Lon.fin&inv.grp Regulatory News (LFI)

LONDON FINANCE & INVESTMENT GROUP P.L.C. ("Lonfin", "the Company" or "the Group") Preliminary announcement of unaudited results for the year ended 30th June 2013 and dividend declaration London Finance & Investment Group P.L.C. (LSE: LFI, JSE: LNF), the investmentcompany whose assets primarily consist of Strategic Investments and a GeneralPortfolio, today announces its Preliminary Results for the year ended 30th June2013. Chairman's statement Lonfin is an investment company whose objective is to generate growth inshareholder value in real terms over the medium to long term while maintaininga progressive dividend policy. In the short term, the performance of the Company can be influenced by overallstock market performance and to ameliorate this short term risk the Company hasa combination of Strategic Investments together with a General Portfolio.Strategic Investments are significant investments in smaller U.K. quotedcompanies and these are balanced by a General Portfolio, which consists of abroad range of investments in major U.S.A., U.K. and other European companieswhich provides a diversified exposure to international equity markets. At 30th June 2013, the Strategic Investments in which we have Directors incommon, were our associated company Western Selection P.L.C. and Finsbury FoodGroup Plc. Detailed comments on our Strategic Investments are given below. * Net assets have increased over the year by 44.6% from 31.6p per share to 45.7p per share * The General Portfolio has increased over the year by 17.5% * The General Portfolio is yielding 3.0% (2012 - 3.0%) * Net borrowings of £534,000 compared with £267,000 of net cash at 30 June 2012 * Decrease of 4% in operating costs Results Our net assets per share have increased 44.6% to 45.7p from 31.6p last year.The increase reflects the appreciation in the value of our StrategicInvestments of 81%, largely attributable to the appreciation in Finsbury FoodGroup, and an increase in the value of our General Portfolio by 17.5% The Group achieved a profit for the year, before tax and the fair valueadjustments of investments, of £171,000 (2012, including profit on sale offreehold property of £2,137,000 - £2,074,000). The profit after fair valueadjustments, tax and non-controlling interest was £4,637,000 (2012 - £869,000)giving a profit per share of 14.9p (2012 - 2.8p). Strategic Investments Western Selection P.L.C. ("Western") The Group owns 7,864,412 shares, being 43.8%, of the issued share capital ofWestern. On 27th September 2013, Western announced a profit before associates and tax of£681,000 for its year to 30th June 2013 (2012 - £164,000). Including associatesand after exceptional items and tax, losses per share were1.6p (2012 - profits- 1.0p). Western has paid an interim dividend of 0.85p and proposes an increased finaldividend of 1.05p (2012 - 0.90p). Western's net assets at market value were £14,799,000, equivalent to 82p per share, an increase of 14% from 72p last year. Our share of the net assets of Western including the value of Western'sinvestments at market value, was £6.5 million (2012 - £5.6 million). The fairvalue recorded in the statement of financial position is the market value of £3,930,000 (2012 - £3,144,000). This represents 27% (2012 - 32%) of the netassets of the Group. Mr. D. C. Marshall is the Chairman of Western and Mr. J. M Robotham and Mr.E.J. Beale, the chief executive of our subsidiary company (City Group P.L.C.),are non-executive Directors. Western has Strategic Investments in Creston plc,Northbridge Industrial Services plc, Swallowfield plc and Hartim Limited. Anextract from Western's announcement relating to its Strategic Investments isset out below: Creston plc Creston is a marketing services group whose strategy is to grow within itssector both by organic growth and through selective acquisition to become asubstantial diversified marketing services group. In their tradingannouncement on 29th July, Creston reported high levels of new businessactivity and confidence this would lead to underlying growth in its clientbase. Further information about Creston is available on their website:www.creston.com. The audited results for the year to 31st March 2013, show a headline profitbefore tax of £10,000,000 (2012 - £10,300,000), equivalent to fully dilutedearnings of 14.66p per share (2012 - 12.34p). Western maintained its holding of 3,000,000 shares in Creston, which is 4.9%of their issued share capital. The value of this investment at 30th June2013 was £3,240,000, an increase of 96% from the value of £1,650,000 at June2012, and represents 22% (2012 - 13%) of Western's net assets. Mr D. C. Marshall is a non-executive director of Creston. Northbridge Industrial Services PLC Northbridge hires and sells specialist industrial equipment to anon-cyclical customer base. With offices or agents in the U.K., U.S.A.,Dubai, Germany, Belgium, France, Australia, Singapore, India, Brazil, Koreaand Azerbaijan, Northbridge has a global customer base. This includesutility companies, the oil and gas sector, shipping, construction and thepublic sector. The product range includes loadbanks, transformers,generators, compressors, loadcells and oil tools. On 13th September Northbridge announced the acquisition of Crestchic (AsiaPacific) PTE Limited for £6.63m, funded by cash resources and a shareplacing of 1,561,700 new shares. The acquisition of the Singapore baseddistributor of loadbanks and transformers, enhances Northbridge's presencein the region and re-unifies the brand. Further information aboutNorthbridge is available on their website: www.northbridgegroup.co.uk. Northbridge announced audited profits of £3,707,000 for the year ended 31stDecember 2012 (2011 - £2,321,000) and declared a final dividend of 3.575pper share, making 5.425p for the year (2012 - 5.0p). Western sold 200,000 of its 2,200,000 holding in May 2013, realising £738,000 and a profit of £527,000, and now holds 2,000,000 shares inNorthbridge. Following the sale, Western's holding is 11.6% of their issuedshare capital. The value of this investment at 30th June 2013 was £7,040,000(2012 - £5,984,000) being 48% (2012 - 46%) of Western's net assets. Mr D. C. Marshall is a non-executive director of Northbridge. Swallowfield plc Swallowfield is a market leader in the development, formulation, manufactureand supply of cosmetics, toiletries and related household products forglobal brands and retailers operating in the cosmetics, personal care andhousehold goods market.The company has recently appointed a new Chairman anda new Chief Executive. Further information about Swallowfield is availableon their website: www.swallowfield.com. Swallowfield announced its annual results to June 2013 on 19th Septembershowing a loss after tax of £815,000 compared to a profit of £1,263,000 forthe comparable period last year. Dividends of £118,000 (2012 - £118,000)were received from Swallowfield during the year. At the reporting date Western owned 1,869,149 shares which is 16.5% of theirissued share capital. The market value of this investment on 30th June 2013was £1,495,000 (2012 - £2,187,000), being 10% (2012 - 17%) of Western's netassets. Investments in Associates Hartim Limited Hartim is the unquoted holding company for Tudor Rose International Limited("TRI") which was founded in 1984. It works closely with a number of leadingUK branded fast moving consumer goods companies, offering a complete sales,marketing and logistical service. Based in Stroud, Gloucestershire, TRIsells into 78 countries worldwide including USA, Spain, Portugal, Italy,Czech Republic, Russia, Turkey, South Africa, Saudi Arabia, UAE, Malaysia,Australia and China. Last year Hartim acquired out of administration itsprincipal distributor in Australia, but the Australian business has not beensuccessful in generating sufficient sales to cover its overhead costs andsignificant losses have been incurred, leading to the winding up of thisbusiness. Western holds 49.5% of Hartim, which has a 31st December year end, and whichgenerated trading profits before exceptional items in the year to 30th June2013 of £915,000. Hartim sustained exceptional losses, after tax, inconnection with Australia of £2,809,000. Turnover in the period was £21,609,000 (2012 - £27,799,000). Western's share of the consolidated lossafter exceptional items and tax for the twelve months to 30th June 2013 was£937,000 (2012 - loss - £342,000) and the book value of the investment at30th June 2013 was £185,000 (2012 - £1,124,000), being 1% (2012 - 