9th Nov 2009 15:09
These results (and comparative figures included therein) do not form audited accounts nor have been extracted from audited accounts. The results disclosed in this trading update may potentially be subject to adjustments during the audit in respect of goodwill valuations and other minor items. The comparative figures used are year on year due to the influence of seasonality within the different businesses in the group.
LONRHO PLC
("Lonrho" or the "Company")
Unaudited Trading Update for the Quarter Ended 30 September 2009
"Lonrho delivers an 88% like for like increase in turnover for the fourth Quarter and a 55% like for like growth in turnover for the full Year"
Lonrho PLC (AIM:LONR) today announces its unaudited fourth quarter results delivering an 88% increase in turnover for the quarter and a 55% increase in turnover for the year ended 30th September 2009 on a like for like basis.
Highlights for the quarter include:
Fourth Quarter turnover from continuing operations was £29.6m. This represents a significant increase of 312% on a reported basis, and an 88% increase on a like for like basis against the prior year.
Turnover in the fourth quarter has been driven by growth in all divisions which has delivered the highest quarterly turnover reported to date, led by growth of the agricultural division.
Turnover for the twelve months was £90.8m. This is an increase of 55% on a reported basis against the previous year and 266% increase on a like for like basis.
EBITDA in the fourth quarter was a positive £9.3m, compared with a loss of £7.0m in the same quarter in the prior year on a reported basis.
EBITDA for the full year was £2.3m with each major operating business cash positive.
Unaudited loss before tax for the twelve months ending 30 September 2009 on a reported basis was a loss of £4.5m compared with a loss of £38.7m in the previous year.
Net assets at the end of the fourth quarter stood at £84.0m, up from £82.6m at 30 June 2009.
The company held cash balances of £6.4m at 30 September 2009.
The market capitalisation of the company at the end of the period was £64m.
Agreement in principle has been reached to settle the outstanding legal case with Incat, the previous owners of Luba Freeport, where Incat was claiming US$8.5m (£5.3m) in disputed outstanding invoices, by an agreed full and final payment of US$1m (£0.6m) to be paid in monthly instalments over a twelve month period subject to Luba Board approval. Lonrho had made provision for liabilities arising from this claim and as such is expecting to record an exceptional gain of US$5.5m (£3.5m) before legal costs in the first quarter of the current financial year.
Currency movements have had a negative impact on the Sterling results. Sterling has continued to be subject to significant currency fluctuation against the US Dollar and the South African Rand during the current quarter. Sterling weakened by 4.7% and 2.9% respectively against the South African Rand and the US Dollar. The US Dollar weakened by 1.9% against the South African Rand. Lonrho's turnover is predominantly reported in US Dollars.
Operational Highlights
The fourth quarter of 2008/09 has seen continued growth and delivery in the Group's core businesses, despite depressed global markets. The Company's strategy of operating in five key industrial sectors inextricably linked to the growth of Africa (Transportation, Infrastructure, Agriculture, Support Services and Hotels) with operations in seventeen countries across Africa is demonstrably successful and clearly mitigates both political and commercial risk in that continent.
Lonrho remains focussed on operating to first world standards across all of its business units, and employing high calibre, well motivated management teams that are experts in their divisional industry to operate the day to day operations within the Group.
The quarterly results show that Lonrho has built a sustainable portfolio of strong businesses across the continent that are well placed for significant growth year on year.
Agribusiness
Rollex SA (51% holding), continues to be the central platform within Lonrho's Agriculture business division and like for like fourth quarter sales were up 65% year on year. Year on Year sales have risen 49%. The Rollex strategic focus remains the vertical integration of the agriculture market, taking African produce, processing and packaging it and delivering it to both local and international markets including Europe, the Middle East and Scandinavia. Lonrho's agribusiness is a significant component of Lonrho's recently completed 5 year strategic business review. The division benefits from the continued development of agriculture for local and export markets in Africa and the growing requirement to deliver production from farm to consumer across the continent.
Rollex has successfully increased volumes supplied to two large domestic supermarkets in South Africa, Pick n Pay and Spar, by 15% quarter on quarter. Export volumes to Europe continue to be affected by a decreased demand for fruit and vegetables in the current global economic conditions.
The Namibian fish processing and packing cold store has seen volumes increase from 95 tons in both July and August up to 167 tons in September. Fish exports remain highly related to the volume demand for premium fish from Europe.
Rollex Freight and Rollex Cargo continue to grow their businesses maximising the back load efficiencies for the trucking fleet used for collecting agricultural produce across southern Africa.
