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

29 Sep 2011 10:30

LONDON FINANCE & INVESTMENT GROUP P.L.C. ("Lonfin", "the Company" or "the Group")

Preliminary announcement of unaudited results for the year ended 30th June 2011

London Finance & Investment Group P.L.C. , the investmentcompany whose assets primarily consist of three Strategic Investments and aGeneral Portfolio, today announces its Preliminary Results for the year ended30th June 2011. Chairman's statementLonfin is an investment company whose assets primarily consist of threeStrategic Investments and a General Portfolio. Strategic Investments aresignificant investments in smaller U.K. quoted companies and these are balancedby a General Portfolio, which consists mainly of investments in major U.K. andEuropean equities.At 30th June 2011, the three Strategic Investments, in which we have directorsin common, were our associated company Western Selection P.L.C. and MWB GroupHoldings Plc and Finsbury Food Group plc. Detailed comments on our StrategicInvestments are given below.

Our objective is to achieve capital growth in real terms over the medium term, while maintaining a progressive dividend policy.

● Net assets including our investment property at its latest valuation net of tax have increased by 29% from 27.1p per share to 35.0p per share ● The General Portfolio is yielding 3.1 % (2010 - 2.9%) up 7%. ● Borrowings are 17% (2010 - 23%) of the value of liquid stock market investments ● Operating costs have been reduced.

Results

Our net assets per share as recorded in the statement of financial positionhave increased 26% to 29p from 23p last year, reflecting the recovery in theassociated company and Strategic Investments values. These increased in valueby 29% and 24% respectively, after taking into account additions and disposalsof investments. The General Portfolio increased by 23% outperforming themarkets. These movements compare with the increases in the FTSE 100 index of21% and 13% in the FTSE Eurofirst 300 index over the year. In addition ourinvestment property has been revalued from £1,575,000 to £2,150,000 (from £1,575,000 to £2,093,000 net of tax), but accounting standards do not permit usto include these values in the statement of financial position.

The Group achieved a profit before tax for the year of £2,145,000 (2010 - £ 705,000). The profit after tax and non-controlling interest was £2,118,000 (2010 - £693,000) giving a profit per share of 6.8p (2010 -2.2p).

Strategic Investments

Western Selection P.L.C. ("Western")

The Group owns 7,864,412 shares, being 43.8% of the issued share capital of Western.

On 6th September 2011, Western announced a profit before associates and tax of£136,000 for its year to 30th June 2011 (2010 - £128,000). Including associatesand after exceptional items and tax, profits per share were 2.6p (2010 - 1.4p).Western has paid an interim dividend of 0.65p and proposes an increased finaldividend of 0.85p (2010 - 0.65p). Western's net assets at market value were £15,022,000, equivalent to 84p per share, an increase of 38% from 61p last year.Our share of the net assets of Western including the value of Western'sinvestments at market value, was £6.6 million (2010 - £4.8 million). The fairvalue recorded in the statement of financial position is the market value of £3,458,000 (2010 - £2,672,000). This represents 37% of the net assets of theGroup.Mr. D. C. Marshall is the Chairman of Western and Mr. Robotham and Mr. Beale,the chief executive of our subsidiary company (City Group P.L.C.), arenon-executive directors. Western has strategic investments in Creston plc,Northbridge Industrial Services plc, Swallowfield plc and Hartim Limited. Anextract from Western's announcement of its strategic investments is set out

below: Creston plc

Creston is a marketing services group whose strategy is to grow within its

sector both by organic growth and through selective acquisition to become

a substantial, diversified marketing services group. The audited results for the year to 31st March 2011, show a profit after tax of £10,400,000 (2010 - £5,133,000), equivalent to fully diluted earnings of 12.39p per

share (2010 - 8.74p). Western maintained it's holding of 3,000,000 shares

in Creston (4.9%) with a value at 30th June 2011 of £3,390,000 (2010 - £

2,752,000) being 23% (2010 - 25%) of Western's assets. Northbridge Industrial Services PLC Northbridge was formed for the purpose of acquiring companies that hire

and sell specialist industrial equipment supplying a non-cyclical customer

base including utility companies, the public sector and the oil and gas industries. In particular it will seek to acquire specialist businesses

that have the potential for expansion into complete outsourcing providers.

