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 2014 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 June2014. Strategy and Business Model Lonfin is an investment company whose objective is to generate growth inshareholder value in real terms over the medium to long term whilst 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. Up until 30th June 2014, the two Strategic Investments, in which we hadDirectors in common, were our associated company Western Selection P.L.C. andFinsbury Food Group Plc. With effect from 30th June 2014, David Marshall stooddown as a Director of Finsbury Food Group Plc. Edward Beale, the chiefexecutive of our subsidiary, City Group P.L.C., remains a director of FinsburyFood Group Plc. Results * Net assets have decreased over the year by 2% from 45.7p per share to 44.7p per share, and our Strategic Investments have decreased in value over the year by 4%, due to the decline in value of our investment in Finsbury Food Group Plc. * Strategic Investments are yielding 2.5% * The General Portfolio has increased over the year by 15.4% * The General Portfolio is yielding 2.8% (2013 - 3.0%). * Net borrowings of £886,000 compared with £534,000 at 30th June 2013 * Increase of 6.6% in operating costs mainly due to the first increase in director's fees since 2000. The Group achieved a profit for the year, before tax and the fair valueadjustments of investments, of £205,000 (2013- £171,000). The loss, afternegative fair value adjustments, tax and non-controlling interest was £43,000(2013 - £4,637,000 after positive fair value adjustments of £4,637,000) givinga loss per share of 0.1p (2013 profit per share - 14.9p). Strategic Investments Western Selection P.L.C. ("Western") The Group owns 7,860,515 shares, being 43.8%, of the issued share capital ofWestern. On 29th September 2014, Western announced a profit before associates and tax of£446,000 for its year to 30th June 2014 (2013 - £681,000). Including associatesand after exceptional items and tax, profits per share were 4.4p (2013 - losses- 1.6p). Western has paid an interim dividend of 0.95p and proposes an increased finaldividend of 1.05p (2013 - 0.9p). Western's net assets at market value as at30th June 2014 were £18,307,000, equivalent to 102p per share, an increase of20% from 82p last year. Our share of the net assets of Western, including the value of Western'sinvestments at market value, was £8 million (2013 - £6.5 million). The fairvalue recorded in the statement of financial position is the market value of £4.2 million (2013 - £3.9 million). This represents 30% (2013 - 27%) of the netassets of the Group. Western's objective is to generate growth in value for shareholders over themedium to long term and pay a progressive dividend. In the past it has soughtto achieve this through a twin track approach of a mix of strategic stakes insmaller quoted companies with whom it has directors in common and a generalportfolio of investments. Western has recently undertaken a strategic review. As a result of this reviewit has determined that it will follow a single track business model in futurewhich will provide more clarity for investors. Its new business model will be to take sizeable minority stakes in relativelysmall companies at a pre-IPO or IPO stage, and have directors in common throughwhich they can provide advice and support for these growing companies. Thesemay or may not be associated companies. Their aim is that these core holdingswill then be sold over time into the market. Companies that are targeted ascore holdings will have an experienced management team, a credible businessmodel and also good prospects for growth. Mr. D. C. Marshall is the Chairman of Western and Mr. Robotham and Mr. Bealeare non-executive Directors. Western's main core holdings are Creston plc,Northbridge Industrial Services plc, Swallowfield plc and Hartim Limited. Anextract from Western's announcement relating to its main core holdings is setout 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 31st July 2014, Creston reported a 3% growth in revenue for the3 months to June. Further information about Creston is available on theirwebsite: www.creston.com. The audited results of Creston for the year to 31st March 2014, show a headlineprofit before tax of £9.6 million (2013 - £10.0 million), equivalent to fullydiluted earnings of 11.8p per share (2013 - 14.7p, including tax credit from apositive conclusion to an HMRC enquiry). Western maintained its holding of 3,000,000 shares in Creston, which is 5% oftheir issued share capital. The value of this investment at 30th June 2014 was£3,150,000, a decrease of 3% from the value of £3,240,000 at 30th June 2013.This represents 17% (2013 - 22%) 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 a non-cyclicalcustomer base. With offices or agents in the U.K., U.S.A., Dubai, Germany,Belgium, France, Australia, Singapore, India, Brazil, Korea