28th Mar 2007 07:01
Lonrho Africa PLC28 March 2007 Lonrho Africa Plc ("Lonrho" or the "Company") Preliminary Results for the year ended September 30th 2006 Lonrho, the Pan-African company with a diverse portfolio of investments in hardasset infrastructure and other interlinked opportunities, today announces itspreliminary results for the year ended September 30th 2006. Financial Highlights • Group turnover was £3.4 million • Total Operating Assets reached £23.5 million at year end • Cash balance at year end stood at £20.7 million Operational Highlights • The Company received shareholder approval at the EGM in February 2006 to initiate a new investment strategy to re-establish Lonrho's presence in Africa • Since that date the Company has made a number of investments: Infrastructure • In May 2006 Lonrho acquired 63% of Luba Freeport Limited in Equatorial Guinea, which is being developed into the premier West African hub for oil and gas and transhipping Hotels / Leisure • Investment in Hotel Cardoso retained; with the hotel enjoying its best year's trading for eight years in 2006 Natural Resources • Lonrho made investments in Brinkley Mining, a uranium mining company, and Nare Diamonds, a diamond exploration and production company in South Africa Post-Year end • Lonrho has made strong inroads in the transport sector since the year end: o Lonrho acquired 49% of Fly540, a new low cost airline based in Nairobi, for US$1.5m o Lonrho acquired 43% of Norse Air, a cargo and charter passenger air travel business based in South Africa, for US$6m • Also since year end Lonrho has acquired a 50% interest in Swissta Holding Limited, a water bottling company with factories in Mozambique and the Democratic Republic of the Congo David Lenigas, Executive Chairman and Chief Executive Officer of Lonrho,commented: "Since the new investment strategy was approved by shareholders, Lonrho hasshown its ability to make value enhancing investments across Africa in a rangeof sectors. These fit in with the Company's strategy of servicing Westerninvestment in the continent whilst supporting African wealth creation. "In 2007 Lonrho will continue to target investments in lead sectors alongsideinterlinked opportunities and anticipates strong growth from its existinginvestments." 28 March 2007 Enquiries: Lonrho Africa PlcDavid Lenigas Tel: +44 (0)20 7016 5100 Email: [email protected] Public RelationsCharles Vivian Tel: +44 (0)20 7743 6672 Email: [email protected] Haythornthwaite Tel : +44 (0)20 7743 6676 Email : [email protected] PartnersSimon Raggett Tel : +44 (0)20 7409 3494 Email : [email protected] Investment Strategy Lonrho is re-establishing itself as a Pan-African company, along the lines ofLonrho of old with a diverse portfolio of assets. In order to create maximumvalue for shareholders, the management team is currently implementing aninvestment strategy that targets hard asset infrastructure linking with adiverse range of other opportunities via organic growth and capital injections.This strategy was approved by shareholders at an EGM held on 24 February 2006. Following the appointment of David Lenigas as Chief Executive Officer on 21December 2005, the Board, supported by a number of Lonrho's major shareholders,concluded that it would be in the best interests of shareholders to use theCompany's strong brand name and cash position to re-establish a significantpresence in Africa. To date the new investment strategy focuses on key linked investments in theinfrastructure and transportation sectors as well as related investments inhotels/leisure and natural resources sectors. Chairman's and Chief Executive's statement This year Lonrho has been strongly acquisitive and made a number of keyinvestments in its target sectors. The Board believes that to create value forshareholders it needs to re-build what is already a well recognised brand with astrong reputation in Africa. We see ourselves as fundamentally an African infrastructure company, joiningforeign investment with African business opportunities. I believe this approachis in the best interests of our shareholders and will also support Africanwealth creation. Lonrho is seeking to establish a significant presence in thecontinent of Africa by investing in entities operating in a broad range ofsectors, including those in which Lonrho has historically been active and alsoin new sectors. Our aim is to create hubs of business where the Company already has key in-housefinancial and management expertise, through our key infrastructure projects, andto build up linked investments in emerging sectors across a resurgent Africa. Todate, this approach has led to a portfolio of interests in primaryinfrastructure projects, such as the Luba Freeport; in infrastructure supportservices, with two air carriers; a legacy investment in the Hotel Cardoso inMozambique and investments in two developing mining companies. Infrastructure Lonrho is looking to invest in infrastructure projects throughout Africa thatwill benefit businesses and communities alike, and allow the Company to buildhubs from them. We believe that infrastructure projects can be divided intohard asset and support services categories. Hard Asset Infrastructure In May, we acquired 63% of