Wrap Text
interim results and dividend declaration
LONDON FINANCE AND INVESTMENT GROUP P.L.C.
(“Lonfin”, “the Company” or “the Group”)
(Incorporated in England – Registration No. 201151 (UK))
JSE Code: LNF ISIN: GB0002994001
(“Lonfin”)
Lonfin (LSE: LFI, JSE: LNF), today announces its unaudited interim
results for the six months ended 31st December 2012 and dividend
declaration.
Chairman’s Statement
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.K. and European equities.
At 31st December 2012, 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 13% to 35.6p at 31st December
2012 from 31.6p at 30th June 2012. Our Strategic Investments
increased in value by 23.5%, following a strong performance in
Finsbury Food’s share price over the period. Our General
Portfolio increased by 4%, compared with increases of 6% in the
FTSE 100 index, and 11% in the FTSEurofirst 300 index over the
half year. At the close of business on 15th February 2013, our
net asset value was 39.8p.
The Group profit before tax for the half year was £1,389,000
compared to a profit of £1,233,000 for the same period last year,
which included an exceptional profit on a property disposal of
£2,132,000. Our profit after tax and minority interest was
£1,359,000 (2011 profit: £1,108,000) giving profits per share of
4.4p (2011 – 3.6p).
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 28th February 2013, Western announced a profit after tax of
£78,000 for its half year to 31st December 2012 and a profit per
share of 0.4p (2010: loss 0.5p). Western’s net assets at market
value were £12,572,000 equivalent to 70p per share, a decrease of
3% from 72p at 30th June 2012. Western has announced an increased
interim dividend of 0.85p per share, an increase of 6% on the
prior year.
The market value of the Company’s investment in Western at 31st
December 2012 was £2,987,000 representing 27% of the net assets of
Lonfin. The underlying value of the investment in Western,
valuing Western’s own investments at market value, was £5.4
million (30th June 2012: £5.6 million).
I am the Chairman of Western and Mr. Robotham is a Non-Executive
Director. Western has strategic investments in Creston plc,
Northbridge Industrial Services PLC, Swallowfield plc and Hartim
Limited. Extracts from Western's announcement on its strategic
investments are set out below:
Creston plc (“Creston”)
Creston is a marketing services group with a strategy to grow
within its sector to become a substantial, diversified
international marketing services group. Further information
about Creston is available on its website: www.creston.com.
Creston's results for the half-year to 30th September 2012
show a profit after tax of £8,259,000 including a deferred
consideration write-back of £3,450,000 (2011: £2,821,000).
Creston declared an interim dividend of 1.0p per share, an
increase of 20% on the prior year.
Western owns 3,000,000 shares in Creston (4.9%) with a market
value at 31st December 2012 of £2,370,000 (30th June 2012:
£1,650,000), being 19% of Western’s assets.
Northbridge Industrial Services plc (“Northbridge”)
Northbridge hires and sells specialist industrial equipment
to a non-cyclical customer base. With offices or agents in
the U.K., U.S.A., Dubai, Germany, Belgium, France, Australia,
Singapore, India, Brazil, Korea and Azerbaijan, Northbridge
has a global customer base. This includes utility companies,
the oil and gas sector, shipping, construction and the public
sector. The product range includes loadbanks, transformers,
generators, compressors, loadcells and oil tools. Further
information about Northbridge is available on its website:
www.northbridgegroup.co.uk.
Northbridge’s latest results, for the half year to 30th June
2012, showed profit after tax of £1,027,000 (2011:
£1,656,000). Northbridge declared an interim dividend of
1.85p per share, an increase of 6% on the prior year.
Western owns 2,200,000 shares, representing 14.2% of
Northbridge’s share capital. The value of this investment
has been volatile and at 31st December 2012 was £5,170,000
(30th June 2012: £5,984,000), representing 41% of Western’s
assets.
Swallowfield plc (“Swallowfield”)
Swallowfield is a market leader in the development,
formulation, manufacture and supply of cosmetics, toiletries
and related household products for global brands and
retailers operating in the cosmetics, personal care and
household goods market. Further information about
Swallowfield is available on its website:
www.swallowfield.com.
Swallowfield’s latest results, for the year to 30th June
2012, showed profit after tax of £1,263,000 (2011:
£1,082,000). Swallowfield declared a final dividend of 4.1p,
unchanged on the prior year. Swallowfield has warned that
full year results for the year ending 30th June 2013 will be
below last year’s results.
At 31st December 2012, Western owned 1,869,149 shares in
Swallowfield (16.5% of their issued share capital). The
market value of the Company’s holding in Swallowfield on 31st
December 2012 was £1,925,000 (30th June 2012: £2,187,000)
representing 15% of the Company’s assets.
Hartim Limited (“Hartim”)
Hartim offers a complete export sales, marketing and
logistical services to a number of well known UK branded fast
moving consumer goods companies. This investment was
acquired on 28th March 2009 and is accounted for as an
associated company.
