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ISSUED BY LONMIN PLC
4 GROSVENOR PLACE, LONDON SWIX 7YL
TEL: 0171 201 6000 FAX: 0171 201 6100
INTERIM STATEMENT - 31 MARCH 1999
HIGHLIGHTS
6 MONTHS TO 6 MONTHS TO - 6 MONTHS TO 6 MONTHS TO
31 MARCH 31 MARCH - 31 MARCH 31 MARCH
1999 1998 - 1999 1998
- RESTATED - - RESTATED
PROFITS
GBP69M GBP33M OPERATING PROFIT - CONTINUING $114M $55M
- - OPERATIONS UP 107%
GBP60M GBP39M PROFIT BEFORE TAX PRE- $99M $65M
- - EXCEPTIONALS UP 52%
27.7P 14.1P EARNINGS PER SHARE 45.6C 23.1C
- - PRE-EXCEPTIONALS UP 97%
7.5P 7.2P DIVIDENDS PER SHARE 12.1C 12.1C
- - CASH FLOW
24.5P 5.5P TRADING CASH FLOW PER SHARE 39.6C 9.1C
13.8P (3.0P) FREE CASH FLOW PER SHARE 22.6C (5.0)C
- - BALANCE SHEET
GBP430M GBP830M EQUITY INTERESTS $698M $1,395M
GBP123M GBP164M NET BORROWINGS $199M $276M
21% 17% GEARING 21% 17%
COMMENTING ON THE RESULTS, LONMIN'S CHIEF EXECUTIVE, NICHOLAS MORRELL SAID:
"THESE RESULTS DEMONSTRATE THE STRENGTH AND QUALITY OF THE GROUP'S ASSETS AND
THEIR POTENTIAL TO GENERATE A COMPETITIVE RETURN FOR SHAREHOLDERS. AS LONMIN
GETS INTO ITS STRIDE AS A MINING COMPANY, THE BENEFITS OF THE MAJOR
RESTRUCTURING EXERCISE UNDERTAKEN OVER THE LAST THREE YEARS ARE BEGINNING TO BE
REALISED".
NOTES ON HIGHLIGHTS
THE 1999 FIGURES REFLECT THE ADOPTION OF THE US DOLLAR AS THE FUNCTIONAL
CURRENCY OF THE GROUP WITH EFFECT FROM 1 OCTOBER 1998 AND THE UTILISATION OF
THE AVERAGE EXCHANGE RATE METHOD FOR THE COMPUTATION OF THE PROFITS. THIS MORE
ACCURATELY REFLECTS THE UNDERLYING EARNINGS STREAM OF THE GROUP AND IS IN LINE
WITH THE MAJORITY OF INTERNATIONAL MINING COMPANIES. STERLING EQUIVALENTS ARE,
AND WILL CONTINUE TO BE, PRESENTED TO ASSIST CLARITY FOR SHAREHOLDERS.
THE 1998 FIGURES HAVE BEEN RESTATED TO REFLECT THE CHANGE IN METHODOLOGY OF
COMPUTATION OF THE PROFITS AT THE AVERAGE RATHER THAN CLOSING EXCHANGE RATE
METHOD. THE 1998 BALANCE SHEET AND GEARING FIGURES ARE NOT STRICTLY COMPARABLE
AS THE PREVIOUS YEAR'S FIGURES REFLECT THE GROUP PRIOR TO THE SIGNIFICANT
REORGANISATION ACHIEVED IN THE SECOND HALF OF THE LAST FINANCIAL YEAR.
GEARING IS CALCULATED ON THE EQUITY AND MINORITY INTERESTS OF THE GROUP.
PRESS ENQUIRIES: ANTHONY CARDEW, CARDEW & CO - 0171 930 0777
THIS PRESS RELEASE IS AVAILABLE ON HTTP:/WWW.LONMIN.COM
LONMIN PLC
CHIEF EXECUTIVE'S STATEMENT
DEAR SHAREHOLDER,
THE IMPROVING TREND EVIDENT LAST YEAR HAS CONTINUED, SO THAT AT THIS INTERIM
STAGE I AM PLEASED TO REPORT A VERY SATISFACTORY INCREASE IN YOUR COMPANY'S
PROFITS. WHILE THE RESULTS ARE GOOD, THEY HAVE BENEFITED FROM HIGHER PRICES FOR
PLATINUM GROUP METALS (PGMS) THAN PREVAILED LAST YEAR, AS WELL AS PROFITS FROM
THE TAVISTOCK COAL OPERATIONS, WHICH, AS SHAREHOLDERS WILL APPRECIATE, WERE
ONLY ACQUIRED IN APRIL LAST YEAR AND WERE THEREFORE NOT INCLUDED IN LAST YEAR'S
INTERIM RESULTS. THE SECOND HALF OF THE YEAR WILL BE MORE DEMANDING BUT IT IS
ENCOURAGING, NEVERTHELESS, THAT YOUR COMPANY'S PRINCIPAL OPERATIONS HAVE ALL
CONTRIBUTED TO THE MORE THAN DOUBLING OF OPERATING PROFITS. ALTHOUGH PLATINUM
WAS PREDICTABLY THE STAR PERFORMER, THE ACHIEVEMENTS BY OUR GOLD AND COAL
OPERATIONS ARE SIGNIFICANT GIVEN THE DIFFICULT MARKET CONDITIONS FOR BOTH
COMMODITIES.
THE ASSOCIATED AND MARKED INCREASE IN TRADING CASH FLOW IS EQUALLY WELCOME
WHICH, TOGETHER WITH OTHER FACTORS, HAS ENCOURAGED THE BOARD TO MAINTAIN THE
LEVEL OF INTERIM DIVIDEND IN US DOLLAR TERMS, WHICH GIVEN THE CURRENT EXCHANGE
RATE WILL RESULT IN A 4.2 PER CENT INCREASE IN THE STERLING DIVIDEND PAID.
THE QUALITY OF OUR MINING ASSETS AND THEIR DEMONSTRABLE ABILITY TO GENERATE A
COMPETITIVE RETURN IS COMPLEMENTED BY THE SCOPE FOR FURTHER DEVELOPMENT AND
ORGANIC GROWTH. OVER THE NEXT THREE YEARS AND AGAINST VERY ROBUST FORECASTS FOR
THE DEMAND FOR PLATINUM GROUP METALS, OUR PLATINUM OPERATIONS WILL UNDERTAKE A
SIGNIFICANT EXPANSION INCREASING ANNUAL OUTPUT TO A LEVEL IN EXCESS OF 700,000
OUNCES OF PLATINUM. FOLLOWING THE ACQUISITION OF THE CORSYN MINORITY, WE NOW
OWN 100 PER CENT OF OUR GOLD ASSETS IN ZIMBABWE. THE INITIAL RESULTS OF
EXPLORATION PROGRAMMES WHICH ARE NOW TAKING PLACE ON THE MAJOR PROPERTIES HAVE
REVEALED CONSIDERABLE POTENTIAL FOR PROFITABLE EXPANSION, EVEN AT TODAY'S GOLD
PRICE.