Luba Freeport Limited in Equatorial Guinea which weare developing into the premier West African hub for both oil and gas, andtranshipping. Luba represents our flagship investment to date. Luba presently serves most major oil companies in the region as a one-stopfacility. We have commenced construction of a 60,000 sq metre logisticsfacility for Mobil Equatorial Guinea Inc (MEGI) part of the world's largest oilcompany, ExxonMobil. Lonrho has also begun an extensive expansion program toimprove quay-space and port facilities, employing Jurong Primewide, worldleaders in port design and construction, and retaining Mace International,project management consultants to London 2012. Infrastructure Support Services We have already made strong inroads in the transportation sector. We have madeour first foray into Kenya under the new strategy with an investment in Fly540,a new low cost airline based in Nairobi. This project offers strong expansionpossibilities, as the number of passengers grows due to increased tourism andbusiness travel in the region. We have ambitions to grow Fly540 into aninternational carrier servicing Eastern Africa by the end of 2007. We have also invested in Norse Air, an aviation business based in Mauritius andSouth Africa, with operations across the continent. There is an increasingdemand for reliable cargo and chartered passenger air travel across Africa,demonstrated by a contract announced after the year end in February 2007 withAngloGold Ashanti for cargo and passenger services to service their Africanmining operations. Lonrho believes that aviation fits well into our strategy as we strive to makeinvestments that will positively impact on African business and communitiesalike. Support Services Throughout our former disposal programme, we held onto our 59.04% investment inthe Hotel Cardoso in Mozambique. The wisdom of this decision was confirmedrecently when the hotel recorded its best year's trading for eight years. Thehotel has spent a significant amount of capital on refurbishments to itsexisting facilities which has resulted in increased capacity and revenue, suchexpenditure being financed from existing cashflow. Since Lonrho's year end, we have entered into the water bottling market throughan investment via Strenner Holding Limited in Swissta. Swissta produces purifiednatural water in Africa which is enriched with essential minerals. The Companycurrently has water bottling factories in Mozambique and the Democratic Republicof the Congo. During the current financial year we intend to develop ourpresence in this sector with a number of target acquisitions identified in thewater bottling market across Africa. Natural Resources Investing in natural resources fits with our strategy as Africa hashistorically, and will continue to be, a resources hub. As such it has strongconnections with the infrastructure and transportation sectors. Our first investment was in Brinkley Mining, a growing player in the re-emergingUranium sector. Brinkley Mining has significant potential in the Uranium marketin South Africa and the Democratic Republic of the Congo. We had an 8.2%investment in Brinkley prior to the company coming to the AIM market in June. We made our second investment in the natural resources sector by acquiring a 17%interest in Nare Diamonds, a diamond production and exploration Company in SouthAfrica. Nare's Schmidtsdrift Mine has consistently yielded diamonds larger than30 carats. A 235-carat high quality diamond was discovered at the mine inApril, which was subsequently sold for US$10,205.91 per carat, yielding a totalprice of US$2,398,695. Lonrho has been operating in Africa for many years and has a strong reputationand brand recognition. We aim to see the Company flourish again over the nextfew years turning it back into a leading Pan-African investor, helping to driveAfrica's growth at the same time. In this regard, I am seeking shareholders' approval at the forthcoming AnnualGeneral Meeting for a change in the company's name to Lonrho Plc. I look forward to a productive year ahead and would like to take thisopportunity to thank all of the Company's staff in London and in Africa fortheir hard work and contributions made throughout the year. I would also like tothank our shareholders for their continued confidence and support, as we seek torebuild Lonrho in Africa. David LenigasExecutive Chairman and CEO Review of Operations Introduction Lonrho is re-establishing a significant presence on the African Continentthrough strategic investments across a range of sectors thereby playing anintegral role in Africa's current revival. Infrastructure There currently exists significant opportunities for Lonrho to be part of the "movement" to radically improve African infrastructure which is fundamental toachieving sustainable growth across the continent. Frequently, governments andthe public sector are unable to provide sufficient funding for necessaryprojects which are critical platforms for economic growth. This represents areal opportunity for private investment. Lonrho's strategy of investing in hardasset infrastructure will accelerate growth, assist in reducing poverty andpromote regional integration, while adding shareholder value. Luba