Wrap Text
LONRHO PLC - HIGHLIGHTS
* PRE-TAX PROFITS BEFORE EXCEPTIONAL ITEMS ARE #10L MILLION (#110 MILLION)
* PROFIT BEFORE TAX IS #198 MILLION COMPARED WITH #78 MILLION IN 1996
* MAINTAINED FINAL DIVIDEND OF 3.0P MAKING TOTAL DIVIDEND FOR THE YEAR 5.25P
* EARNINGS PER SHARE BEFORE EXCEPTIONAL ITEMS 6.1P (11.9P)
* EARNINGS PER SHARE INCLUDING EXCEPTIONAL ITEMS IS 18.1P (NIL)
* NET BORROWINGS REDUCED TO #259 MILLION OR 22% GEARING
* EQUITY INTERESTS ARE UP BY #176 MILLION TO #975 MILLION
COMMENTING ON THE RESULTS, LONRHO'S CHIEF EXECUTIVE NICK MORRELL SAID:
"TRADING RESULTS FOR 1997 ARE DOWN ON THE PREVIOUS YEAR BUT SUBSTANTIAL
PROGRESS HAS BEEN MADE TOWARDS ACHIEVING OUR OVERALL OBJECTIVE WHICH IS TO
CREATE A STRONG FOCUSED MINING COMPANY. OUR BALANCE SHEET IS STRONG, BORROWINGS
ARE SIGNIFICANTLY DOWN AND EQUITY INTERESTS HAVE INCREASED.
"THE STRENGTH OF STERLING, WEAKER COAL AND PRECIOUS METAL PRICES HAVE IMPACTED
ON THE PROFITS FOR THE YEAR. LONRHO AFRICA HAS ALSO BEEN AFFECTED BY REDUCED
DEMAND IN KENYA PRIOR TO THE ELECTIONS IN DECEMBER 1997 AND PROVISIONS ARISING
FROM A BALANCE SHEET REVIEW.
"SINCE THE SALE OF METROPOLE HOTELS IN NOVEMBER 1996 A NUMBER OF OTHER SALES
HAVE BEEN COMPLETED: HARRISONS, LONRHO SUGAR, LONRHO CONTINENTAL, CRAMLINGTON
TEXTILES AND MOST RECENTLY DUTTON FORSHAW. THESE DISPOSALS HAVE STRENGTHENED
OUR BALANCE SHEET AND CASH FLOW AND THE SALE OF CRAMLINGTON TEXTILES AND
HARRISON ELIMINATED TRADING LOSSES IN BUSINESSES THAT WERE NON CORE.
"PERHAPS OF EVEN GREATER SIGNIFICANCE IS THAT ONLY TWO MAJOR TRANSACTIONS
REMAIN OUTSTANDING BEFORE LONRHO PLC IS ESTABLISHED AS A FOCUSED MINING
COMPANY. THESE ARE THE SALE OF PRINCESS HOTELS AND DEMERGER OF LONRHO AFRICA.
"WE CONTINUE TO DISCUSS WITH ANGLO AMERICAN AND JCI THE POSSIBLE ACQUISITION BY
LONRHO OF THE ANGLO AMERICAN SHAREHOLDING IN LONRHO AND JCI'S INVESTMENT IN
TAVISTOCK. WE HOPE THESE DISCUSSIONS CAN BE COMPLETED TO THE MUTUAL BENEFIT OF
ALL PARTIES BUT IF AGREEMENT CANNOT BE REACHED, IT WILL BE OUR INTENTION TO
PROCEED WITH THE BUY BACK OF OUR SHARES IN THE MARKET UNDER THE AUTHORITY
GRANTED TO THE BOARD AT THE LAST ANNUAL GENERAL MEETING.
