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

LONDON FINANCE & INVESTMENT GROUP PLC - Half-yearly Report

PR Newswire

London, February 23

London Finance & Investment Group P.L.C.

Interim Results

Lonfin (LSE: LFI, JSE: LNF) today announces its unaudited interim results for the six months ended 31st December 2015 and dividend declaration.

Introduction

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.S., U.K. and European equities.

At 31st December 2015, we held two Strategic Investments in which we have board representation: our associated company Western Selection P.L.C. and Finsbury Food Group plc. Detailed comments on our Strategic Investments are given below.

Results

Our net assets per share increased 16.0% to 58.1p at 31st December 2015 from 50.1p at 30th June 2015. Our Strategic Investments, adjusting for the disposal of part of the investment in Finsbury Foods, which realised a profit of £1,409,000, increased in value by 14.0% during the period, reflecting a strong performance in Finsbury Food’s share price. Our General Portfolio increased by 4.5%, compared with decreases of 3.8% and 4.5% in the FTSE 100 index and the FTSEurofirst 300 Index respectively, over the half year. At the close of business on 22nd February 2016, our net asset value was 57.5p per share.

The Group profit before tax for the half year was £3,296,000 compared to a profit of £1,017,000 for the same period last year, which reflects the profit realised from the disposal of part of the investment in, and the unrealised profit arising from the strong performance of, Finsbury. Our profit after tax and minority interest was £2,683,000 (2014: £810,000) giving profits per share of 8.6p (2014: 2.6p).

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 22nd February 2016, Western announced a profit after tax of £77,000 for its half year to 31st December 2015 and a profit per share of 0.4p (2014: profit 1.2p). Western’s net assets at market value were £14,272,000 equivalent to 80p per share, an increase of 6% from 75p at 30th June 2015. Western has announced an interim dividend of 1.05p per share (prior year: 1.05p).

The market value of the Company’s investment in Western at 31st December 2015 was £3,537,000 representing 19% of the net assets of Lonfin. The underlying value of the investment in Western, valuing Western’s own investments at market value, was £6.3 million (30th June 2015: £5.9 million).I am the Chairman of Western and Mr. Robotham is a Non-Executive Director. Western’s principal core holdings are in Northbridge Industrial Services plc, Swallowfield plc, Bilby Plc and Hartim Limited. Extracts from Western's announcement on its core holdings are set out below:

Finsbury Food Group plc (“Finsbury Food”)

Finsbury Food is a leading manufacturer of cakes and bread to the major UK multiple grocers and recently acquired the Fletchers Group, suppliers of fresh and frozen bread and morning goods to the major UK multiple grocers and the UK foodservice sector. Further information about Finsbury Food is available on its website: www.finsburyfoods.co.uk.

In October 2015, the Group disposed of 2,000,000 shares in Finsbury Food for £1,985,000 and now holds 8,000,000 shares, representing 6.25% of their issued share capital. The market value of our holding was £9,040,000 on 31st December 2015 compared to a cost of £2,300,000; this represents 50% of the net assets of Lonfin.

Finsbury Food will be announcing their interim results on 16th March 2016.

Mr Beale is a Non-Executive Director of Finsbury Food.

General Portfolio

The list of investments included in the General Portfolio is set out at the end of this announcement. We continue to hold 26 investments, having taken £60,000 out of the amount invested.

Outlook

 The Board expect to see a continuation of the volatility in equity and currency markets and remain cautious about the remainder of the year.

The Board has declared an interim dividend of 0.50p per share (prior year: 0.50p).

Statement of directors’ responsibility

The directors confirm that, to the best of their knowledge:

- the unaudited interim results for the six months ended 31st December 2015, have been prepared in accordance with IAS 34 as adopted by the EU; and

- the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules.

By order of the Board

David C. Marshall

Chairman

Interim Dividend

The declared interim dividend is 0.50p per share (ZAR 10.73075 cents) (prior year: 0.50p) and will be paid on Friday, 8th April 2016 to those members registered at the close of business on Friday 18th March 2016 (SA and UK). Shareholders on the South African register will receive their dividend in South African Rand converted from sterling at the closing rate of exchange on 22nd February 2016.

The issued number of shares as at the declaration date is 31,207,479.

The Company’s UK Income Tax reference number is 948/L32120.

This dividend should be regarded as a foreign dividend by South African shareholders.

Share certificates may not be dematerialised or rematerialised between Monday, 14th March 2016 and Friday 18th March 2016, both dates inclusive. Shares may not be transferred between registers during this period either.

Shareholders are hereby advised that the exchange rate to be used will be GBP 1 = ZAR 21.4615. This has been calculated as the average of the bid/ask spread at 16.00 (United Kingdom time) being the close of business on 22nd February 2016. Consequently, the dividend of 0.50p will be equal to ZAR 10.73075 cents.

The JSE Listings Requirements require disclosure of additional information in relation to any dividend payments. 

Shareholders registered on the South African register are reminded that the dividend withholding tax will be withheld from the gross final dividend amount of ZAR 10.73075 cents per share at a rate of 15%, unless a shareholder qualifies for an exemption; shareholders registered on the South African register who do not quality for an exemption will receive a net dividend of ZAR 9.12114 cents per share. The dividend is payable in cash as a ‘Dividend’ (as defined in the South African Income Tax Act, 58 of 1962, as amended) by way of a payment out of income reserves. The dividend withholding tax and the information contained in this paragraph is only of direct application to shareholders registered on the Johannesburg register, who should direct any questions about the application of the dividend withholding tax to Computershare Investor Services (Pty) Limited, Tel: +27 11 373-0004.

Unaudited Consolidated Statement of Comprehensive Income

Unaudited Consolidated Changes in Shareholders’ Equity

Unaudited Consolidated Statement of Financial Position

Unaudited Consolidated Statement of Cash Flow

Reconciliation of net cash flow to movement in net debt

Notes:-

Composition of General Portfolio