10%) ofWestern's assets. Despite the problems in Australia, the UK division of Hartim continues totrade profitably. We have high hopes for this business provided that it canavoid any more costly misadventures. Western has two nominees on the board of Hartim: Mr E. J. Beale and Mr L. H.Marshall (a director of City Group PLC, Western's company secretaries). MWB Group Holdings Plc ("MWB") MWB was placed into administration on 16 November 2012. We made animpairment provision in the subsidiary holding this investment of £1,611,000in 2012 and with a write off of £70,000 this year the cost has now beenfully written off. Finsbury Food Group Plc ("Finsbury") Finsbury is one of the largest producers and suppliers of premium cakes,bread and morning goods in the UK. The Group currently supplies most of theUK's major supermarket chains. Further information about Finsbury isavailable on its website: www.finsburyfoods.co.uk. The Group increased its holding in Finsbury by 1 million shares at a cost of£390,000 and held 9 million shares, representing 13.95% of their sharecapital. The market value of the holding was £5,490,000 on 30th June 2013(cost - £2,283,000) and represents 38% (2012 - 19%) of the net assets of theGroup. On 23rd September Finsbury announced audited profits on continuingoperations after tax and minority interests of £5,218,000 for the year ended30th June 2013 (2012 - £3,291,000) and profits after tax on discontinuedoperations of £3,034,000 (2012 - £1,560,000). Finsbury returned to thedividend list for the first time since 2008, paying an interim of 0.25p anddeclaring a final dividend of 0.5p per share, making 0.75p for the year(2012 - nil). Mr. D.C. Marshall and Mr. E. J. Beale, the Chief Executive of our subsidiarycompany City Group P.L.C., are non-executive Directors of Finsbury. General Portfolio The investments comprising the General Portfolio at 30th June 2013 arelisted on page 11. The spread of the General Portfolio was increased by theaddition of North American holdings. The portfolio is diverse with materialinterests in Food and Beverages, Natural Resources, Chemicals, and Tobacco.We believe that the portfolio of quality companies we hold has the potentialto outperform the market in the medium to long term. The number of holdings in the General Portfolio has reduced to 29 from 30.We have increased the amount invested in the General Portfolio over the yearby £626,000 (2012: increased by £171,000). Operations & Employees All of our operations and those of our associate, Western, except investmentselection, are outsourced to our subsidiary, City Group P.L.C. City Group alsoprovides office accommodation, company secretarial and head office financeservices to a number of other U.K. and Jersey clients. City Group hasresponsibility for the initial identification and appraisal of potential newstrategic investments for the Group and the day to day monitoring of existingstrategic investments. Dividend The Board recommends a final dividend of 0.4p, making 0.8p per share for theyear (2012 - 0.7p). Subject to member's approval on 28th November 2013, thedividend will be paid on 11th December 2013 to those members on the register atthe close of business on 22nd November 2013. Shareholders on the South Africanregister will receive their dividend in South African rand converted fromsterling at the closing rate of exchange on 26 September 2013 being GBP1 =ZAR16.0307. Since the introduction on 1 April 2012 of a new dividend withholding tax inSouth Africa, the JSE Listings Requirements require disclosure of additionalinformation in relation to any dividend payments. Shareholders registered onthe Johannesburg register are therefore advised that the new dividendwithholding tax will be withheld from the gross final dividend amount of6.41228 SA cents per share at a rate of 15%, unless a shareholder qualifies foran exemption; shareholders registered on the Johannesburg register who do notquality for an exemption will therefore receive a net dividend of 5.45044 SAcents per share. The Company, as a non-resident of South Africa, was notsubject to the secondary tax on companies (STC) applicable before 1st April2012, and accordingly, no STC credits are available for set-off against thedividend withholding tax liability on the final