Freeport Limited (63%) Lonrho acquired 63% of Luba Freeport Limited ("Luba Freeport") in May 2006 withDavid Lenigas being appointed as Chairman of the Luba Freeport Board. Lonrho'saim is to develop Luba Freeport into the premier West African hub for both theoil and gas industry as well as for transhipping. Luba Freeport provides a strategic, naturally sheltered deep-water environmentin Equatorial Guinea. Presently servicing numerous major oil and gas companiesin the region, Luba acts as a logistics centre for the burgeoning oil and gasindustries operating in the Gulf of Guinea. Luba Freeport currently services the expanding oil fields situated in the Gulfof Guinea providing a hub for the supply of consumables to oil production andexploration rigs. It is a one-stop facility - vessels receive their fuel, bulkchemicals, water and cargo without the need to change berths. The port benefitsfrom a central location: short sailing times to a number of countries gives Lubaa significant advantage over other regional ports. Luba Freeport also enjoys taxconcessions awarded by the Government of Equatorial Guinea and provides an idealregional transhipping hub. Expansion Lonrho is maintaining the overall development programme for the port'sfacilities with the support of the government of Equatorial Guinea, our partnershareholder. Lonrho has to date invested in new operations equipment and hasexpanded accommodation and catering facilities to meet increased demand. Lonrhois also overseeing the immediate construction of an additional 70m of quay. Aspart of the first phase of expansion, Lonrho will also develop a larger storageand management facility for MI Swaco, a leading provider of fluid engineeringservices to the oil and gas sector. Luba Freeport will also accommodate MI Swacoto provide a waste management system facility for the treatment of oil industrywaste. This facility will be a Joint Venture between MI Swaco and the Governmentof Equatorial Guinea. Currently waste is being held and transported toneighbouring countries for treatment. In September, Mobil Equatorial Guinea Inc. (MEGI), part of ExxonMobil, and LubaFreeport agreed terms to build a 60,000 sq metre logistics facility at Luba.The new world class facility will serve as the regional logistics base for MEGIand is expected to be completed by 30 June 2007. The facility sets the pace forgrowth at Luba and provides MEGI with leading-edge technology to increase itsproduction activities in the Gulf of Guinea. MEGI's relocation to Luba Freeportdemonstrates its commitment to Luba as a regional hub for the expansion of itsoperations and further suppliers to the oil and gas industry are expected tofollow suit. Luba Freeport has also appointed two of the world's leading players in portdesign and management to assist in realising its huge potential in West Africa.Jurong Primewide, part of Jurong International, has masterplanned and designedthe expansion of Luba. Jurong has been responsible for shaping the shippinglandscape of Singapore since 1968 and offers Luba fully-integrated solutions todevelop it into a world-class facility. Luba has also appointed MaceInternational to help deliver the expansion on time and to budget. Macecurrently manages the infrastructure delivery for London's 2012 Olympics andHeathrow Airport's Terminal 5. Lonrho and Luba Freeport's management are committed to improve and expand theport's facilities over the next few years. The foresight of this investment isstarting to show as the increase in oil activity is accelerating in the Gulf ofGuinea, where there are a further 11 exploration wells programmed to be drilledin 2007. Exploration drilling is also expected to commence in Sao Tome, tothe south of Equatorial Guinea. Vessel calls in Luba will increase to supportthese operations and since Lonrho's acquisition, vessel movements have increasedby some 45% month-on-month (2005/2006). In the six months to the year ending 30September 2006, the port brought in revenue of US$5.4m, making a profit beforetax of US$1.6m. Transport Improved transportation systems including roads, railways and airlines, arenecessary to improve living standards as well as to increase Africa's regionaland international trade. Lonrho intends to invest in transport related projectsand businesses that can make a substantive difference to the region. Since theend of the period under review, Lonrho now holds stakes in two airlines - Fly540and Norse Air. Five Forty Aviation Limited (49%) Five Forty Aviation Limited ("Fly540") is a recently established low costairline based in Nairobi, Kenya. Lonrho's investment in Fly540 was its first in the aviation business sector. Itis an ideal fit with Lonrho's objective to invest in businesses that can make asubstantive difference to the region. Lonrho acquired 49% of the issued share capital of the airline in October for acash consideration of US$1.5 million. As part of the investment, David Lenigasassumed the role of Chairman of Fly540. As well as providing some freight services, Fly540 has been created to meet thegrowing demand for alternative domestic and regional air travel within Africa.Kenya is seen as an ideal base for the new airline as the country is a populartourist destination with