TIDMLONR
RNS Number : 5716R
Lonrho PLC
07 November 2011
LONRHO PLC
("Lonrho" or "the Company")
Lonrho Plc reports a 35% increase in revenues and 190% increase
in profits
Lonrho Plc announces its unaudited Interim Results for the six
months ended 30 September 2011.
The Company is delighted to report a 35% increase in revenues
and a 190% increase in profit before tax for the period.
Lonrho continues to focus exclusively on the emerging Africa
market and has seen strong demand during the period for its core
services in the Agriculture, Logistics, Transport and
Infrastructure sectors across the Continent.
Financial Highlights for the six months to 30 September 2011
are:
-- The Company generated revenues of GBP81.4m, a 35% increase on
the same period in the prior year. Like-for-like sales grew by
21.3%.
-- Gross profit margin in the period has increased to 28.7%
during the period, an increase of 1.6%.
-- Profit before tax for the period increased by 190% to GBP5.8m.
-- Net assets at 30 September 2011 stood at GBP151.6m. At 31
March 2011 the comparative figure was GBP126.4m.
-- Available cash balances held at 30 September 2011 totalled
GBP14.6m, compared to GBP7.8m at 30 September 2010.
The interim report and financial statements are, today,
published on the Company's website (www.lonrho.com).
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.
Lonrho is releasing a second set of interim results due to the
change in the Company's accounting reference date from 30 September
to 31 December, as announced on 22 September 2011, so that the
Company's accounting period falls in line with the statutory
reporting obligations of the various countries in which it operates
such as Mozambique, DRC and Angola.
David Lenigas, Lonrho's Executive Chairman, commented:
"Achieving a 35% increase in revenues and 190% increase in
profits before tax for the six month period demonstrates that
Lonrho has delivered real progress in building its business in
Africa. During the period, Lonrho has completed five synergistic
and strategic acquisitions to further develop our core capabilities
and add further to revenues and margins.
Lonrho continues to see strong growth across all of its
divisions since the end of the period, spear-headed by Lonrho's
agribusiness division and expects this to continue through to the
end of the 15 month reporting period to 31 December 2011 and into
2012.
We believe that in an increasingly turbulent global economic
environment, Africa is a very attractive investment
opportunity."
Enquiries
Lonrho Plc +44 (0) 20 7016 5105
David Lenigas
Geoffrey White
David Armstrong
Panmure Gordon +44 (0) 20 7459 3600
Tim Linacre
Dominic Morley
Adam Pollock
Hannah Woodley
Pelham Bell Pottinger +44 (0) 20 7861 3232
Gavin Davis
Charlie Harrison
James MacFarlane
Chief Executive's Statement
As a result of the Company's change of accounting reference date
to 31 December, the Group presents a second set of interim accounts
for the six month period ended 30 September 2011.
The change to a calendar year accounting period will reduce
potential seasonal variances in reported results in relation to the
main production season in the expanding agriculture division, which
has a September/October harvest output. It will also bring the
Group's timetable into line with the statutory reporting
obligations of the various countries in which it operates,
including Mozambique, Democratic Republic of the Congo and
Angola.
The Group's next full financial statements will be in respect of
the 15 months to 31 December 2011.
Summary
For the financial period to the end of September 2011 Lonrho has
delivered a very strong result reporting significant growth in both
profitability and revenues.
Twelve month results on a year on year comparison show a 32%
growth in revenue and a 480% increase in profit before tax.
Six month results on a year on year comparison show a 35% growth
in revenue and a 190% increase in profit before tax.
Quarter 4 results on a year on year comparison show a 37% growth
in revenue.
Revenue for the six month period was GBP81.4m, compared to
revenue for the same period last year of GBP60.5m. Profit before
tax for the period was GBP5.8m compared to profit before tax for
the same period last year of GBP2.0m.
Revenue for the 12 months to 30 September 2011 was GBP142.5m
compared with GBP107.8m. Profit before tax for the same period was
GBP4.4m before negative foreign exchange movements of GBP1.5m which
occurred in September 2011 due to significant strengthening of the
US dollar versus sterling. A significant portion of this
translation on exchange loss (GBP1.2m) has already been reversed
from beneficial moves in exchange rates since the period end. Gross
margin in the 12 month period rose from 26.4% to 26.7%.
The Group's available cash balance at 30 September 2011 was
GBP14.6m (2010:GBP7.8m).
Market
Africa continues to grow in stature and economic significance
and is becoming widely recognised as an exciting emerging global
market that plays an increasingly important role in the global
economy.
With the population of the Continent approaching one billion,
the potential consumer expenditure of the African consumer market
is forecast to reach US$1.6 trillion (GBP1 trillion) by 2020. This
market is attracting increasing attention from the World's leading
consumer brands and retailers as they start to focus on the
opportunities across the Continent.
The continuing economic development on the Continent is being
created by the expansion of the African oil and gas industries;
increasing agricultural output for domestic and export markets and
mineral extraction, which is driving GDP and creating a burgeoning
middle class with a rapidly expanding disposable income. The World
Bank recently published statistics demonstrating that seven out of
the ten fastest growing economies in the World are in Africa.
Sub-Saharan Africa is forecast to grow at over 5.8% in GDP in
2012 and, despite the troubles with the western economies, the
fundamentals of emerging market growth in Africa have proven to be
resilient. The social challenges in North Africa have had little
noticeable effect on sub-Saharan Africa and, in due course, the
stability and economic growth that will potentially follow the
'Arab Spring' will be beneficial for the rest of Africa.
Lonrho's strategic objectives remain focused on supporting
sub-Saharan African economic growth and helping to provide the
services and infrastructure required to enable continued
growth.
