Interim Management Statement (1127L)

TIDMLONR

RNS Number : 1127L

Lonrho PLC

27 July 2011

Lonrho Plc

("Lonrho" or the "Company")

Interim Management Statement for the Quarter ended 30 June 2011

The following statement covers trading during the period 1 April 2011 to 30 June 2011 and material transactions up to 26 July 2011.

Q3 Lonrho reports 31% growth and major new contract wins

-- Total reported revenue in the third quarter was GBP35.1m, an increase of 31.1% on the prior year, 19.1% on a like-for-like basis (excluding acquisitions and disposals)

-- Oceanfresh signed major new deals with Walmart in the US and Pick'n'Pay and Makro in South Africa

-- Lonrho Budget Hotels was awarded the exclusive master franchise for the easyHotel brand across Africa

-- Lonrho Agribusiness acquired the trade and assets of logistics firm Grindrod PCA, becoming the market leader in the export of fresh produce from Southern Africa by air

-- Lonrho Agribusiness acquired the fish distribution business Fish On Line

-- The Group transferred its listing to the premium listing of the LSE's Main Market from AIM

In the third quarter of trading, Lonrho Plc increased its revenue by 31.1% compared with the same quarter in the prior year. On a like-for-like basis this represented growth of 19.1%. All 5 divisions within the group showed at least double digit growth on the prior year with the most notable being support services, where the addition of the AFEX group as well as strong performance at CES Zambia and Bytes & Pieces helped to increase revenue by 117.8% compared with Q3 FY10.

Within the Agribusiness division, Oceanfresh continued to build well with new contracts signed in the quarter with both Pick'n'Pay and Makro. At Pick'n'Pay, Oceanfresh will supply 16 of the 19 items that will be launched under their private label brand, whilst further product lines will be supplied to Makro under their private label 'M brand'. Since the quarter end Lonrho announced an agreement to supply Walmart in the US with hake fillets. It is anticipated that Oceanfresh will initially supply 500 Walmart stores with product commencing from 1(st) October 2011.

Infrastructure divisional growth of 35.8% was especially driven by Kwikbuild which had its most successful quarter ever, with the three month period generating the same revenues as the whole of FY10. The business has been delivering projects through different sectors and with the factory now operating at full capacity the business is in excellent shape for the remainder of the year.

Fly540, having seen the full roll out of services in Angola, as well as a ramp up of operations in Tanzania, has achieved turnover growth of 25.6% in the quarter. The business is still experiencing some delays in deploying sufficient aircraft in Angola to service the demand that is being seen on many routes but aircraft arrivals in August and September will increase capacity significantly. High fuel prices and aggressive pricing policies from competitors in Kenya specifically mean that margins in the business remain under pressure in the short term. Fly540 is on track to open its third hub in Ghana by October 2011.

Acquisitions and New Ventures

On 27(th) July Lonrho announced that its wholly owned subsidiary, Lonrho Budget Hotels Ltd, has signed a twenty year master franchise agreement (MFA) with Easy Group Holdings to open and operate a network of budget hotels under the easyHotel brand across Africa. The MFA provides Lonrho the exclusive rights to the easyHotel brand in Africa and lays out an agreed opening schedule leading to fifty properties by 2016. The easyHotel brand is ideally suited for rebranding existing hotel properties and the conversion of existing buildings into hotels.

In the quarter, Lonrho completed the acquisition of Fish On Line. Based in Cape Town, South Africa, Fish On Line operates bulk cold storage and fish processing facilities, adding further capacity to the growing fish section of the Agribusiness division.

On 19 July, Lonrho announced the acquisition of the trade and assets of Grindrod PCA a division of Grindrod Freight Services Pty. Grindrod PCA is a South African based logistics company with operations in Johannesburg, Cape Town, Port Elisabeth and George. The acquisition supports the growing agribusiness capabilities of Lonrho to export African produce to the world's supermarkets and takes Lonrho to an estimated 65% market share of the logistics market for the export of fresh produce from Southern Africa by air.

Corporate Activity and Financial Position

During the quarter, the Group successfully transferred the listing of its ordinary share capital from AIM to a premium listing on the Official List of the UK Listing Authority and to trading on the London Stock Exchange's Main Market. This move opens up the Company to new investors and is seen as a significant step in the further progression of the Group. In South Africa, the JSE approved the transfer of the secondary listing of the Company from the Venture Capital Market, to the AltX of the JSE with effect from 17 May 2011.

In May Lonrho Plc further 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 of 118,000,000 new ordinary shares represented approximately 9.9 per cent of the issued share capital of Lonrho.

As at 30(th) June 2011 the Group had available cash balances of GBP23.2m.

Outlook

The fourth quarter of the year is the most significant for the Group in terms of revenue and profitability and will have a significant impact on results for the financial year. With the further expansion of Fly540, the acquisitions of Grindrod PCA and Fish On Line and the implementation of new contracts at Oceanfresh, the building blocks are in place to deliver results in line with market expectations.

Commenting on the results, David Lenigas, Lonrho Executive Chairman, said: "The quarter has been very positive for Lonrho. Moving to the premium list on the main LSE market is a significant step forward for the Group. The completion of 2 strategic acquisitions as well as landing a number of new large contracts puts the company in a strong position for the remainder of the year and into 2012."

Enquiries

 
Lonrho Plc 
 
David Lenigas,         Tel +44 (0) 
 Executive Chairman     20 7016 5105 
Geoffrey White,        Tel +44 (0) 
 Chief Executive        20 7016 5105 
David Armstrong,       Tel +44 (0) 
 Finance Director       20 7016 5105 
 
Panmure Gordon         Tel +44 (0) 
                        20 7459 3600 
Tim Linacre 
 Dominic Morley 
 Adam Pollock 
 Hannah Woodley 
 
Pelham Bell Pottinger 
Charles Vivian         Tel +44 (0) 
                        20 7861 3126 
James MacFarlane       Tel +44 (0) 
                        20 7861 3864

These results (and comparative figures included therein) do not form audited accounts nor have they been extracted from audited accounts. Certain statements made in this announcement are forward looking. These statements are based on current expectations and are subject to a number of risks and uncertainties which could cause actual results to differ materially from expected results. Any forward looking statement represents the views of management as at the date of this announcement only.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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