Sales are made to the U.K., U.S.A., Brazil, Singapore, Germany, UAE and Korea;Northbridge also has subsidiaries operating in Perth, Dubai and Azerbaijan. Northbridge announced profits of £3,036,000 for the year ended 31st

December 2010 (2009 - £1,571,000) and declared a final dividend of 3.05p

per share, making 4.6p for the year (2009 - 4.1p). Northbridge acquired Tasman Oil Tools Pty Ltd, based in Perth, Western Australia, which specialises in the rental of equipment for the onshore and off-shore oil industry throughout Australia, after raising

approximately £8 million by way of an open offer. Western took up 325,000

shares in that offer at a cost of £406,250, increasing its holding to 2,200,000 shares in Northbridge, which is 14.19% of the issued share capital. The value of the investment at 30th June 2011 was £6,094,000 (2010 - £2,508,000) being 40% (2010 - 23%) of Western's assets. Swallowfield plc

Swallowfield is involved in the development, formulation, manufacture and

supply of cosmetics, toiletries and related household products for global

brands and retailers operating in the cosmetics, personal care and household goods market. Swallowfield announced its interim results to

January 2011 showing a profit after tax of £519,000 compared to £533,000

for the comparable period last year. Dividends of £116,000 (2010 - £ 87,000) were received from Swallowfield during the year. Western increased its holding in Swallowfield during the year and since

the year end. At 31st August 2011 it owns 1,868,149 shares which is 16.52%

of the issued share capital. The market value of the Company's holding in

Swallowfield on 30th June 2011 was £1,922,000 (2010 - £1,816,000), being

13% (2010 - 17%) of Western's net assets.

Swallowfield has had turnover of £52.4 million, £49.1 million and £44.8

million over the last three years and despite this their market

capitalisation remains at £13 million. Whilst Western has played a role in

bringing about some changes to the board during the year, we believe there

may still be scope for improvement, and Western will continue to monitor board performance. 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 UK branded fast moving consumer goods companies, offering a complete sales, marketing and logistical service. Based in Stroud, Gloucestershire, TRI sells into 78 countries worldwide including USA, Spain, Portugal, Italy, Czech Republic, Russia, Turkey, South Africa, Saudi Arabia, UAE, Malaysia, Australia and China. Hartim has recently

acquired a distribution business in Australia to improve the service that

it can offer to principals. Western holds 49.5% of Hartim, which has a 31st December year end and

achieved profits in 2010 of £540,000 after tax on turnover of £22,282,000.

Western's share of the consolidated profit after tax for the twelve months

to 30th June 2011 was £337,000 (2010 - £150,000) and the book value of the

investment at 30th June 2011 was £1,465,000 (2010 - £1,129,000), being 10%

(2010 - 10%) of Western's assets.

MWB Group Holdings Plc ("MWB")

The Group holding in MWB was unchanged from the 2 million shares held at June2011, representing 1.22% of MWB's issued share capital. The market value at30th June 2011 was £775,000 (2010 - £795,000), compared with the book value of£1,681,000, and represents 8% (2010 - 11%) of the net assets of the Group.

MWB is in the process of maturing and realising its assets for the benefit of all stakeholders through an orderly disposal programme.

Mr. D.C. Marshall is a non-executive director of MWB.

Finsbury Food Group plc ("Finsbury")

The Group holding in Finsbury remains at 8 million shares, representing 15.18%of their share capital. The market value of the holding was £1,700,000 on 30thJune 2011 (cost - £1,893,000) and represents 18% of the net assets of theGroup.

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 the UK's major supermarket chains, including Asda, Co-op, Morrisons, Sainsbury, Somerfield, Tesco and Waitrose.

Mr. D.C. Marshall and Mr. Beale, the Chief Executive of our subsidiary company City Group P.L.C., are non-executive directors of Finsbury.

