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LAF - Lonrho Plc - Interim management statement for the quarter ended 30 June
2011
Lonrho Plc
(Incorporated and registered in England and Wales)
(Registration number 2805337)
(Share code: LAF ISIN number: GB0002568813)
("Lonrho" or "the Company")
INTERIM MANAGEMENT STATEMENT FOR THE QUARTER ENDED 30 JUNE 2011
The following statement covers trading during the period 1 April 2011 to 30 June
2011 and material transactions up to 26 July 2011.
Q3 Lonrho reports 31% growth and major new contract wins
- Total reported revenue in the third quarter was GBP35.1m, an increase of
31.1% on the prior year, 19.1% on a like-for-like basis (excluding
acquisitions and disposals)
- Oceanfresh signed major new deals with Walmart in the US and Pick`n`Pay and
Makro in South Africa
- Lonrho Budget Hotels was awarded the exclusive master franchise for the
easyHotel brand across Africa
- Lonrho Agribusiness acquired the trade and assets of logistics firm
Grindrod PCA, becoming the market leader in the export of fresh produce
from Southern Africa by air
- Lonrho Agribusiness acquired the fish distribution business Fish On Line
- The Group transferred its listing to the premium listing of the LSE`s Main
Market from AIM
In the third quarter of trading, Lonrho Plc increased its revenue by 31.1%
compared with the same quarter in the prior year. On a like-for-like basis this
represented growth of 19.1%. All 5 divisions within the group showed at least
double digit growth on the prior year with the most notable being support
services, where the addition of the AFEX group as well as strong performance at
CES Zambia and Bytes & Pieces helped to increase revenue by 117.8% compared with
Q3 FY10.
Within the Agribusiness division, Oceanfresh continued to build well with new
contracts signed in the quarter with both Pick`n`Pay and Makro. At Pick`n`Pay,
Oceanfresh will supply 16 of the 19 items that will be launched under their
private label brand, whilst further product lines will be supplied to Makro
under their private label `M brand`. Since the quarter end Lonrho announced an
agreement to supply Walmart in the US with hake fillets. It is anticipated that
Oceanfresh will initially supply 500 Walmart stores with product commencing from
1st October 2011.
Infrastructure divisional growth of 35.8% was especially driven by Kwikbuild
which had its most successful quarter ever, with the three month period
generating the same revenues as the whole of FY10. The business has been
delivering projects through different sectors and with the factory now operating
at full capacity the business is in excellent shape for the remainder of the
year.
Fly540, having seen the full roll out of services in Angola, as well as a ramp
up of operations in Tanzania, has achieved turnover growth of 25.6% in the
quarter. The business is still experiencing some delays in deploying sufficient
aircraft in Angola to service the demand that is being seen on many routes but
aircraft arrivals in August and September will increase capacity significantly.
High fuel prices and aggressive pricing policies from competitors in Kenya
specifically mean that margins in the business remain under pressure in the
short term. Fly540 is on track to open its third hub in Ghana by October 2011.
Acquisitions and New Ventures
On 27th July Lonrho announced that its wholly owned subsidiary, Lonrho Budget
Hotels Ltd, has signed a twenty year master franchise agreement (MFA) with Easy
Group Holdings to open and operate a network of budget hotels under the
easyHotel brand across Africa. The MFA provides Lonrho the exclusive rights to
the easyHotel brand in Africa and lays out an agreed opening schedule leading to
fifty properties by 2016. The easyHotel brand is ideally suited for rebranding
existing hotel properties and the conversion of existing buildings into hotels.
In the quarter, Lonrho completed the acquisition of Fish On Line. Based in Cape
Town, South Africa, Fish On Line operates bulk cold storage and fish processing
facilities, adding further capacity to the growing fish section of the
Agribusiness division.
On 19 July, Lonrho announced the acquisition of the trade and assets of Grindrod
PCA a division of Grindrod Freight Services Pty. Grindrod PCA is a South African
based logistics company with operations in Johannesburg, Cape Town, Port
Elisabeth and George. The acquisition supports the growing agribusiness
capabilities of Lonrho to export African produce to the world`s supermarkets and
takes Lonrho to an estimated 65% market share of the logistics market for the
export of fresh produce from Southern Africa by air.
Corporate Activity and Financial Position
During the quarter, the Group successfully transferred the listing of its
ordinary share capital from AIM to a premium listing on the Official List of the
UK Listing Authority and to trading on the London Stock Exchange`s Main Market.
This move opens up the Company to new investors and is seen as a significant
step in the further progression of the Group. In South Africa, the JSE approved
the transfer of the secondary listing of the Company from the Venture Capital
Market, to the AltX of the JSE with effect from 17 May 2011.
In May Lonrho Plc further announced a placing of new ordinary shares in the
capital of the Company at 16.5 pence per share to raise gross proceeds of
GBP19.5 million. The Placing of 118,000,000 new ordinary shares represented
approximately 9.9 per cent of the issued share capital of Lonrho.
As at 30th June 2011 the Group had available cash balances of GBP23.2m.
Outlook
The fourth quarter of the year is the most significant for the Group in terms of
revenue and profitability and will have a significant impact on results for the
financial year. With the further expansion of Fly540, the acquisitions of
Grindrod PCA and Fish On Line and the implementation of new contracts at
Oceanfresh, the building blocks are in place to deliver results in line with
market expectations.
Commenting on the results, David Lenigas, Lonrho Executive Chairman, said:"The
quarter has been very positive for Lonrho. Moving to the premium list on the
main LSE market is a significant step forward for the Group. The completion of 2
strategic acquisitions as well as landing a number of new large contracts puts
the company in a strong position for the remainder of the year and into 2012."
Enquiries
Lonrho Plc
David Lenigas, Executive Chairman Tel +44 (0) 20 7016 5105
Geoffrey White, Chief Executive Tel +44 (0) 20 7016 5105
David Armstrong, Finance Director Tel +44 (0) 20 7016 5105
Panmure Gordon Tel +44 (0) 20 7459 3600
Tim Linacre
Dominic Morley
Adam Pollock
Hannah Woodley
Pelham Bell Pottinger
Charles Vivian Tel +44 (0) 20 7861 3126
James MacFarlane Tel +44 (0) 20 7861 3864
These results (and comparative figures included therein) do not form audited
accounts nor have they been extracted from audited accounts. Certain statements
made in this announcement are forward looking. These statements are based on
current expectations and are subject to a number of risks and uncertainties
which could cause actual results to differ materially from expected results. Any
forward looking statement represents the views of management as at the date of
this announcement only.
South African sponsor
Java Capital
27 July 2011
Date: 27/07/2011 08:01:22 Supplied by www.sharenet.co.za
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