27th Apr 2009 07:00
27 April 2009
LONRHO PLC
("Lonrho" or the "Company")
Trading Update for the Quarter Ended 31 March 2009
"Lonrho Reports Continued Strong Growth"
Lonrho PLC (AIM: LONR) today announces its unaudited trading update for the second quarter ended 31 March 2009 ("Second Quarter").
These results (and comparative figures included therein) do not form audited accounts nor have been extracted from audited accounts. The comparative figures used are year on year due to the influence of seasonality within the different businesses in the group. The Company intends to release and post its half year results during May 2009.
Trading Update - 3 months to 31 March 2009
The second quarter of 2008/09 has seen a period of focus on delivering growth in the core businesses. The Company continues to operate in five strategic sectors. (Transportation, Infrastructure, Agriculture, Support Services and Hotels). Lonrho has built a portfolio of businesses geographically distributed across Africa's strongest emerging markets. Lonrho believes these businesses are well positioned to capitalise on further growth opportunities.
Second Quarter turnover of continuing operations was £19.6m. This represents a significant increase of +245% on a reported basis, and +61% increase on a like for like basis against the prior year.
Year to date turnover for the first six months was £41.5m, this is an increase of +275% on a reported basis against the previous year and 60% increase on a like for like basis.
The Company held cash balances of £13m at 31 March 2009.
Net assets increased to £86.1m up from £83.0m at 31 December 2008.
EBITDA in the Second Quarter has improved 68% on the prior year with a loss of £2.7m compared to a loss of £8.3m in the prior year on a reported basis.
Profit before tax for the first six months on a reported basis was a profit of £0.6m compared to a loss of £6.2m in the previous year.
The Group has recognised foreign exchange gains of £6.1m in respect of the half year to 31 March 2009. As at 31 March 2009, the Group also had unrecognised foreign exchange gains of £7.1m.
The Second Quarter profit before tax includes a one off gain of £2.3m in relation to the closure of SAILS.
Trading Highlights by Division
Agri-Processing
Rollex SA (51% holding), continues to be the central focus within Lonrho Agriculture's logistical division and like for like Quarter 2 sales were up 89% year on year. International fish export volumes decreased by 4.1% in Q2 due to slow down in global markets. Rollex have successfully offset this impact by identifying and entering new markets. In Zambia, road hauled cargo has more than quadrupled to 1,256 tons from 306 tons in the second quarter of 2008. These volumes comprise general cargo to Zambia and include the early autumn harvest volumes (vegetables and Flowers) from Zambia to South Africa. Cargo volumes to Zimbabwe have grown strongly during the quarter. Despite shrinking world markets Rollex is remainingprofitable and continuing to grow.
Building work continues for the first John Deere Angola branch which will be located in Catete, in the Bengo Province. This branch is anticipated to open in July 2009 to coincide with the Angolan National Agricultural Fair ( FILPA ). Initial customer discussions are very positive.
Transport
Lonrho's pan African aviation company, branded Fly540, has continued to expand its operations. The roll out plans for Angola and Ghana continue to proceed and are at an advanced stage. 540 Angola is expected to commence operations during the next quarter and followed by 540 Ghana in the second half of 2009.
At 540 Kenya (49% holding), the business continues to operate profitably, with passenger numbers reaching 17,311 in March 2009 (2008: 13,579 passengers), above budget for a slower month prior to the increased demand in preparation of the Easter holidays. The Nairobi to Kilimanjaro route opened in January 2009 and the Nairobi to Mwanza route is expected to open during the coming quarter.
540 Uganda, (90% holding), continues to see freight volumes growing although growth has been hampered by the delay in the slow return of the food aid flights to the DRC. It is intended to open passenger routes as planned to Rwanda, Juba and Mwanza during the next quarter.
540 Tanzania (90% holding), we expect that 540 Tanzania will receive its Air Operators Certificate (A.O.C) before end of May 2009 which will be in time for the peak travel season in June. It is currently operating premium business charter flights in Tanzania until the A.O.C is granted. Clients include the Tanzanian government, NGO's and commercial clients.
Support Services
Bytes & Pieces (65% holding), continues to grow as a result of expanding business provided to existing clients as the market benefits from the continued rejuvenation of Mozambique. All the solutions that are offered to customers are based on converged technologies and unified communications. Avaya IP Telephony systems and Polycom video conferencing products have been added to the product portfolio. Bytes &Pieces recently provided Avaya products and services to First National Bank and TATA in Mozambique.
