Interim Results

11 May 2010

Lonrho Plc

("Lonrho" or the "Company")

Interim results for the 6 months ended 31 March 2010

Lonrho Plc (AIM:LONR), the conglomerate with a structured portfolio of African investments, announces its unaudited Interim Results for the six months ended 31 March 2010. 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.

Financial Highlights

The interim report and financial statements are being posted to shareholders and will be published on the Company's website (www.lonrho.com) today.

LONRHO ENQUIRIES

Chief Executive's Statement

During the first six months of the financial year Lonrho has performed on target and delivered growth in each division.

The Group continues to concentrate on the growth of its existing portfolio of businesses that are each aligned to the economic growth of Africa. Africa as a market has emerged from the global financial crisis in a strong position and GDP projections for Sub Saharan Africa for the coming years are again very strong.

Lonrho has operations in seventeen countries across Africa and remains confident that the countries where the Company operates will provide ongoing development and growth driven by oil, mineral and agricultural resources being brought on stream.

Lonrho has progressed a number of important new additions within its divisions that have been successfully developed during the first half of the year. These will have a positive impact on the results of the Group moving forward. In addition, new divisional operations coming on stream include :

Lonrho Hotels : The 213 room Karavia Hotel has opened in Lubumbashi

Lonrho Aviation : Fly540 Angola received the first aircraft delivery in April 2010

Fly540 Ghana is scheduled to commence operations in mid 2010

Lonrho Agribusiness : The John Deere and Komatsu dealerships in Mozambique.

In addition to organic growth in all divisions, the above projects coming to fruition will add further turnover and profitability to the Group.

To ensure that shareholders are kept fully informed of the progress of the Company, Lonrho commenced issuing unaudited quarterly trading updates on performance in March 2009 and this has been well received.

The interim results are in line with the second quarter trading update issued on the 4 May 2010 .

Financial Highlights :

·; Turnover from operations for the first six months to 31 March 2010 increased 23.5% on a comparable currency basis to reach £47.3m.

·; Turnover from continuing operations up 14% on a statutory basis.

·; EBITDA for the first six months was £2.8m, compared with £1.9m in the same period in the prior year.

·; The loss before tax of £1.5m compared to a profit of £0.6m for the same period last year. However, after eliminating exceptional gains in the prior year of £2.3m (in respect of the closure of SAILS) and a difference in exchange movements of £0.6m, trading profits showed an improvement of £0.8m.

·; Net assets at the end of the period stood at £101.3m.

·; In December 2009, the Company successfully raised £25.1m, mainly from existing shareholders.

·; The Group held cash balances of £17.0m at the end of the period.

·; The Company's share price has risen 55.5% in the half year period since the beginning of the financial year.  

Operational Review

All five divisions (Infrastructure, Agribusiness, Regional Transportation, Support Services and Hotels) have shown growth in their operations.

Agribusiness

The agribusiness division remains Lonrho's largest division. The vertical integration of the fresh produce logistics cold chain taking African produce (vegetables, fruit, meat and fish) from the producer, processing, packing and delivering it to the consumer is an essential requirement for agricultural development to succeed across the Continent.

African agricultural output is becoming recognised as an important part of the global agricultural industry, vital in meeting the demand from the one billion domestic consumers in the Continent but also as a global source of produce.

Rollex ( 51% holding ) provides the essential infrastructure, cold store, processing, packing and transport logistics required for African produce to reach its markets both in Africa and internationally. As approved at the Company's AGM, Lonrho will increase its stake in Rollex to 100% in the coming weeks.

Currently Rollex is delivering fresh produce from African producers to Africa, Europe, Scandinavia and the Middle East. The company is shortly opening logistics channels for produce to retailers in the USA and is investigating the supply chain logistics for delivering produce to the Far East.

The supply of produce to Rollex comes from a combination of commercial farming operations and local small scale producers and co-operatives. Rollex supports rural farming initiatives to increase yields, quality and technology in the agricultural sector. It is developing several new farming projects across Southern Africa to complement and feed into its logistics chain and increase its ability to meet off-take agreements.

Lonrho Agribusiness sees the availability of the latest technology, equipment and infrastructure support as an important element of the development of the agricultural industry across Africa. Lonrho has therefore invested in and is developing the John Deere franchises in Angola and Mozambique.

Divisional highlights during the period include :

·; Turnover for the Agribusiness division increased 4.5% compared to the same period in the previous year.

·; Lonagro (John Deere Angola 51% holding) received its first substantial order at the end of March for delivery in April 2010.The construction of the new showroom, maintenance facility, training centre and stores at Catete is progressing well and is due for completion mid-2010.

