Q1 Trading Update

LONRHO PLC

("Lonrho" or the "Company" or the "Group")

Trading Update for the Quarter Ended 31 December 2009

"Lonrho reports strong growth and improved operating margins"

Lonrho Plc (AIM:LONR) today announces its unaudited first quarter trading results for the three months to 31 December 2009. The Company has performed on target and delivered growth expectations.

All of the Group's turnover is denominated in foreign currency, predominantly the US Dollar and the South African Rand. The inter-relationships between these currencies in particular has had a significant effect on reported turnover in Pound Sterling. The past twelve months have witnessed large swings in foreign exchange rates particularly in relation to the South African Rand and the US Dollar. In order to demonstrate Lonrho's true performance at divisional level the Group is reporting its quarterly turnover figures by restating the previous year's turnover using comparable currency exchange rates as well as on a reported Sterling basis.

Highlights for the first quarter include:

·; Turnover from operations reached £22.7m. Adopting the comparable currency basis as explained above this represents an increase of 21.7% compared to the same period in the previous year which is equivalent to 3.1% on a reported basis.

·; Growth of the turnover in the first quarter has been driven by expected expansion and growth across all divisions.

·; During the quarter, the Company's strategy was to focus on increasing operating margins. As a result, gross margins have generally improved across the businesses and have significantly improved in the Agribusiness and Infrastructure divisions.

·; Net assets at the end of the first quarter stood at £104m, an increase of £20m since 30 September 2009.

·; The Company held cash balances of £32m at the end of the quarter.

·; Over the last quarter the share price rose 46.1% from 8.04p at close on 1 October 2009 to 11.75p at close of business on 31 December 2009.

·; Market capital increased from £64.2m to £123.4m in the last quarter.

·; As forecast, EBITDA in the first quarter was a reduced loss of £1.2m, compared with a loss of £1.9m in the same quarter in the prior year on a reported basis, reflecting the improvement of gross margins across the businesses.

·; For the three months ended 31 December 2009 the loss before tax was £3.3m compared to £2.7m in the previous year on a reported basis. The increased loss for the quarter reflects the additional interest and depreciation on the capital expenditure programme required to expand the Agribusiness and Infrastructure divisions combined with the effect of a 20% strengthening of the South African Rand against Pound Sterling.

Operational Highlights

The first quarter of 2009/10 has seen continued performance and delivery in the Group's core businesses. Despite the global economic crisis, the Company's core markets are continuing to expand and grow across the Continent.

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

Agribusiness

·; Rollex SA (Pty) Limited (51% holding) remains the central platform within Lonrho's Agribusiness division. First quarter sales increased 14% compared to the same period in the previous year on a comparable currency basis. The business experienced a tightening of international markets in Europe during the quarter but was more than able to compensate through growth in South Africa and the opening of new markets in the Middle East and Scandinavia.

·; Gross margins have improved from 15% to 18%. The improvement in the gross margin is linked directly to the increased volumes of fresh produce and fish exported during the quarter. Airfreight volumes have increased by 7% for the quarter compared to the previous year. The increase has been driven by growing demand for fresh fish from European customers. Fish exports increased by 18% in November and 16% in December against the prior year.

·; Rollex has successfully increased volumes supplied by 182% to two large domestic supermarkets in South Africa: Pick n Pay and Spar, quarter on quarter, and by 292% against the same period in the previous year. This is as a result of innovative new lines being introduced to expand the products on offer to these existing customers. Volumes provided to Pick 'n Pay and Spar will continue to grow as Rollex has become a preferred supplier to both retail chains.

Infrastructure

·; Revenue for this quarter at Luba Freeport (63% holding) has increased by 8% against the previous year on a comparable currency basis. This encouraging increase is stimulated by a series of new drilling programmes being initiated off-shore by a number of existing tenants.