CORPORATE INITIATIVES TO EXPAND THE COMPANY, BASED ON THE QUALITY OF OUR
PRECIOUS METAL ASSETS WILL BE MEASURED AGAINST THE CRITERIA OF FURTHER
ENHANCING SHAREHOLDER VALUE. IN THIS CONTEXT, THE RECENT RULING FROM THE
EUROPEAN COURT OF FIRST INSTANCE EFFECTIVELY PREVENTS A MERGER WITH IMPALA, BUT
THE RATIONALISATION OF IMPALA'S SHAREHOLDING IN LONMIN PLATINUM REMAINS A
PRIORITY ISSUE.
RESULTS
THE OVERALL PROFIT ATTRIBUTABLE TO SHAREHOLDERS, EXCLUDING EXCEPTIONAL ITEMS,
FOR THE PERIOD WAS 59 PER CENT UP AT $73 MILLION (GBP44 MILLION) COMPARED TO
$46 MILLION (GBP28 MILLION) IN THE FIRST HALF OF 1998. TRADING CASH FLOW PER
SHARE, REPRESENTING CASH FLOW FROM OPERATIONS LESS TAX AND INTEREST PAYMENTS,
INCREASED FROM 9.1 CENTS (5.5 PENCE) IN 1998 TO 39.6 CENTS (24.5 PENCE) IN
1999, AN INCREASE OF 335 PER CENT. AFTER DEDUCTING CAPITAL EXPENDITURE AND
INVESTMENTS IN ASSOCIATED COMPANIES, FREE CASH FLOW PER SHARE AVAILABLE FOR
DIVIDENDS AND FUTURE GROWTH OPPORTUNITIES WAS 22.6 CENTS (13.8 PENCE) COMPARED
WITH AN OUTFLOW OF 5.0 CENTS (10 PENCE) LAST YEAR.
GEARING AT 31 MARCH 1999 REMAINED AT A COMFORTABLE LEVEL OF 21 PER CENT
COMPARED TO THE 26 PER CENT AT LAST YEAR END CALCULATED ON THE ADJUSTED BASIS
OF NET BORROWINGS OF $226 MILLION (GBP133 MILLION) REFLECTING PAYABLES AND
RECEIVABLES IN RESPECT OF BUSINESSES SOLD.
IN CONJUNCTION WITH THE CHANGE IN THE FUNCTIONAL CURRENCY OF THE GROUP TO US
DOLLARS THE REALISTIC USEFUL LIVES OF THE ASSETS HAVE BEEN REASSESSED AND
APPROPRIATE INCREASES MADE TO THE DEPRECIATION CHARGE. IN ADDITION, THE
COMPARISON WITH LAST YEAR'S DEPRECIATION CHARGE HAS ALSO BEEN AFFECTED BY THE
ACQUISITION OF TAVISTOCK.
PLATINUM
OPERATING PROFIT AT $56 MILLION (GBP34 MILLION) REPRESENTS A 56 PER CENT
INCREASE ON THE $36 MILLION (GBP21 MILLION) ACHIEVED IN 1998. THE PERIOD UNDER
REVIEW BENEFITED FROM SIGNIFICANTLY HIGHER AVERAGE REALISED PRICES FOR
PALLADIUM AND RHODIUM COMPARED TO LAST YEAR. NOTWITHSTANDING THE COMBINED
EFFECTS OF A STRIKE IN OCTOBER 1998 AND A FALL OF GROUND AT EASTERN PLATINUM IN
DECEMBER 1998, OUTPUT OF PGMS AT 564,000 OUNCES WAS BROADLY COMPARABLE WITH THE
568,000 OUNCES ACHIEVED IN 1998. BEARING IN MIND THE ABOVE FACTORS, AND TAKING
INTO CONSIDERATION MOVEMENTS IN CURRENCIES, COST PER KILOGRAMME OF METALS
PRODUCED INCREASED BY 12 PER CENT IN RAND TERMS WHILST REDUCING BY 8 PER CENT
IN US DOLLAR TERMS.
PRICES REMAIN VOLATILE, PARTICULARLY WITH RESPECT TO PALLADIUM, AND THE
INCREASES EXPERIENCED IN THE SECOND HALF OF LAST YEAR COMPARED TO THE FIRST
HALF, ARE NOT EXPECTED TO BE REPEATED THIS YEAR. WHILE THE MARKET SENTIMENT IN
THE MEDIUM TERM CONTINUES TO REMAIN POSITIVE, THE MARKET IN THE SHORT TERM
CONTINUES TO BE SUBJECTED TO THE INFLUENCES OF ACTIVITY IN RUSSIA AND OVERALL
MARKET SPECULATION.
THE PLANNING PROCESS FOR THE ENHANCED SMELTER COMPLEX IS ALMOST COMPLETE AND
COMMISSIONING IS CURRENTLY SCHEDULED FOR THE LATTER PART OF NEXT YEAR. NOT ONLY
WILL THIS FURTHER REDUCE PRODUCTION BOTTLENECKS RESULTING IN IMPROVED
EFFICIENCIES, BUT, IMPORTANTLY THE OVERALL DESIGN CATERS FOR AN ANNUAL
THROUGHPUT CAPACITY OF SOME 800,000 OUNCES OF PLATINUM. CAPITAL EXPENDITURE IN
THE FIRST HALF OF THE YEAR HAS MAINLY FOCUSED ON UNDERGROUND DEVELOPMENT TO
PROVIDE THE BASE FOR THE CURRENT EXPANSION TO OVER 700,000 ANNUAL OUNCES OF
PLATINUM.
COAL
OPERATING PROFIT INCREASED TO $27 MILLION (GBP16 MILLION) COMPARED TO $9
MILLION (GBP6 MILLION) FOR THE SAME PERIOD LAST YEAR REFLECTING THE
CONTRIBUTION FROM TAVISTOCK FOR THE FIRST TIME IN 1999. PRICES IN THE WORLD
MARKET REMAIN STATIC AND THE LOCAL MARKET IN SOUTH AFRICA CONTINUES TO BE
HIGHLY COMPETITIVE. WHILE OVERALL PRODUCTION AND SALES FIGURES ARE NOT
COMPARABLE BETWEEN THE TWO PERIODS UNDER REVIEW, THE INTEGRATION OF TAVISTOCK
WITH OUR ORIGINAL COAL ACTIVITIES WITHIN DUIKER CONTINUES SUCCESSFULLY.