net dividend amount. Thedividend is payable in cash as a `Dividend' (as defined in the South AfricanIncome Tax Act, 58 of 1962, as amended) by way of a reduction of incomereserves. The dividend withholding tax and the information contained in thisparagraph is only of direct application to shareholders registered on theJohannesburg register, who should direct any questions about the applicationof the new dividendwithholding tax to Computershare Investor Services (Pty)Limited, Tel: +27 11373-0004. Dividend dates: 2013 Last date to trade (SA) Friday, 15 November Shares trade ex dividend (SA) Monday,18 November Shares trade ex dividend (UK) Wednesday, 20 November Record date (UK and SA) Friday, 22 November 2013 Pay date Wednesday, 11 December 2013 Share certificates may not be dematerialised or rematerialised between Monday18th November and Friday 22nd November 2013, both days inclusive. Shares maynot be transferred between registers during this period either. Outlook We believe our mix of Strategic Investments and a General Portfolio gives usevery chance of outperforming the broader market in the medium to long term.However, as a board we do concern ourselves that large scale quantitativeeasing by central banks is creating a market that is divorced from economicreality. By Order of the Board CITY GROUP P.L.C.Secretaries30th September 2013 Unaudited Consolidated Statement of Comprehensive Income Consolidated Statement of Total Comprehensive Income For the year ended 30th June 2013 2012 £000 £000 Dividends - Listed investments 313 265 Interest receivable 4 4 Rental and other income 54 70 Profits/(Losses) realised on sales of investments 215 (32) Management services fees 228 295 ------ -----Operating income 814 602 Administration expenses (610) (638) ------ ------Operating profit/(loss) 204 (36) Unrealised changes in the carrying value of 4,629 (1,134)investments Exceptional profit on disposal of property - 2,137 Interest payable (33) (27) ----- ------Profit on ordinary activities before taxation 4,800 940 Tax on result of ordinary activities (180) (65) ----- ------Profit on ordinary activities after taxation 4,620 875 Non-controlling interest 17 (6) ----- ------Profit for the financial year attributable to 4,637 869members of the holding company Other comprehensive income - - ----- ------Total comprehensive income attributable to 4,637 869shareholders Reconciliation of headline earnings Basic profit per share 14.9p 2.8p Adjustment for the unrealised changes in the (14.2)p 3.6pcarrying value of investments, net of tax ------- ------ Headline profit per share 0.7p 6.4p ------- ------ Unaudited Consolidated Statement of Changes in Shareholders' Equity Unrealised Share of Retained Ordinary Share profits/ undistributed realised Non- Share premium Revaluation (losses) on results of profits Controlling Total Capital account Reserve investments Subsidiaries & losses Total interests equity £000 £000 £000 £000 £000 £000 £000 £000 £000 Year ended 30th June2012 Balances at 1st July 1,560 2,320 330 (1,750) 904 5,825 9,189 92 9,2812012 Total comprehensive - - - 2,086 (1,476) 259 869 6 875income ---------------------------------------------------------------------------------------Transfer on disposal - - (330) - - 330 - - - Dividends paid - - - - - (203) (203) - (203) ---------------------------------------------------------------------------------------Total transactions - - - - - (203) (203) - (203)with shareholders ---------------------------------------------------------------------------------------Balances at 30th 1,560 2,320 - 336 (572) 6,211 9,855 98 9,953June 2013 --------------------------------------------------------------------------------------- Year ended 30thJune 2013 Balances at 1st 1,560 2,320 - 336 (572) 6,211 9,855 98 9,953July 2012 ---------------------------------------------------------------------------------------Total - - - 4,495 73 69 4,637 (17) 4,620comprehensive ---------------------------------------------------------------------------------------income Dividends paid - - - - - (234) (234) - (234) ---------------------------------------------------------------------------------------Total - - - - - (234) (234) - (234)transactionswith ---------------------------------------------------------------------------------------shareholders