General Portfolio

The investments comprising the General Portfolio at 30th June 2011 are listedon page 10. The General Portfolio is well spread with material interests inFood and Beverages, Oil, Natural Resources, Chemicals, and Tobacco. We believethat the portfolio of quality companies we hold has the potential to outperformthe market in the medium to long term, especially in respect of our WesternEuropean holdings.The number of holdings in the General Portfolio has decreased to 23 from 25. Wehave decreased the amount invested in the General Portfolio by £464,000 (2010:decreased by £669,000) over the year.We have a £2 million bank facility, and at 30th June 2011 had net borrowings of£1.8 million. This leaves £200,000 available for further investment when theBoard feels appropriate. The increase in value of our investments over theperiod has decreased borrowings as a percentage of the market value of allstock market investments from 23% to 17 %.

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., Jersey and Luxembourg clients. City Grouphas responsibility for the initial identification and appraisal of potentialnew strategic investments for the Group and the day to day monitoring ofexisting strategic investments.

Dividend

The Company will be recommending final dividend for the year ended 30th June 2011 and further details will be announced shortly.

Outlook

The outlook for stock markets remains very uncertain. We will continue to adopt a cautious stance, with our general portfolio invested in the best European companies.

By Order of the BoardCITY GROUP P.L.C.Secretaries28th September 2011

Unaudited Consolidated Comprehensive Income Statement

For the year ended 30th June 2011 2010 £000 £000 Dividends - Listed investments 251 174 Interest receivable - 1 Rental and other income 94 86 Profits realised on sales of investments 266 119 Management services fees 398 405 ---------- ---------- Operating income 1,009 785 Administration expenses (749) (757) ---------- ---------- Operating profit 260 28 Unrealised changes in the carrying value of investments 1,995 791 Interest payable (110) (114) ---------- ---------- Profit on ordinary activities before taxation 2,145

705

Tax on result of ordinary activities (19) (18) ---------- ----------

Profit on ordinary activities after taxation 2,126

687 Non-controlling interest (8) 6 ---------- ---------- Profit for the financial year attributable to members of 2,118 693the holding company Other comprehensive income - - ---------- ---------- Total comprehensive income attributable to shareholders 2,118 693 ====== ======

Reconciliation of headline earnings

Basic profit per share 6.8 p 2.2 p

Adjustment for the unrealised changes in the carrying (6.4)p (2.5)p value of investments, net of tax

---------- ---------- Headline profit/(loss) per share 0.4 p (0.3)p ====== ======

All profits and losses are on continuing activities.

Unaudited Consolidated Statement of Changes in Shareholders' Equity

Share of undistributed Retained Ordinary Share Unrealised results of realised Non- Share premium Revaluation profits/ Subsidiaries profits Controlling Total (losses) & Capital account Reserve on and losses Total interests equity investments associates £000 £000 £000 £000 £000 £000 £000 £000 £000 Year ended 30th June 2010 Balances at 1st 1,560 2,318 330 (4,538) 747 6,239 6,656 90 6,746July 2009 Total comprehensive - - - 791 44 (142) 693 (6) 687income ------- ------- ------- ------- ------- ------- ---- ------- ----- Interim dividend - - - - - (93) (93) - (93)paid ------- ------- ------- ------- -------- ------- ---- ------- ----- Total transactions - - - - - (93) (93) - (93)with shareholders ------- ------- ------- ------- ------- ------- ---- ------- ----- Balances at 30th 1,560 2,318 330 (3,747) 791 6,004 7,256 84 7,340June 2010 ------- ------- ------- ------- ------- ------- ---- ------- ----- Year ended 30th June 2011 Balances at 1st 1,560 2,318 330 (3,747) 791 6,004 7,256 84 7,340July 2010 ------- ------- ------- ------- ------- ------- ---- ------- ----- Total comprehensive - - - 1,997 113 8 2,118 8 2,126income ------- ------- ------- ------- ------- ------- ---- ------- ----- Shares issued - 2 - - - - 2 - 2 Dividends paid - - - - - (187) (187) - (187) ------- ------- ------- ------- ------- ------- ---- ------- ----- Total transactions - 2 - - - (187) (185) (185)with shareholders ------- ------- ------- ------- ------- ------- ---- ------- ----- Balances at 30th 1,560 2,320 330 (1,750) 904 5,825 9,189 92 9,281June 2011 ------- ------- ------- ------- -------