and Azerbaijan,Northbridge has a global customer base. This includes utility companies, theoil and gas sector, shipping, construction and the public sector. The productrange includes loadbanks, transformers, generators, compressors, loadcells andoil tools. Further information about Northbridge is available on their website:www.northbridgegroup.co.uk. Northbridge audited profits for the year ended 31st December 2013 were £5,255,000 and paid a final dividend of 3.9p per share, making 5.9p for the year(2013 - 5.4p). On 23rd September 2014, Northbridge announced unaudited interimprofits for the six months ended 30th June 2014 of £2,568,000 (2013 - £1,949,000) and declared an interim dividend of 2.2p per share (2013 - 2.0p). Western sold 125,000 of its 2,000,000 holding in April 2014 for £586,000 and arealised profit of £434,000 and now holds 1,875,000 shares in Northbridge (2013- realised profit of £527,000 on disposal of 200,000 shares). Western's holdingis 10.8% of Northbridge's issued share capital. The value of this investment at30th June 2014 was £9,750,000 (2013 - £7,040,000) being 53% (2013 - 48%) ofWestern'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 for globalbrands and retailers operating in the cosmetics, personal care and householdgoods market. Further information about Swallowfield is available on theirwebsite: www.swallowfield.com. Swallowfield announced its annual results to 30th June 2014 on 18th September2014 showing a profit after tax of £157,000 compared to a loss of £910,000(restated) for the comparable period last year. No dividends were received fromSwallowfield during the year (2013 - £118,000). Profits are expected to recoverfurther in the current year under the new management At the reporting date, Western owned 1,869,149 shares which is 16.5% ofSwallowfield's issued share capital. The market value of this investment on30th June 2014 had increased by 21% to £1,813,000 from the value at June 2013of £1,495,000. This is 10% (2013 - 10%) of Western's net assets. Mr E. J. Beale was appointed a non-executive director of Swallowfield on 1stJuly 2014. 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 leading UKbranded fast moving consumer goods companies, offering a complete sales,marketing and logistical service. Based in Stroud, Gloucestershire, TRI sellsinto 78 countries worldwide including USA, Spain, Portugal, Italy, CzechRepublic, Russia, Turkey, South Africa, Saudi Arabia, UAE, Malaysia, Australiaand China. 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 June2014 of £434,000. Hartim recognised exceptional profits, after tax, inconnection with its former Australian subsidiary of £337,000 (2013 loss - £2,809,000). Turnover in the period was £20,448,000 (2013 - £21,609,000).Western's share of the consolidated profit after exceptional items and tax forthe twelve months to 30th June 2014 was £382,000 (2013 - loss - £937,000) andthe book value of the investment at 30th June 2014 was £568,000 (2013 - £185,000), being 3% (2013 - 1%) of Western's assets. During the period a loan of £500,000 was made to Hartim. This loan isconvertible into B shares at par if not repaid, carries interest at a rate of6% over base rate. It is repayable by 31st December 2016 and is secured overHartim's principal asset, its investment in Tudor Rose Limited. Western has two nominees on the board of Hartim: Mr E. J. Beale and Mr L. H.Marshall. Finsbury Food Group Plc ("Finsbury") Finsbury is one of the largest producers and suppliers of premium cakes, breadand morning goods in the UK and currently supplies most of the UK's majorsupermarket chains. Further information about Finsbury is available on itswebsite: www.finsburyfoods.co.uk. Lonfin holds 9 million shares, representing 13.45% of Finsbury's share capital.The market value of the holding was £4,860,000 as at 30th June 2014 (cost - £2,283,000) and represents 35 % (2013 - 38%) of Lonfin's net assets. On 22nd September 2014, Finsbury announced audited profits on continuingoperations after tax and minority interests of £6.5 million for the year ended28th June 2014 (2013 - £5 million). Finsbury paid an interim dividend of 0.25p and has recommended to itsshareholders a final dividend of 0.75p per share, making 1.00p for the year(2013 - 0.75p). Mr. Beale, the Chief Executive of our subsidiary company City Group P.L.C., isa non-executive Director of Finsbury. Mr D.C .Marshall stood down as a Directorof Finsbury on 30th June 2014. General Portfolio The portfolio is diverse with material interests in Food andBeverages, Natural Resources, Chemicals and Tobacco. We believe that theportfolio of quality companies we hold has the potential to outperform themarket in the medium to long term. The number of holdings in the General Portfolio has been held at 29. We haveincreased the amount invested in the General Portfolio over