·; On 18 February the Company announced the acquisition of a 100% stake in Trak Auto Lda which owns the exclusive dealerships for John Deere and Komatsu in Mozambique. The acquisition was completed on 8 April 2010. With pre- acquisition turnover of approximately US$10million per annum and gross profits of US$1.4million, Lonrho is looking to build revenues and profits substantially over the coming years in the strongly expanding Mozambique market.

Infrastructure

Luba Freeport

Luba Freeport (63% holding), the Lonrho oil services terminal in the Gulf of Guinea, is unique in West Africa in that it is a natural deep water port situated in a large sheltered bay providing depths of up to 45 metres. Central to the Gulf of Guinea, the port not only services the requirements of the expanding Equatorial Guinean oil industry, but provided much of the logistics support for the recent successful drilling programmes in the region.

The extensive list of world class tenants already established at the port, includes companies such as ExxonMobil, Baker Hughes, Schlumberger, Hess, M-I SWACO, CNOOC, and SBM and continues to grow with the further mobilisation of new tenants such as Noble Energy, Tenaris and Asia Malabo.

Divisional highlights during the period include :

·; Turnover at Luba Freeport increased by 19.7% compared with the same period last year.

·; The number of liner and tanker calls to Luba Freeport has seen a significant increase compared to the previous year.

Kwikbuild

Kwikbuild Corporation (70% holding) and its South African subsidiary e-Kwikbuild (52% holding) provide prefabricated building solutions for Africa. Typical applications for the production include houses, schools, clinics, offices and workers' camps for the mining and oil industry. E-Kwikbuild is a Black Empowerment Enterprise company.

Kwikbuild has focused on establishing the fundamentals to extend its product offering to a wider market during the first six months of the year. This has included the recruitment of specialised sales staff for Africa, new marketing materials centred around a core highly competitive and solutions driven portfolio of products and introducing the product to new territories. The company is now well positioned to address identified new market opportunities including Tanzania, Kenya, Ghana, Angola, Mozambique, Uganda and the DRC.

Divisional highlights during the period include :

·; Turnover at e-Kwikbuild increased 62.7% compared with the same period last year.

·; Requests for quotes and tenders have increased sevenfold compared to the same period last year. e-Kwikbuild is a preferred supplier on a number of South African Government tenders which are expected to be awarded in the final half of the current year.

Hotels

The Grand Karavia Hotel (50% holding + Management Contract) has completed its US$20 million (£12 million) refurbishment. The hotel commenced trading with the first commercial guests staying at the end of April. The market reaction to the hotel has been very positive and the property will be officially inaugurated by the Government of the Democratic Republic of Congo on 5th June 2010 to coincide with the 50th Anniversary Independence celebrations. The hotel provides the only international standard accommodation in Lubumbashi, the centre of the burgeoning copperbelt of the DRC.

Hotel Cardoso in Mozambique (59% holding + Management Contract) has completed its refurbishment programme and seen average occupancy levels and room rates increase. The refurbishment of the rooms, conference facilities and restaurant, with its new terrace overlooking the bay, and the redevelopment of the park adjacent to the hotel, including the new playground and coffee shop, have been very successful and positioned the Hotel Cardoso firmly at the top end of the Maputo hotel market.

Divisional highlights during the period include :

·; Turnover at the Cardoso increased 58.5% compared with the same period last year.

·; Hotel Cardoso has delivered average room rates for the 6 months to 31 March 2010 of US$109 per night compared to US$80 for the same period last year.

·; Hotel Grand Karavia has set average room rates at US$350 per night reflecting the accommodation rates in Lubumbashi.

Transportation

The requirement for a reliable, safe and punctual airline connecting Africa grows day by day. As the Continent delivers continued GDP growth, commerce and increasing prosperity the market for regional aviation expands. Fly540 remains focused on delivering the first international standard regional African airline that services two key markets; regional distribution for intercontinental carriers flying into Africa and the ability for passengers in Africa to travel North to South and East to West across the Continent.

Centred around three strategic hubs, the East Africa hub is fully operational based out of Nairobi serving Kenya, Uganda, Tanzania, Southern Sudan and Burundi.

Fly540 Angola has completed the implementation and training necessary for operations to commence and developed the required infrastructure. The first aircraft has arrived in Luanda and is gearing up to commence scheduled commercial operations. Initial destinations for Fly540 Angola will include major centres of Cabinda, Luanda, Soyo, to be followed by Benguela, Huambo, and Malanje and thereafter will grow to fifteen domestic destinations.

Fly540 Ghana, the third planned hub, is expected to commence operations mid-2010. Local infrastructure is complete, staff have been recruited and training is ongoing.

Divisional highlights during the period include :

·; Lonrho Aviation has seen turnover increase by 22.5% compared with the same period last year.