a thriving domestic air travel market. Fly540 commenced operations in Kenya in November 2006 with its inaugural route,the busy Nairobi/ Mombasa connection. In January 2007, Fly540 began flying theNairobi/Kisumu route. This was followed by a number of new local Kenyan routesto Kisumu, Malindi and Lamu. Fly540 plans to add further regional East Africanroutes in 2007. Initially, the airline deployed a fleet of two modern French made ATR42 turboprop aircraft offering a mix of comfort, speed and economic operating costs. In2007, Fly540 plans to add at least two additional similar aircraft. Offices and check-in facilities are now established at Nairobi Domestic andInternational Terminals as well as at Mombasa, Malindi, Kisumu and LamuAirports. Norse Air Limited (43%) Norse Air Limited ("Norse Air") is a private aviation business based inMauritius and South Africa. Lonrho acquired 43% of its issued share capital inNovember 2006 for a total cash consideration of $6 million. As part of itsinvestment, Lonrho is entitled to nominate the Non-Executive Chairman of NorseAir. Services include charter and freight services, leasing, sales and maintenance.Norse Air manages flights to and from Afghanistan, Ivory Coast, Central AfricanRepublic, Madagascar, Mozambique and Singapore. For the ten months ended 31 December 2005, the Norse Air Group generatedrevenues of approximately R91.8 million, a pre-tax profit of approximately R26.2million and as at 31 December 2005 had total assets of R131 million. Lonrho's investment will facilitate Norse Air's geographic expansion of both itsCharter and Leasing operations and will assist in funding the acquisition ofadditional aircraft, resources and infrastructure facilities. Norse Air Leasing offers a global on-site service providing aircraft, crew andmaintenance. Norse Air has a number of aircraft based in various parts of Africaand in the East, including, Ivory Coast, Gabon, Madagascar, Mozambique, CentralAfrican Republic, Ghana, Singapore and Afghanistan. The company has successfully operated aircraft for the World Food Programme, theInternational Red Cross, the United Nations and other Non-GovernmentalOrganisations and international businesses, often under hostile environmentalconditions. Norse Air provides aircraft such as King Airs, Beechcrafts, SAABsand Learjets. Norse Air Charter is focused on the provision of passenger and cargo charterservices both within and to Africa. Norse Air's extensive network of contacts,and its ability to leverage long-standing relationships with both Governmentaland Non-Governmental Organisations, enables it to successfully manage flightsinto inhospitable areas with little infrastructure as well as to deal withmilitant activity. The Charter Division has landed its largest contract to date providing AngloGoldAshanti with a Boeing 737 'Quick Change' aircraft which can convert frompassenger to cargo specification. The Quickchange aircraft will be predominatelyused for the AngloGold Ghana and Mali mines. The contract has an annualisedvalue of US$10m, which will increase Norse's turnover by more than 50% from theprevious year. In addition, Norse has been re-awarded a two year contract,running to February 2009, by the National Treasury Department of the Republic ofSouth Africa for the hiring of aircraft and helicopters to the State. Theprevious contract, for 2004 to 2006, had a gross value of approximately £1.75million. Norse Air Sales has gained significant momentum over the past three years withthe recovery in values of turbo prop and small jets which generated significantinterest amongst investors, corporations and aircraft operators in owning theirown aircraft. Norse Air Maintenance meets the demanding maintenance requirements of theGroup's operations, utilising on-site engineers in various developing countriesbacked up by the company's main base at Rand Airport, Johannesburg. Themaintenance operation is licensed to service a variety of aircraft includingSAAB, Embraer and Beechcraft, as well as jets such as the Citation and theLearjet. Although its primary focus is on maintaining the various aircraft ownedby the company, it also services aircraft on behalf of third parties. Support Services The tourism industry in Africa grew by an estimated 10% in 2005 with anestimated 36.7 million tourists visiting Africa, up from 33.3 million in 2004.This compares favourably with the global average for tourism industry growth in2005 of just 5.5% (World Tourist Organisation). Lonrho will benefit from thisgrowth in the African tourism and leisure industry through its investment in theHotel Cardoso, Mozambique and potentially through additional investments in, andacquisitions of, hotels and other leisure businesses across the Continent. Hotel Cardoso SARL (59.04%) Mozambique has one of the fastest growing tourism industries in the world. Thisgrowth was reflected in improved business at the Hotel Cardoso in Maputo whichreported its best year's trading in eight years in September. The Hotel Cardoso offers an ideal venue for both business and leisuretravellers. The bar and restaurant and all its bedrooms and lounges aredecorated in bright colours to reflect the laid back, beautiful environment.Most notable features are