·; The Company strategy of improving margins in the quarter has been successful and resulted in gross margins this quarter at Luba Freeport increasing by 3% compared to the previous year.

·; The number of liner and tanker calls to Luba Freeport has seen a significant increase of 56% compared to the previous year. This is due to the demand for materials and supplies required to support the new drilling programmes that have been initiated by Amerada Hess, Exxon Mobil and Noble Energy.

·; As previously announced, Noble Energy commenced operations at Luba Freeport during the quarter and has committed to exclusively utilise the port as a central operational base for its Gulf of Guinea operations.

·; During the quarter Lonrho increased its holding in its Kwikbuild Corporation subsidiary to 70% as announced on 21st December 2009. Kwikbuild Corporation Limited has a 51% shareholding in the South African prefabricated building solutions company e-Kwikbuild.

·; Turnover at e-Kwikbuild increased 39% from the previous year on a comparable currency basis. The order book stood at a record ZAR 30m (£2.5m) at the end of the quarter.

·; In line with the Company's strategy to improve margins, gross margins at e-Kwikbuild have increased by over 10% from the previous year.

·; Following the successful commissioning and integration of the new manufacturing facilities in South Africa, e-Kwikbuild has tendered for a number of export projects in Tanzania, Angola, Kenya and Mozambique during the current quarter. These export projects are all potentially highly profitable and this new pan-African focus for the Company, and the leveraging of the strong Lonrho brand and relationships, is an important step in the planned expansion of the business.

Hotels

·; Hotel Cardoso in Mozambique (59% holding + Management Contract), has delivered average occupancy for the quarter of over 74%. Average room rates have improved to over US$100 per night compared with a room rate of US$78 per night in December 2008. The refurbishment of the hotel rooms, restaurants and conference facilities were completed this quarter and have been very well received by guests and locals, firmly establishing the hotel as a leading facility in Maputo.

·; Turnover at the Cardoso increased 78% on the prior year on a comparable currency basis.

·; Hotel Grand Karavia in Lubumbashi, DRC (50% holding + Management Contract) is nearing completion of its US$20m refurbishment. During the quarter US$7.6m of the hotel's US$10m DBSA senior debt facility was drawn down for the refurbishment programme. The hotel is scheduled to open at the end of March 2010 and will provide 216 rooms and suites of the only international standard accommodation in Lubumbashi, the centre of the burgeoning copper belt of the DRC.

·; The recovery of the copper sector in Lubumbashi continues and demand for quality hotel rooms is expected to be even stronger in 2010.

Transport

·; Lonrho Aviation has seen turnover increase by 41% compared to the same quarter last year on a comparable currency basis.

·; During the quarter, Fly 540 launched a new service from Nairobi to Mwanza and Bujumbura and began a scheduled service connecting Zanzibar to Kilimanjaro and the Serengeti. The Fly540 service continues to connect East Africa. Further growth will continue in Tanzania with two further aircraft being deployed to the fleet during the second quarter.

·; Fly 540 has taken delivery of its first CRJ regional jet which will be used for longer distance regional routes not suitable for turboprops (Entebbe, Mwanza, Bujumbura and Zanzibar). The introduction of the jet to the fleet is an important step in the expansion of the airline and the delivery of a pan-African integrated operation.

·; The application processes for Air Operators Certificates in Ghana and Angola are nearing completion and both hubs are gearing up to launch operations. Local infrastructure is complete, staff have been recruited and training is ongoing.

Support Services

·; Bytes & Pieces (65% holding), has seen revenues has grow this quarter by 5% when compared with the same period last year.

·; During the quarter Bytes and Pieces partnered with Xerox to offer customers new paperless office solutions for the first time. In addition they have also secured service contracts with Capital Star Steel, SA in Mozambique and enjoyed strong revenues from First National Bank, Riversdale Mining Limited and Global Alliance.