Infrastructure
At Luba Freeport (63% holding), negotiations are proceeding well for new clients to utilise the port as a central operational base. Noble Energy has agreed a US$ 2 billion contract with the Government of Equatorial Guinea and has signed an MOU to locate their operations at Luba. Revenue has increased by 13% on a reported quarterly basis against the previous year. Costs continue to be kept below budget. There has been a two month delay with the delivery of the new container scanner which is now due to arrive in May 2009.
Kwikbuild Corporation Limited (62% holding) and the South African subsidiary e-Kwikbuild has reported that turnover has been lower than expectations. This is due to the South African government postponing awarding contracts until after the elections which were held on 22 April 2009. The order book currently stands in the region of ZAR 58m. Margins have improved during the current quarter and this is attributable to the new plant that was opened during the previous quarter which is functioning as planned.
Hotels
At the Hotel Cardoso in Mozambique (59% holding + Management Contract), the new restaurant has now been completed as well as the refurbishment and redevelopment of the adjacent park. Occupancy has steadily increased during the quarter and reached 83.2% during March with an average room rate of US$83 per night compared with an occupancy rate of 72.6% and a room rate of US$65 per night in March of the previous year.
Hotel Grand Karavia in Lubumbashi, DRC, (50% holding + Management Contract) continues with its US$20m refurbishment. A loan agreement with the DBSA was signed during the quarter providing a US$10m loan specific to the refurbishment project. The balance of the project is being funded by local joint venture partners and banks. Contractors are on site and redeveloping the hotel and landscaping the grounds. The hotel remains scheduled to re-open in summer of 2009 and provide the only quality accommodation in Lubumbashi. The copper belt of the DRC has seen improved economic activity with mines that had gone on care and maintenance recommencing production as commodity prices rise.
Other
Lonrho Mining. Lonrho participated in a successful rights issue in Lonrho Mining, which is listed on the Australian Stock Exchange. Lonrho's Holding currently stands at 25.59% and the results from the Lulo concession in Angola remain very encouraging.
Lonzim PLC, in which Lonrho has a 24.25% shareholding, has announced that it expects to be served by Pershing Nominees Limited on behalf of AMB Capital (Ireland) Limited ("AMB"), a company that has recently acquired 20.75% of the Lonzim issued share capital a requisition to convene an Extraordinary General Meeting ("EGM") of its shareholders. This will be after the company's Annual General Meeting ("AGM") which has already been convened for 30th April 2009. Key Developments Announced
During the First Quarter, Lonrho also announced two other important developments:
Lonrho Mining Ltd has reinforced the Lulo Diamond project Kimberlite potential following positive microprobe results.
Beaumont Cornish Limited has been appointed as Nominated Adviser, and WH Ireland Limited has been appointed as broker to the Company
Current Trading and Future Outlook
Each of the Company's core businesses continued to perform to expectations during the second quarter. The impact of the global recession continues to be felt across Africa, however the impact on the African continent is less severe and forecasts expect sub Saharan growth in GDP to continue in 2009 albeit at a slower rate. Lonrho continues to focus on the industry sectors and specific economies which it believes will continue to provide the strongest growth in Africa.
It is intended that the next quarterly update for the company will be released in July 2009.
.
David Lenigas, Lonrho's Executive Chairman commented:
"Lonrho has for the second consecutive quarter delivered strong financial results, which have delivered continued strong growth at a time when the global economy is contracting, with revenues increasing 61% on a like for like basis against the same period last year. We expect to report a profit before tax for the half year end 31 March 2009"
"We expect Lonrho's operations to continue to deliver strong quarterly trading performances in 2009, and we are focusing on strengthening our core businesses. We remain extremely positive about Lonrho's prospects in our chosen countries of operation and specific market sectors across Africa."
