Last checked at 29 Feb 2012 14:30
Date: 29th February 2012 On behalf of: London Finance & Investment Group P.L.C. ("Lonfin", "the Company" or "the Group") Embargoed until: 14.30hrs (UK Time) 16.30hrs (SA Time)
London Finance & Investment Group P.L.C.
Interim Results
Lonfin , today announces its unaudited interim results for the six months ended 31st December 2011 and dividend declaration.
Chairman's StatementIntroduction
As an investment company our target is to achieve growth in shareholder value in real terms over the medium to long term. In the short term our results can be influenced by overall stock market performance, particularly the valuation of our Strategic Investments. We continue to believe that a combination of Strategic Investments and a General Portfolio is the most effective way of achieving our aims. Strategic Investments are significant investments in smaller UK quoted companies where we have expectations of above average growth over the medium to longer term and these are balanced by a General Portfolio which consists of investments in major U.K. and European equities.
At 31st December 2011, we held three Strategic Investments in which we have board representation: our associated company Western Selection P.L.C., MWB Group Holdings Plc and Finsbury Food Group plc. Detailed comments on our Strategic Investments are given below.
Results
Our net assets per share decreased 7% to 32.7p at 31st December 2011 from 35.0p at 30th June 2011. Our Strategic Investments decreased in value by 8%. Our General Portfolio decreased by 9%, compared with the increases of 21% in the FTSE 100 index, a decrease of 10% in the FTSEurofirst 300 index and a decrease of 19% in AIM over the half year. At the close of business on 15th February 2012, our net asset value was 34.6p.
The Group profit before exceptional items and tax for the half year was £32,000 compared to a profit of £250,000 for the same period last year. This was in the main due to no profits being realised from the General Portfolio. Including the exceptional profit of £2,132,000 arising from the disposal of the property and the recognition of the net decrease in the fair value of our investments, our profit after tax and minority interest was £1,108,000 (2010 profit: £2,005,000) giving profits per share of 3.6p (2010 - 6.4p).
Strategic Investments
Western Selection P.L.C. ("Western")
The Group owns 7,860,515 Western shares, representing 43.8% of Western's issued share capital.
On 28th February 2012, Western announced a loss after tax of £86,000 for its half year to 31st December 2011 and a loss per share of 0.5p (2010: profit 1.8p). Western's net assets at market value were £12,113,000 equivalent to 67p per share, a decrease of 19% from 84p at 30th June 2011. Western has announced an increased interim dividend of 0.8p per share, an increase of 23% on the prior year.
The market value of the Company's investment in Western at 31st December 2011 was £2,987,000 representing 29% of the net assets of Lonfin. The underlying value of the investment in Western, valuing Western's own investments at market value, was £5.4 million (30th June 2011: £5.6 million).
I am the Chairman of Western and Mr. Robotham is a Non-Executive Director. Western has strategic investments in Creston plc, Northbridge Industrial Services PLC, Swallowfield plc. and Hartim Limited. Extracts from Western's announcement on its strategic investments are set out below:
Creston plc("Creston") Creston is a marketing services group with a strategy to grow within its sector to become a substantial, diversified international marketing services group. Creston's results for the half-year to 30th September 2011 show a profit after tax of £2,821,000 (2010: loss - £133,000). Creston declared an interim dividend of 0.83p per share, an increase of 11% on the prior year. Creston has recently announced the acquisition of the Corkery Group, a New York based health and medical public relations company, complementing Creston's US healthcare company Cooney/Waters. Further information about Creston is available on its website: www.creston.com. Western owns 3,000,000 shares in Creston (4.9%) with a market value at 31st December 2011 of £2,070,000 (30th June 2011: £2,752,000), being 16% of Western's assets. Northbridge Industrial Services plc ("Northbridge") Northbridge hires and sells specialist industrial equipment to utility companies, the oil and gas sector, shipping, construction and the public sector. The product range includes loadbanks, transformers, generators, compressors and oil tools. It has grown by acquisition of companies in the UK, Dubai, Azerbaijan and Australia and through investing further in those companies to make them