A FUNDAMENTAL REVIEW OF THE ACTIVITIES OF DUIKER RESULTED IN THE DECISION TO
DISPOSE OF THE ANTHRACITE AND SMALL GOLD BUSINESSES WHEN AN APPROPRIATE PRICE
CAN BE REALISED. THIS HAS RESULTED IN A PROVISION OF $5 MILLION (GBP3 MILLION),
WHICH HAS BEEN CHARGED IN THIS PERIOD AGAINST THE CARRYING VALUE OF THESE
ASSETS IN ANTICIPATION OF THEIR REALISATION. THE RESULTING CONCENTRATION ON THE
BITUMINOUS ACTIVITIES WILL LEAD TO A MORE PROFITABLE UTILISATION OF THE
RICHARDS BAY COAL TERMINAL ENTITLEMENT AND INCREASING MANAGEMENT FOCUS ON THE
POSSIBILITIES FOR RATIONALISATION AND EXCHANGES OF COAL RIGHTS WITHIN THE
INDUSTRY AS A WHOLE SOUTH AFRICA. THIS SHOULD HAVE THE DUAL BENEFIT OF
EXTENDING THE LIVES OF VARIOUS MINES WITHIN THE GROUP AND IMPROVING THE
UTILISATION OF THE GROUP'S ASSETS AND THE RETURN FROM THEM GOLD
OPERATING PROFITS FROM THE GROUP'S GOLD OPERATIONS HAVE DOUBLED DURING THE
PERIOD UNDER REVIEW FROM $13 MILLION (GBP7 MILLION) IN 1998 TO $27 MILLION
(GBP16 MILLION) IN 1999. THIS SUBSTANTIAL INCREASE REFLECTS A VERY SIGNIFICANT
TURNAROUND IN OUR OPERATIONS IN ZIMBABWE, TOGETHER WITH CONTINUED IMPROVEMENT
IN THE RETURNS FROM OUR INVESTMENT IN ASHANTI.
IN ZIMBABWE THE IMPROVEMENT IN PROFITABILITY FROM A BREAK-EVEN POSITION IN 1998
TO AN OPERATING PROFIT OF $10 MILLION (GBP6 MILLION) IN 1999 REFLECTS TWO KEY
FACTORS. THERE HAS BEEN A MATERIAL IMPROVEMENT IN EFFICIENCIES RESULTING FROM
MORE FOCUSED AND TARGETED MANAGEMENT OF THE OPERATIONS. IN ADDITION THERE HAS
BEEN A SHORT TERM BENEFIT FROM THE SIGNIFICANT DEVALUATION IN THE ZIMBABWE
DOLLAR PARTIALLY OFFSET BY THE LOWER GOLD PRICE REALISED. MANAGEMENT HAS USED
THIS WINDOW OF OPPORTUNITY TO INCREASE EXPENDITURE ON THE INFRASTRUCTURE AND
EXPLORATION, WHICH WILL SIGNIFICANTLY ENHANCE OPPORTUNITIES FOR PROFITABLE
DEVELOPMENT IN THE FUTURE. DEBT HAS BEEN REDUCED SIGNIFICANTLY FROM $8 MILLION
(GBP5 MILLION) IN SEPTEMBER 1998 TO $2 MILLION (GBP1 MILLION) AT MARCH 1999 AND
THE OPERATIONS CONTINUE TO BE CASH GENERATIVE.
DEVELOPMENTS WITHIN ASHANTI HAVE CONTINUED. THE CONTRIBUTION TO LONMIN'S
OPERATING PROFIT HAS INCREASED FROM $12 MILLION (GBP7 MILLION) IN 1998 TO $17
MILLION (GBP10 MILLION) IN 1999 REFLECTING EXPANSION AT SIGUIRI AND BIBIANI
WITH THEIR RELATIVELY LOW PRODUCTION COST PER OUNCE AND, AS A RESULT OF THE
SUCCESSFUL HEDGING POLICIES, THE CONTINUED ACHIEVEMENT OF AN AVERAGE GOLD PRICE
OF $382 PER OUNCE BEING WELL ABOVE THE MARKET PRICE.
OTHER ACTIVITIES
THE GROUP RETAINS ONLY TWO OTHER PERIPHERAL ACTIVITIES, BEING ITS INVESTMENT IN
F E WRIGHT, THE LLOYDS INSURANCE BROKER, AND THE OWNERSHIP OF A HOTEL AND
CASINO COMPLEX IN THE BAHAMAS. THE INSURANCE ACTIVITIES HAVE BROKEN EVEN DURING
THE FIRST HALF OF THE YEAR REFLECTING THE COMPETITIVE INSURANCE MARKET PLACE AT
THE CURRENT TIME. THE HOTEL AND CASINO COMPLEX CONTRIBUTED AN OPERATING PROFIT
OF $2 MILLION (GBP1 MILLION) IN THE PERIOD UNDER REVIEW CAPITAL EXPENDITURE
INVESTMENT IN FIXED ASSETS IN THE MINING OPERATIONS AMOUNTS TO $29 MILLION
(GBP18 MILLION) IN 1999 COMPARED TO $23 MILLION (GBP14 MILLION) IN 1998. THE
MAJORITY OF THE EXPENDITURE WAS IN PLATINUM REFLECTING THE PLANNED ORGANIC
GROWTH OF THESE OPERATIONS.
DIRECTORATE
MR ROBIN WHITTEN RETIRED FROM THE BOARD ON 31 MARCH 1999 AFTER 20 YEARS OF
DISTINGUISHED SERVICE WITH THE GROUP. HE WAS SUCCEEDED AS FINANCE DIRECTOR BY
MR JOHN ROBINSON, AGE 44, WHO HAS WORKED WITHIN THE FINANCIAL MANAGEMENT TEAM
FOR THE PAST 20 YEARS.
DIVIDEND AND OUTLOOK
THE BOARD HAS DECLARED AN INTERIM DIVIDEND OF 7.5 PENCE (12.1 CENTS) PER SHARE
AS COMPARED TO 7.2 PENCE (12.1 CENTS) PER SHARE IN 1998. AS THE COMPANY HAS NOW
ADOPTED THE US DOLLAR AS ITS FUNCTIONAL CURRENCY, THE DIVIDEND IS DETERMINED IN
US DOLLARS BUT IS DECLARED AND WILL BE PAYABLE TO SHAREHOLDERS IN STERLING,
CONVERTED AT EXCHANGE RATES APPLICABLE TWO DAYS PRIOR TO THIS ANNOUNCEMENT,
REPRESENTING AN INCREASE OF 4.2 PER CENT IN STERLING TERMS.