As a result, Lonrho operates in an environment that is typically
growing strongly and has seen each of its core businesses perform
well during the period, with revenues growing 33% in comparison to
the first six months of the year and 35% when compared year on
year.
As each division within the Group grows, margins are improving
as each business builds market share and volumes increase. The
Group maintains its policy of only investing and operating in
Africa and is building a reputation for being a unique conduit for
investors to access African growth. The Group maintains its
conservative approach of de-risking its operations through
geographical spread (operating in eighteen countries) and by each
of Lonrho's five divisions being stand-alone investment silos with
no recourse from one division to the other.
The move from AIM to a premium listing on the main market of the
London Stock Exchange in April 2011 proved to be very positive for
the Company and a natural step forward in the progress it is
making.
In conjunction with the move to the London main market, the
Company appointed the Rt Hon. Sir Richard Needham as an independent
non-executive director.
The Company undertook a placing of 118,000,000 new ordinary
shares at a price of 16.5 pence in May 2011, raising GBP19.5m.
Financial highlights for the six months to end September
2011
-- Revenue for the 6 months increased by 35% to GBP81.4m from
GBP60.5m in the same period in the previous year.
-- Gross margin increased from 27.1% to 28.7% compared with the
same period in the previous year.
-- Profit before tax for the 6 months increased 190% to GBP5.8m,
after foreign exchange losses of GBP1.5m, from GBP2.0m, after
foreign exchange losses of GBP0.6m representing an underlying
improvement of GBP4.6m over the same period in the previous
year.
-- Total equity at the period end was GBP151.6m compared with
GBP127.7m at the same date in the previous year.
Operational review
Lonrho remains focused on developing its five core divisions:
Agribusiness, Infrastructure, Transportation, Hotels and Support
Services.
Agribusiness
Africa contains 60% of the World's arable land, yet only 10% of
it is productive (McKinsey 2010). There is an increasing demand for
agricultural output to meet the growing domestic market within
Africa but also an increasing demand from the wider global market
that, in the future, will be reliant on Africa to contribute to
meet worldwide demand.
Lonrho's Agribusiness Division accounts for 55% of Group
revenues and is a vertically integrated supplier to the retail
shelves of the World's supermarkets. Focusing on the vegetables,
fruit, meat and fish markets, Lonrho produces and procures large
volumes of produce and then processes, packs and ships it to retail
chains both within Africa (such as Shoprite, Massmart, Woolworths,
Pic n Pay, Makro and Spar), Europe (such as Marks & Spencer,
Tesco, Sainsbury's, Waitrose and Asda), the USA (such as Walmart,
Sysco and Costco), the Middle East and, increasingly, the Far
East.
Lonrho believes that to meet the future requirements of its
customers (supermarkets worldwide) it needs to offer a single point
solution to retailers, where the growing, logistics, processing and
packing are all available via Lonrho as a one stop shop. The
vertical integration of the whole process from 'field to fork'
allows Lonrho to deliver the quality, product traceability and
transparency that the market is increasingly demanding.
Within its core markets Lonrho operations now operates over
100,000 square feet of agri-processing capacity and, following the
acquisition of the business of Grindrod PCA during the period,
Lonrho Logistics has grown to become the market leader in Southern
Africa in agri-logistics delivering fresh produce to world
retailers and supermarkets by air.
-- In June 2011 Lonrho acquired 51% of the seafood wholesale
business Fish On Line, which increased Lonrho's management
expertise and product access in the seafood industry and assisted
Lonrho to meet its targets for its rapidly expanding seafood
exports to the USA.
-- In July 2011, following approval by the Competition Committee
of South Africa, Lonrho acquired the business of Grindrod PCA.
Grindrod PCA is a leading exporter of fruit, vegetables and fish
from Southern Africa and complemented Lonrho's existing
capabilities.
During the period the Group has successfully expanded its
farming operations and continued its planting program in line with
long term plans. The total number of trees under cultivation at
period end amounted to 189,000 (2010: 119,000) and the net present
value of these biological assets amounted to GBP23.6m.
With the expansion of the agricultural sector in Africa, quality
agricultural equipment is essential to increase productivity in the
sector through mechanisation. Lonrho's John Deere business in
Mozambique has reported significant sales growth during the period,
increasing sales 31% like for like and the new John Deere
distributorship in Angola has reported strong initial sales
following its inauguration in June 2011.
Lonrho focuses not only on equipment sales, but spares,
maintenance and training to fully support the after-sales service
required. This philosophy continues to successfully build market
share for John Deere in the countries where Lonrho is the
distributor.
A joint promotion between Lonrho, John Deere, Standard Bank and
USAID, where an agricultural financial starter package is supported
that brings the entry price for mechanisation for small farmers
from US$30,000 to US$5,000, has had a significant uptake and
excellent results.
Infrastructure
The oil and gas industry in Africa continues to deliver world
class resources and the economic opportunities for growth and
development on both the west and east coast are significant. Both
the USA and China are increasingly dependent on Africa for oil and
gas resources and ongoing exploration and reported finds are
indicating that Africa potentially holds a quarter of the World's
oil and gas reserves.
The Lonrho oil services terminal in Equatorial Guinea, Luba
Freeport, continues to develop. During the period, turnover growth
was modest at 1% compared to prior year due to a temporary decrease
in exploration activity. A new container scanner commenced
operations ensuring the port meets the highest international
security standards. New customers entering the port during the year
included Tenaris and Dickerman Overseas & Champion Technologies
and Luba Freeport now handles the vast majority of the oil and gas
logistics for the country. New drilling programmes announced for
Equatorial Guinea for 2012 will mean that the port is in strong
demand moving forward.