the year by £271,000 (2013: increased by £626,000). Operations and 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 companies. City Group hasresponsibility for the initial identification and appraisal of potential newstrategic investments for the Company and the day to day monitoring of existingstrategic investments and employs 8 people. Following expiry of its lease, City Group moved offices in the period andexpenses of £39,000 relating to the office move have been capitalised and arebeing written off over the 5 year period of its new lease. Dividend The Board recommend a final dividend of 0.45p per share, making 0.9p per sharefor the year (2013 - 0.8p). Subject to members' approval on 2nd December 2014,the dividend will be paid on 12th December 2014 to those members on theregister at the close of business on 21st November 2014. Shareholders on theSouth African register will receive their dividend in South African randconverted from sterling at the closing rate of exchange on 29th September beingGBP1= ZAR 18.3049. Shareholders registered on the Johannesburg register areadvised that the dividend withholding tax will be withheld from the gross finaldividend amount of 8.23721 SA cents per share at a rate of 15% unless ashareholder qualifies for an exemption; shareholders registered on theJohannesburg register who do not qualify for an exemption will thereforereceive a net dividend of 7.00163 SA cents per share. The Company, as anon-resident of South Africa, was not subject to the secondary tax on companies(STC) applicable before 1st April 2012, and accordingly, no STC credits areavailable for set-off against the dividend withholding tax liability on thefinal net dividend amount. The dividend is payable in cash as a `Dividend' (asdefined in the South African Income Tax Act, 58 of 1962, as amended) by way ofa reduction of income reserves. The number of shares in issue as at 30thSeptember 2014 is 31,207,479 and the Company's UK Income Tax reference numberis 948/L32120. The dividend withholding tax and the information contained inthis paragraph is only of direct application to shareholders registered on theJohannesburg register, who should direct any questions about the application ofthe new dividend withholding tax to Computershare Investor Services (Pty)Limited, Tel: +27 11 373-0004. Dividend dates: Last date to trade (SA) Friday 14 November 2014 Shares trade ex dividend (SA) Monday 17 November 2014 Shares trade ex dividend (UK) Thursday 20 November 2014 Record date (UK and SA) Friday 21 November 2014 Pay date Friday 12 December 2014 Share certificates may not be dematerialised or rematerialised between Monday17th November and Friday 21st November, both days inclusive. Shares may not betransferred 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.The political tensions in Europe and the Middle East may well createsubstantial volatility in markets and currencies. By Order of the Board City Group P.L.C. 29th September 2014 Johannesburg Sponsor: Sasfin Capital (a division of Sasfin Bank Limited) Unaudited Consolidated Statement of Total Comprehensive Income For the year ended 30th June 2014 2013 £000 £000 Dividends - Listed investments 393 313Interest receivable - 4Rental and other income 82 54Profits realised on sales of investments 205 215Management services fees 205 228 ------ ------Operating income 885 814 Administration expenses (651) (610) ------ ------Operating profit 234 204 Unrealised changes in the carrying value of (339) 4,629 investmentsInterest payable (25) (33) ------ ------(Loss)/profit on ordinary activities before taxation (130) 4,800 Tax on result of ordinary activities 71 (180) ------ ------(Loss)/profit on ordinary activities after taxation (59) 4,620 Non-controlling interest 16 17 ------ -------(Loss)/profit for the financial year attributable to (43) 4,637members of the holding company Other comprehensive income - - ------- -------Total comprehensive income attributable to (43) 4,637shareholders _______ _______ Reconciliation of headline earnings Basic (loss)/profit per share (0.1)p 14.9pAdjustment for the unrealised changes in the carrying 0.8p (14.2)pvalue of investments, net of tax ------- -------Headline profit per share 0.7p 0.7p ------- ------- Unaudited Consolidated Statement of Changes in Shareholders' Equity Unrealised Share of Retained Ordinary Share profits(losses) undistributed realised Non- Share premium on results of profits & Controlling Total Capital account investments Subsidiaries losses Total interests equity £000 £000 £000 £000 £000 £000 £000 £000 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) 4,620comprehensiveincome -------------------------------------------------------------------------------------------- Dividends paid - - - - (234) (234) - (234) -------------------------------------------------------------------------------------------- Total