6th Jun 2006 07:01
Lonrho Africa PLC06 June 2006 LONRHO AFRICA PLC Interim results for the six months to 31 March 2006 Highlights • David Lenigas appointed Chief Executive in December 2005 to re-establish the Company in Africa • New strategic focus on infrastructure; mining, oil & gas; hotel & leisure; agribusiness • Investment in Hotel Cardoso retained • Emma Priestley joined the Board as Executive Director Developments since 31 March 2006 • Investment of 8.2% in Brinkley Mining, which has significant Uranium and Molybdenum prospects in South Africa • Acquisition of 17% stake in Nare Diamonds, which has since recovered a rare 235 carat diamond from its Schmidtsdrift diamond mine in South Africa • Lonrho Africa acquired 63% of Luba Freeport in Equatorial Guinea, which acts as a logistics centre for the oil and gas industries in the Gulf of Guinea • David Lenigas appointed Executive Chairman • Martin Horgan appointed Non-Executive Director • Gerard Holden appointed Joint Executive Chairman David Lenigas, Lonrho Africa's Joint Executive Chairman and Chief Executive,said: "I am pleased to report considerable progress in our drive to position LonrhoAfrica as a significant player once again on the African Continent. The newlyadopted investment strategy focuses on the natural resources, infrastructure,leisure and agribusiness sectors. It has already delivered three investments inmining and infrastructure, all of which offer the potential of excellent returnsto our shareholders. These investments are illustrative of the excitingopportunities available in Africa which, as a whole, is gaining renewedinternational investor interest. I would like to thank Lonrho Africa's Board -present and past - for their contribution during this exciting time and lookforward to the future with confidence." For further information, please contact: Lonrho Africa Plc +44 (0)20 7016 5100David LenigasEmma Priestley Strand Partners Limited +44 (0)20 7409 3494Simon Raggett / Matthew Chandler Cardew Group +44 (0)20 7930 0777Nadja Vetter / Eden Mendel / Emma Consett Notes to editors Lonrho Africa is in the process of re-establishing a significant presence on theAfrican Continent. The new investment and acquisition strategy, adoptedfollowing the appointment of David Lenigas as Chief Executive in December 2005,will focus on the natural resources, infrastructure, leisure and agribusinesssectors. Lonrho Africa has considerable experience across these industries in awide range of countries. Recently, the Company announced investments in BrinkleyMining Plc, Nare Diamonds Ltd and Luba Freeport Ltd in Equatorial Guinea. Chairman's statement In the period under review Lonrho Africa made its first investment in line withthe Company's new growth strategy, which was endorsed by shareholders at anExtraordinary General Meeting held on 24 February 2006. The strategy will seethe Company re-establishing a significant presence on the African Continentfocusing on the natural resources, infrastructure, leisure and agribusinesssectors. At the time of that Meeting we also strengthened our Board with the appointmentof Emma Priestley as an Executive Director whose background in miningengineering and expertise in the natural resources sector will greatly benefitthe Company. Emma joined Lonrho Africa from Ambrian Partners, the investmentbank where she worked as a corporate broker and adviser. Hotel Cardoso SARL Following the decision to retain our investment in the Cardoso Hotel inMozambique, we have decided to make a further investment in the hotel andenhance its facilities. The hotel made a profit during the six month periodunder review of which the Group's share amounted to £7,000 (2005: £73,000 loss)as a result of improved trading conditions. Matrix Properties (Pty) Limited The sale of the remaining industrial property in South Africa has beenre-negotiated at a considerably higher price and we anticipate completing thisby the end of the year. Since the period end, we have continued to make considerable progress tore-establish Lonrho Africa as a pan-African conglomerate with a diverseportfolio of investments across the Continent. Brinkley Mining Plc On 14 March 2006, it was announced that we had agreed to invest £5 million inBrinkley Mining, which has significant Uranium and Molybdenum prospects in theKaroo region of South Africa. This was completed in May 2006. Brinkley Miningraised further finance prior to its IPO resulting in a reduction in our holding from 10% to 8.2%. Brinkley Mining was admitted to AIM on Monday 5 June 2006. Nare Diamonds Limited On 11 April 2006 we announced our second acquisition under the new investmentstrategy, being the acquisition of 14.44 million shares in Nare Diamonds, whichhas five diamond projects in South Africa. This is again part of a pre-IPOfunding exercise and represents a 17% holding at a cost of £1.5 million. When our investment was announced I said that this would provide Lonrho Africawith exposure to the lucrative diamond industry and offer the potential of anexcellent return to our shareholders. I had, of course, not anticipated thatwithin