Building work continues on the John Deere distributorship for Angola (51% holding) located in Catete, in the Bengo Province. John Deere Angola exhibited at the Angolan National Agricultural Fair (FILPA) on the 14 July 2009. The Lonrho John Deere stand attracted great interest and significant sales enquiries and firm orders. Agricultural redevelopment remains a primary Angolan Government objective. The Government has announced that it intends to invest US$2 billion in rebuilding Angolan agriculture of which a reported US$350m of financial incentives is being made available to indigenous farmers to purchase agricultural equipment.
Infrastructure
At Luba Freeport (63% holding), the Lonrho oil services terminal in the Gulf of Guinea, and Lonrho's largest single asset, Noble Energy has committed (announced 27th October) to utilise the port as a central operational base for it's Gulf of Guinea operations. Noble is expected to develop into a further major client for Luba, joining the extensive list of world class tenants already established at the port, including companies such as ExxonMobil, Schlumberger, Hess, M-I Swaco and SBM.
Revenue at Luba has increased by 16% on a reported quarterly basis against the previous year. Full year revenues have increased 9%. The activity for the current quarter is showing strong signs of growth with new drilling programs being initiated off shore by several existing Luba tenants and general oil industry confidence in the Gulf of Guinea is clearly growing.
Agreement in principle has been reached to settle the outstanding dispute with Incat, the previous owners of Luba Freeport, where Incat was claiming US$8.5m (£5.3m) in outstanding invoices, with an agreed payment of US$1m (£0.6m) paid in twelve instalments. Lonrho had made provision for liabilities from this claim and as such is expecting to record an exceptional gain of US$5.5m (£3.5m) before legal costs in the first quarter of the current financial year.
There has been a delay with the delivery of the new fixed container scanner for the port which is now due to arrive and be installed in the first quarter of 2010. When operational, the scanner will provide the premier container scanner security service in Equatorial Guinea and be a major asset for the port.
Luba has established a debt facility with both CCEI bank and BNGE bank to fund immediate capital requirements as they arise and to meet the capital required for developing new infrastructure for tenants as they arrive at the port. These facilities are secured against the port's existing assets.
Kwikbuild Corporation Limited (62% holding) and the South African subsidiary e-Kwikbuild (52% holding) has reported that, as explained in the previous quarterly update the elections in South Africa this year led to a decrease in the number of tenders that were issued as Government contracts. During the current quarter there has been a four fold increase in the number of projects released for tender by the South African Government, compared with the previous two quarters. Kwikbuild has reacted to the opportunity created by the upsurge in the tender process and has tendered for significant potential volumes. Historically, the company wins circa 40% of tender applications that they have submitted. During quarter four Kwikbuild has secured new orders to the value of £1.5m (ZAR 18m).
Hotels
At the Hotel Cardoso in Mozambique (59% holding + Management Contract), occupancy continues to exceed expectations with close to 80% during July and achieving an average room rate of over US$100 per night compared with a room rate of US$73 per night in July 2008. This was driven by increased tourist numbers coming from South Africa. The refurbished 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 firmly re-established the Hotel Cardoso at the premier end of the Maputo hotel market.
Hotel Grand Karavia in Lubumbashi, DRC, (50% holding + Management Contract) continues with its US$20m refurbishment. The hotel will provide the only international standard accommodation in Lubumbashi, the centre of the burgeoning copper belt of the DRC. Development of the hotel has had some supplier delays in regard to delivery of windows and other items from Turkey resulting in the opening of the hotel scheduled for December 2009 being likely to be put back until January 2010. The recovery of the copper sector in Lubumbashi continues and demand for hotel rooms is expected to be even greater in 2010. The executive management team at the hotel have joined the company as from the 1st October as planned and are working on the opening program.
Transport
Lonrho's pan African regional aviation company, Fly540, has continued to expand its network and build on its reputation for reliability, safety and punctuality. 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.
The Fly540 Kenya and Tanzania businesses continue to operate profitably as a result of increased local demand, with 58,008 passengers carried during this quarter, which is 19% higher than the previous quarter. Revenue this quarter has grown by 160% compared to the prior year. Advance bookings for the peak December period have already been sold out at full fare, and additional peak December flights provided in the quarter also sold out within a short period of being made available.
540 Angola (60% holding) has, during the quarter, continued to work with the Angola Civil aviation authority to convert the Air Services Licence (ASL), received in the previous quarter, to an Air Operators Certificate (AOC) necessary to permit flight operations to commence. It is expected that flight operations will commence before the end of the calendar year. Initial destinations for Fly540 Angola will include the major centres of Cabinda, Luanda, Soyo, Benguela, Huambo, and Malanje and thereafter grow to fifteen domestic destinations. Operations are centred out of Cabinda, (the centre of the oil industry) and Luanda. Lonrho plans to initially deploy two new ATR72 aircraft to Angola to establish the primary routes and further aircraft as the operation grows. The company is in the process of concluding the necessary financing arrangements.