In August 2011 Lonrho Ports signed a Memorandum of Understanding
with the Government of Ghana to conduct the feasibility study and
design for the oil services terminal in the Western Region of Ghana
to support the developing oil industry. Lonrho has the sole right
to develop the project in joint venture with the Government. Ghana
is forecast to become a significant African oil producer by 2015
and the initial interest from the oil service and support industry
endorses the need for this strategic infrastructure to be developed
as rapidly as possible.
The prefabricated building business, e-Kwikbuild, has
successfully commissioned its new manufacturing base in Cape Town
and reported strong growth year on year for the period, increasing
revenues from GBP2.9m to GBP6.6m. The strategy to reduce the
company's dependency on Government contracts has been successful,
with private sector business increasing to 24% of business in the
period and important new clients being secured including Barrick
Gold, First Quantum and BHP.
Transportation
Fly540 saw continued growth during the period. The three
regional hubs that are an integral part of developing the
pan-African network are now complete. In East Africa the extension
of the Kenyan hub operations into the Tanzanian market has already
delivered strong load factors and Fly540 has taken immediate and
significant market share. In Angola, despite the difficulty of
operating in a very frustrating bureaucratic environment, load
factors are building and demand for a scheduled first world,
punctual, regional service is higher than expected.
The third regional hub, completing the pan-African network roll
out, is Ghana, which will service West Africa. A new ATR72 was
delivered to Ghana in August to establish the Ghanaian hub, which
subsequently started commercial operations after the period end in
November.
Further leased aircraft are being deployed into both the Angolan
and Ghanaian hubs to meet passenger demand.
Following the completion of the route network for Fly540, Lonrho
is undertaking a strategic review on the alternative options to
maximise the growth of the business now that the unique core
network across Africa has been established.
Operating losses for the transportation division amounted to
GBP7.9m for the period compared with GBP4.8m for the same period
last year as a result of pre-operating costs and route development
costs in the two new hubs in Angola and Ghana.
Hotels
During the period the Hotels division has seen steady progress.
The existing hotel management contracts and properties are
operating in line with previous performance, with the Hotel Cardoso
in Mozambique continuing to deliver exceptionally strong occupancy
levels in the high 80% range.
The need for accommodation across the expanding African market
is demonstrable at all levels. Lonrho Hotels continues to seek new
management opportunities and to expand the portfolio with quality
properties under management, focused on the business market.
In July 2011 Lonrho Hotels signed a 20 year master franchise
agreement with Stelios Haji-Ioannou and his easyGroup to open and
operate a budget chain of hotel properties across Africa to be
branded 'easyHotel.com' and designated as 'a Lonrho Hotel' to build
maximum market presence and credibility. The agreement provides
Lonrho with the exclusive rights to the easyHotel brand in Africa
and sets out an agreed opening schedule for fifty properties by
2016.
Support Services
Lonrho IT continues to provide the lead role in the support
services division and has continued to see strong results from the
Mozambican market. The new IT operations in Zambia and in Zimbabwe
have started well with strong order books and the businesses have
attracted a range of blue chip clients. Despite weaknesses in the
Mozambique Metical, turnover for Lonrho IT grew by 18% and profits
grew by 55%.
AFEX, the division's East African based camp and accommodation
company with operations in Kenya and Southern Sudan, is continuing
to see strong demand in its Juba camp as a result of the growing
interest in the Republic of South Sudan following its independence.
The Republic of South Sudan is forecast to be one of the fastest
growing economies in Africa in the coming years and will become a
significant oil producer. AFEX is well positioned to benefit from
this growth.
AFEX has contributed turnover of GBP5.7m and operating profit of
GBP0.3m since its acquisition.
Geoffrey White
Director and Chief Executive Officer
7 November 2011
Condensed consolidated interim income statement
Unaudited Unaudited Unaudited Audited
6 months 6 months 12 months 12 months
to to to to
30 September 30 September 30 September 30 September
2011 2010 2011 2010
Note GBPm GBPm GBPm GBPm
------------------------------------ ----- ------------- ------------- ------------- -------------
Revenue 81.4 60.5 142.5 107.8
Cost of sales (58.0) (44.0) (104.5) (79.3)
------------------------------------ ----- ------------- ------------- ------------- -------------
GROSS PROFIT 23.4 16.5 38.0 28.5
------------------------------------ ----- ------------- ------------- ------------- -------------
Gain arising on fair valuation
of biological assets 12.1 9.0 17.0 9.0
Other operating income 4.4 3.5 6.1 3.6
Operating costs (27.7) (27.5) (49.1) (45.4)
------------------------------------ ----- ------------- ------------- ------------- -------------
OPERATING PROFIT/(LOSS) 12.2 1.5 12.0 (4.3)
------------------------------------ ----- ------------- ------------- ------------- -------------
Finance income 8 1.2 2.9 2.7 8.6
Finance expense 8 (6.2) (4.9) (10.5) (5.7)
------------------------------------ ----- ------------- ------------- ------------- -------------
NET FINANCE (EXPENSE)/INCOME 8 (5.0) (2.0) (7.8) 2.9