LONRHO GROUP
RESULTS FOR YEAR ENDED 30 SEPTEMBER 1997
THE RESULTS OF THE LONRHO GROUP OF COMPANIES IN RESPECT OF THE YEAR ENDED 30
SEPTEMBER 1997 ARE AS FOLLOWS:
1997 1997 1997 1996 1996 1996
BEFORE EXCEP- TOTAL BEFORE EXCEP- TOTAL
EXCEP- TIONAL EXCEP- ITEMS RESTATED
TIONAL ITEMS TIONAL
ITEMS RESTATED
NOTE #M #M #M #M #M #M
TURNOVER (INCLUDING
ASSOCIATES)
- CONTINUING OPERATIONS 1,384 1,384 1,445 1,445
- DISCONTINUED
OPERATIONS 613 613 743 743
1,997 1,997 2 188 2,188
OPERATING PROFIT L/2
- CONTINUING OPERATIONS 130 (5) 125 163 (7) 156
- DISCONTINUED OPERATIONS 22 22 70 70
152 (5) 147 233 (7) 226
PROFIT/(LOSS) ON DISPOSAL
OF FIXED ASSETS 4
- CONTINUING OPERATIONS 1 1 4 4
- DISCONTINUED OPERATIONS (2) (2)
PROFIT(LOSS) ON SALE
OR TERMINATION OF
OPERATIONS 4
- CONTINUING OPERATIONS (23) (23) (2) (2)
- DISCONTINUED OPERATIONS 124 124 (85) (85)
NET INTEREST PAYABLE 5 (51) (51) (63) (63)
PROFIT BEFORE TAXATION 1/3 101 97 198 170 (92) 78
TAXATION 6 (26) (3) (29) (35) (35)
PROFIT AFTER TAXATION 75 94 169 135 (92) 43
MINORITY INTERESTS (27) (27) (42) (1) (43)
RESULT FOR THE YEAR 1/9 48 94 142 93 (93) -
DIVIDENDS 10 (41) (41) (41) (41)
7 94 101 52 (93) (41)
EARNINGS PER SHARE L/8 6.1P 12.0P 18.1P 11.9P (11.9)P -
DISCONTINUED ACTIVITIES INCLUDE THE CONSOLIDATED RESULTS OF CRAMLINGTON
TEXTILES, DUTTON FORSHAW, HARRISON, LONRHO CONTINENTAL, LONRHO SUGAR AND
METROPOLE HOTELS.
THE RESTATEMENT OF THE 1996 FIGURES IS ONLY TO REFLECT THE CHANGE IN ACCOUNTING
TREATMENT OF THE TURNOVER OF DUIKER MINING AMOUNTING TO AN INCREASE IN TURNOVER
OF #42 MILLION (1997 - #35 MILLION).
CONSOLIDATED BALANCE SHEET
THE BALANCE SHEET OF THE LONRHO GROUP OF COMPANIES AS AT 30 SEPTEMBER 1997 IS
AS FOLLOWS:-
1997 1996
NOTES #M #M
FIXED ASSETS
TANGIBLE ASSETS 1,164 1,489
ASSOCIATES 138 161
OTHER INVESTMENTS 77 79
1 379 1 729
CURRENT ASSETS
STOCKS 238 335
DEBTORS 262 330
INVESTMENTS 1 1
CASH AT BANK AND IN HAND 14 260 195
761 861
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR:
CURRENT BANK LOANS AND OVERDRAFTS (275) (327)
OTHER CREDITORS (394) (492)
NET CURRENT ASSETS 92 42
TOTAL ASSETS LESS CURRENT LIABILITIES 1,471 1,771
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN
ONE YEAR:
LOANS FROM A MINORITY SHAREHOLDER 13 (7) (11)
LOANS DUE AFTER MORE THAN ONE YEAR 12 (237) (667)
OTHER CREDITORS (15) (29)
PROVISIONS FOR LIABILITIES AND CHARGES (27) (5)
NET ASSETS 15 1,185 1,059
CAPITAL AND RESERVES
CALLED UP SHARE CAPITAL 198 195
RESERVES 777 604
EQUITY INTERESTS 16 975 799
MINORITY EQUITY INTERESTS 210 260
1,185 1,059
CONSOLIDATED CASH FLOW STATEMENT
THE CASH FLOW STATEMENT FOR THE LONRHO GROUP OF COMPANIES FOR THE YEAR ENDED 30
SEPTEMBER 1997 IS AS FOLLOWS:-
1997 1996
NOTES #M #M #M #M
NET CASH INFLOW FROM OPERATING