Balances at 30th 1,560 2,320 - 4,831 (499) 6,046 14,258 81 14,339June 2013 ---------------------------------------------------------------------------------------- Unaudited Consolidated Statement of Financial Position At 30th June 2013 2012 £000 £000 Non-current Assets Tangible assets 3 4 Investments 9,420 5,094 ------ ------ 9,423 5,098 ------ ------Current Assets Listed investments 5,601 4,533 Trade and other receivables 256 272 Cash at bank 116 2,217 ------ ------ 5,973 7,022 Current Liabilities Trade and other payables: falling due within one year (853) (2,167) ------ ------Net Current Assets 5,120 4,855 Deferred taxation (204) - ------ ------Total Assets less Current Liabilities 14,339 9,953 ------ ------Capital and Reserves Called up share capital 1,560 1,560 Share premium account 2,320 2,320 Unrealised profits and losses on investments 4,831 336 Share of retained realised profits and losses of (499) (572)subsidiaries Company's retained realised profits and losses 6,046 6,211 ------- ------- 14,258 9,855 Non-controlling equity interests 81 98 ------- ------- 14,339 9,953 ------- ------- Unaudited Company Statement of Financial Position at 30th June 2013 2012 £000 £000 Non-current Assets Investments in Group companies 6,147 5,987 ---------- ----------- Current Assets Listed investments 5,601 4,533 Trade and other receivables 35 18 Bank balance 76 2,202 ------- ------- 5,712 6,753 Trade and other payables: falling due within one year (757) (2,096) ------- -------Net Current Assets 4,955 4,657 ------- -------Deferred taxation (204) - ------- -------Total Assets less Current Liabilities 10,898 10,644 ------- -------Capital and Reserves Called up share capital 1,560 1,560 Share premium account 2,320 2,320 Unrealised profits and losses on investments 972 553 Realised profits and losses 6,046 6,211 ------- -------Equity shareholders' funds 10,898 10,644 ------- ------- Unaudited Consolidated Statement of Cash Flow For the year ended 30th June 2013 2012 £000 £000 Cash flows from operating activities Profit before tax 4,800 940 Adjustments for non-cash and non-operating activities - Finance expense 33 27 Profit on disposal of property - (2,137) Depreciation charges 1 5 Unrealised changes in the fair value of investments (4,629) 1,134 ------- ------ 205 (971) Taxes paid (22) (17) ------- -------Changes in working capital Increase in trade and other receivables (16) (12) Increase in trade and other payables 64 158 Increase in current asset investments (375) (301) ------- ------ (327) (155) ------- ------ Net cash outflow from operating activities (144) (63) ------- -------Cash flows from disposal of property - 2,495 ------- -------Cash flows from investment activity Purchase of strategic investments (390) - ------- -------Net cash outflow from investment activity (390) - ------- -------Cash flows from financing Interest paid (33) (27) Equity dividends paid (234) (203) Net (repayment) / drawdown of loan facilities (1,300) 134 ------- ------Net cash outflow from financing (1,567) (96) ------- ------(Decrease)/Increase in cash and cash equivalents (2,101) 2,196 Cash and cash equivalents at the beginning of the year 2,217 21 ------- ------Cash and cash equivalents at end of the year 116 2,217 ------- ------ Notes 1. Earnings per share are based on the profit on ordinary activities after taxation and non controlling interests and on 31,207,479 shares (2012-31,207,479) being the weighted average of the number of shares in issue during the year. 2. The financial information in this preliminary announcement of unaudited group results does not constitute the company's statutory accounts for the years ended 30th June 2013 or 30th June 2012 but is derived from those accounts. The accounts have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The accounts are prepared on the historical cost basis, except for certain assets and liabilities which are measured at fair value, in accordance with IFRS and comply with IAS 34. The audited accounts of the group for the year ended 30th June 2012 were reported on with an unqualified audit report and have been delivered to the Registrar of Companies. Enquiries to: London Finance & Investment GroupP.L.C. 020 7448 8950 David Marshall / Edward Beale