the large outdoor pool, surrounded by spaciousgardens, and the terrace with stunning views over the bay and the city ofMaputo. The hotel is fully air-conditioned. The Hotel Cardoso is five minutes by car to the business centre of Maputo andjust 15 minutes from Mavalane Airport. Lonrho purchased the Hotel Cardoso in 1990. In 1991, Lonrho offered shares inthe hotel for public purchase while retaining a 50% shareholding and, in 1997,increased this to 59.04%. For its financial year ended 30 September 2006, Hotel Cardoso's revenues were upby 15% as a result of a 9% increase in occupancy levels to 53% combined with a14% growth in average room rate achieved. Lonrho and the Hotel Cardoso's management are committed to improve and expandthe Hotel's facilities over the next couple of years. During 2006, the hotelspent US$470,000 on capital improvements which included the upgrading of publicarea air conditioning, carpeting, landscaping, lift refurbishment, a newgymnasium and the addition of wireless internet services throughout the Hotel. This coming year, the hotel will refurbish all hotel bedrooms and perform majorimprovements to the conference facilities at a cost of around US$750,000. In the twelve months ended 30 September 2006, the hotel achieved revenue ofUS$2.17m, making a profit before tax of US$82,000. Natural Resources Increasingly, international investor attention is turning to Africa -specifically to Natural Resources. Last year the United States imported moreoil from Africa than it did from the Middle East. Natural Resources are going tobe a key aspect of Lonrho's investment strategy moving forward with a focus onuranium, base metals, platinum, oil and gas. Nare Diamonds Limited (19.05%) Nare Diamonds Limited ("Nare") was established in 2004 and through its SouthAfrican subsidiary, New Diamond Corporation ("NDC"), has interests in acombination of diamond production and exploration operations in South Africa. In April 2006, as part of a pre-IPO funding, Lonrho invested £1.5 million inNare Diamonds Limited in return for a 17% holding in Nare's issued sharecapital. Lonrho subscribed for 14.44 million ordinary shares at 10.4 pence pershare. As part of the investment, David Lenigas became Non-Executive Chairmanof Nare. At the IPO onto the Australian Stock Exchange, Lonrho subscribed for afurther 7.36m shares for £1.5m taking the holding to 19.05%, in December 2006. Nare Diamonds is involved in production and exploration projects in South Africawhich include the Schmidtsdrift Diamond Mine, the Klipspringer Joint Venture,the Groen River Project and the Kamfersdam Kimberlite Pipe and tailingsoperation. Nare Diamonds was admitted to the Australian Stock Exchange inDecember 2006 and is seeking an admission to AIM. Since commencing production in March 2006, Nare has sold a total of 3,849 caratsof diamonds at an average price of US$1,161 per carat for an aggregateconsideration of approximately US$4.5 million. Nare's most recent diamond salesaw 1,177.83 carats sold for US$735,328, an average price of approximatelyUS$624 per carat. Included in that sale were two large diamonds in excess of30 carats each and six diamonds between 10 and 30 carats. 235-Carat DiamondA 235-carat high quality diamond was discovered at the Schmidtsdrift Mine inApril. Nare sold the stone for US$10,205.91 per carat, yielding a total price ofUS$2,398,695. Brinkley Mining Plc (4.23%) Brinkley Mining Plc ("Brinkley") has significant Uranium and Molybdenumprospects in the Karoo region of South Africa some 450 km North-East of CapeTown. In March 2006, Lonrho invested £5 million in Brinkley subscribing for 25 millionof Brinkley's ordinary shares at a price of 20 pence per share, whichrepresented an 8.2% shareholding. This was Lonrho's first investment under itsnew investing strategy and under the leadership of David Lenigas. Brinkley wasadmitted to the AIM market in June 2006. Lonrho has subsequently sold asubstantial part of its stake, realising £3.65m, and therefore reduced it'sholding to 4.23%. The net proceeds are intended to be utilised for investmentopportunities in the infrastructure and support services sectors. Brinkley has acquired the sole ownership rights to five farms near the town ofBeaufort West representing 162 square miles. In the 1970's, Union CarbideCorporation and Essex Minerals Company undertook extensive exploration work inthe Karoo region consisting of airborne surveys and drilling programmes whichincluded the four prospects owned by Brinkley. Since the year end Brinkley has entered into a partnership with the AtomicEnergy Commission of the Democratic Republic of Congo for the development ofthe country's uranium resources. Corporate Social Responsibility We believe that the way to drive African wealth creation is through privateinvestment and ethically conducted business. Lonrho aims to improve business in Africa and make a positive difference tolocal communities. We believe that our investments and acquisitions willencourage job creation as well as economic and political stability throughoutAfrica. We pride ourselves in investee companies, such as Norse Air which hassuccessfully operated aircraft for the World Food Programme, the InternationalRed Cross and the United