ten days of our making this investment Nare Diamonds would find a 235carat diamond that was subsequently sold for US$2.4 million. At present, NareDiamonds is seeking an admission to AIM. Luba Freeport Limited On 12 May 2006 we announced the acquisition of 63% of Luba Freeport, located inEquatorial Guinea, for a cash consideration of US$2 million. As part of theacquisition Lonrho Africa also assumed secured debt of approximately US$11.3million. As a result, Lonrho Africa has taken control of Luba Freeport and Ihave taken on the role of Chairman. This acquisition is a major step in ourinvolvement in infrastructure projects in Africa where the Port acts as alogistics centre for the burgeoning oil and gas industries in the Gulf of Guineaand services major oil companies in the region. As part of the transaction,Lonrho Africa has agreed with the Government of Equatorial Guinea to maintainthe overall development programme for the Port facilities. Directorate We have made a number of significant appointments recently which will proveinvaluable to the Company's ongoing growth strategy. Following my appointment as Chief Executive on 21 December 2005, I was delightedto take on the role of Chairman at the end of April 2006. Martin Horgan was appointed as a Non-Executive Director of the Company on 15 May2006. Martin has more than 10 years experience in the mining sector and mostrecently was an Associate Director at Barclays Capital. I believe that LonrhoAfrica will benefit greatly from his extensive knowledge of the mining industryand the raising of finance in that sector. I was very pleased to announce that Gerard Holden had agreed to join the Boardas Joint Executive Chairman with effect from 26 May 2006. He will also take onthe role as Non-Executive Chairman of Brinkley Mining. Gerard has veryconsiderable experience of financing projects in the commodities sector. Mostrecently he was Managing Director and Global Head of Mining and Metals atBarclays Capital. His experience ranges from acquisition, corporate and projectfinancing to bond issues and advisory assignments. I would like to take this opportunity to thank Richard Wilkinson, who steppeddown as a Director on 3 May 2006, for his services to the Company over the lastseven years. Likewise I would like to thank Christopher Mills who stepped down as Chairmanfollowing the conclusion of the Annual General Meeting. Christopher was aDirector for seven years and had been Chairman since 2004. During that time heplayed a pivotal role in ensuring the survival of the Company by helping tosteer it through very difficult times. David LenigasJoint Executive Chairman and Chief Executive5 June 2006 This announcement was approved by the Board of Directors on 5 June 2006. Consolidated profit and loss account 6 months 6 months 6 months 6 months 12 months to 31.3.06 to 31.3.05 to 31.3.05 to 31.3.05 to 30.9.05 Continuing Discontinued Total operations operations Total Total Note £m £m £m £m £m_________________________________________________________________________________________________ Turnover 0.6 0.5 4.1 4.6 5.8Net operating costs (1.0) (1.0) (3.6) (4.6) (5.8)_________________________________________________________________________________________________ Operating (loss)/profit (0.4) (0.5) 0.5 - -_________________________________________________________________________________________________ Non-operating exceptionalitems 2 - - 0.1 0.1 1.7Interest receivable 0.4 0.1 - 0.1 0.5_________________________________________________________________________________________________ Profit/(loss) on ordinary activities before taxation - (0.4) 0.6 0.2 2.2Taxation - - (0.2) (0.2) (0.3)_________________________________________________________________________________________________ Profit/(loss) on ordinary activities after taxation - (0.4) 0.4 - 1.9Minority interests - 0.1 - 0.1 0.1_________________________________________________________________________________________________ Profit/(loss) for the period - (0.3) 0.4 0.1 2.0_________________________________________________________________________________________________Profit per share - 0.1p 1.3p_________________________________________________________________________________________________Profit per share beforeexceptional items - - 0.2p_________________________________________________________________________________________________ Earnings per share Profit per share has been calculated using the profit after taxation andminority interest applied to 157,572,088 shares. Profit per share excluding exceptional items has been calculated on the profitafter taxation and minority interest but before exceptional items applied to157,572,088 shares. Group balance sheet 31 March 31 March 30 September 2006 2005 2005 Note £m £m £mFixed assets Tangible 2.6 17.5 2.6________________________________________________________________________________________________________________ Current assetsStocks 0.3 0.6 0.3Debtors Amounts falling due within one year 1.2 3.7 1.8Cash at bank 20.9 6.9 20.3________________________________________________________________________________________________________________ 