------------------------------------ ----- ------------- ------------- ------------- -------------
Share of results of associates (1.8) 2.7 (1.7) 2.3
Share of results of joint ventures - (0.2) - (0.4)
Share of other investments 0.4 - 0.4 -
------------------------------------ ----- ------------- ------------- ------------- -------------
PROFIT BEFORE TAX 5.8 2.0 2.9 0.5
------------------------------------ ----- ------------- ------------- ------------- -------------
Income tax charge (0.6) (0.5) (1.0) (0.7)
------------------------------------ ----- ------------- ------------- ------------- -------------
PROFIT/(LOSS) FOR THE PERIOD 5.2 1.5 1.9 (0.2)
------------------------------------ ----- ------------- ------------- ------------- -------------
ATTRIBUTABLE TO:
Owners of the Company 2.5 1.3 1.3 0.3
Non-controlling interests 2.7 0.2 0.6 (0.5)
------------------------------------ ----- ------------- ------------- ------------- -------------
PROFIT/(LOSS) FOR THE PERIOD 5.2 1.5 1.9 (0.2)
------------------------------------ ----- ------------- ------------- ------------- -------------
EARNINGS PER SHARE:
Basic earnings per share (pence) 0.20p 0.12p 0.11p 0.03p
Diluted earnings per share
(pence) 0.19p 0.11p 0.11p 0.03p
------------------------------------ ----- ------------- ------------- ------------- -------------
Condensed consolidated interim statement of
financial position
Unaudited Unaudited Audited
30 September 31 March 30 September
2011 2011 2010
GBPm GBPm GBPm
---------------------------------- ------------- ---------- -------------
ASSETS
Goodwill 18.2 15.8 15.5
Other intangible assets 5.8 5.6 4.5
Biological assets 23.6 15.0 9.0
Property, plant and equipment 163.6 124.0 109.2
Investments in associates and
joint ventures 11.1 12.9 10.3
Other investments 0.6 0.2 0.6
Deferred tax 0.7 0.7 0.7
---------------------------------- ------------- ---------- -------------
TOTAL NON-CURRENT ASSETS 223.6 174.2 149.8
---------------------------------- ------------- ---------- -------------
Inventories 11.7 6.7 4.9
Trade and other receivables 60.9 45.8 33.9
Cash and cash equivalents 19.3 23.9 7.8
---------------------------------- ------------- ---------- -------------
TOTAL CURRENT ASSETS 91.9 76.4 46.6
---------------------------------- ------------- ---------- -------------
TOTAL ASSETS 315.5 250.6 196.4
---------------------------------- ------------- ---------- -------------
EQUITY
Share capital 13.0 11.8 11.7
Share premium 138.3 138.4 138.0
Revaluation reserve 4.6 3.9 3.3
Share option reserve 4.9 4.6 4.7
Translation reserve (9.6) (9.2) (8.7)
Other reserves 10.9 (4.5) (5.5)
Retained earnings (34.8) (37.4) (36.1)
---------------------------------- ------------- ---------- -------------
TOTAL EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE COMPANY 127.3 107.6 107.4
---------------------------------- ------------- ---------- -------------
NON-CONTROLLING INTERESTS 24.3 18.8 20.3
---------------------------------- ------------- ---------- -------------
TOTAL EQUITY 151.6 126.4 127.7
---------------------------------- ------------- ---------- -------------
LIABILITIES
Loans and borrowings 73.9 63.0 24.6
Obligations under finance leases 20.7 10.8 1.8
Trade and other payables 10.9 3.3 2.5
Deferred tax 3.3 3.0 3.0
---------------------------------- ------------- ---------- -------------
TOTAL NON-CURRENT LIABILITIES 108.8 80.1 31.9
---------------------------------- ------------- ---------- -------------
Bank overdraft 8.9 4.7 3.9
Loans and borrowings 3.3 3.9 4.6
Obligations under finance leases 2.5 0.9 1.0
Trade and other payables 40.4 34.3 27.0
Tax liability - 0.3 0.3
---------------------------------- ------------- ---------- -------------
TOTAL CURRENT LIABILITIES 55.1 44.1 36.8
---------------------------------- ------------- ---------- -------------
TOTAL LIABILITIES 163.9 124.2 68.7
---------------------------------- ------------- ---------- -------------
TOTAL EQUITY AND LIABILITIES 315.5 250.6 196.4
---------------------------------- ------------- ---------- -------------
Condensed consolidated interim statement of
comprehensive income
Unaudited Unaudited Unaudited Audited
6 months 6 months 12 months 12 months
to to to to
30 September 30 September 30 September 30 September
2011 2010 2011 2010
GBPm GBPm GBPm GBPm
------------------------------ ------------- ------------- ------------- -------------
Foreign exchange translation
differences 1.5 (6.5) 2.3 (8.7)
Revaluations of property,
plant and equipment (0.2) (0.2) (0.2) -
------------------------------ ------------- ------------- ------------- -------------
Total other comprehensive
income and expense 1.3 (6.7) 2.1 (8.7)
Profit /(loss) 5.2 1.5 1.9 (0.2)
------------------------------ ------------- ------------- ------------- -------------
Total comprehensive income
and expense 6.5 (5.2) 4.0 (8.9)
------------------------------ ------------- ------------- ------------- -------------
ATTRIBUTABLE TO:
Owners of the Company 2.9 (4.2) 1.8 (7.2)
Non-controlling interests 3.6 (1.0) 2.2 (1.7)
------------------------------ ------------- ------------- ------------- -------------
Total comprehensive income
and expense 6.5 (5.2) 4.0 (8.9)
------------------------------ ------------- ------------- ------------- -------------
Condensed consolidated interim cash flow statement
Unaudited Audited
30 September 30 September
2011 2010
Note GBPm GBPm
---------------------------------------------- ----- ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) for the period 1.9 (0.2)
Adjustments 9 (13.6) (3.7)
---------------------------------------------- ----- ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
BEFORE MOVEMENTS IN WORKING CAPITAL (11.7) (3.9)
Change in inventories (5.8) (0.1)
Change in trade and other receivables (19.7) 1.0
Change in trade and other payables 7.7 (10.4)