ACTIVITIES 18
- CONTINUING OPERATIONS 170 171
- DISCONTINUED OPERATIONS 47 75
217 246
RETURNS ON INVESTMENTS AND SERVICING
OF FINANCE 19 (68) (77)
TAX PAID (32) (31)
NET CASH INFLOW BEFORE INVESTING
ACTIVITIES AND EQUITY DIVIDENDS 117 138
CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENT 20 (119) (120)
DISPOSALS AND ACQUISITIONS 21 518 (275)
- EQUITY DIVIDENDS PAID (32) (37)
NET CASH INFLOW/(OUTFLOW) BEFORE
FINANCING
- CONTINUING OPERATIONS 567 (16)
- DISCONTINUED OPERATIONS (83) (278)
484 (294)
APPLICATION OF CASH FLOWS
FINANCING 22 (410) 279
INCREASE/(DECREASE) IN CASH
- CONTINUING OPERATIONS 137 (2)
- DISCONTINUED OPERATIONS (63) (13)
INCREASE/(DECREASE) IN CASH 74 (15)
1) PROFIT FOR THE YEAR
1997 1996
CONTINUING DISCONTINUED TOTAL CONTINUING DISCONTINUED TOTAL
OPERATIONS OPERATIONS OPERATIONS OPERATIONS RESTATED
RESTATED
(M (M (M (M (M (M
TURNOVER
GROUP 1,242 608 1,850 1,295 733 2,028
ASSOCIATES 142 5 147 150 10 160
1,384 613 1,997 1,445 743 2,188
GROUP 117 21 138 140 68 208
ASSOCIATES 13 1 14 23 2 25
OPERATING PROFIT
BEFORE EXCEP-
TIONAL ITEMS 130 22 152 163 70 233
NET INTEREST
PAYABLE (43) (8) (51) (57) (6) (63)
PROFIT BEFORE
EXCEPTIONAL
ITEMS 87 14 101 106 64 170
EXCEPTIONAL
ITEMS (27) 124 97 (5) (87) (92)
PROFIT BEFORE
TAXATION 60 138 198 101 (23) 78
TAXATION (27) (2) (29) (15) (20) (35)
PROFIT AFTER
TAXATION 33 136 169 86 (43) 43
MINORITY
INTERESTS (22) (5) (27) (24) (19) (43)
RESULT FOR THE
YEAR 11 131 142 62 (62) -
EARNINGS PER
SHARE BASED
ON RESULT FOR
THE YEAR 1.4P 16.7P 18.1P 8.0P (8.0)P -
EARNINGS PER
SHARE EXCLUDING
NET EXCEP-
TIONAL ITEMS 4.8P 1.3P 6.1P 8.7P 3.2P 11.9P
2) OPERATING PROFIT BY ACTIVITY AND GEOGRAPHICAL AREA
AN ANALYSIS OF GROUP PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST AND TAXATION
AND OF ASSOCIATES' PROFIT BEFORE TAXATION BY ACTIVITY AND GEOGRAPHICAL AREA IS
GIVEN BELOW:
1997 1996
GROUP ASSOCIATES TOTAL GROUP ASSOCIATES TOTAL
#M #M #M #M #M #M
MINING AND
REFINING 59 12 71 68 22 90
MOTOR AND
EQUIPMENT
DISTRIBUTION 13 1 14 21 21
HOTELS 23 23 26 26
AGRICULTURE 14 14 20 20
MANUFACTURING 2 2 1 1
GENERAL TRADE 19 19 21 1 22
CENTRAL COSTS
- LONRHO LONDON (9) (9) (10) (10)
- LONRHO AFRICA (4) (4) (7) (7)
117 13 130 140 23 163
DISCONTINUED
OPERATIONS 21 1 22 68 2 70
138 14 152 208 25 233
EXCEPTIONAL
ITEMS 97 (92)
NET INTEREST
PAYABLE (51) (63)
PROFIT BEFORE
TAXATION 198 78
SOUTHERN AFRICA 63 1 64 63 1 64
EAST, CENTRAL
AND WEST AFRICA 37 12 49 61 22 83
THE AMERICAS 21 21 24 24
UNITED KINGDOM 7 7 7 7
EUROPE AND
OTHER 2 2 2 2
CENTRAL COSTS
- LONRHO LONDON (9) (9) (10) (10)
- LONRHO AFRICA (4) (4) (7) (7)
117 13 130 140 23 163
DISCONTINUED
OPERATIONS 21 1 22 68 2 70
138 14 152 208 25 233
EXCEPTIONAL
ITEMS 97 (92)
NET INTEREST
PAYABLE (51) (63)