22.4 11.2 22.4 Creditors: amounts falling due within one year (0.8) (2.3) (0.6)________________________________________________________________________________________________________________ Net current assets 21.6 8.9 21.8________________________________________________________________________________________________________________ Total assets less current liabilities 24.2 26.4 24.4 Provisions for liabilities and charges (2.2) (3.6) (2.5)________________________________________________________________________________________________________________ Net assets 22.0 22.8 21.9________________________________________________________________________________________________________________ Capital and reservesCalled up share capital 1.6 31.5 1.6Merger reserve 96.1 96.1 96.1Revaluation reserve 0.9 7.7 0.8Profit and loss account (77.8) (115.2) (77.7)Other reserve 3 0.1 - -________________________________________________________________________________________________________________ Shareholders' funds (equity) 20.9 20.1 20.8Minority interests (equity) 1.1 2.7 1.1________________________________________________________________________________________________________________ 22.0 22.8 21.9________________________________________________________________________________________________________________ Consolidated cash flow statement 6 months 6 months 12 months to 31.3.06 to 31.3.05 to 30.9.05 Note £m £m £m £m £m £m_______________________________________________________________________________________________________________Net cash flow from operating activities - continuing operations 0.2 (0.9) (0.8)- discontinued operations - 2.3 3.1 ____ ____ ____ 1 0.2 1.4 2.3 Return on investments and servicing of finance- interest received 0.4 0.1 0.5 Tax paid - overseas - (0.5) (0.6)_______________________________________________________________________________________________________________ Net cash inflow before investing activities 0.6 1.0 2.2 Net capital payments 1 - (0.1) (0.1) Net proceeds from disposal of subsidiaries 1 - - 13.7 Demerger dividend - - (1.6)_______________________________________________________________________________________________________________ Increase in cash 0.6 0.9 14.2_______________________________________________________________________________________________________________ Movement in net cashfor the six months to 31 March 2006 1 October Net cash 31 March 2005 flows 2006 £m £m £m_________________________________________________________________________________________________________Cash 20.3 0.6 20.9_________________________________________________________________________________________________________ Statement of total recognised gains and losses 6 months 6 months 12 months to 31.3.06 to 31.3.05 to 30.9.05 £m £m £m________________________________________________________________________________________________________ Profit for the period - 0.1 2.0Increase/(decrease) arising on revaluationof assets 0.1 - (0.1)Exchange adjustments (0.1) 0.6 1.1________________________________________________________________________________________________________ Total recognised gains and losses in the period - 0.7 3.0________________________________________________________________________________________________________ Reconciliation of movements in shareholders' funds 6 months 6 months 12 months to 31.3.06 to 31.3.05 to 30.9.05 Note £m £m £m_____________________________________________________________________________________________________Recognised gains and losses relating tothe period - 0.7 3.0Reserve arising on grant of share optionsin the period 3 0.1 - -Demerger dividend - - (1.6)_____________________________________________________________________________________________________Net increase in shareholder funds 0.1 0.7 1.4At beginning of period 20.8 19.4 19.4_____________________________________________________________________________________________________At end of period 20.9 20.1 20.8_____________________________________________________________________________________________________ Historical cost profits and losses 6 months 6 months 12 months to 31.3.06 to 31.3.05 to 30.9.05 £m £m £m___________________________________________________________________________________________________Historical cost profit before taxationReported profit before taxation - 0.2 2.2Difference between historical cost depreciationcharge and the actual depreciation charge calculatedon the revalued amount - 0.1 0.1___________________________________________________________________________________________________Historical cost profit before taxation - 0.3 2.3___________________________________________________________________________________________________Historical cost profit after taxation andminority interests - 0.2 2.1___________________________________________________________________________________________________ Basis of preparation of the interim financial information The interim financial information has been prepared on the same basis and usingthe same accounting policies as were applied in