LONRHO GROUP
GROUP TURNOVER
1 JANUARY to 31 MARCH 2009
£'000S
|
TURNOVER On a reported basis |
||||
|
|
3 months to 31 March 2009 |
3 months to 31 March 2008 |
Variance |
Var % |
|
Agri Processing |
||||
|
Rollex |
10,670 |
0 |
10,670 |
100% |
|
Transport |
||||
|
540 Group |
3,807 |
1,785 |
2,022 |
113% |
|
Other |
0 |
166 |
-166 |
-100% |
|
Support Services |
||||
|
Bytes & Pieces |
1,642 |
1,389 |
253 |
18% |
|
Other |
298 |
147 |
151 |
103% |
|
Infrastructure |
||||
|
Luba Freeport |
2,052 |
1,811 |
241 |
13% |
|
E-Kwikbuild |
476 |
0 |
476 |
100% |
|
Hotels |
||||
|
Hotel Cardoso |
612 |
376 |
236 |
63% |
|
Continuing operations |
19,557 |
5,674 |
13,883 |
245% |
|
Shipping -Discontinued |
||||
|
SAILS |
0 |
3,179 |
-3,179 |
N/A |
|
Discontinued operations |
0 |
3,179 |
-3,179 |
N/A |
|
Total Turnover |
19,557 |
8,853 |
10,704 |
121% |
|
LIKE FOR LIKE TURNOVER1 |
||||
|
3 months to 31 March 2009 |
3 months to 31 March 2009 |
Variance |
Var % |
|
|
Agri Processing |
||||
|
Rollex |
10,670 |
5,641 |
5,029 |
89% |
|
Transport |
||||
|
540 Group |
3,807 |
1,785 |
2,022 |
113% |
|
Other |
0 |
166 |
-166 |
-100% |
|
Support Services |
||||
|
Bytes & Pieces |
1,642 |
1,389 |
253 |
18% |
|
Other |
298 |
147 |
151 |
103% |
|
Infrastructure |
||||
|
Luba Freeport |
2,052 |
1,811 |
241 |
13% |
|
E-Kwikbuild |
476 |
831 |
-355 |
-43% |
|
Hotels |
||||
|
Hotel Cardoso |
612 |
376 |
236 |
63% |
|
Continuing operations |
19,557 |
12,146 |
7,411 |
61% |
|
Shipping -Discontinued |
||||
|
SAILS |
0 |
3,179 |
-3,179 |
N/A |
|
Discontinued operations |
0 |
3,179 |
-3,179 |
N/A |
|
Total Turnover |
19,557 |
15,325 |
4,232 |
28% |
1Including Rollex and E-Kwikbuild and removal of Sails from 2008 results
Results sourced from March 2009 management accounts
LONRHO GROUP
GROUP TURNOVER
SIX MONTHS to 31 MARCH 2009
£'000S
|
Turnover on a reported basis |
||||
|
6 months to 31 March 2009 |
6 months to 31 March 2009 |
Variance |
Var % |
|
|
Agri Processing |
||||
|
Rollex |
22,859 |
0 |
22,859 |
100% |
|
Transport |
||||
|
540 Group |
8,013 |
3,590 |
4,423 |
123% |
|
Other |
||||
|
Support Services |
||||
|
Bytes & Pieces |
3,567 |
2,758 |
809 |
29% |
|
Other |
736 |
393 |
343 |
87% |
|
Infrastructure |
||||
|
Luba Freeport |
4,163 |
3,465 |
698 |
20% |
|
E-Kwikbuild |
853 |
0 |
853 |
100% |
|
Hotels |
||||
|
Hotel Cardoso |
1,312 |
861 |
451 |
52% |
|
Continuing operations |
41,503 |
11,067 |
30,436 |
275% |
|
Shipping -Discontinued |
||||
|
SAILS |
1,187 |
6,701 |
-5,514 |
-82% |
|
Discontinued operations |
1,187 |
6,701 |
-5,514 |
-82% |
|
Total Turnover |
42,690 |
17,768 |
24,922 |
140% |
|
LIKE FOR LIKE TURNOVER1 |
||||
|
6 months to 31 March 2009 |
6 months to 31 March 2009 |
Variance |
Var % |
|
|
Agri Processing |
||||
|
Rollex |
22,859 |
13,807 |
9,052 |
66% |
|
Transport |
||||
|
540 Group |
8,013 |
3,590 |
4,423 |
123% |
|
Other |
||||
|
Support Services |
||||
|
Bytes & Pieces |
3,567 |
2,758 |
809 |
29% |
|
Other |
736 |
393 |
343 |
87% |
|
Infrastructure |
||||
|
Luba Freeport |
4,163 |
3,465 |
698 |
20% |
|
E-Kwikbuild |
853 |
1,079 |
-226 |
-21% |
|
Hotels |
||||
|
Hotel Cardoso |
1,312 |
861 |
451 |
52% |
|
Continuing operations |
41,503 |
25,954 |
15,549 |
60% |
|
Shipping -Discontinued |
||||
|
SAILS |
1,187 |
6,701 |
-5,514 |
-82% |
|
Discontinued operations |
1,187 |
6,701 |
-5,514 |
-82% |
|
Total Turnover |
42,690 |
32,655 |
10,035 |
31% |
1Including Rollex and E-Kwikbuild and removal of Sails from 2008 results
Results sourced from March 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 |
|
Emma de Borchgrave, Executive Director |
+44 (0)20 7016 5105 |
|
|
|
|
Pelham PR |
|
|
Charles Vivian |
+44 (0) 20 7743 6672 |
|
|
+44 (0) 7977 297903 |
|
James MacFarlane |
+44 (0) 20 7743 6375 |
|
|
+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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