---------------------------------------------- ----- ------------- -------------
CASH GENERATED FROM OPERATIONS (29.5) (13.4)
Interest received 0.2 0.1
Interest paid (6.4) (2.3)
Income tax paid (1.0) (0.4)
---------------------------------------------- ----- ------------- -------------
NET CASH FROM OPERATING ACTIVITIES (36.7) (16.0)
---------------------------------------------- ----- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant
and equipment 2.2 0.4
Acquisition of subsidiary, net of cash
acquired (6.1) (3.2)
Acquisition of property, plant and equipment (15.8) (6.8)
Acquisition of associates and joint
ventures (0.9) (0.1)
Acquisition of investment - (0.4)
---------------------------------------------- ----- ------------- -------------
NET CASH FROM INVESTING ACTIVITIES (20.6) (10.1)
---------------------------------------------- ----- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issue of share capital 19.1 23.6
Proceeds from the exercise of share
options 0.3 -
Loan advance 56.5 3.7
Repayment of borrowings (8.7) (2.1)
Payment of finance lease liabilities (3.4) (0.9)
Minority dividends paid - (0.4)
---------------------------------------------- ----- ------------- -------------
NET CASH FROM FINANCING ACTIVITIES 63.8 23.9
---------------------------------------------- ----- ------------- -------------
Net increase/(decrease) in cash and
cash equivalents 6.5 (2.2)
Cash and cash equivalents at 1 October 3.9 6.0
Foreign exchange movements - 0.1
---------------------------------------------- ----- ------------- -------------
CASH AND CASH EQUIVALENTS AT END OF
THE PERIOD 10.4 3.9
---------------------------------------------- ----- ------------- -------------
Condensed consolidated statement of changes in equity
Owners of
the Non-Controlling
Company interests Total
GBPm GBPm GBPm
---------------------------------------------- -------------------- --------------------- ------
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)
Revaluations 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
---------------------------------------------- -------------------- --------------------- ------
UNAUDITED
Balance at 1 April 2010 99.0 2.3 101.3
---------------------------------------------- -------------------- --------------------- ------
Profit 1.3 0.2 1.5
Foreign exchange translation differences (5.3) (1.2) (6.5)
Revaluation of property, plant and equipment (0.2) - (0.2)
---------------------------------------------- -------------------- --------------------- ------
Total comprehensive income and expense (4.2) (1.0) (5.2)
Issue of shares 13.1 - 13.1
Issue of share options (net) 2.2 - 2.2
Purchase of non controlling interest (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 April 2011 107.6 18.8 126.4
---------------------------------------------- -------------------- --------------------- ------
Profit 2.5 2.7 5.2
Foreign exchange translation differences 0.6 0.9 1.5
Revaluation of property, plant and equipment (0.2) - (0.2)
---------------------------------------------- -------------------- --------------------- ------
Total comprehensive income and expense 2.9 3.6 6.5
Issue of shares 19.1 - 19.1
Subsidiaries acquired - 2.1 2.1
Put option - Fish on Line (2.3) - (2.3)
Minority dividends - (0.2) (0.2)
---------------------------------------------- -------------------- --------------------- ------
BALANCE AT 30 SEPTEMBER 2011 127.3 24.3 151.6
---------------------------------------------- -------------------- --------------------- ------
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 second half yearly report has
been prepared in accordance with IAS34 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.
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 period
ending 31 December 2011, none have been assessed as having a
significant impact on the Group.
(a) Basis of consolidation
Subsidiaries
The consolidated financial statements incorporate the financial
statements of Lonrho Plc and entities controlled by Lonrho Plc (its
subsidiaries). Control is achieved where Lonrho Plc (the Company)
has the power to govern the financial and operating policies of an
investee entity so as to obtain benefits from its activities.
The portion of a non-controlling interest is stated as the
non-controlling interest's proportion of the fair values of the
assets and liabilities recognised. Subsequently, losses applicable
to the non-controlling interest in excess of the non-controlling
interest in the subsidiary's equity are allocated against the
interests of the Group except to the extent that the
non-controlling interest has a binding obligation and is able to
make an additional investment to cover the losses. Future profits
attributable to the non-controlling interest are not recognised
until the unrecognised losses have been extinguished.
The results of entities acquired or disposed of during the
period are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate. Negative goodwill recognised on
acquisition is recognised in the income statement at the effective
date of acquisition.
3. Earnings per share
Basic and diluted earnings per share are arrived at by dividing
the profit for the period by the average number of shares in issue
during the period.
4. Capital management
Given the current 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. In October 2010 the Company
completed the issue of US$70m (GBP44.3m) Guaranteed Convertible
Bonds due 2015. Further, 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 GBP19.5m. The placing was
limited to 118,000,000 new shares in the capital of Lonrho
representing approximately 9.09% of the current issued share
capital of Lonrho.
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
organized 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.