Fly 540 Ghana (60% holding), has during the quarter been awarded an Air Services Licence by the Ghana Civil Aviation Authority and is rapidly finalising the process to convert this ASL to an Air Operators Certificate (AOC). Flight operations are expected to commence early in 2010.
Fly 540 Zimbabwe (a LonZim company), plans to commence operations in the next quarter. Lonzim Air, a wholly owned subsidiary of Lonzim Plc, has purchased one ATR 42 turbo prop from the Lonrho Aviation Fleet for US$4.3m to facilitate passenger operations in Zimbabwe as leasing aircraft into Zimbabwe in the current environment is difficult. Fly 540 will earn a license fee of 2.5% of gross turnover and a monthly management fee of US$35,000 for managerial services to Fly 540 Zimbabwe.
Support Services
Bytes & Pieces (65% holding), is the market leader in the IT sector in Mozambique and continues to grow as a result of expanding business to existing clients as the market benefits from the continued economic growth of Mozambique. Bytes and Pieces accounts for 80% of the revenue generated by the support services division. Revenue has grown this quarter by 28% compared with the same period last year.
During the current quarter Bytes and Pieces has won a complete IT outsourcing contract with Riverdale Mining Limited valued at circa US$145k per year and has also been appointed as their sole IT supplier. Riverdale Mining Limited has acquired coal exploration tenements in Mozambique with the combined tenement size now in excess of 250,000 hectares in the Tete-Moatize area. New products added during the quarter include the Silver Bed wide area network accelerator.
CES Zambia (50% holding+ Board Control), started trading in quarter three and is already on track to achieve US$1m turnover in the first 12 months of operation.
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. Plans to take CES into Malawi and the booming Angolan market where the company can utilise its in-house Portuguese workforce to gain a competitive advantage are well advanced.
LonZim Plc
Lonzim Plc, (LonZim) in which Lonrho has a 27.87% shareholding and a management contract, previously announced that AMB Capital (Ireland) Limited ("AMB"), acting in concert with Damille Partners (Damille) had requisitioned an Extraordinary General Meeting ("EGM") of its shareholders to dispose of the Company's assets and return cash to shareholders. LonZim is pleased to announce that at the Extraordinary General Meeting held on 30 July, that all of the proposed hostile resolutions were defeated. In a strong vote of confidence in the Company, its Directors and its objectives, a significant majority of shareholders voted to support the existing Board and maintain the Company's current investment mandate to develop a business portfolio in Zimbabwe.
A market update issued by LonZim on the 15 October 2009 highlighted that the portfolio of businesses acquired by LonZim over the past two years reflected (at acquisition cost) that LonZim's market capitalisation represented a 62% discount to the cost of the businesses acquired.
LonZim Plc announced that it had invested US$2.3m for 51% of Panafmed, a new start up business that imports, wholesales and distributes pharmaceutical products in Zimbabwe. Panafmed has filled an essential market need supplying NGO's, private and public hospitals, clinics and pharmacies with quality products delivered via a professional, secure and chilled refrigerated logistics chain.
Lonzim Plc also announced that two new Directors have been appointed.
David Armstrong, the Lonrho Plc Finance Director, has also assumed the role of Finance Director for LonZim Plc. David is an experienced Finance Director, with extensive knowledge of the African market, gained whilst the Commercial Director at Diageo Africa.
Colin Orr Ewing has been appointed as a non executive Director of LonZim Plc. Colin is highly experienced in the African resources sector and his career as an investment manager, initially with Shell Pension Fund and thereafter with a series of fund managers focused on Africa, brings a strong set of independent skills to the Board
Financing Activities
Lonrho announced on 11th August that it had issued 35,277,423 ordinary shares at a price of 7.047p (equating to 4.415% of the Company) to Altima Global Special Opportunities Master Fund Limited a fund managed by Altima Partners LLP for cash to meet an existing obligation under the purchase agreement of its 51% stake in Rollex (SA) Pty Ltd ('Rollex') announced in April 2008. The shares issued by the Company Directors are under the existing authority approved at the Company's EGM on the 9th December 2008.
Unaudited Loss Before Tax
Interim results reported a profit before tax of £0.6m after recognising a foreign exchange gain (£6.1m). The unaudited loss before tax of £4.5m for the full year is in line with management expectations during this start-up and growth phase of the company, and in particular includes the continued roll out of Fly 540, the pan African aviation company during the second half of the year.