THE INTERIM DIVIDEND WILL BE PAID ON 1 OCTOBER 1999 TO SHAREHOLDERS ON THE
REGISTERS AT 6 AUGUST 1999. THE FINAL DIVIDEND WILL BE REVIEWED BY THE BOARD,
IN LINE WITH PERFORMANCE FOR THE YEAR AS A WHOLE. IT REMAINS THE BOARD'S
POLICY TO PROVIDE A COMPETITIVE RETURN FOR SHAREHOLDERS WHILE TAKING ACCOUNT OF
THE INVESTMENT NECESSARY TO EXPAND AND DEVELOP THE GROUP.
THE SECOND HALF OF THE YEAR WILL NOT, FOR THE FACTORS PREVIOUSLY MENTIONED,
DEMONSTRATE THE SAME RATE OF GROWTH AS THAT ACHIEVED IN THIS PERIOD.
NEVERTHELESS THE BOARD BELIEVES THAT, SUBJECT TO EXCHANGE RATES AND COMMODITY
PRICES, EARNINGS FOR THE YEAR BEFORE EXCEPTIONAL ITEMS FROM CONTINUING
OPERATIONS, SHOULD BE SATISFACTORY.
NICHOLAS MORRELL
9 JUNE 1999
CONSOLIDATED BALANCE SHEET
THE UNAUDITED BALANCE SHEET OF THE LONMIN GROUP OF COMPANIES AS AT 31 MARCH
1999 IS AS FOLLOWS:
AS AT AS AT AS AT - AS AT AS AT AS AT
31 MARCH 30 SEPT 31 MARCH - 31 MARCH 30 SEPT 31 MARCH
1999 1998 1998 - 1999 1998 1998
GBPM GBPM GBPM - $M $M $M
- - - FIXED ASSETS
600 575 959 TANGIBLE ASSETS 972 978 1,615
133 119 119 ASSOCIATES 215 204 199
13 12 8 OTHER INVESTMENTS 21 20 14
746 706 1,086 1,208 1,202 1,828
- - - CURRENT ASSETS
41 36 150 STOCKS 66 61 251
84 87 222 DEBTORS 137 147 375
1 1 1 INVESTMENTS 1 1 2
73 119 240 CASH AT BANK AND IN 119 203 403
- - - HAND
199 243 613 - 323 412 1,031
- - - CREDITORS: AMOUNTS
- - - FALLING DUE WITHIN
- - - ONE YEAR
(12) (21) (191) CURRENT BANK LOANS (20) (36) (320)
- - - AND OVERDRAFTS
(143) (170) (290) OTHER CREDITORS (231) (289) (489)
44 52 132 NET CURRENT ASSETS 72 87 222
790 758 1,218 TOTAL ASSETS LESS 1,280 1,289 2,050
- - - CURRENT LIABILITIES
- - - CREDITORS: AMOUNTS
- - - FALLING DUE AFTER MORE
- - - THAN ONE YEAR
- - (4) LOAN FROM MINORITY SHARE-
- - - HOLDER - - (8)
(184) (202) (209) OTHER LOANS (298) (344) (351)
(2) (3) (19) OTHER CREDITORS (3) (4) (32)
(26) (39) (12) PROVISIONS FOR (42) (66) (20)
- - - LIABILITIES AND CHARGES
578 514 974 937 875 1,639
- - - CAPITAL AND RESERVES
159 158 199 CALLED UP SHARE 258 268 335
- - - CAPITAL
271 219 631 RESERVES 440 373 1,060
430 377 830 EQUITY INTERESTS 698 641 1,395
148 137 144 MINORITY EQUITY 239 234 244
- - - INTERESTS
578 514 974 - 937 875 1,639
CONSOLIDATED PROFIT AND LOSS ACCOUNT
THE UNAUDITED RESULTS OF THE LONMIN GROUP OF COMPANIES IN RESPECT OF THE SIX
MONTHS ENDED 31 MARCH 1999 ARE AS FOLLOWS:
6 MONTHS TO 6 MONTHS TO - 6 MONTHS TO 6 MONTHS TO
31 MARCH 31 MARCH - 31 MARCH 31 MARCH
1999 1998 - 1999 1998
- RESTATED - - RESTATED
GBPM GBPM - $M $M
- - TURNOVER (INCLUDING ASSOCIATES)
351 268 - CONTINUING OPERATIONS 579 445
- 468 - DISCONTINUED OPERATIONS - 780
351 736 579 1,125
- - GROUP OPERATING PROFIT
56 26 - CONTINUING OPERATIONS 93 43
- 25 - DISCONTINUED OPERATIONS - 42
- (2) - DISCONTINUED EXCEPTIONAL COSTS - (3)
56 49 93 82
13 8 SHARE OF ASSOCIATES' OPERATING 21 14
- - PROFIT
69 57 TOTAL OPERATING PROFIT 114 96
69 59 EXCLUDING EXCEPTIONAL ITEMS 114 99
- (2) EXCEPTIONAL ITEMS - (3)
- - PROFIT ON DISPOSAL OF FIXED - -
- - ASSETS
- - PROFIT/(LOSS) ON SALE OR TERMINATION OF OPERATIONS
- (65) GROUP - DISCONTINUED OPERATIONS - (110)
1 - ASSOCIATE - CONTINUING OPERATIONS 2 -
(9) (20) NET INTEREST PAYABLE AND SIMILAR (15) (34)
- - ITEMS
61 (28) PROFIT/(LOSS) BEFORE TAXATION 101 (48)
60 39 EXCLUDING EXCEPTIONAL ITEMS 99 65
1 (67) EXCEPTIONAL 2 (113)
(4) (4) TAX ON PROFIT ON ORDINARY (7) (6)
- - ACTIVITIES
57 (32) PROFIT/(LOSS) AFTER TAXATION 94 (54)
56 35 EXCLUDING EXCEPTIONAL ITEMS 92 59
1 (67) EXCEPTIONAL ITEMS 2 (113)
(12) (7) MINORITY INTERESTS (19) (12)
45 (39) PROFIT/(LOSS) FOR THE PERIOD 75 (66)
44 28 EXCLUDING EXCEPTIONAL ITEMS 73 46
1 (67) EXCEPTIONAL ITEMS 2 (112)
(12) (11) INTERIM DIVIDEND (19) (19)
33 (50) RETAINED PROFIT/(LOSS) FOR THE 56 (85)
- - PERIOD
28.5P (19.6)P EARNINGS PER SHARE 46.8C (33.2)C
27.7P 14.1P EARNINGS PER SHARE EXCLUDING 45.6C 23.1C
- - EXCEPTIONAL ITEMS
26.5P (19.5)P FULLY DILUTED EARNINGS PER SHARE 43.5C (33.1)C
25.8P 14.0P FULLY DILUTED EARNINGS PER SHARE 42.3C 23.0C
- - EXCLUDING EXCEPTIONAL ITEMS
7.5P 7.2P INTERIM DIVIDEND PER SHARE 12.1C 12,1C
THE 1999 FIGURES HAVE BEEN PREPARED ON THE BASIS THAT THE US DOLLAR IS THE
FUNCTIONAL CURRENCY OF THE GROUP WITH EFFECT FROM 1 OCTOBER 1998.