·; Fly 540 Kenya has taken delivery of its first CRJ regional jet which will be used for longer distance regional routes not suitable for turboprops of more than 1.5 hours complementing the existing fleet of turboprop aircraft. The introduction of the jet to the fleet is an important step in the expansion of the airline and the delivery of the connectivity between the three Fly540 hubs ( Kenya, Angola, Ghana) to deliver a pan-African integrated operation.

·; Fly 540 Kenya commenced flights to Burundi.

Support Services

Bytes & Pieces (65% holding) has continued to dominate the IT sector in Mozambique, with significant new clients being serviced including Riversdale Mining. The market continues to grow with the development of the Mozambican economy. Lonrho IT (CES, 50% holding + Board control) continues to grow its operations across Southern Africa. In South Africa the Johannesburg and Nelspruit offices continue to deliver growth in their core businesses. CES Zambia (50% holding + Board control) started trading in the period and has already built an impressive blue chip client list and is forecasting to exceed initial budgets.

Lonrho Projects SA Pty (70% holding) has commenced its first projects in the second quarter and produced its first revenue. Revenue is expected to be in line with first year targets and the groundwork undertaken during the past year can be seen to be delivering real progress.

Lonrho Water continues to develop its bottled water projects in Mozambique, DRC and Angola. The new water purification solutions division is tendering for sizeable municipal contracts and attracting significant interest in the new Lonrho bespoke containerised potable water plants.

During the period Lonrho IT saw turnover increase by 8.8% compared with the same period last year.

Other Investments

LonZim Plc

LonZim Plc (LonZim), in which Lonrho currently has a 24.61% shareholding and a management contract, owns seven core businesses in Zimbabwe that are well positioned to grow as the economy in Zimbabwe recovers.

On 26 January 2010, LonZim announced its results for the year ending 31 August 2009, reporting a turnover of £2.6m and profit after tax of £0.9m.

Lonrho Mining Limited ( 15.04 % holding )

Lonrho Mining has a highly prospective diamond mining concession in Angola. Its 2010 exploration programme will define and sample 40 of the 217 kimberlite pipes highlighted by the radiometric survey carried out by the company in 2008. During the period Lonrho Mining purchased and deployed the necessary equipment for its exploration programme and is expected to identify significant primary (kimberlitic) and secondary (alluvial) diamond deposits during the current calendar year. Lonrho Mining anticipates being in a position to take full advantage of the increase in diamond prices predicted for 2012 and beyond.

Geoffrey White

Chief Executive Officer

10 May 2010

Condensed consolidated interim statement of comprehensive income

Notes

Note of preparation

1. 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 half yearly report has been prepared in accordance with the recognition and measurement requirements of IFRSs as adopted by the EU.

The financial information is unaudited and does not constitute the Company's statutory accounts within the meaning of Section 434 of the Companies Act 2006.

Statutory accounts for the year ended 30 September 2009 have been delivered to the Registrar of Companies. The comparative figures for the financial year ended 30 September 2009 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. 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.

3. 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. As referred to in the Chief Executive's Statement, the Company raised £25.1m in December 2009 through share issues.

4. Except as described below, the accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended 30 September 2009.

Accounting for business combinations

The Group has applied the revised versions of IFRS 3 Business combinations and IAS 27 Consolidated and separate financial statements with effect from 30 September 2009. The standard applies prospectively to all business combinations executed from that date. Business combinations executed prior to that date, and the resolution of related issues, are dealt with under the preceding version of the standard as previously applied by the Group.

The revised standards introduce changes in a number of areas, including the requirement to recognise changes in contingent consideration in the income statement rather than as an adjustment to goodwill; the requirement to recognise contingent liabilities at fair value; and the requirement to expense acquisition costs as incurred rather than treating them as part of the cost of acquisition. 

The Group did not complete any business combinations in the 6 months ended 31 March 2010, and therefore the application of these revised standards has no material impact on the Group's condensed consolidated interim financial statements.

Presentation of financial statements

The Group has applied IAS 1 (Revised) Presentation of financial statements which became effective for the Group on 1 October 2009. As a result, all owner changes in equity are presented in the consolidated statement of changes in equity, which becomes a primary statement. Previously, this information was included in a note to the financial statements. All non-owner changes in equity are now presented in the consolidated statement of comprehensive income, which is also a primary statement. This information was previously included in the consolidated statement of recognised income and expense, which was also a primary statement.

Comparative information has been re-presented so that it conforms with the revised standard. Since the change in accounting policy only impacts presentation, there is no impact on reported profit, earnings per share or net assets.

Corporate Information 

Directors

David Lenigas Chairman

Geoffrey White Director & Chief Executive Officer

David Armstrong Finance Director

Emma Priestley Executive Director

Jean Ellis Non-Executive Director

Donald Strang Non-Executive Director

Ambassador F. Cook Non-Executive Director