------- ---- ------- -----

Unaudited Consolidated Statement of Financial Position

At 30th June 2011 2010 £000 £000 Non-current Assets Tangible assets 367 377 Investments 5,933 4,667 --------- --------- 6,300 5,044 --------- --------- Current Assets Listed investments 4,668 4,225 Trade and other receivables 260 294 Bank balance and deposits 21 17 --------- --------- 4,949 4,536 Current Liabilities Trade and other payables: falling due within one year (1,968) (2,240) --------- --------- Net Current Assets 2,981 2,296 --------- --------- Total Assets less Current Liabilities 9,281 7,340 ===== ===== Capital and Reserves Called up share capital 1,560 1,560 Share premium account 2,320 2,318 Revaluation reserve 330 330 Unrealised profits and losses on investments (1,750)

(3,747)

Share of retained realised profits and losses of 904 791 subsidiaries and associates Company's retained realised profits and losses 5,825 6,004 --------- --------- 9,189 7,256 Non-controlling equity interests 92 84 --------- --------- 9,281 7,340 ====== ======

Unaudited Company Statement of Financial Position

at 30th June 2011 2010 £000 £000 Non-current Assets Tangible assets 367 377 Investments in Group companies 7,726 7,832 ------- ------- 8,093 8,209 ------- ------- Current Assets Listed investments 4,668 4,225 Trade and other receivables 38 58 Bank balance - - ------- ------- 4,706 4,283 Current Liabilities

Trade and other payables: falling due within one year (1,915) (2,159)

------- ------- Net Current Assets 2,791 2,124 ------- ------- Total Assets less Current Liabilities 10,884 10,333 Deferred taxation - - ------- ------- 10,884 10,333 ====== ====== Capital and Reserves Called up share capital 1,560 1,560 Share premium account 2,320 2,318 Revaluation reserve 330 330 Unrealised profits and losses on investments 849 121 Realised profits and losses 5,825 6,004 ------- ------- Equity shareholders' funds 10,884 10,333 ====== ======

Unaudited Consolidated Statement of Cash Flow

For the year ended 30th June 2011 2010 £000 £000 Cash flows from operating activities Profit before tax 2,145 705 Adjustments for non-cash and non-operating activities ------- ------- - Finance expense 110 114 Depreciation charges 10 13

Unrealised changes in the fair value of investments (1,995) (791)

------- ------- (1,875) (664) ------- ------- Taxes paid (19) (18) ------- ------- Changes in working capital Decrease in trade and other receivables 34 15 (Decrease) in trade and other payables (6) (122) Decrease in current asset investments 285 669 ------- ------- 313 562 ------- ------- Net cash inflow from operating activities 564 585 Cash flows from financing Shares issued 2 - Interest paid (110) (114) Equity dividends paid (187) (93) Net repayment of loan facilities (265) (475) ------- ------- Net cash outflow from financing (560) (682) ------- ------- Increase/(Decrease) in cash and cash equivalents 4 (97)

Cash and cash equivalents at the beginning of the year 17 114

------- ------- Cash and cash equivalents at end of the year 21 17 ====== ====== Notes1. Earnings per share are based on the profiton ordinary activities after taxation andnon controllinginterests and on 31,205,694shares (2010- 31,201,466) being the weighted average of the number of shares in issue during the year. 2. The net assets attributable to shareholders, taking investments at market value, are before providing for any tax that may arise on realisation.

3. 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 2011 or 30th June 2010 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 2010

were reported on with an unqualified audit report and have been delivered to the Registrar of Companies. Enquiries to:London Finance & Investment Group 020 7448 8950

David Marshall / Edward Beale