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Interim management statement
Lonrho Plc
(Incorporated and registered in England and Wales)
(Registration number 2805337)
JSE share code: LAF; ISIN number: GB0002568813
(“Lonrho” or “the Group”)
INTERIM MANAGEMENT STATEMENT
Lonrho reports £39.1m revenues in first quarter and 7.2% increase in gross margin
Lonrho Plc announces its results for the first quarter to 31 March 2013 incorporating an update on
material transactions to 8 May 2013.
Lonrho’s core businesses operate in the agriculture and oil and gas sectors across sub Saharan Africa.
These burgeoning industries are the key drivers of African growth as African energy resources and
agricultural produce become increasingly important in meeting global demand. As a result of the
development of these sectors and subsequent economic growth Lonrho is seeing significantly
increasing demand from the expanding consumer market across the Continent.
Geoffrey White, Lonrho's Chief Executive Officer, commented:
“Q1 has delivered good progress for the Group with reported revenues of £39.1m for the first quarter
and, importantly, gross margin increasing by 7.2 % year on year. The strategic decision made in the
second half of 2012 to focus on improving Group margins and to concentrate on the Group’s higher
margin businesses whilst reducing the exposure to lower margin businesses has, as expected, resulted
in slower growth in turnover (increased 0.3% on a like for like basis) for the quarter but has had a
very positive effect on gross margins (increased 7.2%) which is expected to continue going forward.”
Continuing 1st Quarter
Operations
1
Quarter to Reported Adjusted
March 2013 Growth like-for-like
growth
£ million
Revenue
Agribusiness 23.9 (35.2%) 3.1%
Infrastructure 4.0 (9.8%) (10.6%)
Support Services 7.8 39.1% (6.1%)
Hotels 3.4 37.2% 8.9%
Lonrho Plc 39.1 (20.8%) 0.3%
Group Gross
Margin 32.4% 7.2%
Financial Highlights up to 31 March 2013:
- Revenue in the first quarter was £39.1m. On an adjusted like-for-like basis at constant
currency revenue has marginally increased by 0.3% year on year.
- Gross margins across the Group are up 7.2% in the quarter demonstrating the results of the
continued focus and strategic action by the board on increasing margins through operational
efficiencies.
- Net debt was £99.1m at 31 March 2013 compared with £87.2m at 31 December 2012. The
majority of this increase (of £11.9m) was due to a £6.1m negative foreign exchange
movement due to the decline of Sterling versus the US dollar. The balance reflects
anticipated working capital movements in the quarter.
The first quarter is historically always the quietest period for the Group’s businesses, with the January
slowdown in retail and consumer markets following the December holiday period impacting local and
export sales. Lonrho’s outlook for 2013 remains in line with the Board’s expectations and the Group
expects to continue delivering improved performance across each of its operating divisions.
Operational highlights in the first quarter:
- The Agribusiness fish division reported very strong growth in the quarter with revenues up
46.3% year on year. Lonrho’s Oceanfresh has continued to build strongly on its core
business locally with African customers and internationally where it has seen further
deployment of its ‘Kirkland Signature Hake’ into Costco. Fish-on-Line, the division’s
wholesale fish company, reported strong results in the quarter and continued delivery of its
first own branded goods to over 100 stores in South Africa for Food Lovers Market. The
buyout of the minority shareholders in Fish-on-Line was completed in the quarter for £0.2m
and Lonrho now owns 100% of the business.
- In our Support Services division, the IT business won two significant contracts with the City
of Windhoek and MTC Namibia through CES Namibia which commenced operation in
November 2012. CES Namibia has delivered strong results and growth and these contracts
are valued at close to US$5m of which US$3.5m will be completed in Q1 and Q2 and the
remainder will be delivered over the balance of the year and into Q1 2014.
- The first ‘easyHotel by Lonrho’ opened in Johannesburg on 26 March 2013. This budget
hotel had been expected to open in December 2012, but experienced delays to its originally
planned opening date. Initial demand has exceeded expectations and occupancy levels have
averaged over 60% in the first few weeks of operation.
- e-Kwikbuild has had a difficult first quarter and continues to struggle to complete its ongoing
Government contracts with Eastern Cape Schools and SAPS. The Group is looking at a
number of strategic options to strengthen the underlying position of the business for the
months ahead.
1
Adjusted like-for-like figures include acquisitions (pre-acquisition comparables based on un-audited
management accounts), exclude start-up businesses trading for less than 12 months and are adjusted
to constant currency.
9 May 2013
Enquiries:
Lonrho Plc (London) +44 (0) 20 7016 5105
Geoffrey White
David Armstrong
FTI Consulting (London) +44 (0) 20 7831 3113
Edward Westropp
Georgina Goodhew
JSE Sponsor
Java Capital
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