Nations often under hostile environmental conditions. We are in the process of establishing a strategic socially responsible businessprogram that will guide our growth strategy and business dealings. Philanthropy Lonrho is a proud sponsor of "Our Forgotten Children", the massive, travellingopen-air exhibit, to be unveiled at the 2008 Olympic Games, in Tiananmen Square,Beijing, and to tour every major city in the world. The goal of the project is to create awareness of what it is like to be a childof the New Millennium, and to show the faces-untainted by politics orprejudice-of those who will inherit the Earth. In a world of depleted natural resources, global confrontations and countriestorn apart by man-made conflicts, it is our children who hold the key to thefuture. Consolidated profit and loss accountfor the year ended 30th September 2006 Note Continuing Continuing Discontinued operations Acquisitions Total operations operations 2006 2006 2006 2005 2005 2005 £m £m £m £m £m £m________________________________________________________________________________________________________________TurnoverGroup 1.2 2.2 3.4 1.0 4.8 5.8________________________________________________________________________________________________________________Group net operating costs (2.8) (1.6) (4.4) (1.9) (3.9) (5.8)________________________________________________________________________________________________________________Operating (loss)/profitGroup- before exceptional items (1.6) 0.6 (1.0) (0.9) 0.9 -Non-operating exceptional items 1 0.4 1.7Interest payable (0.2) -Interest receivable 0.7 0.5________________________________________________________________________________________________________________(Loss)/profit before taxation (0.1) 2.2Taxation - (0.3)________________________________________________________________________________________________________________(Loss)/profit after taxation (0.1) 1.9Minority interests (0.1) 0.1________________________________________________________________________________________________________________(Loss)/profit for the year (0.2) 2.0________________________________________________________________________________________________________________(Loss)/profit per share (0.1)p 1.3p________________________________________________________________________________________________________________ (Loss)/profit per sharebefore exceptional items (0.3)p 0.2p________________________________________________________________________________________________________________ Balance sheetsas at 30th September 2006 Group Company 2006 2005 2006 2005 £m £m £m £m________________________________________________________________________________________________________________Fixed assetsIntangible - goodwill 3.3 - - -Tangible Investments: 19.8 2.6 - - Other investments - - 31.5 31.5________________________________________________________________________________________________________________ 23.1 2.6 31.5 31.5________________________________________________________________________________________________________________Current assetsStocks 0.2 0.3 - -Debtors 2.3 1.8 - -Investments 7.1 - - -Cash at bank 20.7 20.3 - -________________________________________________________________________________________________________________ 30.3 22.4 - -Creditors: amounts falling due within one year (13.4) (0.6) (11.5) (26.0)________________________________________________________________________________________________________________ Net current assets/(liabilities) 16.9 21.8 (11.5) (26.0)________________________________________________________________________________________________________________ Total assets less current liabilities 40.0 24.4 20.0 5.5________________________________________________________________________________________________________________ Provisions for liabilities and charges - (2.5) - (2.1)________________________________________________________________________________________________________________Net assets 40.0 21.9 20.0 3.4________________________________________________________________________________________________________________Capital and reservesCalled up share capital 2.2 1.6 2.2 1.6Share premium 17.4 - 17.4 -Merger reserve - 96.1 - -Revaluation reserve 1.6 0.8 - -Other reserve 0.1 - 0.1 -Profit and loss account 18.2 (77.7) 0.3 1.8________________________________________________________________________________________________________________Shareholders' funds 39.5 20.8 20.0 3.4Minority interests 0.5 1.1 - -________________________________________________________________________________________________________________ 40.0 21.9 20.0 3.4 These financial statements were approved by the Board of Directors on March26th 2007 and signed on its behalf by: D Lenigas Consolidated cash flow statementfor the year ended 30th September 2006 2006 2005 £m £m________________________________________________________________________________________________________________Net cash flow from operating activities - continuing operations (0.5) (0.8) - acquisition 0.5 - - discontinued operations - 3.1________________________________________________________________________________________________________________ - 2.3Returns on investments and servicing