5. Segmental reporting
Unaudited 6 months to September 2011
Consolidated
Agri- Trans- Infra- Support continuing
business portation structure services Hotels operations
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- --------- ---------- ---------- --------- ------- -------------
EXTERNAL REVENUE 40.8 14.5 10.3 11.0 4.8 81.4
-------------------------------- --------- ---------- ---------- --------- ------- -------------
Segment result 20.7 (7.9) 1.0 0.2 4.0 18.0
Unallocated expenses (5.8)
-------------------------------- --------- ---------- ---------- --------- ------- -------------
OPERATING PROFIT 12.2
-------------------------------- --------- ---------- ---------- --------- ------- -------------
Net finance expense (5.0)
Share of results of associates (1.8)
Share of results of other
investments 0.4
Income tax charge (0.6)
-------------------------------- --------- ---------- ---------- --------- ------- -------------
PROFIT FOR THE PERIOD 5.2
-------------------------------- --------- ---------- ---------- --------- ------- -------------
Unaudited 6 months to September 2010
Consolidated
Agri- Trans- Infra- Support continuing
business portation structure services Hotels operations
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- --------- ---------- ---------- --------- ------- -------------
EXTERNAL REVENUE 31.5 11.6 7.6 6.2 3.6 60.5
-------------------------------- --------- ---------- ---------- --------- ------- -------------
Segment result 7.2 (4.8) 3.9 0.1 (0.5) 5.9
Unallocated expenses (4.4)
-------------------------------- --------- ---------- ---------- --------- ------- -------------
OPERATING PROFIT 1.5
-------------------------------- --------- ---------- ---------- --------- ------- -------------
Net finance expense (2.0)
Share of results of associates 2.7
Share of results of joint
ventures (0.2)
Income tax charge (0.5)
-------------------------------- --------- ---------- ---------- --------- ------- -------------
PROFIT FOR THE PERIOD 1.5
-------------------------------- --------- ---------- ---------- --------- ------- -------------
Unaudited 12 months to September 2011
Consolidated
Agri- Trans- Infra- Support continuing
business portation structure services Hotels operations
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- --------- ---------- ---------- --------- ------- -------------
EXTERNAL REVENUE 72.4 24.6 17.8 18.8 8.9 142.5
-------------------------------- --------- ---------- ---------- --------- ------- -------------
Segment result 27.8 (10.6) 1.0 0.5 3.8 22.5
Unallocated expenses (10.5)
-------------------------------- --------- ---------- ---------- --------- ------- -------------
OPERATING PROFIT 12.0
-------------------------------- --------- ---------- ---------- --------- ------- -------------
Net finance expense (7.8)
Share of results of associates (1.7)
Share of results of other
investments 0.4
Income tax charge (1.0)
-------------------------------- --------- ---------- ---------- --------- ------- -------------
PROFIT FOR THE PERIOD 1.9
-------------------------------- --------- ---------- ---------- --------- ------- -------------
Audited 12 months to September 2010
Consolidated
Agri- Trans- Infra- Support continuing
business portation structure services Hotels operations
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- --------- ---------- ---------- --------- ------- -------------
EXTERNAL REVENUE 55.3 21.5 14.0 11.1 5.9 107.8
-------------------------------- --------- ---------- ---------- --------- ------- -------------
Segment result 7.9 (7.6) 4.1 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 results of joint
ventures (0.4)
Income tax charge (0.7)
-------------------------------- --------- ---------- ---------- --------- ------- -------------
LOSS FOR THE PERIOD (0.2)
-------------------------------- --------- ---------- ---------- --------- ------- -------------
Unaudited 30 September 2011
Consolidated
Agri- Trans- Infra- Support continuing
business portation structure services Hotels Other operations
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
Segment operating assets 100.0 47.9 84.9 13.4 38.9 - 285.1
Investment in associates - - - - - 11.1 11.1
Unallocated assets/interest
bearing assets - - - - - 19.3 19.3
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
TOTAL ASSETS 100.0 47.9 84.9 13.4 38.9 30.4 315.5
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
Segment operating liabilities 42.1 34.3 14.6 7.6 16.2 - 114.8
Unallocated liabilities/interest
bearing liabilities - - - - - 49.1 49.1
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
TOTAL LIABILITIES 42.1 34.3 14.6 7.6 16.2 49.1 163.9
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
Depreciation of segment
assets 1.1 0.6 1.6 0.3 0.6 0.1 4.3
Amortisation of segment
assets 0.3 - - 0.1 - - 0.4
Capital expenditure 4.1 14.8 1.5 0.3 0.3 - 21.0
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
Unaudited 31 March 2011
Consolidated
Agri- Trans- Infra- Support continuing
business portation structure services Hotels Other operations
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
Segment operating assets 58.8 33.5 83.4 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 33.5 83.4 12.5 25.0 37.4 250.6
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
Segment operating liabilities 22.2 19.3 15.2 6.8 11.0 - 74.5
Unallocated liabilities/interest
bearing liabilities - - - - - 49.7 49.7
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
TOTAL LIABILITIES 22.2 19.3 15.2 6.8 11.0 49.7 124.2
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
Depreciation of segment
assets 0.7 0.2 1.6 0.1 0.6 0.1 3.3
Amortisation of segment
assets 0.3 - - 0.1 - - 0.4
Capital expenditure 1.2 13.2 0.8 0.2 0.3 0.1 15.8
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
Audited 30 September 2010
Consolidated
Agri- Trans- Infra- Support continuing
business portation structure services Hotels Other operations
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
Segment operating assets 51.1 16.4 82.9 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 16.4 82.9 3.9 23.3 18.8 196.4
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
Segment operating liabilities 28.8 7.4 14.5 1.2 9.9 - 61.8
Unallocated liabilities/interest
bearing liabilities - - - - - 6.9 6.9
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
TOTAL LIABILITIES 28.8 7.4 14.5 1.2 9.9 6.9 68.7
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
Depreciation of segment
assets 1.5 0.6 3.0 0.1 0.6 0.1 5.9
Amortisation of segment
assets 0.5 0.1 - 0.2 - - 0.8
Capital expenditure 2.9 0.8 3.7 - 1.4 0.3 9.1
---------------------------------- --------- ---------- ---------- --------- ------- ------ -------------
6. Acquisition of subsidiaries
AFEX
With effect from 1 January 2011, the Group acquired 100% of the
issued share capital of Global Horizons Ltd (which trades as AFEX)
for an initial consideration of US$3m (GBP1.9m). Further payments
of up to US$5m (GBP3.1m) 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
Republic of Southern Sudan. This infrastructure is in great demand
from corporate clients, NGO's, and Government Aid Agencies working
in the Republic of 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:
Fair
Pre- valuation Values
acquisition adjustment recognised
carrying on on
value acquisition 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 franchise - 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
GBP0.1m and have been expensed in operating costs 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 GBP5.7m to the Group's revenue and GBP0.3m
profit to the Group's profit before tax for the period between the
date of acquisition and the reporting date.