PROFIT BEFORE
TAXATION 198 78
THE 1996 FIGURES HAVE BEEN ADJUSTED TO REFLECT THE PROFITS OF BAUMANN HINDE
AMOUNTING TO #3 MILLION (1997 - #3 MILLION) IN AGRICULTURE INSTEAD OF GENERAL
TRADE, AS IT IS NOW REPORTED WITHIN THE AGRI-BUSINESS DIVISION OF LONRHO
AFRICA. CENTRAL COSTS OF LONRHO AFRICA ARE NOW SEPARATELY DISCLOSED AND THE
1996 FIGURES HAVE BEEN ADJUSTED ACCORDINGLY.
3) PROFIT BEFORE TAX BY ACTIVITY AND GEOGRAPHICAL AREA
AN ANALYSIS OF PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION BY ACTIVITY AND
GEOGRAPHICAL AREA IS GIVEN BELOW:
1997 1996
#M #M
MINING AND REFINING 56 76
MOTOR AND EQUIPMENT DISTRIBUTION 4 11
HOTELS 14 17
AGRICULTURE 12 17
MANUFACTURING (1)
GENERAL TRADE 18 19
CENTRAL FINANCE END COSTS - LONRHO LONDON (13) (28)
- LONRHO AFRICA (4) (5)
87 106
DISCONTINUED OPERATIONS 14 64
EXCEPTIONAL ITEMS 97 (92)
198 78
SOUTHERN AFRICA 48 50
EAST, CENTRAL AND WEST AFRICA 31 60
THE AMERICAS 14 16
UNITED KINGDOM 9 10
EUROPE AND OTHER 2 3
CENTRAL FINANCE AND COSTS - LONRHO LONDON (13) (28)
- LONRHO AFRICA (4) (5)
87 106
DISCONTINUED OPERATIONS 14 64
EXCEPTIONAL ITEMS 97 (92)
198 78
THE 1996 FIGURES HAVE BEEN ADJUSTED TO REFLECT THE PROFITS OF BAUMANN HINDE
AMOUNTING TO #3 MILLION (1997 - #3 MILLION) IN AGRICULTURE INSTEAD OF GENERAL
TRADE, AS IT IS NOW REPORTED WITHIN THE AGRI-BUSINESS DIVISION OF LONRHO
AFRICA. CENTRAL FINANCE AND COSTS OF LONRHO AFRICA ARE NOW SEPARATELY DISCLOSED
AND THE 1996 FIGURES HAVE BEEN ADJUSTED ACCORDINGLY.
4) EXCEPTIONAL ITEMS
1997 1996
CONTINUING DISCONTINUED TOTAL CONTINUING DISCONTINUED TOTAL
OPERATIONS OPERATIONS OPERATIONS OPERATIONS
#M #M #M #M (M #M
DISPOSAL OF
OTHER FIXED
ASSET - PROFIT 2 2 7 7
- LOSS (1) (1) (3) (2)
PROFIT/(LOSS) ON
DISPOSAL OF FIXED
ASSESS 1 1 4 (2) 2
SALE OR TERMINA-
TION OF OPERA-
TIONS
- PROFIT ON THE
SALE OF LONRHO
SUGAR 141 141
- PROVISION FOR
LOSS ON SALE OF
CRAMLINGTON
TEXTILES (22) (22)
- PROVISION
AGAINST
AMANTAYTAU GOLD
MINE (15) (15)
- PROVISION FOR
LOSS ON SALE OF
METROPOLE HOTELS (87) (87)
- OTHER PROFITS 5 7 12 2 2 4
- OTHER LOSSES (13) (2) (15) (4) (4)
PROFIT/(LOSS) ON
SALE OR TERMINA-
TION OF OPERA-
TIONS BEFORE
TAXATION (23) 124 101 (2) (85) (87)
REDUNDANCY AND
REORGANISATION
COSTS (5) (5)
PLATINUM MERGER
AND DEMERGER
COSTS (7) (7)
NET EXCEPTIONAL
ITEMS BEFORE
TAXATION (27) 124 97 (5) (87) (92)
TAXATION (3) (3)
MINORITY INTERESTS (1) (1)
NET EXCEPTIONAL
ITEMS (27) 121 94 (6) (87) (93)
EXCEPTIONAL ITEMS INCLUDE NET GOODWILL RELEASED TO THE PROFIT AND LOSS ACCOUNT
OF #4 MILLION.
A PROVISION OF #87 MILLION FOR THE LOSS ON SALE OF METROPOLE HOTELS WAS MADE IN
THE 1996 ACCOUNTS AND FOLLOWING COMPLETION OF THE SALE IN NOVEMBER 1996, NO
FURTHER PROVISION WAS NECESSARY IN 1997.
5) NET INTEREST PAYABLE
NET INTEREST PAYABLE FOR THE YEAR ENDED 30 SEPTEMBER 1997 AMOUNTED TO #51
MILLION (1996-#63 MILLION). NO INTEREST WAS CAPITALISED DURING THE PERIOD
(1996-#NIL).
6) TAXATION ON PROFIT ON ORDINARY ACTIVITIES BEFORE EXCEPTIONAL ITEMS
1997 1996
#M #M
UNITED KINGDOM:
CORPORATION TAX AT 32 PER CENT (1996 - 33 PER CENT) 7 9
ADVANCE CORPORATION TAX (1)
7 8
RELIEF FOR OVERSEAS TAX (2) (2)
5 6
OVERSEAS TAX FOR THE YEAR 19 34
RELEASE OF PRIOR YEAR PROVISIONS (8)
ASSOCIATES 2 5
DEFERRED TAX (2)
26 35
THE CHARGE FOR TAX HAS BEEN REDUCED BY #18 MILLION (1996 - #25 MILLION) IN
RESPECT OF ACCELERATED TAX ALLOWANCES IN EXCESS OF DEPRECIATION AND OTHER
TIMING DIFFERENCES.