of financeInterest - received 0.7 0.5________________________________________________________________________________________________________________Net cash inflow after returns on investments and servicing of finance 0.7 2.8________________________________________________________________________________________________________________Tax paidOverseas - (0.6) ________________________________________________________________________________________________________________Net cash inflow before investing activities and financing 0.7 2.2Purchase of tangible fixed assets (1.8) (0.1) Purchase of investments (7.1) -Loan repayments (0.2) -Net cost of acquisition of subsidiary (1.7) -Loan paid on acquisition of subsidiary (6.1) -Bank overdraft acquired with subsidiary (0.1) -Net (costs)/proceeds from closure/disposal of subsidiaries (1.8) 13.7Net proceeds from sale of properties 0.4 -Share issue 18.0 -Demerger dividend - (1.6) ________________________________________________________________________________________________________________Increase in cash in the year 0.3 14.2________________________________________________________________________________________________________________ Statement of total recognised gains and lossesfor the year ended 30th September 2006 Group 2006 2005 £m £m________________________________________________________________________________________________________________(Loss)/profit for the year (0.2) 2.0Increase/(decrease) arising on revaluation of assets 0.9 (0.1)Exchange adjustments to net investments in overseas companies (0.1) 1.1________________________________________________________________________________________________________________Total recognised gains relating to the year 0.6 3.0________________________________________________________________________________________________________________Total recognised gains since last annual report 0.6 3.0________________________________________________________________________________________________________________ Reconciliation of movements in shareholders' fundsfor the year ended 30th September 2006 Group 2006 2005 £m £m________________________________________________________________________________________________________________Recognised gains relating to the year 0.6 3.0Shares issued in year 18.0 -Credit in respect of share options 0.1 -Demerger dividend - (1.6)________________________________________________________________________________________________________________Net increase in shareholders' funds in the year 18.7 1.4At beginning of year 20.8 19.4________________________________________________________________________________________________________________At end of year 39.5 20.8 Note of historical cost profits and lossesfor the year ended 30th September 2006 Group 2006 2005 £m £m________________________________________________________________________________________________________________Reported (loss)/profit before taxation (0.1) 2.2Difference between historical cost depreciation - 0.1charge and the actual depreciation charge calculatedon the revalued amount________________________________________________________________________________________________________________Historical cost (loss)/profit before taxation (0.1) 2.3________________________________________________________________________________________________________________Historical cost (loss)/profit after taxation and minority interests (0.2) 2.1________________________________________________________________________________________________________________ Notes to the financial statements 1. Non-operating exceptional items 2006 2005 £m £m________________________________________________________________________________________________________________Profit on sale of properties 0.4 0.5Profit on disposal of hotels - 2.7Charge for disposal and closure costs - (1.0) Demerger costs - (0.5)________________________________________________________________________________________________________________ 0.4 1.7________________________________________________________________________________________________________________Non-operating exceptional items analysed by division are as follows:Properties 0.4 0.5Central (1.5) Hotels - 2.7________________________________________________________________________________________________________________ 0.4 1.7________________________________________________________________________________________________________________Profits 0.4 3.2Losses (1.5)________________________________________________________________________________________________________________ 0.4 1.7________________________________________________________________________________________________________________ Annual General Meeting The Annual General Meeting of Lonrho Africa Plc will be held at the EdinburghSuite, The Thistle Marble Arch, Bryanston Street, London W1A 4UR on Wednesday25th April 2007 at 12 noon. Statutory Information The financial information set out above does not constitute the Company'sstatutory accounts for the period ended 30 September 2006 but is derived fromthose accounts. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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