THE 1998 FIGURES HAVE BEEN RESTATED TO REFLECT THE CHANGE IN ACCOUNTING POLICY
TO TRANSLATING RESULTS AT WEIGHTED AVERAGE EXCHANGE RATES INSTEAD OF THE
PREVIOUS POLICY OF TRANSLATING RESULTS AT CLOSING RATES. THERE HAS ALSO BEEN A
REALLOCATION OF THE GROUP SHARE OF ASHANTI ROYALTY CHARGES BETWEEN OPERATING
PROFIT AND TAXATION.
1998 DISCONTINUED ACTIVITIES INCLUDE THE RESULTS OF DUTTON FORSHAW, PRINCESS
HOTELS, SUNLEY TURRIFF AND WILLOUGHBYS WHICH WERE SOLD AND LONRHO AFRICA WHICH
WAS DEMERGED.
CONSOLIDATED CASH FLOW STATEMENT
THE UNAUDITED CASH FLOW STATEMENT OF THE LONMIN GROUP OF COMPANIES FOR THE SIX
MONTHS ENDED 31 MARCH 1999 IS AS FOLLOWS:
6 MONTHS TO 6 MONTHS TO - 6 MONTHS TO 6 MONTHS TO
31 MARCH 31 MARCH - 31 MARCH 31 MARCH
1999 1998 - 1999 1998
GBPM GBPM - $M $M
- - NET CASH INFLOW FROM OPERATING ACTIVITIES
57 31 - CONTINUING
- - OPERATIONS 92 52
- 12 - DISCONTINUED
- - OPERATIONS - 20
57 43 - 92 72
- 2 DIVIDENDS RECEIVED
- - FROM ASSOCIATE - 3
(11) (19) NET INTEREST PAID (18) (33)
(6) (3) DIVIDENDS PAID TO
- - MINORITIES (10) (5)
(17) (22) RETURNS ON INVESTMENTS AND
- - SERVICING OF FINANCE (28) (38)
(7) (13) TAX PAID (11) (21)
(18) (24) PURCHASE OF TANGIBLE
- - FIXED ASSETS (30) (40)
- (3) PURCHASE OF FIXED
- - ASSET INVESTMENTS - (5)
- 7 SALE OF TANGIBLE
- - FIXED ASSETS - 12
(1) - ADVANCES OF LOANS
- - RECEIVABLE (1) -
- 1 REPAYMENT OF LOANS
- - RECEIVABLE - 2
2 - NET FUNDING REPAID BY
- - ASSOCIATES 4 -
(17) (19) CAPITAL EXPENDITURE AND
- - FINANCIAL INVESTMENT (27) (31)
(34) 25 ACQUISITIONS AND
- - DISPOSALS (56) 42
- (15) EQUITY DIVIDENDS PAID - (25)
(18) 1 NET CASH (OUTFLOW)/INFLOW
- - BEFORE FINANCING (30) 2
(18) 31 - CONTINUING ACTIVITIES (30) 53
- (30) - DISCONTINUED
- - ACTIVITIES - (51)
(25) (23) FINANCING - NET REPAY-
- - MENT OF LOANS (40) (39)
(43) (22) DECREASE IN NET CASH (70) (37)
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
6 MONTHS TO 6 MONTHS TO - 6 MONTHS TO 6 MONTHS TO
31 MARCH 31 MARCH - 31 MARCH 31 MARCH
1999 1998 - 1999 1998
GBPM GBPM - $M $M
34 (46) PROFIT/(LOSS) FOR THE 57 (78)
- - PERIOD GROUP
11 7 - ASSOCIATES 18 12
(4) - DILUTION OF GROUP'S (6) -
- - INTEREST IN ASHANTI
9 - GROUP SHARE OF EQUITY 14 -
- - ISSUED BY ASHANTI
13 (62) EXCHANGE ADJUSTMENTS - (29)
- - GROUP
6 (6) ASSOCIATES - (10)
69 (107) TOTAL RECOGNISED GAINS/ 83 (105)
- - (LOSSES) FOR THE PERIOD
NOTE ON EXCHANGE ADJUSTMENTS
THERE ARE NO EXCHANGE ADJUSTMENTS IN THE US DOLLAR NUMBERS FOR 1999 AS THE
FIGURES ARE PREPARED UTILISING THE US DOLLAR AS THE FUNCTIONAL CURRENCY. THE
EQUIVALENT STERLING FIGURES FOR 1999 INCLUDE THE TRANSLATION ADJUSTMENT FROM US
DOLLARS TO STERLING ON THE OPENING EQUITY FIGURE AT 1 OCTOBER 1998.
THE COMPARATIVE FIGURES FOR 1998 ARE NOT PREPARED ON A COMPARABLE BASIS AS THE
US DOLLAR WAS NOT USED AS THE FUNCTIONAL CURRENCY IN THIS PERIOD. THE STERLING
FIGURES REPRESENT THOSE EXCHANGE ADJUSTMENTS REPORTED LAST YEAR. THE US DOLLAR
FIGURES FOR 1998 INCLUDE THE ADJUSTMENTS ORIGINALLY REPORTED IN STERLING, THE
TRANSLATION ADJUSTMENT OF THE STERLING EQUITY FIGURES AT 1 OCTOBER 1997 INTO US
DOLLARS, AND THE DIFFERENCES BETWEEN THE AVERAGE AND CLOSING EXCHANGE RATES ON
THE PROFITS FOR THE PERIOD.