THE ALLOCATION OF THE UNITED KINGDOM TAX CHARGE BETWEEN CORPORATION TAX AND
ADVANCE CORPORATION TAX ("ACT") IS A REQUIREMENT OF STATEMENT OF STANDARD
ACCOUNTING PRACTICE NO. 8. THE UTILISATION OF TIMING DIFFERENCES AVAILABLE AND
OTHER FACTORS CAN HAVE A SIGNIFICANT EFFECT ON THIS ALLOCATION.
7) CONSOLIDATED HISTORICAL COST PROFITS
THE HISTORICAL COST PROFIT BEFORE TAXATION FOR THE TWELVE MONTHS ENDED 30
SEPTEMBER 1997 IS AS FOLLOWS:
1997 1996
#M #M
HISTORICAL COST PROFIT BEFORE TAXATION
REPORTED PROFIT BEFORE TAXATION 198 78
REALISATION OF PROPERTY REVALUATION GAINS OF
PREVIOUS YEARS 69
DIFFERENCE BETWEEN A HISTORICAL COST DEPRECIATION
CHARGE AND THE ACTUAL DEPRECIATION CHARGE CALCULATED
ON THE REVALUED AMOUNT 3 3
HISTORICAL COST PROFIT BEFORE TAXATION 270 81
HISTORICAL COST PROFIT FOR THE YEAR
REPORTED RESULT FOR THE YEAR 142
DIVIDENDS (41) (41)
REALISATION OF PROPERTY REVALUATION GAINS OF PREVIOUS
YEARS AFTER MINORITY INTERESTS 64
DIFFERENCE BETWEEN A HISTORICAL COST DEPRECIATION
CHARGE AND THE ACTUAL DEPRECIATION CHARGE CALCULATED
ON THE REVALUED AMOUNT AFTER MINORITY INTERESTS 2 2
HISTORICAL COST PROFIT/(LOSS) FOR THE YEAR AFTER
DIVIDENDS 167 (39)
8) EARNINGS PER SHARE
BASIC EARNINGS PER SHARE HAS BEEN CALCULATED ON THE PROFIT ATTRIBUTABLE TO
SHAREHOLDERS AMOUNTING TO #48 MILLION (1996 - #93 MILLION) BEFORE EXCEPTIONAL
ITEMS AND (142 MILLION (1996 - #NIL) AFTER EXCEPTIONAL ITEMS USING A WEIGHTED
AVERAGE OF 786,233,769 ORDINARY SHARES (1996 - 779,325,449).
NO FULLY DILUTED EARNINGS PER SHARE FIGURE BASED ON SHARE OPTIONS AND THE
CONVERTIBLE BONDS IN ISSUE IS PROVIDED AS IT IS IN EXCESS OF THE BASIC EARNINGS
PER SHARE.
9) RECOGNISED GAINS AND LOSSES
THE STATEMENT OF TOTAL CONSOLIDATED RECOGNISED GAINS AND LOSSES IS AS FOLLOWS:
1997 1996
#M #M
RESULT FOR THE YEAR 142 -
DILUTION OF THE GROUP'S INTEREST IN ASHANTI 22 26
DILUTION OF THE GROUP'S INTEREST IN DUIKER 8
UNREALISED NET SURPLUS/(DEFICIT) ON REVALUATION OF
ASSETS 66 (63)
EXCHANGE ADJUSTMENTS (49) (84)
TOTAL RECOGNISED GAINS/(LOSSES) RELATING TO THE YEAR 181 (113)
10) DIVIDENDS
A FINAL DIVIDEND OF 3.0 PENCE PER SHARE (1996 - FINAL DIVIDEND OF 3.0 PENCE),
1.25P OF WHICH IS AN ENHANCED FOREIGN INCOME DIVIDEND ("FID"), IS RECOMMENDED
FOR PAYMENT ON 6 APRIL 1998 TO SHAREHOLDERS ON THE REGISTERS AT 6 FEBRUARY
1998. BECAUSE THE ACT PAID ON THE FID CAN BE RECLAIMED BY THE COMPANY, THE CASH
SAVED IS PASSED ON TO SHAREHOLDERS BY ENHANCING THE AMOUNT OF THE FID BY 25 PER
CENT TO 1.25P PER SHARE, WHICH IS THE EQUIVALENT GROSS VALUE OF A L.0P
CONVENTIONAL DIVIDEND. FOR INCOME TAX PURPOSES THE FID IS TREATED AS HAVING
SUFFERED INCOME TAX AT THE LOWER RATE OF 20 PER CENT BUT THIS INCOME TAX IS NOT
REPAYABLE TO SHAREHOLDERS.