Hartim’s estimated results for the year ended 31st December
2012 showed a loss of £1,000 (2010 £220,000) after tax and
before exceptional items. These results include losses
incurred in turning round its Australian distributor acquired
out of administration last year.
At 31st December 2012, Western owned 49.5% of Hartim. The
carrying value of the Company’s investment in Hartim on 31st
December 2012 was £1,173,000 (30th June 2012: £1,124,000)
representing 9% of the Company’s assets.
Finsbury Food Group plc (“Finsbury Food”)
Finsbury Food is a supplier of ambient cakes to most of the UK's
major supermarket chains and speciality breads to Waitrose
including gluten-free and low fat products. On 8th February 2013,
Finsbury Food announced the sale of its gluten-free businesses to
its joint venture partner, Genius Foods Limited, for £121 million.
Further information about Finsbury Food is available on its
website: www.finsburyfoods.co.uk.
The Group increased its holding in Finsbury Food in November by
958,000 shares, at a cost of £366,000, to 8,958,000 shares,
representing 12.5% of their share capital. The market value of
our holding was £3,359,000 on 31st December 2012 compared to a
cost of £2,259,000; this represents 30% of the net assets of
Lonfin.
I am a Non-Executive Director of Finsbury
MWB Group Holdings Plc (“MWB”)
The Group owns 2,000,000 shares, representing 1.2% of MWB’s issued
share capital. The shares were suspended following that company
entering administration. Full provision against the cost of this
investment has now been made, an additional amount of £70,000
being made in the period.
General Portfolio
The list of investments included in the General Portfolio is set
out at the end of this announcement. There have been very few
changes to the portfolio in the period and we retain cash balances
while waiting for an opportunity to acquire undervalued stocks.
Dividends
The Board has declared an interim of 0.4p payable on Friday 12th
April 2013 to shareholders on the register at the close of
business on Friday 22nd March 2013.
Outlook
Global stock markets have had a very strong start to the New Year,
but the Board are cautious given the disconnect between the
performance of equities and general economic conditions. However,
it is the intention of the Board to get fully invested as and when
buying opportunities arise.
David C. Marshall
Chairman
Interim dividend
The declared interim dividend is 0.4p per share (ZAR 5.36424
cents) (2011 - 0.35p) and will be paid on Friday 12th April 2013
to those members registered at the close of business on Friday
22nd March 2013. Shareholders on the South African register will
receive their dividend in South African Rand converted from
sterling at the closing rate of exchange on 27th February 2013.
The issued number of shares as at declaration date is 31,207,479
Salient dates for dividend
Last day to trade (SA) Thursday 14th March 2013
Shares trade ex dividend (SA) Friday 15th March 2013
Shares trade ex dividend (UK) Wednesday 20th March
2013
Record date (UK & SA) Friday 22nd March 2013
Pay date Friday 12th April 2013
Shareholders are hereby advised that the exchange rate to be used
will be GBP 1 = ZAR 13.4106. This has been calculated as the
average of the bid/ask spread at 16.00 (United Kingdom time) being
the close of business on 27th February 2013. Consequently the
dividend of 0.4p will be equal to 5.36424 South African cents.
Since the introduction on 1st April 2012 of a new dividend
withholding tax in South Africa, the JSE Listings Requirements
require disclosure of additional information in relation to any
dividend payments. Shareholders registered on the Johannesburg
register are therefore advised that the new dividend withholding
tax will be withheld from the gross final dividend amount of
5.36424 SA cents per share at a rate of 15%, unless a shareholder
qualifies for an exemption; shareholders registered on the
Johannesburg register who do not quality for an exemption will
therefore receive a net dividend of 4.5596 SA cents per share.
The Company, as a non-resident of South Africa, was not subject to
the secondary tax on companies (STC) applicable before 1st April
2012, and accordingly, no STC credits are available for set-off
against the dividend withholding tax liability on the final net
dividend amount. 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 new dividend withholding tax to Computershare
Investor Services (Pty) Limited, Tel: +27 11 373-0004.
No dematerialisation or rematerialisation of share certificates,
nor transfer of shares between the registers in London and South
Africa will take place between Friday 15th March 2013 and Friday
22nd March 2013, both dates inclusive.