RECONCILIATION OF MOVEMENT IN EQUITY INTERESTS
6 MONTHS TO 6 MONTHS TO - 6 MONTHS TO 6 MONTHS TO
31 MARCH 31 MARCH - 31 MARCH 31 MARCH
1999 1998 - 1999 1998
GBPM GBPM - $M $M
377 975 EQUITY INTERESTS AT 641 1,566
- - 1 OCTOBER
69 (107) RECOGNISED GAINS/ 83 (105)
- - (LOSSES) RELATING TO
- - THE PERIOD
(12) (11) DIVIDEND (19) (19)
1 2 SHARES ISSUED 2 3
- (2) SURPLUS REALISED ON - (3)
- - DISPOSAL OF SUBSIDIARIES
- (2) GOODWILL ON ACQUISITION
- - OF SUBSIDIARIES - (3)
- (18) GOODWILL ON ACQUISITION - (30
- - WRITTEN OFF BY ASHANTI
(5) (7) OTHER ITEMS (9) (14)
430 830 EQUITY INTERESTS AT 698 1,395
- - 31 MARCH
NOTES TO THE HALF YEAR ACCOUNTS
1 PROFIT FOR THE PERIOD
6 MONTHS TO 6 MONTHS TO - 6 MONTHS TO 6 MONTHS TO
31 MARCH 31 MARCH - 31 MARCH 31 MARCH
1999 1998 - 1999 1998
- RESTATED - - RESTATED
GBPM GBPM - $M $M
- - TURNOVER
267 665 GROUP 441 1,106
84 71 ASSOCIATES 138 119
351 736 - 579 1,225
351 268 CONTINUING OPERATIONS 579 1,106
- 468 DISCONTINUED - 119
- - OPERATIONS
- - OPERATING PROFIT
56 51 GROUP 93 85
13 8 ASSOCIATES 21 14
69 59 - 114 99
69 33 CONTINUING 114 55
- - OPERATIONS
- 26 DISCONTINUED - 44
- - OPERATIONS
- - NET INTEREST PAYABLE
- - AND SIMILAR ITEMS
(11) (19) GROUP - NET INTEREST (18) (32)
- - PAYABLE
5 - - EXCHANGE DIFFERENCES
- - ON NET DEBT 8 -
(3) (1) SHARE OF ASSOCIATES' (5) (2)
- - NET INTEREST PAYABLE
60 39 PROFIT BEFORE 99 65
- - EXCEPTIONAL ITEMS
60 28 CONTINUING OPERATIONS 99 47
- 11 DISCONTINUED - 18
- - OPERATIONS
1 (67) EXCEPTIONAL ITEMS 2 (113)
61 (28) PROFIT/(LOSS) BEFORE 101 (48)
- - TAXATION
61 28 CONTINUING OPERATIONS 101 47
- (56) DISCONTINUED - (95)
- - OPERATIONS
(4) (4) TAXATION (7) (6)
57 (32) PROFIT/(LOSS) AFTER 94 (54)
- - TAXATION
57 25 CONTINUING OPERATIONS 94 43
- (57) DISCONTINUED OPERATIONS - (97)
(12) (7) MINORITY INTERESTS (19) (12)
45 (39) PROFIT/(LOSS) FOR THE 75 (66)
- - PERIOD
45 19 CONTINUING OPERATIONS 75 33
- (58) DISCONTINUED - (99)
- - OPERATIONS
27.7P 14.1P EARNINGS PER SHARE 45.6C 23.1C
- - EXCLUDING EXCEPTIONAL
- - ITEMS
27.7P 9.6P CONTINUING OPERATIONS 45.6C 16,6C
- 4.5P DISCONTINUED OPERATIONS - 6.5 C
28.5P (19.6)P EARNINGS PER SHARE 46,8C (33.2)C
- - BASED ON PROFIT/(LOSS)
- - FOR THE PERIOD
28.5P 9.6P CONTINUING OPERATIONS 46.8C 16.6C
- (29.2)P DISCONTINUED OPERATIONS - (49.8)C
2 TURNOVER BY ACTIVITY AND GEOGRAPHICAL AREA
TURNOVER, INCLUDING SHARE OF ASSOCIATES' TURNOVER, IS ANALYSED BY ACTIVITY AND
GEOGRAPHICAL AREA BELOW:
6 MONTHS TO 6 MONTHS TO - 6 MONTHS TO 6 MONTHS TO
31 MARCH 31 MARCH - 31 MARCH 31 MARCH
1999 1998 - 1999 1998
- RESTATED - - RESTATED
GBPM GBPM - $M $M
112 102 PLATINUM 184 170
124 56 COAL 204 93
79 72 GOLD 131 120
36 38 OTHER 60 62
- 468 DISCONTINUED - 780
- - OPERATIONS
351 736 - 579 1,225
236 158 SOUTH AFRICA 388 263
79 72 ZIMBABWE AND GHANA 131 120
34 34 THE AMERICAS 56 57
2 4 EUROPE 4 5
- 468 DISCONTINUED - 780
- - OPERATIONS
351 736 - 579 1,225
SHARE OF ASSOCIATES' TURNOVER IS ANALYSED BY ACTIVITY AND GEOGRAPHICAL AREA
BELOW:
6 MONTHS TO 6 MONTHS TO - 6 MONTHS TO 6 MONTHS TO
31 MARCH 31 MARCH - 31 MARCH 31 MARCH
1999 1998 - 1999 1998
- RESTATED - - RESTATED
GBPM GBPM - $M $M
21 - COAL 34 -
63 55 GOLD 104 91
- 16 DISCONTINUED - 28
- - OPERATIONS
84 71 - 138 119
21 - SOUTH AFRICA 34 -
63 55 ZIMBABWE AND GHANA 104 91
- 16 DISCONTINUED - 28
- - OPERATIONS
84 71 - 138 119
3 OPERATING PROFIT BY ACTIVITY AND GEOGRAPHICAL AREA
OPERATING PROFIT, INCLUDING SHARE OF ASSOCIATES' OPERATING PROFIT, IS ANALYSED
BY ACTIVITY AND GEOGRAPHICAL AREA BELOW:
6 MONTHS TO 6 MONTHS TO - 6 MONTHS TO 6 MONTHS TO
31 MARCH 31 MARCH - 31 MARCH 31 MARCH
1999 1998 - 1999 1998
- RESTATED - - RESTATED
GBPM GBPM - $M $M
34 21 PLATINUM 56 36
16 6 COAL 27 9
16 7 GOLD 27 13
6 3 OTHER 9 4
(3) (4) CENTRAL COSTS (5) (7)
69 33 - 114 55
- 26 DISCONTINUED OPERA-
- - TIONS - 44
69 59 - 114 99
1 (67) EXCEPTIONAL ITEMS 2 (113)
(9) (20) NET INTEREST PAYABLE
- - AND SIMILAR ITEMS (15) (34)
61 (28) PROFIT/(LOSS) BEFORE
- - TAXATION 101 (48)
49 26 SOUTH AFRICA 80 42
16 7 ZIMBABWE AND GHANA 27 13
3 2 THE AMERICAS 6 5
4 2 EUROPE 6 2
(3) (4) CENTRAL COSTS (5) (7)
69 33 - 114 55
- 26 DISCONTINUED OPERA-
- - TIONS - 44
69 59 - 114 99
1 (67) EXCEPTIONAL ITEMS 2 (113)
(9) (20) NET INTEREST PAYABLE
- - AND SIMILAR ITEMS (15) (34)
61 (28) PROFIT/(LOSS) BEFORE
- - TAXATION 101 (48)