AN INTERIM DIVIDEND OF 2.25 PENCE PER SHARE WAS PAID ON 1 OCTOBER 1997 OF WHICH
1.25P WAS A FID BRINGING THE TOTAL DIVIDEND FOR THE YEAR TO 5.25 PENCE PER
SHARE OF WHICH 2.5P IS A FID (1996 - 5.25 PENCE OF WHICH 2.5P WAS A FID).
THE TOTAL DISTRIBUTION AMOUNTS TO #41 MILLION (1996 - #41 MILLION).
11) SHARES IN LIEU OF CASH DIVIDEND
SHAREHOLDERS WILL BE ENTITLED, IF THEY WISH, TO ELECT TO RECEIVE SHARES
CREDITED AS FULLY PAID IN LIEU OF CASH IN RESPECT OF THE 1.75P ELEMENT OF THE
DIVIDEND (OR PART THEREOF), WHICH IS NOT A FID, RECOMMENDED FOR PAYMENT ON 6
APRIL 1998. DETAILS WILL BE SENT TO SHAREHOLDERS IN FEBRUARY, WITH THE REPORT
AND ACCOUNTS.
12) NET BORROWINGS
NET BORROWINGS CAN BE ANALYSED BY GEOGRAPHICAL AREA AS FOLLOWS:
1997 1996
#M #M
SOUTHERN AFRICA 52 51
EAST, CENTRAL AND WEST AFRICA 86 76
THE AMERICAS 76 91
UNITED KINGDOM TRADING ACTIVITIES 10 40
EUROPE AND OTHER (1) 1
UNITED KINGDOM CENTRAL FINANCE (45) 283
178 542
DISCONTINUED OPERATIONS 81 268
259 810
THE NET BORROWINGS OF DISCONTINUED OPERATIONS AT 30 SEPTEMBER 1997 RELATE TO
CRAMLINGTON TEXTILES AND DUTTON FORSHAW WHICH HAVE BEEN SOLD SINCE THE YEAR END
LOANS DUE AFTER MORE THAN ONE YEAR CAN BE ANALYSED AS FOLLOWS:
SECURED UNSECURED
1997 1996 1997 1996
#M #M #M #M
BETWEEN ONE AND TWO YEARS 25 30 32 387
BETWEEN TWO AND FIVE YEARS 28 57 2 34
OVER FIVE YEARS:
- BY INSTALMENTS 36 43 3 3
- OTHERWISE - 2 111 111
89 132 148 535
13) LOANS FROM A MINORITY SHAREHOLDER
THE LOANS FROM A MINORITY SHAREHOLDER COMPRISE LOANS FROM GAZELLE PLATINUM
LIMITED, A WHOLLY OWNED SUBSIDIARY OF IMPALA PLATINUM HOLDINGS LIMITED, TO
WESTERN PLATINUM AND EASTERN PLATINUM.
THE LOANS AMOUNT TO SOUTH AFRICAN RAND 54 MILLION EQUIVALENT TO #7 MILLION
(1996 - #11 MILLION) AND ARE WHOLLY REPAYABLE WITHIN TWO TO FIVE YEARS AND BORE
INTEREST IN 1997 AT 20.1 PER CENT.
14) CASH AT BANK
CASH AT BANK AT 30 SEPTEMBER 1997 AMOUNTED TO #260 MILLION (1996 -#195
MILLION). OF THIS CASH 7S PER CENT (1996 - 59 PER CENT) WAS HELD IN BANK
ACCOUNTS IN EUROPE AND THE UNITED STATES BY COMPANIES REGISTERED AND OPERATING
IN THOSE AREAS. THE CASH HELD IN SOUTHERN AFRICA AT 30 SEPTEMBER 1997 WAS 18
PER CENT (1996 - 28 PER CENT) OF TOTAL CASH.