FISH ON LINE
With effect from 1 June 2011, the Group acquired 51% of the
issued share capital of Fish Online Pty Limited for an initial
consideration of GBP0.3m.
Pursuant to the share purchase agreement, the sellers have been
granted a put option to sell their remaining 49% to Lonrho three
years after the signature date at a purchase price of 6x multiple
of Fish On Line's profit before tax for the 2014 financial year
end, which is capped at a maximum of ZAR 35.0m (GBP2.3m).
The transaction has been accounted for by the purchase method of
accounting. The fair value of the net assets at 1 June 2011 is set
out below:
Fair
Pre- valuation Values
acquisition adjustment recognised
carrying on on
value acquisition acquisition
GBPm GBPm GBPm
----------------------------------------- ------------ ------------ ------------
Property, plant and equipment 0.1 - 0.1
Inventory 0.8 - 0.8
Trade and other receivables 1.2 - 1.2
Cash and cash equivalents (0.8) - (0.8)
Trade and other payables (0.7) - (0.7)
Loans and borrowings (0.2) - (0.2)
----------------------------------------- ------------ ------------ ------------
NET IDENTIFIABLE ASSETS AND LIABILITIES 0.4 - 0.4
----------------------------------------- ------------ ------------ ------------
Non-controlling interest share (0.2)
Consideration paid 0.3
----------------------------------------- ------------ ------------ ------------
GOODWILL ON ACQUISITION 0.1
----------------------------------------- ------------ ------------ ------------
The transaction costs incurred to acquire the company were
GBP0.1m and have been expensed in operating costs in the income
statement.
The goodwill arising on the acquisition of Fish On Line Pty
Limited is attributable to the anticipated profitability of the
distribution of the company's service and product to new
customers.
Fish On Line Pty Limited contributed GBP2.7m to the Group's
revenue and GBP0.1m loss to the Group's profit before tax for the
period between the date of acquisition and the reporting date.
GRINDROD PCA
With effect from 1 July 2011, the Group acquired 100% of the
trading assets of Grindrod PCA for a consideration of ZAR 50m
(GBP4.5m).
The transaction has been accounted for by the purchase method of
accounting. The fair value of the net assets at 1 July 2011 is set
out below:
Fair
Pre- valuation Values
acquisition adjustment recognised
carrying on on
value acquisition acquisition
GBPm GBPm GBPm
---------------------------------------------- ------------ ------------ ------------
Property, plant and equipment 0.5 - 0.5
Inventory - - -
Trade and other receivables 5.2 - 5.2
Cash and cash equivalents 0.9 - 0.9
Trade and other payables (4.6) - (4.6)
Intangible related to customer relationships - 2.5 2.5
---------------------------------------------- ------------ ------------ ------------
NET IDENTIFIABLE ASSETS AND LIABILITIES 2.0 2.5 4.5
---------------------------------------------- ------------ ------------ ------------
Consideration paid 4.5
Contingent consideration -
---------------------------------------------- ------------ ------------ ------------
GOODWILL ON ACQUISITION -
---------------------------------------------- ------------ ------------ ------------
The transaction costs incurred to acquire the company were
GBP0.1m and have been expensed in operating costs in the income
statement.
The goodwill arising on the acquisition of Grindrod PCA is
attributable to the anticipated profitability of the distribution
of the company's services.
Grindrod PCA contributed GBP9.1m to the Group's revenue and
GBP0.1m loss to the Group's profit before tax for the period
between the date of acquisition and the reporting date.
ALDEAMENTO TURISTICO DE MACUTI SARLI "ATDM"
On 30 September 2011, the Group acquired 80% of the issued share
capital of ATdM from Lonzim Plc for US$5.1m (GBP3.2m), which will
be settled in cash over the next 5 years. Pursuant to the share
purchase agreement, Lonrho Hotels will also take responsibility for
liabilities up to US$2.7m (GBP1.7m).
The transaction has been accounted for by the purchase method of
accounting. The fair value of the net assets at 30 September 2011
is set out below:
Fair
Pre- valuation Values
acquisition adjustment recognised
carrying on on
value acquisition acquisition
GBPm GBPm GBPm
--------------------------------------------- ------------ ------------ ------------
Long leasehold property 4.5 6.1 10.6
Inventory - - -
Trade and other receivables - - -
Cash and cash equivalents - - -
Trade and other payables (0.6) - (0.6)
Intangible asset - - -
--------------------------------------------- ------------ ------------ ------------
NET IDENTIFIABLE ASSETS AND LIABILITIES 3.9 6.1 10.0
--------------------------------------------- ------------ ------------ ------------
Non-controlling interest (2.0)
Consideration paid 4.0
--------------------------------------------- ------------ ------------ ------------
NEGATIVE GOODWILL RECOGNISED ON ACQUISITION 4.0
--------------------------------------------- ------------ ------------ ------------
The transaction costs incurred to acquire the company were
GBP0.1m and have been expensed in operating costs in the income
statement.
As a first phase development Lonrho Hotels plans to refurbish an
existing property on the site to establish an easyHotel by Lonrho
and provide quality office space for key companies seeking to
establish offices in Beira.
The negative goodwill arising on the acquisition of ATdM is
attributable to the fair value of the property reflecting its
development potential.
ATdM contributed GBPnil to the Group's revenue and GBPnil profit
to the Group's profit before tax for the period between the date of
acquisition, and the reporting date.