SHARE OF ASSOCIATES' OPERATING PROFIT IS ANALYSED BY ACTIVITY AND GEOGRAPHICAL
AREA BELOW:
6 MONTHS TO 6 MONTHS TO - 6 MONTHS TO 6 MONTHS TO
31 MARCH 31 MARCH - 31 MARCH 31 MARCH
1999 1998 - 1999 1998
- RESTATED - - RESTATED
GBPM GBPM - $M $M
3 - COAL 4 -
10 7 GOLD 17 12
13 7 - 21 12
- 1 DISCONTINUED OPERA-
- - TIONS - 2
13 8 - 21 14
1 - EXCEPTIONAL ITEMS 2 -
(3) (1) NET INTEREST PAYABLE
- - AND SIMILAR ITEMS (5) (2)
11 7 PROFIT BEFORE TAXATION 18 12
3 - SOUTH AFRICA 4 -
10 7 ZIMBABWE AND GHANA 17 12
13 7 - 21 12
- 1 DISCONTINUED OPERA-
- - TIONS - 2
13 8 - 21 14
1 - EXCEPTIONAL ITEMS 2 -
(3) (1) NET INTEREST PAYABLE
- - AND SIMILAR ITEMS (5) (2)
11 7 PROFIT BEFORE TAXATION 18 12
4 PROFIT BEFORE TAXATION BY ACTIVITY AND GEOGRAPHICAL AREA
PROFIT BEFORE TAXATION IS ANALYSED BY ACTIVITY AND GEOGRAPHICAL AREA BELOW:
6 MONTHS TO 6 MONTHS TO - 6 MONTHS TO 6 MONTHS TO
31 MARCH 31 MARCH - 31 MARCH 31 MARCH
1999 1998 - 1999 1998
- RESTATED - - RESTATED
GBPM GBPM - $M $M
31 14 PLATINUM 51 24
14 7 COAL 23 11
12 5 GOLD 21 8
7 3 OTHER 10 5
(3) (4) CENTRAL COSTS (5) (7)
(1) 3 CENTRAL INTEREST AND
- - SIMILAR ITEMS (1) 6
60 28 - 99 47
- 11 DISCONTINUED OPERA-
- - TIONS - 18
1 (67) EXCEPTIONAL ITEMS 2 (113)
61 (28) PROFIT/(LOSS) BEFORE
- - TAXATION 101 (48)
44 20 SOUTH AFRICA 71 33
12 5 ZIMBABWE AND GHANA 21 8
4 2 THE AMERICAS 7 5
4 2 EUROPE 6 2
(3) (4) CENTRAL COSTS (5) (7)
(1) 3 CENTRAL INTEREST AND
- - SIMILAR ITEMS (1) 6
60 28 - 99 47
- 11 DISCONTINUED OPERA-
- - TIONS - 18
1 (67) EXCEPTIONAL ITEMS 2 (113)
61 (28) PROFIT/(LOSS) BEFORE
- - TAXATION 101 (48)
5 TAXATION
BECAUSE OF THE INCIDENCE OF ACCELERATED TAX ALLOWANCES, THE TAX CHARGE PROVIDED
AT THE HALF YEAR CAN ONLY BE ESTIMATED.
6 EARNINGS PER SHARE
EARNINGS PER SHARE HAS BEEN CALCULATED ON THE PROFIT ATTRIBUTABLE TO
SHAREHOLDERS OF $73 MILLION (GBP44 MILLION) (1998 - GBP46 MILLION (GBP28
MILLION)) BEFORE EXCEPTIONAL ITEMS AND A PROFIT OF $75 MILLION (GBP45 MILLION)
(1998 - LOSS OF $66 MILLION (LOSS OF GBP39 MILLION)) AFTER EXCEPTIONAL ITEMS
USING A WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OF 159,131,415 (1998 -
198,671,280).
DILUTED EARNINGS PER SHARE HAS BEEN CALCULATED ON A PROFIT ATTRIBUTABLE TO
SHAREHOLDERS OF $75 MILLION (GBP45 MILLION) (1998 - $46 MILLION (GBP28
MILLION)) BEFORE EXCEPTIONAL ITEMS AND A PROFIT OF $77 MILLION (GBP48 MILLION)
(1998 - LOSS OF $66 MILLION (LOSS OF GBP39 MILLION)) AFTER EXCEPTIONAL ITEMS
USING A WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OF 176,962,547 (1998 -
199,349,997). ATTRIBUTABLE PROFIT FOR 1999 USED IN THE CALCULATION OF DILUTED
EARNINGS PER SHARE IS ARRIVED AT BY ADDING BACK INTEREST CHARGED, NET OF TAX,
ON CONVERTIBLE BONDS OF $4 MILLION (GBP2 MILLION) AND WRITING OFF DEFERRED BOND
EXPENSES, NET OF TAX, OF $2 MILLION (GBP1 MILLION). THE WEIGHTED AVERAGE NUMBER
OF SHARES USED IN THE CALCULATION OF DILUTED EARNINGS PER SHARE IS CALCULATED
BY ADDING BACK DILUTIVE SHARE OPTIONS OF 705,675 (1998 - 678,717) AND SHARES ON
CONVERSION OF BONDS OF 17,125,457 (1998 - NIL). SHARES ON CONVERSION OF BONDS
IN 1998 DO NOT HAVE A DILUTIVE EFFECT ON ATTRIBUTABLE PROFIT FROM CONTINUING
OPERATIONS.
7 EXCEPTIONAL ITEMS
6 MONTHS TO 6 MONTHS TO - 6 MONTHS TO 6 MONTHS TO
31 MARCH 31 MARCH - 31 MARCH 31 MARCH
1999 1998 - 1999 1998
GBPM GBPM - $M $M
- (2) REORGANISATION AND RA-
- - TIONALISATION COSTS - (3)
- - DISPOSAL OF FIXED ASSETS
- - SALE OR TERMINATION OF OPERATIONS
- 8 - PROFIT ON THE SALE
- - OF DUTTON FORSHAW - 14
- (69) - PROVISION AGAINST
- - INVESTMENT IN HONDO - (116)
- (4) - OTHER - (8)
1 - SHARE OF EXCEPTIONAL
- - PROFITS OF ASHANTI 2 -
1 (67) - 2 (113)
8 NET BORROWINGS
NET BORROWINGS ARE ANALYSED BY ACTIVITY BELOW:
AS AT AS AT AS AT AS AT AS AT AS AT
31 MARCH 30 31 MARCH 31 MARCH 30 31 MARCH
1999 SEPTEMBER 1998 1999 SEPTEMBER 1998
GBPM 1998 GBPM $M 1998 $M
- GBPM - - $M -
13 5 37 PLATINUM 20 8 62
46 55 (10) COAL 75 94 (17)
1 5 11 GOLD 2 8 19
(8) (7) 2 OTHER (13) (11) 3
71 46 (59) CENTRAL FINANCE 115 78 (99)
123 104 (19) - 199 177 (32)
- - 183 DISCONTINUED
- - - OPERATIONS - - 308
123 104 164 - 199 177 276
INCLUDED IN NET CURRENT ASSETS AT 30 SEPTEMBER 1998 ARE SHORT TERM PAYABLES AND
RECEIVABLES IN RESPECT OF BUSINESSES SOLD. HAD THESE PAYABLES AND RECEIVABLES
BEEN SETTLED AT 30 SEPTEMBER 1998 THE NET BORROWINGS WOULD HAVE BEEN $226
MILLION (GBP133 MILLION).