15) NET NON-INTEREST BEARING OPERATING ASSETS
AN ANALYSIS OF GROUP NET NON-INTEREST BEARING OPERATING ASSETS AND OF
ASSOCIATES' NET ASSETS BY ACTIVITY AND GEOGRAPHICAL AREA IS GIVEN BELOW:
1997 1996
GROUP ASSOCIATES TOTAL GROUP ASSOCIATES TOTAL
#M #M #M #M #M #M
MINING AND
REFINING 558 127 685 569 144 713
MOTOR AND
EQUIPMENT
DISTRIBUTION 99 3 102 100 2 102
HOTELS 372 7 379 375 7 382
AGRICULTURE 115 115 81 81
MANUFACTURING 11 11 12 12
GENERAL TRADE 83 1 84 97 1 98
CENTRAL FINANCE 5 5 9 9
DISCONTINUED
OPERATIONS 112 112 529 7 536
1,355 138 1,493 1,772 161 1,933
NET INTEREST
BEARING LIABILITIES (263) (830)
PROPOSED DIVIDENDS
AND ACT (45) (44)
NET TOTAL ASSETS 1 185 1,059
SOUTHERN AFRICA 497 1 498 494 1 495
EAST, CENTRAL
AND WEST AFRICA 333 129 462 305 146 451
THE AMERICAS 396 7 403 407 7 414
UNITED KINGDOM 11 1 12 26 26
EUROPE AND OTHER 1 1 2 2
CENTRAL FINANCE 5 5 9 9
DISCONTINUED
OPERATIONS 112 112 529 7 536
1,355 138 1,493 1,772 161 1,933
NET INTEREST
BEARING
LIABILITIES (263) (830)
PROPOSED
DIVIDENDS
AND ACT (45) (44)
1,185 1,059
15) NET NON-INTEREST BEARING OPERATING ASSETS (CONTINUED)
1997 1996
#M #M
NET INTEREST BEARING LIABILITIES
COMPRISE THE FOLLOWING:
NET BORROWINGS 259 810
BILLS PAYABLE 10 39
BILLS RECEIVABLE (2) (6)
LOANS RECEIVABLE (4) (13)
263 830
THE 1996 FIGURES HAVE BEEN ADJUSTED TO REFLECT THE NET NON-INTEREST BEARING
OPERATING ASSETS OF BAUMANN HINDE AMOUNTING TO #25 MILLION (1997 - #20 MILLION)
IN AGRICULTURE INSTEAD OF GENERAL TRADE, AS IT IS NOW REPORTED WITHIN THE
AGRI-BUSINESS DIVISION OF LONRHO AFRICA.
16) RECONCILIATION OF MOVEMENT IN EQUITY INTERESTS
1997 1996
#M #M
TOTAL RECOGNISED GAINS/(LOSSES)
RELATING TO THE YEAR 181 (113)
DIVIDENDS (41) (41)
SHARES ISSUED IN LIEU OF CASH DIVIDENDS 9 5
SHARES ISSUED 3 4
NET GOODWILL ON ACQUISITION OF
SUBSIDIARIES AND ASSOCIATES (9) (7)
NET GOODWILL ON ACQUISITION OF
MINORITY INTEREST IN METROPOLE HOTELS (141)
NET GOODWILL ON ACQUISITION OF
INTEREST IN SUBSIDIARIES BY ASHANTI (37) (55)
NET GOODWILL REALISED ON SALE OF SUBSIDIARIES 75 71
OTHER ITEMS (5) (4)
NET INCREASE/(REDUCTION) IN EQUITY
INTERESTS IN THE YEAR 176 (281)
EQUITY INTERESTS AT 1 OCTOBER 799 1,080
EQUITY INTERESTS AT 3O SEPTEMBER 975 799
17) EXCHANGE RATES
FOREIGN CURRENCY ASSETS AND LIABILITIES AND THE RESULTS FOR THE YEAR HAVE BEEN
TRANSLATED INTO STERLING AT THE EXCHANGE RATES RULING AT THE BALANCE SHEET DATE
18) RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES:
1997 1996
#M #M
OPERATING PROFIT FROM CONTINUING ACTIVITIES 130 163
EXCEPTIONAL COSTS (9) (5)
SHARE OF PROFITS OF ASSOCIATES (13) (23)
DIVIDEND RECEIVED FROM ASSOCIATES 6 4
DIVIDENDS RECEIVED FROM FAXED ASSET INVESTMENTS (1)
INCREASE IN PROVISIONS AGAINST INVESTMENTS 1
DEPRECIATION CHARGE 40 39
DECREASE IN OTHER PROVISIONS (1)
DECREASE/(INCREASE) IN WORKING CAPITAL 18 (5)
OTHER ITEMS (2) (1)
NET CASH INFLOW FROM CONTINUING ACTIVITIES 170 171
NET CASH INFLOW IN RESPECT OF
DISCONTINUED ACTIVITIES 47 75
NET CASH INFLOW FROM OPERATING ACTIVITIES 217 246
19) RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
1997 1996
#M #M
NET INTEREST PAID (55) (63)
DIVIDENDS RECEIVED FROM FIXED ASSET INVESTMENTS L
DIVIDENDS PAID TO MINORITIES (13) (15)
(68) (77)
20) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
1997 1996
#M #M
PURCHASE OF TANGIBLE FIXED ASSETS 104 106
PURCHASE OF VEHICLES FOR LEASING 24 21
PURCHASE OF FIXED ASSET INVESTMENTS 14 2
LOANS TO ASSOCIATES 6
SALE OF TANGIBLE FIXED ASSETS (12) (10)
SALE OF FIXED ASSET INVESTMENTS (3) (3)
SALE OF CURRENT ASSET INVESTMENTS (2)
REPAYMENT OF LOANS RECEIVABLE (8)
119 120
21) DISPOSALS AND ACQUISITIONS
1997 1996
#M #M
PURCHASE OF SUBSIDIARIES 18 5
PURCHASE OF MINORITY INTEREST IN METROPOLE HOTELS 254
CASH RECEIVED ON SAFE OF SUBSIDIARIES (537)
INCREASE IN MINORITY INTEREST IN SUBSIDIARIES SOLD (2)
INVESTMENT IN ASSOCIATES 3 13
GOODWILL ARISING ON ACQUISITION OF SUBSIDIARIES 3
(518) 275
PURCHASE OF SUBSIDIARIES INCLUDES #14 MILLION IN RESPECT OF SUBSIDIARIES OF
LONRHO SUGAR WHICH WAS SOLD ON 20 JUNE 1997.