HOME FARMS
On 31 August 2011 the Group acquired 100% of the issued share
capital of Home Farms for a consideration of US$60. Home Farms
consists of 3 leased farms (20 year leases) and substantial
leasehold buildings including a 58,000 square feet agricultural
packhouse and high care unit.
The transaction has been accounted for by the purchase method of
accounting. The fair value of the net assets at 31 August 2011 is
set out below:
Fair
Pre- valuation Values
acquisition adjustment recognised
carrying on on
value acquisition acquisition
GBPm GBPm GBPm
--------------------------------------------- ------------- ------------ ------------
Long leasehold property, plant and
equipment - 8.0 8.0
Inventory - - -
Trade and other receivables - - -
Cash and cash equivalents - - -
Trade and other payables - - -
Intangible related to lease - 3.0 3.0
--------------------------------------------- ------------- ------------ ------------
NET IDENTIFIABLE ASSETS AND LIABILITIES - 11.0 11.0
--------------------------------------------- ------------- ------------ ------------
Consideration paid -
Contingent consideration -
--------------------------------------------- ------------- ------------ ------------
NEGATIVE GOODWILL RECOGNISED ON ACQUISITION 11.0
------------------------------------------------------------ ------------ ------------
The transaction costs incurred to acquire the company were
GBP0.1m and have been expensed in the income statement.
The negative goodwill arising on the acquisition of Home Farms
is attributable to the open market value of the leasehold property
and buildings acquired and the beneficial lease arrangements.
Home Farms contributed GBP0.3m to the Group's revenue and
GBP0.2m loss 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.
Unaudited Unaudited Audited
6 months 6 months 12 months
to to to
30 September 31 March 30 September
2011 2011 2010
GBPm GBPm GBPm
---------------------------------- ------------- ---------- -------------
NON-CURRENT LIABILITIES
Finance lease liabilities 20.7 10.8 1.8
Unsecured bank loans 27.2 17.4 20.3
Convertible bond 43.8 42.6 -
Shareholder loans 2.9 3.0 2.5
Other loans - - 1.8
---------------------------------- ------------- ---------- -------------
94.6 73.8 26.4
---------------------------------- ------------- ---------- -------------
CURRENT LIABILITIES
Unsecured bank loans 3.0 3.9 2.8
Current portion of finance lease
liabilities 2.5 0.9 1.0
Other loans 0.3 - 1.8
Bank overdraft 8.9 4.7 3.9
---------------------------------- ------------- ---------- -------------
14.7 9.5 9.5
---------------------------------- ------------- ---------- -------------
The increase in finance leases reflects the acquisition of 2 ATR
aircraft, one in December 2010 and one in July 2011.
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 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 GBP1.0m
of the total liability under the convertible bond has been
transferred to other reserves, representing the equity portion of
the Bonds at the date of initial recognition.
8. Net finance income
Unaudited Unaudited Unaudited Audited
6 months 6 months 12 months 12 months
to to to to
30 September 30 September 30 September 30 September
2011 2010 2011 2010
GBPm GBPm GBPm GBPm
------------------------------------ ------------- ------------- ------------- -------------
Bank interest receivable 0.1 0.1 0.1 0.1
Foreign exchange gain 1.1 2.8 2.6 8.5
------------------------------------ ------------- ------------- ------------- -------------
FINANCE INCOME 1.2 2.9 2.7 8.6
------------------------------------ ------------- ------------- ------------- -------------
Interest on loans repayable within
five years and overdrafts (3.4) (1.3) (6.2) (2.1)
Foreign exchange loss (2.6) (3.4) (4.1) (3.4)
Interest on finance leases (0.2) (0.2) (0.2) (0.2)
------------------------------------ ------------- ------------- ------------- -------------
FINANCE EXPENSE (6.2) (4.9) (10.5) (5.7)
------------------------------------ ------------- ------------- ------------- -------------
NET FINANCE INCOME (5.0) (2.0) (7.8) 2.9
------------------------------------ ------------- ------------- ------------- -------------
Interest charges for the six months to 30 September 2011
includes GBP1.5m relating to the 7% convertible bond issued in
October 2010. Interest expenses for the 12 month period ended 30
September 2011 include GBP2.8m relating to the bond.
Foreign exchange losses for the 12 month period ended 30
September 2011 include GBP0.7m relating to the 7% convertible bond
issued in October 2010.
9. Note to the cash flow statement
Unaudited Audited
30 September 30 September
2011 2010
GBPm GBPm
----------------------------------------------------- ------------- -------------
Depreciation of property, plant and equipment 7.6 5.9
Amortisation of intangible assets 0.8 0.8
Impairment of investment - 0.4
Share based payment expense 0.3 2.3
Finance income 7.8 (2.9)
Share of profit of associates and joint ventures 1.2 (1.9)
Gain arising on fair valuation of biological assets (17.0) (9.0)
Income tax expense 1.0 0.7
Negative goodwill on acquisition (15.0) -
Profit on sale of property, plant and equipment (0.3) -
----------------------------------------------------- ------------- -------------
ADJUSTMENTS TO PROFIT FOR THE PERIOD (13.6) (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 since 1 October 2010 is Lonrho's participation in a
placing of shares by LonZim Plc. Lonrho participated in the placing
to maintain its then percentage shareholding of 24.61% by
subscribing for 4,384,011 new LonZim Shares at a cost of
GBP1,227,523. At 30 September 2011 Lonrho's shareholding in Lonzim
Plc was 22.92%.
11. Post balance sheet events
There have been no material post balance sheet events.
12. Cautionary statement
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 second 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 6 months ended 30 September 2011
and their impact on the financial information, and a description of
the principal risks and uncertainties for the remaining part of the
period 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 and Chief Executive Officer
7 November 2011
On behalf of the Board
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UGGQUGUPGGBC
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