more successful. Further information about Northbridge is available on its website: www.northbridgegroup.co.uk. Northbridge's latest results, for the half year to 30th June 2011, showed profit of £1,656,000 (2010: £1,024,000). Northbridge declared an interim dividend of 1.75p per share, an increase of 13% on the prior year. Western owns 2,200,000 shares, representing 14.4% of Northbridge's share capital. The value of this investment has been volatile and at 31st December 2011 was £4,576,000 (30th June 2011: £6,094,000), representing 37% of Western's assets. The value of this investment has increased substantially since 31st December 2011. Swallowfield plc ("Swallowfield") Swallowfield is a full service provider for global and household brands operating in the cosmetics and personal care and household goods marketplace. It offers a flexible and tailored service including: contract filling, market analysis, design, formulation and testing of products, packaging design and sourcing and distribution of stock. Further information about Swallowfield is available on its website: www.swallowfield.com. Swallowfield's latest results, for the half year to 31st December 2011, showed profit of £535,000 (31st December 2010: £519,000) against a background of customer uncertainty and rising input costs. Swallowfield declared an interim dividend of 2.2p, unchanged on the prior year. At 31st December 2011, Western owned 1,869,149 shares in Swallowfield (16.53% of their issued share capital). The market value of the Company's holding in Swallowfield on 31st December 2011 was £2,187,000 (30th June 2011: £2,444,000) representing 18% of the Company's assets. Hartim Limited ("Hartim") Hartim offers a complete export sales, marketing and logistical services to a number of well known UK branded fast moving consumer goods companies. This investment was acquired on 28th March 2009 and is accounted for as an associated company. Hartim's estimated results for the year ended 31st December 2011 showed a profit of £168,000 (2010 £540,000) after tax and before exceptional items. These results are explained above, are a credible achievement under challenging world wide conditions, and still represent a reasonable return on our investment. At 31st December 2011, Western owned 49.5% of Hartim. The carrying value of the Company's investment in Hartim on 31st December 2011 was £1,300,000 (30th June 2011: £1,465,000) representing 11% of the Company's assets.
Finsbury Food Group plc ("Finsbury Food")
The Group owns 8,000,000 shares in Finsbury Food, representing 15.2% of their share capital. The market value of our holding was £2,160,000 on 31st December 2011 compared to a cost of £1,893,000; this represents 21% of the net assets of Lonfin.
Finsbury Food is a supplier of ambient cakes to most of the UK's major supermarket chains and speciality breads to Waitrose including gluten-free and low fat products. Further information about Finsbury Food is available on its website: www.finsburyfoods.co.uk.
I am a Non-Executive Director of Finsbury.
MWB Group Holdings Plc ("MWB")
The Group owns 2,000,000 shares, representing 1.2% of MWB's issued share capital. The market value of the holding at 31st December, 2011 was £290,000 (30th June 2011 - £775,000) which represents 3% of the net assets of Lonfin.
MWB is a hotel, serviced offices and retail group that is in the process of realising its assets through an orderly disposal programme. Further information about MWB is available on its website: www.mwb.co.uk.
I am a Non-Executive Director of MWB.
General Portfolio
The General Portfolio is diverse and consists of U.K. and European blue chip equities, most of which have significant international exposure. The list of these investments is set out at the end of this announcement.
Dividends
The Board has declared an interim of 0.35p payable on Thursday 12th April 2012 to shareholders on the register at the close of business on Friday 23rd March 2012.
Outlook
World stock markets have rebounded considerably over the last six months, however we remain cautious about the outlook for 2012 and have positioned the general portfolio accordingly. It is the intention of the Board to reinvest the proceeds of the sale of our property into our General Portfolio, as and when buying opportunities arise.
David C. MarshallChairman Interim dividend
The declared interim dividend is 0.35p per share (2010 - 0.30p) and will be paid on Thursday 12th April 2012 to those members registered at the close of business on Friday 23rd March 2012. Shareholders on the South African register will receive their dividend in South African Rand converted from sterling at the closing rate of exchange on Friday 24th February 2012.