9 NET CASH FLOW FROM OPERATING ACTIVITIES
A RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES GIVEN BELOW:
6 MONTHS TO 6 MONTHS TO - 6 MONTHS TO 6 MONTHS TO
31 MARCH 31 MARCH - 31 MARCH 31 MARCH
1999 1998 - 1999 1998
GBPM GBPM - $M $M
69 33 OPERATING PROFIT FROM
- - CONTINUING ACTIVITIES 114 55
(13) (7) SHARE OF PROFITS OF
- - ASSOCIATES (21) (12)
21 8 DEPRECIATION CHARGE 33 13
(23) (3) MOVEMENT IN WORKING
- - CAPITAL (37) (4)
3 - OTHER ITEMS 3 -
57 31 NET CASH INFLOW FROM
- - CONTINUING OPERATING
- - ACTIVITIES 92 52
- 12 NET CASH INFLOW IN
- - RESPECT OF DISCONTINUED
- - ACTIVITIES - 20
57 43 NET CASH INFLOW FROM
- - OPERATING ACTIVITIES 92 72
10 EXCHANGE RATES
THE 1999 FIGURES HAVE BEEN PREPARED ON THE BASIS THAT THE US DOLLAR IS THE
FUNCTIONAL CURRENCY OF THE GROUP WITH EFFECT FROM 1 OCTOBER 1998. RESULTS HAVE
BEEN TRANSLATED AT WEIGHTED AVERAGE EXCHANGE RATES AND ASSETS AND LIABILITIES
HAVE BEEN TRANSLATED AT CLOSING EXCHANGE RATES.
FOR ILLUSTRATIVE PURPOSES, STERLING AMOUNTS FOR 1998 AND 1999 HAVE BEEN SHOWN
WHICH ARE A TRANSLATION OF THE US DOLLAR FIGURES AT WEIGHTED AVERAGE OR CLOSING
EXCHANGE RATES AS APPROPRIATE.
THE PRINCIPAL US DOLLAR EXCHANGE RATES USED ARE AS FOLLOWS:
6 MONTHS TO 6 MONTHS TO YEAR TO
31 MARCH 31 MARCH 30 SEPTEMBER
1999 1998 1998
AVERAGE RATES:
BRITISH POUND 0.61 0.60 0.60
SOUTH AFRICAN RAND 5.95 4.90 5.33
ZIMBABWE DOLLAR 37.73 15.85 18.86
CLOSING RATES:
BRITISH POUND 0.62 0.60 0.59
SOUTH AFRICAN RAND 6.24 4.98 5.83
ZIMBABWE DOLLAR 38.20 16.12 31.75
11 YEAR 2000
INITIATIVES TO ENSURE THAT ALL ELECTRONIC SYSTEMS USED BY THE GROUP COMPANIES
ARE YEAR 2000 COMPLIANT WERE STARTED IN 1997. EACH DIVISION AND HEAD OFFICE
FORMED A COMMITTEE TO MONITOR COMPLIANCE AND ADDRESS THE GROUP'S EXPOSURE TO
YEAR 2000 ISSUES AND TO ENSURE THAT ADEQUATE RESOURCES ARE AVAILABLE, EITHER TO
REPLACE OR UPGRADE EXISTING SYSTEMS BY MID-1999. WHERE NECESSARY, EXTERNAL
SUPPORT IS BEING USED TO STRENGTHEN THE PROJECT TEAMS.
THE FOLLOWING AREAS ARE BEING SPECIFICALLY ADDRESSED:
- ALL HARDWARE AND SOFTWARE USED THROUGHOUT THE GROUP
- NON-INFORMATION TECHNOLOGY SYSTEMS USED THROUGHOUT THE GROUP
- SUPPLIER AND CUSTOMER COMPLIANCE
- INTERFACES WITH EXTERNAL PARTIES
THE COST TO DATE OF UPGRADING SYSTEMS TO ENSURE YEAR 2000 COMPLIANCE AMOUNTS TO
$3 MILLION (GBP2 MILLION) OF WHICH $1 MILLION (GBP1 MILLION) WAS INCURRED IN
THE 6 MONTHS TO 31 MARCH 1999. YEAR 2000 COSTS HAVE BEEN CAPITALISED IN
ACCORDANCE WITH GROUP ACCOUNTING POLICIES AND ARE DEPRECIATED ACCORDINGLY. IT
IS ESTIMATED THAT A FURTHER $1 MILLION (GBP1 MILLION) WILL BE SPENT IN THE NEXT
SIX MONTHS UP TO COMPLETION OF THE PROJECT.
WHILST THERE CAN BE NO ABSOLUTE GUARANTEES THAT THE GROUP WILL NOT BE AFFECTED
BY SOME SORT OF YEAR 2000 DISRUPTION, CONTINGENCY PLANS ARE BEING ESTABLISHED
TO ENSURE THAT ANY EFFECT ON THE GROUP'S BUSINESSES IS MINIMISED.
12 STATUTORY DISCLOSURE
THE BALANCE SHEET AT 30 SEPTEMBER 1998 IS TAKEN FROM BUT DOES NOT CONSTITUTE
THE COMPANY'S STERLING STATUTORY ACCOUNTS FOR THE YEAR ENDED 30 SEPTEMBER 1998.
STERLING STATUTORY ACCOUNTS FOR THAT YEAR HAVE BEEN DELIVERED TO THE REGISTRAR
OF COMPANIES. THE AUDITORS MADE AN UNQUALIFIED REPORT THEREON AND SUCH REPORT
DID NOT CONTAIN A STATEMENT UNDER SECTION 237(2) OR (3) OF THE COMPANIES ACT
1985.
THE INTERIM STATEMENT WILL BE POSTED TO SHAREHOLDERS ON 14 JUNE 1999 AND COPIES
WILL BE AVAILABLE FROM THE SECRETARY, LONMIN PLC, 4 GROSVENOR PLACE, LONDON
SW1X 7YL.
ENDS
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