transactions - - - - (234) (234) - (234)with shareholders -------------------------------------------------------------------------------------------- Balances at 30th 1,560 2,320 4,831 (499) 6,046 14,258 81 14,339June 2013 -------------------------------------------------------------------------------------------- Year ended 30thJune 2014 Balances at 1st 1,560 2,320 4,831 (499) 6,046 14,258 81 14,339July 2013 ------------------------------------------------------------------------------------------ Total - - (246) 205 (2) (43) (16) (59)comprehensiveincome ------------------------------------------------------------------------------------------- Dividends paid - - - - (265) (265) - (265) -------------------------------------------------------------------------------------------- Total - - - - (265) (265) - (265)transactions withshareholders -------------------------------------------------------------------------------------------- Balances at 30th 1,560 2,320 4,585 (294) 5,779 13,950 65 14,015June 2014 -------------------------------------------------------------------------------------------- Unaudited Consolidated Statement of Financial Position At 30th June 2014 2013 £000 £000 Non-current Assets Tangible assets 39 3 Investments 9,026 9,420 ------ ------ 9,065 9,423 ------ ------ Current Assets Listed investments 5,927 5,601 Trade and other receivables 245 256 Cash at bank 39 116 ------ ------ 6,211 5,973 Current Liabilities Trade and other payables: falling due within one year (1,150) (853) -------- ------ Net Current Assets 5,061 5,120 Deferred taxation (111) (204) ------- -------Total Assets less Current Liabilities 14,015 14,339 ------- ------- Capital and Reserves Called up share capital 1,560 1,560 Share premium account 2,320 2,320 Unrealised profits and losses on investments 4,585 4,831 Share of retained realised profits and losses of (294) (499) subsidiaries Company's retained realised profits and losses 5,779 6,046 ------- ------- 13,950 14,258 Non-controlling equity interests 65 81 ------- ------- 14,015 14,339 ------- ------- Unaudited Company Statement of Financial Position at 30th June 2014 2013 £000 £000 Non-current Assets Investments in Group companies 5,923 6,147 ------- ------ 5,923 6,147 ------- ------Current Assets Listed investments 5,927 5,601 Trade and other receivables 25 35 Bank balance 12 76 ------- ------ 5,964 5,712 Current Liabilities Trade and other payables: falling due within one year (997) (757) -------- ------Net Current Assets 4,967 4,955 Deferred taxation (111) (204) -------- ------Total Assets less Current Liabilities 10,779 10,898 -------- ------ Capital and Reserves Called up share capital 1,560 1,560 Share premium account 2,320 2,320 Unrealised profits and losses on investments 1,120 972 Realised profits and losses 5,779 6,046 ------- ------Equity shareholders' funds 10,779 10,898 ------- ------ Unaudited Consolidated Statement of Cash FlowFor the year ended 30th June 2014 2013 £000 £000 Cash flows from operating activities(Loss)/profit before tax (130) 4,800Adjustments for non-cash and non-operating activities - Finance expense 25 33 Depreciation charges 3 1Unrealised changes in the fair value of investments 339 (4,629) ------ ------- 237 205 ------ ------- Taxes paid (22) (22) ------ ------- Changes in working capital Decrease/(increase) in trade and other receivables 11 (16) Increase in trade and other payables 23 64 Increase in current asset investments (272) (375) ------ ------- (238) (327) ------ ------- Addition to non-current tangible assets (39) - ------ -------Cash flows from tangible non-current assets (39) - ------ ------- Cash flows from investment activityPurchase of strategic investments - (390) ------ -------Net cash outflow from investment activity - (390) ------ ------- Cash flows from financing Interest paid (25) (33) Equity dividends paid (265) (234) Net drawdown/(repayment) of loan facilities 275 (1,300) ------- -------Net cash outflow from financing (15) (1,567) ------- ------- Decrease in cash and cash equivalents (77) (2,101) Cash and cash equivalents at the beginning of the 116 2,217year ------- --------Cash and cash equivalents at end of the year 39 116 ------- -------- 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 (2013 - 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 2014 or 30th June 2013 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 bases, except for certain assets and liabilities which are measured at fair value, in accordance with IFRS and comply with IAS 34. The audited accounts for the group for the year ended 30th June 2013 were reported on with an unqualified audit report and have been delivered to the Registrar of Companies. Enquiries to: London Finance & Investment Group P.L.C.: 020 7796 9060David Marshall/Edward Beale 29th September 2014

Johannesburg Sponsor: Sasfin Capital (a division of Sasfin Bank Limited)