Salient dates for dividend Last day to trade (SA) Thursday 15th March 2012 Shares trade ex dividend (SA) Friday 16th March 2012 Shares trade ex dividend (UK) Wednesday 21st March 2012 Record date (UK & SA) Friday 23rd March 2012 Pay date Thursday 12th April 2012
Shareholders are hereby advised that the exchange rate to be used will be GBP 1 = ZAR 12.04. This has been calculated as the average of the bid/ask spread at 16h00 (United Kingdom time) being the close of business on Friday 24th February 2012. Consequently the dividend of 0.35p will be equal to 4.214 South African cents.
No dematerialisation or rematerialisation of share certificates, nor transfer of shares between the registers in London and South Africa will take place between Friday 16th March 2012 and Friday 23rd March 2012, both dates inclusive.
Unaudited Consolidated Statement of Comprehensive Income
Year Half year ended ended 31st December 30th June 2011 2010 2011 Restated £000 £000 £000 Operating Income . Dividends received 102 97 251 Interest and sundry income 25 20 94 Profit on sales of investments, including - 255 266 provisions -------- -------- -------- 127 372 611 Management services income 199 245 398 -------- -------- -------- 326 617 1,009 -------- -------- -------- Administrative expenses Investment operations (144) (142) (314) Management services (150) (225) (435) -------- -------- -------- Total administrative expenses (294) (367) (749) -------- -------- -------- Operating profit 32 250 260 Unrealised changes in the carrying value of (925) 1,828 1,995 investments Exceptional profit on sale of property 2,132 - - Interest payable (6) (53) (110) -------- -------- --------
Profit on ordinary activities before taxation 1,233 2,025 2,145
Tax on result of ordinary activities (102) (5) (19) -------- -------- --------
Profit on ordinary activities after taxation 1,131 2,020 2,126
Minority interest (23) (15) (8) -------- -------- --------
Total comprehensive income - profit attributable 1,108 2,005 2,118 to members of the holding company
-------- -------- -------- Reconciliation of headline earnings Earnings per share 3.6p 6.4p 6.8p
Adjustment for unrealised changes in the carrying (3.6)p (5.8)p (6.4)p value of investments and exceptional items, net of
tax -------- -------- ------- Headline (loss)/earnings per share (0.0)p 0.6p 0.4p -------- -------- ------- Interim dividend 0.35p 0.30p 0.30p Final dividend 0.30p Total in respect of the year 0.60p
Unaudited ConsolidatedChanges in Shareholders' Equity
31st December 30th June 2010 2011 2011 £000 £000 £000 Total comprehensive income 1,108 2,005 2,118 Shares issued - - 2 Dividends paid to equity shareholders (94) (94) (187) -------- ------- -------- 1,014 1,911 1,849
Equity shareholders' funds at start of period 9,189 7,256 7,340
-------- ------- --------
Equity shareholders' funds at end of period 10,203 9,167 9,189
======== ======= ========
Unaudited Consolidated Statement of Financial Position
Non-current assets Tangible assets - 372 367 Principle investments:- MWB Group Holdings Plc 290 880 775 Finsbury Food Group plc 2,160 1,840 1,700 Western Selection P.L.C. 2,987 3,262 3,458 -------- -------- ------ 5,437 6,354 6,300 -------- -------- ------ Current assets Listed investments 4,240 4,691 4,668 Trade and other receivables 348 269 260 Cash, bank balances and deposits 2,591 50 21 -------- -------- ------- 7,179 5,010 4,949 -------- -------- -------- Total Assets 12,616 11,364 11,249 ======== ====== =======Capital and Reserves Called up share capital 1,560 1,560 1,560 Share premium account 2,320 2,320 2,320 Revaluation reserve - 330 330
Unrealised profits and losses on investments (2,675) (1,827) (1,750)