Current Trading and Future Outlook
Each of the Company's core businesses continued to perform to expectations during the fourth quarter. The impact of the global recession on the African continent is less severe and the majority of economic forecasts expect sub Saharan growth in GDP to continue in 2009 albeit at a slower rate and to recover strongly in the oil, natural resource and agriculture focused economies across the continent in 2010.
The Lonrho strategy has proven to be resilient and the company focuses on the industry sectors and specific countries which it believes will continue to provide the strongest growth in Africa.
The fact that the Group has been able to deliver a positive EBITDA for the year reinforces the growth that has occurred within the Group during the current year. The first quarter of 2010 is set to see strong progress for the group with 540 Angola commencing flight operations, and the Karavia hotel opening in January 2010 and Lonrho Agribusiness opening the John Deere operations in Angola and commencing exports to supermarkets in the Middle East. However trading conditions remain challenging as a result of the global economic climate and fluctuations in the currency markets.
The audited full year accounts will be released in the first quarter 2010.
.
David Lenigas, Lonrho's Executive Chairman commented:
"I am delighted that the Lonrho management teams have demonstrated significant progress delivering real growth and strong tangible businesses on the ground. Turnover for the year has risen to £90.8m and each division is operationally cash positive. Lonrho has produced EBITDA positive results for the year proving that the Company has delivered on its commitments and has become a significant African business.
The solid foundations that are now in place across all five divisions, in seventeen countries, provide the building blocks for further development and profitable growth this year.
To develop it's assets and to take advantage of other opportunities as they arise may require capital. Lonrho has minimal debt and with these impressive divisional results, each of the divisions is in a good position to raise local debt to help fund further expansion.
The future African economy is driven by oil, natural resources and agriculture. Lonrho is ideally placed to participate in and benefit from these specific market opportunities across the continent."
LONRHO GROUP
GROUP TURNOVER
1 July to 30 September 2009
£'000S
|
TURNOVER on a reported basis |
||||
|
3 Months to 30 Sept 2009 |
3 Months to 30 Sept 2008 |
Variance |
Var % |
|
|
Agri Processing |
||||
|
Rollex |
13,825 |
0 |
13,825 |
100% |
|
Transport |
||||
|
Lonrho Aviation |
8,939 |
3,444 |
5,495 |
160% |
|
Support Services |
||||
|
Bytes & Pieces |
1,632 |
1,272 |
360 |
28% |
|
Other |
611 |
328 |
282 |
86% |
|
Infrastructure |
||||
|
Luba Freeport |
1,950 |
1,679 |
271 |
16% |
|
E-Kwikbuild |
317 |
0 |
317 |
100% |
|
Hotels |
||||
|
Hotel Cardoso |
849 |
465 |
384 |
83% |
|
Hotel management services |
425 |
0 |
425 |
100% |
|
Other/ Head office |
1,035 |
0 |
1,035 |
100% |
|
Continuing operations |
29,582 |
7,188 |
22,394 |
312% |
|
Shipping -Discontinued |
||||
|
SAILS |
0 |
4,212 |
-4,212 |
-100% |
|
Discontinued operations |
0 |
4,212 |
-4,212 |
-100% |
|
Total Turnover |
29,582 |
11,400 |
18,183 |
160% |
Including Rollex and E-Kwikbuild and removal of Sails from 2008 results
Results and turnover sourced from September 2009 management accounts
LONRHO GROUP
GROUP TURNOVER
1 July to 30 September 2009
£'000S
|
LIKE FOR LIKE TURNOVER |
||||
|
3 Months to 30 Sept 2009 |
3 Months to 30 Sept 2008 |
Variance |
Var % |
|
|