·; 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 expand with the arrival of a new Business Development Manager at the end of January 2010. During the quarter projects undertaken have included the Ministry of Energy and Minerals in Uganda, Cross Border Road Transport Agency in South Africa and Carmague insurance underwriters.

·; CES Zambia (50% holding+ Board Control), continues to exceed expectations and remains on track to achieve US$1m turnover in the first 12 months of operation. The list of clients continues to grow with the addition of Zambian Breweries, KPMG and PWC amongst others.

·; Swissta Mozambique (100% holding) won a contract from the ruling Frelimo party to supply bottled water at polling stations during the elections held at the end of October 2009 driving volume growth of 10% compared with the previous quarter. During the coming months Lonrho Water will launch a new line of water sachets, which have proved to be very successful elsewhere in Africa.

·; The new bottling plant scheduled for Luanda is making gradual progress. Site work has commenced and the expediting of the equipment is awaiting EXIM funding approval for the confirmation of orders and subsequent delivery.

LonZim Plc

·; Lonrho has a 24.61% shareholding in LonZim (AIM:LZM).

·; LonZim has invested £26m on acquiring a portfolio of companies that are well placed to benefit from economic recovery across key sectors in Zimbabwe. The current market capitalisation of LonZim represents a 51% discount on the acquisition cost of the portfolio.

·; On 4 December 2009, LonZim announced it had raised a further £1.17m gross by way of a private placing of 4,255,525 new ordinary shares. At year end LonZim had cash reserves of £2.4m.

·; On 26 January 2010, LonZim announced its results for the year ending 31 August 2009, reporting a turnover of £2.6m and profit before tax of £0.9m. Each operating company is cash flow positive.

·; LonZim has reported a significant improvement in the commercial environment and the economy in Zimbabwe since the formation of the Government of National Unity and the US dollarization of the currency in February 2009. Hyperinflation has gone and businesses are starting to trade normally.

Financing Activities

Lonrho successfully raised £25.1m this quarter, mainly from existing shareholders. These funds will provide the Company with the ability to increase its equity stake in its core established businesses, specifically its agricultural and building divisions and increase available working capital.

Current Trading and Future Outlook

Each of the Company's businesses continued to perform to expectations during the first quarter and grew their core operations.

The Lonrho strategy continues to be resilient to the global economic crisis and the Company focuses on the industry sectors and specific countries which it believes will continue to provide the strongest growth in emerging Africa. Clear opportunities continue to exist in focusing on and serving the oil, agricultural and mineral industries across the continent.

The first half of 2010 will see new operations that are nearing completion come to fruition for the Group: the Karavia Hotel opening in late March 2010; 540 Angola and Ghana commencing flight operations, subject to receiving final Air Operator Certifications; and Lonrho Agribusiness opening its John Deere operations in Angola.

It is intended that the next quarterly update for the Company will be released in May 2010.

David Lenigas, Lonrho's Executive Chairman commented:

"The 21.7% increase in revenue delivered this quarter on a comparable currency basis to the prior year demonstrates that Lonrho is on track and is meeting its ambitious targets for the year. This success is down to careful planning, and the focus and the quality of the Lonrho management teams, who continue to grow their businesses whilst having to operate in a particularly challenging economic environment.

Lonrho has £32m in cash reserves and has solid, performing businesses in strategic sectors which are well positioned to benefit from, and help deliver, the emerging economies in Africa. We continue to see the provision of services to the oil, agriculture and mineral industries as these are the core economic drivers for emerging Africa. Lonrho's operations remain aligned with the countries growing with the boom in these sectors.

I am particularly excited about the expansion of Fly 540, the opening of the Hotel Karavia in Lubumbashi and the John Deere distributorship for Angola. Each is a commercial milestone in the development of the Company. These new operations complement our existing businesses and will further enhance Lonrho's reputation and delivery in our specific market sectors."

LONRHO GROUP

GROUP TURNOVER

£'000S

Results and turnover sourced from December 2009 management accounts

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