Share of undistributed profits and losses of 996 854 904 subsidiaries and associates
Company's retained realised profits and losses 8,002 5,930 5,825
-------- -------- ------ Equity shareholders funds 10,203 9,167 9,189
Trade and other payables falling due within one 2,298 2,098 1,968 year
Non-controlling equity interest 115 99 92 -------- -------- ------- 12,616 11,364 11,249 ======== ======== ========
Unaudited Statement of Cash Flow
Year Half year ended ended 31st December 30th June 2011 2010 2011 £000 £000 £000 Profit before taxation 1,233 2,025 2,145 -------- -------- ------- Adjustments for non-cash and non-operating expenses:- Depreciation charges - 5 10
Unrealised changes in the carrying value of fixed 496 (1,919) (1,995) asset investments
Exceptional profit on sale of property (2,132) - - Net interest paid 6 53 110 -------- -------- -------- (1,630) (1,861) (1,875) -------- -------- -------- Tax paid (102) (5) (19) -------- -------- -------- Changes in working capital:- (Increase)/Decrease in debtors (88) 24 34 Increase/(Decrease) in creditors 196 7 (6) Decrease in current asset investments 429 139 285 -------- -------- -------- 537 170 313 -------- -------- -------- Cash inflow on operating activities 38 329 564 -------- -------- -------- Investment activities Net proceeds from sale of property 2,498 - - -------- -------- -------- Cash flows from financing Net interest paid (6) (53) (110) Shares issued - - 2 Drawdown/(Repayment) of loan facilities 134 (149) (265) Equity dividend paid (94) (94) (187) -------- -------- -------- Net cash inflow/(outflow) from financing 34 (296) (560) -------- -------- -------- Increase in cash and cash equivalents 2,570 33 4 Cash and cash equivalents at start of period 21 17 17 -------- -------- -------- Cash and cash equivalents at end of period 2,591 50 21 ======= ======== ========
Reconciliation of net cash flow to movement in net debt
At start Cash At end of of period Flow PeriodHalf year ended 31st December £000 £000 £000 2011 Cash at bank 21 2,570 2,591 Bank loan (1,816) (134) (1,950) -------- -------- -------- (1,795) 2,436 641 2010 ======== ======= ======== Cash at bank 17 33 50 Bank loan (2,081) 149 (1,932) -------- -------- -------- (2,064) 182 (1,882) ======== ======== ======== Year ended 30th June 2011 Cash at bank 17 4 21 Bank loan (2,081) 265 (1,816) -------- -------- -------- (2,064) 269 (1,795) ======== ======= ========
Market Value of General Portfolio
31st December 2011 Current Value £000 % Royal Dutch Shell 268 6.3 British American Tobacco 266 6.3 Nestle 254 6.0 Imperial Tobacco 217 5.1 Schindler 215 5.1 Diageo 208 4.9 Pernod-Ricard 207 4.9 Novartis 192 4.5 Unilever 190 4.5 L'Oreal 189 4.5 Henkel 189 4.5 Heineken 173 4.1 Investor 168 4.0 Beiersdorf 165 3.9 Total 156 3.8 Danone 162 3.8 ABB 161 3.8 BASF 157 3.7 Reckitt Benckiser 156 3.7 DSM 155 3.7 Carlsberg 132 3.1 BHB Billiton 131 3.1 Holcim 128 3.0 -------- -------- 4,240 100.0 ======== ========Notes:-1. The results for the half-year are unaudited. The information contained in this report does not constitute statutory accounts within the meaning of the Companies Act 2006. The statutory accounts of the Group for the year ended 30th June 2011 have been reported on by the Company's auditors and have been delivered to the Registrar of Companies. The report of the auditors was unqualified. 2. This report has been prepared in accordance with the accounting policies contained in the Company's Annual Report and Accounts 2011, International Financial Reporting Standards and comply with IAS34. 3. The calculation of earnings per share is based on the weighted average number of shares in issue for the period and the profit on ordinary activities after tax.
XLON