital and to accelerate growth in its operations. A copy of the
Offering Circular in relation to the Bonds is available on the
Company's website: www.lonrho.com. On initial recognition GBP1.0
million of the total liability under the convertible bonds has been
transferred to other reserves, representing the equity portion of
the bonds at the date of initial recognition.
8. Net finance income
6 months
to 12 months to
31 March 6 months to 30 September
2011 31 March 2010 2010
GBPm GBPm GBPm
--------------------------------- ---------- --------------- --------------
Bank interest receivable - - 0.1
Foreign exchange gain - 5.7 8.5
--------------------------------- ---------- --------------- --------------
FINANCE INCOME - 5.7 8.6
--------------------------------- ---------- --------------- --------------
Loans repayable within five
years and overdrafts (2.7) (0.8) (2.1)
Foreign exchange loss - - (3.4)
Finance leases (0.1) - (0.2)
--------------------------------- ---------- --------------- --------------
FINANCE EXPENSE (2.8) (0.8) (5.7)
--------------------------------- ---------- --------------- --------------
NET FINANCE INCOME (2.8) 4.9 2.9
--------------------------------- ---------- --------------- --------------
Notes (continued)
9. Note to the cash flow statement
6 months 6 months
to to 12 months to
31 March 31 March 30 September
2011 2010 2010
GBPm GBPm GBPm
------------------------------------ ---------- ---------- --------------
Depreciation of property, plant
and equipment 3.3 3.6 5.9
Amortisation of intangible assets 0.4 0.3 0.8
Impairment of investment - - 0.4
Share based payment expense - - 2.3
Finance income 2.8 (4.9) (2.9)
Share of profit of associates and
joint ventures (0.2) 0.6 (1.9)
Gain arising on fair valuation of
biological assets (4.9) - (9.0)
Income tax expense 0.4 0.2 0.7
------------------------------------ ---------- ---------- --------------
ADJUSTMENTS TO LOSS FOR THE PERIOD 1.8 (0.2) (3.7)
------------------------------------ ---------- ---------- --------------
10. Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note.
Full details of the Group's other related party transactions and
balances are given in the Group's financial statement for the year
ended 30 September 2010. The only material change in these
relationships in the half year to 31 March 2011 is Lonrho's
participation in a placing of shares by LonZim Plc, in which Lonrho
participated to maintain its percentage shareholding of 24.61% by
subscribing for 4,384,011 new LonZim shares at a cost of
GBP1,227,523.
11. Post balance sheet events
On 26 April 2011, Lonrho successfully transferred the listing of
its ordinary share capital from AIM to the premium listing segment
of the Official List of the UK Listing Authority and to trading on
the London Stock Exchange plc's main market for listed securities
under the ticker "LONR". Trading in the Company's shares on AIM was
cancelled simultaneously with Admission.
Also on 26 April 2011, Lonrho also announced the appointment of
the Rt. Hon. Sir Richard Needham as an Independent Non-Executive
Director of the Company. Sir Richard had a distinguished career in
Parliament culminating in his time as Britain's longest serving
Minister in Northern Ireland from 1985 - 1992 and as Minister of
Trade from 1992 - 1995.
On 10 May 2011, Lonrho announced that the Johannesburg Stock
Exchange had formally approved the transfer of the secondary
listing of the Company from the Venture Capital Market to the AltX
of the JSE with effect from the commencement of business on 17 May
2011.
On 20 May 2011, Lonrho announced a placing of new ordinary
shares in the capital of the Company at 16.5 pence per share to
raise gross proceeds of GBP19.5 million. The placing was limited to
118,000,000 new shares in the capital of Lonrho and represented
approximately 9.99% of the issued share capital of Lonrho. On 25
May 2011 Lonrho announced that 118,000,000 shares had been placed.
The shares were admitted to trading on 26 May 2011.
12. Cautionary statements
The interim results announcement contains forward looking
statements. These have been made by the Directors in good faith
based on the information available to them up to the time of their
approval of this report. The Directors can give no assurance that
these expectations will prove to have been correct. Due to the
inherent uncertainties, including both economic and business risk
factors underlying such forward looking information, actual results
may differ materially from those expressed or implied by these
forward looking statements. The Directors undertake no obligation
to update any forward looking statements whether as a result of new
information, future events or otherwise.
There are a number of potential risks and uncertainties which
could have a material impact on the Group's performance over the
remainder of the financial year and could cause actual results to
differ materially from expected and historical results. These
include but are not limited to, competitor activity and competition
risk, changes in foreign exchange and commodity prices and the
political and economic risks of operating in Africa. Details of the
key risks facing the Group's businesses at an operational level are
included on pages 11 to 24 of the Group's listing prospectus which
is available on the Group's website (www.lonrho.com). Details of
further potential risks and uncertainties arising since the issue
of that document are included within the operating review as
appropriate.
13. Responsibility statement
The interim results announcement complies with the Disclosure
and Transparency Rules ("the DTR") of the Financial Services
Authority in respect of the requirement to produce a half yearly
financial report.
The Directors confirm that to the best of their knowledge:
-- this financial information has been prepared in accordance
with IAS 34 as adopted by the EU;
-- this interim results announcement includes a fair review of
the important events during the first half and their impact on the
financial information, and a description of the principle risks and
uncertainties for the remaining half of the year as required by DTR
4.2.7R; and
-- this interim results announcement includes a fair review of
the disclosure of related party transactions and changes therein as
required by DTR 4.2.8R.
Geoffrey White
Director & Chief Executive Officer
31 May 2011
On behalf of the Board
Corporate information
Directors
David Lenigas Chairman
Geoffrey White Director & Chief Executive Officer
David Armstrong Finance Director
Emma Priestley Executive Director
Ambassador Frances Cook Senior Independent Director
The Rt, Hon. Sir Richard Needham Non-Executive Director
Jean Ellis Non-Executive Director
Kiran Morzaria Non- Executive Director
Secretary and Registered Office Registrars
J H Hughes Equiniti
Level 2 Aspect House
25 Berkeley Square Spencer Road
London Lancing
W1J 6HB West Sussex
Tel: +44 (0) 20 7016 5105 BN99 6DA
Fax: +44 (0) 20 7016 5109 Tel: 0800 169 2608 (if calling from
e-mail: hughes@lonrho.com UK)
Registered in England Tel: +44 121 415 7047 (if calling
Number 2805337 from overseas)
Textel: 0871 384 2255 (for the hard
of hearing)
Please be advised calls to the textel
line are charged at 8p/min from
BT landlines. Other telephone providers'
costs may vary.
Auditors South African Transfer Secretaries
KPMG Audit Plc Computershare Investor Services
15 Canada Square (Pty) Ltd
Canary Wharf PO Box 61051
London Marshalltown 2107
E14 5GL South Africa
Tel: +27 (0) 11 370 5000
Fax: +27 (0) 11 370 5271/2
PR Advisors Stockbrokers
Pelham Bell Pottinger Panmure Gordon (UK) Ltd
5(th) Floor WH Ireland Ltd
Holborn Gate Java Capital (Pty) Ltd
330 High Holborn Principal Group Bankers
London Barclays Bank Plc
WC1V 7QD Lord Street
Tel: +44 (0) 20 7861 3232 Liverpool
Fax: +44 (0) 20 7861 3233
South African Sponsor
Java Capital Trustees & Sponsor
(Pty) Limited
2 Arnold Road
Rosebank
2196 South Africa
This information is provided by RNS
The company news service from the London Stock Exchange
END
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