Lonrho PLC Interim Management Statement (2958E)

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RNS Number : 2958E

Lonrho PLC

09 May 2013

9 May 2013

Lonrho Plc ("Lonrho")

Interim Management Statement

Lonrho Plc reports GBP39.1m revenues in first quarter and 7.2% increase in gross margin

Lonrho Plc announces its results for the first quarter to 31 March 2013 incorporating an update on material transactions to 8 May 2013.

Lonrho's core businesses operate in the agriculture and oil and gas sectors across sub Saharan Africa. These burgeoning industries are the key drivers of African growth as African energy resources and agricultural produce become increasingly important in meeting global demand. As a result of the development of these sectors and subsequent economic growth Lonrho is seeing significantly increasing demand from the expanding consumer market across the Continent.

Geoffrey White, Lonrho's Chief Executive Officer, commented:

"Q1 has delivered good progress for the Group with reported revenues of GBP39.1m for the first quarter and, importantly, gross margin increasing by 7.2 % year on year. The strategic decision made in the second half of 2012 to focus on improving Group margins and to concentrate on the Group's higher margin businesses whilst reducing the exposure to lower margin businesses has, as expected, resulted in slower growth in turnover (increased 0.3% on a like for like basis) for the quarter but has had a very positive effect on gross margins (increased 7.2%) which is expected to continue going forward."

 
 Continuing Operations                  1st Quarter 
-----------------------  ---------------------------------------- 
                            Quarter     Reported     1Adjusted 
                            to March     Growth     like-for-like 
                              2013                     growth 
-----------------------  ------------  ---------  --------------- 
                          GBP million 
 Revenue 
 Agribusiness                23.9       (35.2%)         3.1% 
 Infrastructure               4.0        (9.8%)       (10.6%) 
 Support Services             7.8        39.1%         (6.1%) 
 Hotels                       3.4        37.2%          8.9% 
 
 Lonrho Plc                  39.1       (20.8%)         0.3% 
-----------------------  ------------  ---------  --------------- 
 Group Gross 
  Margin                     32.4%        7.2% 
-----------------------  ------------  ---------  ---------------

Financial Highlights up to 31 March 2013:

-- Revenue in the first quarter was GBP39.1m. On an adjusted like-for-like basis at constant currency revenue has marginally increased by 0.3% year on year.

-- Gross margins across the Group are up 7.2% in the quarter demonstrating the results of the continued focus and strategic action by the board on increasing margins through operational efficiencies.

-- Net debt was GBP99.1m at 31 March 2013 compared with GBP87.2m at 31 December 2012. The majority of this increase (of GBP11.9m) was due to a GBP6.1m negative foreign exchange movement due to the decline of Sterling versus the US dollar. The balance reflects anticipated working capital movements in the quarter.

The first quarter is historically always the quietest period for the Group's businesses, with the January slowdown in retail and consumer markets following the December holiday period impacting local and export sales. Lonrho's outlook for 2013 remains in line with the Board's expectations and the Group expects to continue delivering improved performance across each of its operating divisions.

Operational highlights in the first quarter:

-- The Agribusiness fish division reported very strong growth in the quarter with revenues up 46.3% year on year. Lonrho's Oceanfresh has continued to build strongly on its core business locally with African customers and internationally where it has seen further deployment of its 'Kirkland Signature Hake' into Costco. Fish-on-Line, the division's wholesale fish company, reported strong results in the quarter and continued delivery of its first own branded goods to over 100 stores in South Africa for Food Lovers Market. The buyout of the minority shareholders in Fish-on-Line was completed in the quarter for GBP0.2m and Lonrho now owns 100% of the business.

-- In our Support Services division, the IT business won two significant contracts with the City of Windhoek and MTC Namibia through CES Namibia which commenced operation in November 2012. CES Namibia has delivered strong results and growth and these contracts are valued at close to US$5m of which US$3.5m will be completed in Q1 and Q2 and the remainder will be delivered over the balance of the year and into Q1 2014.

-- The first 'easyHotel by Lonrho' opened in Johannesburg on 26 March 2013. This budget hotel had been expected to open in December 2012, but experienced delays to its originally planned opening date. Initial demand has exceeded expectations and occupancy levels have averaged over 60% in the first few weeks of operation.

-- e-Kwikbuild has had a difficult first quarter and continues to struggle to complete its ongoing Government contracts with Eastern Cape Schools and SAPS. The Group is looking at a number of strategic options to strengthen the underlying position of the business for the months ahead.

1Adjusted like-for-like figures include acquisitions (pre-acquisition comparables based on un-audited

management accounts), exclude start-up businesses trading for less than 12 months and are adjusted to constant currency.

ENDS

 
 Enquiries: 
 
                    +44 (0) 20 7016                     +44 (0) 20 7831 
 Lonrho Plc          5105             FTI Consulting     3113 
 Geoffrey White                       Edward Westropp 
 David Armstrong                      Georgina Bonham

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END

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