22) FINANCING OF THE GROUP
1997 1996
#M #M
ISSUE OF SHARE CAPITAL (2) (4)
NET LOAN REPAYMENTS/(ADVANCES) 412 (275)
410 (279)
23) RECONCILIATION OF NET CASH FLOW TO MOVEMENT
IN NET BORROWINGS
1997 1996
#M #M
NET BORROWINGS AT 1 OCTOBER 810 530
(INCREASE)/DECREASE IN CASH IN THE PERIOD (74) 15
CASH (OUTFLOW)/INFLOW FROM DECREASE IN FINANCING (412) 275
LOANS AND FINANCE LEASES (DISPOSED OF)/ACQUIRED
WITH SUBSIDIARIES (55) 4
NEW FINANCE LEASES 2
EFFECT OF EXCHANGE RATE MOVEMENTS (25) (16)
OTHER 15
259 810
24) EQUITY INTERESTS INCLUDING THE MARKET VALUE OF LISTED INVESTMENTS
SOME OF THE GROUP'S INVESTMENTS ARE LISTED ON VARIOUS STOCK EXCHANGES. THE
GROUP'S ADJUSTED EQUITY INTERESTS AND THE MARKET VALUE OF THESE COMPANIES AT 30
SEPTEMBER 1997 COMPARED TO BOOK VALUE WOULD BE AS FOLLOWS:
BOOK MARKET SURPLUS/
VALUE VALUE (DEFICIT)
#M #M #M
ASHANTI GOLDFIELDS COMPANY LTD. 127 231 104
DUIKER MINING LTD. 44 98 54
HONDO OIL & GAS COMPANY 69 41 (28)
JOHN HOLT PLC. 8 13 5
LONRHO MOTORS EAST AFRICA LTD. 11 8 (3)
WILLOUGHBY'S CONSOLIDATED PLC. 2 5 3
135
EQUITY INTERESTS AT 30 SEPTEMBER 1997 975
ADJUSTED EQUITY INTERESTS AT 30 SEPTEMBER 1997 1,110
THE BOOK VALUE OF HONDO OIL & GAS REPRESENTS LOANS MADE TO HONDO OIL & GAS AND
THE COST OF SHARES IN HONDO OIL & GAS.
25) ANNUAL GENERAL MEETING
THE ANNUAL GENERAL MEETING WILL BE HELD ON FRIDAY, 27 MARCH 1998.
26) THE FINANCIAL INFORMATION SET OUT ABOVE IS TAKEN FROM BUT DOES NOT
CONSITITUTE THE COMPANY'S STATUTORY ACCOUNTS FOR THE YEARS ENDED 30 SEPTEMBER
1997 OR 1996. STATUTORY ACCOUNTS FOR 1996 HAVE BEEN DELIVERED, AND FOR 1997
WILL BE DELIVERED, TO THE REGISTRAR OF COMPANIES. THE AUDITORS HAVE MADE
UNQUALIFIED REPORTS ON THOSE ACCOUNTS AND SUCH REPORTS DID NOT CONTAIN A
STATEMENT UNDER SECTION 237(2) OR (3) OF THE COMPANIES ACT 1985.
COPIES OF THE 1997 LONRHO ACCOUNTS WILL BE POSTED TO SHAREHOLDERS AND WILL BE
AVAILABLE AT THE COMPANY'S REGISTERED OFFICE IN MID FEBRUARY 1998.
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