Agri Processing |
||||
|
Rollex |
13,825 |
8,346 |
5,479 |
65% |
|
Transport |
||||
|
Lonrho Aviation |
8,939 |
3,444 |
5,495 |
160% |
|
Support Services |
||||
|
Bytes & Pieces |
1,632 |
1,272 |
360 |
28% |
|
Other |
611 |
328 |
282 |
86% |
|
Infrastructure |
||||
|
Luba Freeport |
1,950 |
1,679 |
271 |
16% |
|
E-Kwikbuild |
317 |
169 |
147 |
87% |
|
Hotels |
||||
|
Hotel Cardoso |
849 |
465 |
384 |
83% |
|
Hotel management services |
425 |
0 |
425 |
100% |
|
Other/ Head office |
1,035 |
0 |
1,035 |
100% |
|
Continuing operations |
29,582 |
15,703 |
13,879 |
88% |
|
Shipping -Discontinued |
||||
|
SAILS |
0 |
4,212 |
-4,212 |
-100% |
|
Discontinued operations |
0 |
4,212 |
-4,212 |
-100% |
|
Total Turnover |
29,582 |
19,915 |
9,667 |
49% |
Including Rollex and E-Kwikbuild and removal of Sails from 2008 results
Results and turnover sourced from September 2009 management accounts
LONRHO GROUP
GROUP TURNOVER
TWELVE MONTHS to 30 SEPTEMER 2009
£'000S
|
TURNOVER on a reported basis |
||||
|
12 Months to 30 SEPT 2009 |
12 Months to 30 SEPT 2008 |
Variance |
Var % |
|
|
Agri Processing |
||||
|
Rollex |
46,529 |
0 |
46,529 |
100% |
|
Transport |
||||
|
Lonro Aviation |
20,834 |
9,304 |
11,530 |
124% |
|
Support Services |
||||
|
Bytes & Pieces |
6,773 |
5,161 |
1,612 |
31% |
|
Other |
1,728 |
915 |
813 |
89% |
|
Infrastructure |
||||
|
Luba Freeport |
7,974 |
7,323 |
651 |
9% |
|
E-Kwikbuild |
1,276 |
0 |
1,276 |
100% |
|
Hotels |
||||
|
Hotel Cardoso |
3,022 |
1,783 |
1,239 |
70% |
|
Hotel management services |
425 |
0 |
425 |
100% |
|
Other/ Head office |
1,035 |
0 |
1,035 |
100% |
|
Continuing operations |
89,595 |
24,486 |
65,109 |
266% |
|
Shipping -Discontinued |
||||
|
SAILS |
1,187 |
18,566 |
-17,379 |
-94% |
|
Discontinued operations |
1,187 |
18,566 |
-17,379 |
-94% |
|
Total Turnover |
90,782 |
43,052 |
47,730 |
111% |
Including Rollex and E-Kwikbuild and removal of Sails from 2008 results
Results and turnover sourced from September 2009 management accounts
LONRHO GROUP
GROUP TURNOVER
TWELVE MONTHS to 30 SEPTEMER 2009
£'000S
|
LIKE FOR LIKE TURNOVER |
||||
|
12 Months to 30 SEPT 2009 |
12 Months to 30 SEPT 2008 |
Variance |
Var % |
|
|
Agri Processing |
||||
|
Rollex |
46,529 |
31,132 |
15,397 |
49% |
|
Transport |
||||
|
Lonrho Aviation |
20,834 |
9,304 |
11,530 |
124% |
|
Support Services |
||||
|
Bytes & Pieces |
6,773 |
5,161 |
1,612 |
31% |
|
Other |
1,728 |
915 |
813 |
89% |
|
Infrastructure |
||||
|
Luba Freeport |
7,974 |
7,323 |
651 |
9% |
|
E-Kwikbuild |
1,276 |
2,241 |
-965 |
-43% |
|
Hotels |
||||
|
Hotel Cardoso |
3,022 |
1,783 |
1,239 |
70% |
|
Hotel management services |
425 |
0 |
425 |
100% |
|
Other/ Head office |
1,035 |
0 |
1,035 |
100% |
|
Continuing operations |
89,595 |
57,859 |
31,737 |
55% |
|
Shipping -Discontinued |
||||
|
SAILS |
1,187 |
18,566 |
-17,379 |
-94% |
|
Discontinued operations |
1,187 |
18,566 |
-17,379 |
-94% |
|
Total Turnover |
90,782 |
76,425 |
14,358 |
19% |
Including Rollex and E-Kwikbuild and removal of Sails from 2008 results
Results and turnover sourced from September 2009 management accounts
Enquiries
|
Lonrho Plc |
- |
|
David Lenigas, Executive Chairman |
+44 (0)20 7016 5105 |
|
Geoffrey White, Chief Executive Officer |
+44 (0)20 7016 5105 |
|
David Armstrong, Finance Director |
+44 (0)20 7016 5105 |
|
|
|
|
Pelham PR |
|
|
Charles Vivian |
+44 (0) 20 7337 1538 |
|
|
+44 (0) 7977 297903 |
|
James MacFarlane |
+44 (0) 20 7337 1527 |
|
|
+44 (0) 7841 672831 |
|
|
|
|
Beaumont Cornish Limited (Nomad) |
|
|
Rosalind Hill Abrahams |
+44 (0) 20 7628 3396 |
|
Roland Cornish |
+44 (0) 20 7628 3396 |
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