drawing up the statutoryaccounts for the year ended 30 September 2005. The figures for the six months to31 March 2006 and 31 March 2005 are unaudited. The figures for the year ended30 September 2005 do not constitute the statutory accounts for that year whichhave been filed with the Registrar of Companies and on which the auditors'report was unqualified without any statement under Section 237 of the CompaniesAct 1985. Notes to the half year accounts 1. Consolidated cash flow statement 6 months 6 months 6 months 6 months 12 months to 31.3.06 to 31.3.05 to 31.3.05 to 31.3.05 to 30.9.05 Continuing Discontinued Total operations operations Total TotalNet cash flow from operating activities Note £m £m £m £m £m______________________________________________________________________________________________________Operating (loss)/profit for the period (0.4) (0.5) 0.5 - -Depreciation charge 0.1 0.1 0.2 0.3 0.4Charge in respect of share options granted 3 0.1 - - - -Decrease in stocks - - 0.1 0.1 0.1Decrease/(increase) indebtors 0.4 (0.5) 0.5 - 1.6Increase in creditors - - 1.0 1.0 0.2______________________________________________________________________________________________________Net cash inflow/(outflow) from operating activities 0.2 (0.9) 2.3 1.4 2.3______________________________________________________________________________________________________ 6 months 6 months 12 months to 31.3.06 to 31.3.05 to 30.9.05Net capital payments £m £m £m___________________________________________________________________________ Purchase of tangible fixed assets - (0.1) (0.1)___________________________________________________________________________ - (0.1) (0.1)___________________________________________________________________________ 6 months 6 months 12 months to 31.3.06 to 31.3.05 to 30.9.05Net proceeds from disposal of subsidiaries £m £m £m__________________________________________________________________________Sale of subsidiaries - - 15.2Disposal and closure costs - - (1.0)Costs of demerger - - (0.5)__________________________________________________________________________ - - 13.7__________________________________________________________________________ 6 months 6 months 12 months to 31.3.06 to 31.3.05 to 30.9.05Reconciliation of net cash flow to movement in net cash £m £m £m______________________________________________________________________________________ Increase in cash in the period 0.6 0.9 14.2Exchange rate movements - - 0.1______________________________________________________________________________________Movement in net cash 0.6 0.9 14.3Balance at beginning of period 20.3 6.0 6.0______________________________________________________________________________________Net cash 20.9 6.9 20.3______________________________________________________________________________________ 2. Non-operating exceptionals 6 months 6 months to 31.3.06 to 31.3.05 12 months Discontinued Discontinued to 30.9.05 operations operations Total Total Total £m £m £m____________________________________________________________________________________________________Profit on disposal : Hotels - - 2.7 Property in South Africa - 0.1 0.5 Disposal and closure costs - - (1.0)Demerger costs - - (0.5)____________________________________________________________________________________________________ - 0.1 1.7____________________________________________________________________________________________________ 3. Share options The following share options over 1p ordinary shares were granted under an Unapproved Share Option scheme during the period: Number of Period during Market price Date share options Exercise which per share at granted granted price exercisable date of grant ____________________________________________________________________________________________________________David Lenigas 25.01.06 3,500,000 17p 25.01.06 - 24.01.11 15.5pJames Hughes 25.01.06 1,000,000 17p 25.01.06 - 24.01.11 15.5pMichael Wilson 30.03.06 1,000,000 17p 30.03.06 - 24.01.11 20.75pRichard Wilkinson 30.03.06 500,000 17p 30.03.06 - 24.01.11 20.75p____________________________________________________________________________________________________________ The agreement on 25 January 2006 to grant options to Michael Wilson and RichardWilkinson was approved by shareholders on 24 February 2006. However, as theCompany was then in a close period the grant of these options took place on 30March 2006 following the publication of the Company's results for the year ended30 September 2005. Therefore, there is a charge to the profit and loss account of £56,250 inrespect of the difference between the exercise price of options granted toMichael Wilson and Richard Wilkinson and the market price at 24 February 2006.This charge has been included in operating costs and a corresponding credit hasbeen made in the balance sheet to "Other reserve". The market price per share as at 31 March 2006 was 21.75p - 22.25p. The range of market prices per share over the six months ended 31 March 2006were 11.5p - 23.75p. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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