Lonrho Plc (AIM: LONR), the conglomerate with a structured portfolio of African investments, announces its Interim Results for the sixth months ended 31 March 2008.
Lonrho remains focused on investing in and developing opportunities across the continent, where it operates five strategic divisions in fourteen countries.
Financial Highlights:
The results for the six months to 31 March 2008 reflect that Lonrho continues to invest in and grow businesses across Africa.
For the six months to 31 March 2008:
*
Turnover has increased to £17.8m (2007: £4.6m).
*
A loss of £4.0m (2007: £3.3m) which is as expected given the ongoing development of the Group's investments.
- Primarily due to a loss of £6.1m in SAILS which reflects the substantial costs of developing new routes in the
shipping industry. These reflect one off deployment and establishment costs for four new ships. In addition, although
Fly540 Kenya was profitable, costs of £1.7m on the ongoing roll out of Fly540 Africa in Uganda, Tanzania,
Angola and Ghana have been incurred.
*
Lonrho received shares in LonZim Plc with a value of £7.3m in respect of a non-compete agreement.
*
Cash held in the United Kingdom at 31 March 2008 was £18.3m.
These are the first results prepared by the Company in accordance with International Financial Reporting Standards. The comparative figures have been restated accordingly. In addition, the figures for 31 March 2007 have been restated following the reclassification of Norse Air Limited as an associate as disclosed in the Annual Report and Accounts for the year ended 30 September 2007.
Operational Highlights:
Ports and Infrastructure:
*
Luba Freeport
- Development of a further 83m of quay is due for completion in September 2008
*
KwikBuild
- Acquisition of KwikBuild delivering prefabricated building solutions across Africa
Transportation:
*
Fly540
- Now operating in six countries in Africa
*
SAILS
- Increased SAILS fleet from two to six vessels, introduced 1,000 'reefer' chilled containers and increased stake to
67%
Support Services:
*
Lonrho Springs
- Constructing new water bottling plants in Angola, DRC and South Africa
*
CES
- Established new operations in South Africa to provide turnkey network solutions, hardware and maintenance
support across the African marketplace
*
Hotels
- 23% increase in revenue at Hotel Cardoso
- Build Operate Transfer contract to redevelop the Karavia hotel in Lubumbashi in the DRC
Natural Resources:
*
Completed airborne magnetic and radiometric survey on the Lulo concession in Angola with exceptional results
Zimbabwe:
*
Listed LonZim Plc on AIM raising £29.0m, Lonrho receiving a 20% free carried interest
Geoffrey White, Lonrho CEO commented:
"During the period, we have continued to build a strong foundation for the business through strategic investments. Our investments have been selected on the basis of significant potential for growth both locally and across the African continent.
"The future of Lonrho lies in expanding existing businesses across the continent. Over the next year we will focus on strengthening synergies between our group of companies and divisions to assist in this process. We remain extremely positive about Lonrho's prospects in Africa."
LONRHO ENQUIRIES
Lonrho Plc
+44 (0)20 7016 5105
David Lenigas, Executive Chairman
+44 (0)7881 825 378
Geoffrey White, Chief Executive Officer
+44 (0)7717 307 308
Emma de Borchgrave, Executive Director
+44 (0)7867 785 177
Pelham PR
Charles Vivian
+44 (0) 20 7743 6672
+44 (0) 7977 297903
James MacFarlane
+44 (0) 20 7743 6375
+44 (0) 7841 672831
Collins Stewart Europe : NOMAD to Lonrho
Hugh Field
+44 (0) 20 7523 8350
Chief Executive's Statement
During the six month period to the end of March 2008 Lonrho has continued to implement its business strategy across Africa. The Company remains focused on investing in and developing opportunities across the continent, where it operates five strategic divisions in fourteen countries. This diversity seeks to mitigate risk geographically, politically and across sectors, whilst bringing commercial benefits to each of Lonrho's divisions.
The Lonrho corporate objective is to establish sound businesses, either through investment in new ventures or acquisitions, and then grow each across the continent. The majority of the strategic investments made to date are now beginning to demonstrate their potential.
Lonrho's core market sectors remain those fundamental to supporting economic growth in Africa, and revolve around providing the services and industry needed for economic development.
Africa has become one of the World's new emerging market economies, and the opportunities for economic development of the Continent are tangible. The driving force behind the substantial growth in GDP in sub-Saharan Africa is largely due to the burgeoning natural resources sector. This has led the way for developments and growth in other sectors and is stimulating the foreign direct investment needed to encourage, develop and drive the economy as a whole.
The Group has seen an increase in turnover from £4.6m for the six months period to 31 March 2007 to £17.8m for the six months period to 31 March 2008 (the March 2007 figures having been restated following the reclassification of Norse Air Limited as an associate as disclosed in the Annual Report and Accounts for the year ended 30 September 2007).
The loss for the period of £4.0m (£3.3m for the period to 31 March 2007, the figures having been restated following the reclassification of Norse Air Limited as an associate as disclosed in the Annual Report and Accounts for the year ended 30 September 2007) reflects the ongoing development phase of the Group's investments.
During the period SAILS incurred a loss of £6.1m on turnover of £6.7m which reflects the substantial costs of developing new routes in the shipping industry. These reflect one off deployment and establishment costs for four new ships. In addition, although Fly540 Kenya was profitable, costs of £1.7m on the ongoing roll out of Fly540 Africa in Uganda, Tanzania, Angola and Ghana have been incurred.
The Group received shares with a value of £7.3m in LonZim Plc during the period to reflect the non-compete agreement which Lonrho Plc has entered into. This is shown as a 'Gain on sale of intangible fixed asset' in the Consolidated Interim Income Statement.
Cash held in the United Kingdom at 31 March 2008 was £18.3m.
The Group continues in an investment and growth phase. During the period, Lonrho raised £40.85m (net of expenses) from institutions to continue the development of the business.
This is the first report prepared by the Group in accordance with International Financial Reporting Standards ("IFRS") which are required for all AIM listed companies for accounting periods commencing on or after 1 January 2007. The comparative figures have been restated accordingly. An IFRS Restatement Report, which explains the effects on the financial statements of the adoption of IFRS, can be found on the Company's website at www.lonrho.com.
There has been no change in the Group's position with regard to its investment in Norse Air Limited as reported in the Annual Report and Accounts for 2007. Legal action is ongoing.
A review of the major operations, by division, follows.
Transportation
Five Forty Aviation Limited ("Fly540") (49% holding)
The business concept of Fly540 was to establish a safe and reliable African airline operating to international standards. Initially operating out of Kenya, the successful business model is now being rolled out across Africa. A regional hub is currently being established in Angola, with initial flights expected to commence in August 2008, and plans to open a West African hub in Ghana in the second half of 2008 are advanced. A subsidiary hub is operational in Uganda and feasibility studies for further subsidiary hubs in Zimbabwe, Djibouti, Mozambique, Tanzania, Mauritius and Equatorial Guinea are in process. Each hub will eventually be linked delivering the first true pan-African airline, flying passengers East to West and North to South.