Unaudited Consolidated Statement of Comprehensive Income
Year
Half year ended ended
30th
31st December June
2012 2011 2012
£000 £000 £000
Operating Income
Dividends received 106 102 265
Interest and sundry income - 25 74
Profit/(Losses) on sales of investments,
including provisions 131 - (32)
-------- -------- --------
237 127 307
Management services income 134 199 295
-------- -------- --------
371 326 602
-------- -------- --------
Administrative expenses
Investment operations (148) (144) (301)
Management services (146) (150) (337)
-------- -------- --------
Total administrative expenses (294) (294) (638)
-------- -------- --------
Operating profit/(loss) 77 32 (36)
Unrealised changes in the carrying value of
investments 1,321 (925) (1,134)
Exceptional profit on sale of property - 2,132 2,137
Interest payable (9) (6) (27)
-------- -------- --------
Profit on ordinary activities before 1,389 1,233 940
taxation
Tax on result of ordinary activities (34) (102) (65)
-------- -------- --------
Profit on ordinary activities after
taxation 1,355 1,131 875
Non-controlling interest 4 (23) (6)
-------- -------- --------
Total comprehensive income - profit
attributable to members of the holding
company 1,359 1,108 869
-------- -------- --------
Reconciliation of headline earnings
Earnings per share 4.4 p 3.6 p 2.8 p
Adjustment for unrealised changes in the
carrying value of investments and
exceptional items, net of tax (4.3)p (3.6)p 3.6 p
-------- -------- --------
Headline (loss)/earnings per share 0.1 p 0.0 p 6.4 p
-------- -------- --------
Interim dividend 0.4 p 0.35 p 0.35 p
Final dividend - - 0.35 p
Total in respect of the year - - 0.70 p
Unaudited Consolidated Changes in Shareholders’ Equity
30th
31st December June
2012 2011 2012
£000 £000 £000
Total comprehensive income 1,359 1,108 869
Dividends paid to equity shareholders (109) (94) (203)
------ ------ ------
-- -- --
1,250 1,014 666
Equity shareholders’ funds at start of
period 9,855 9,189 9,189
------ ------ ------
-- -- --
Equity shareholders’ funds at end of 11,105 10,203
period 9,855
====== ====== ======
Unaudited Consolidated Statement of Financial Position
31st December 30th June
2012 2011 2012
£000 £000 £000
Non-current assets
Tangible assets 3 - 4
Principle investments:-
MWB Group Holdings Plc - 290 70
Finsbury Food Group plc 3,359 2,160 1,880
Western Selection P.L.C. 2,987 2,987 3,144
-------- -------- --------
6,349 5,437 5,098
-------- -------- --------
Current assets
Listed investments 4,746 4,240 4,533
Trade and other receivables 269 348 272
Cash, bank balances and deposits 1,108 2,591 2,217
6,123 7,179 7,022
Total Assets 12,472 12,616 12,120
Capital and Reserves
Called up share capital 1,560 1,560 1,560
Share premium account 2,320 2,320 2,320
Unrealised profits and losses on
investments 1,727 (2,675) 336
Share of undistributed profits and
losses of subsidiaries and associates (576) 996 (572)
Company’s retained realised profits and
losses 6,074 8,002 6,211
Equity shareholders funds 11,105 10,203 9,855
Trade and other payables falling due
within one year 1,274 2,298 2,167
Non-controlling equity interest 93 115 98
12,472 12,616 12,120
Net assets per share 35.6p 32.7p 31.6p
Unaudited Statement of Cash Flow
Year
Half year ended ended
31st December 30th June
2012 2011 2012
£000 £000 £000
Profit before taxation 1,389 1,233 940
Adjustments for non-cash and non-
operating expenses:-
Depreciation charges 1 - 5
Unrealised changes in the carrying (1,321) 496 1,134
value of fixed asset investments
Exceptional profit on sale of property - (2,132) (2,137)
Net interest paid 9 6 27
(1,311) (1,630) (971)
Tax paid (4) (102) (17)
Changes in working capital:-
Decrease/(Increase) in debtors 3 (88) (12)
Increase in creditors 26 196 158
Decrease/(Increase) in current asset 222 429
investments (301)
251 537 (155)
Cash inflow/Outflow) on operating 325 38
activities (203)
Investment activities
Net proceeds from sale of property - 2,498 2,495
Purchase of additional shares in (366) -
strategic investment -
(366) - -
Cash flows from financing
Net interest paid (9) (6) (27)
(Repayment)/Drawdown of loan facilities (950) 134 134
Equity dividends paid (109) (94) (203)
Net (outflow)/inflow from financing (1,068) 34 (96)
(Decrease)/Increase in cash and cash
equivalents (1,109) 2,570 2,196
Cash and cash equivalents at start of
period 2,217 21 21
Cash and cash equivalents at end of
period 1,108 2,591 2,217
Reconciliation of net cash flow to movement in net debt
At At end
start Cash of
of
period Flow Period
Half year ended 31st December £000 £000 £000
2012
Cash at bank 2,217 (1,109) 1,108
Bank loan (1,950) 950 (1,000)
167 159 108
2011
Cash at bank 21 2,570 2,591
Bank loan (1,816) (134) (1,950)
(1,795) 2,436 641
Year ended 30th June 2012
Cash at bank 21 2,196 2,217
Bank loan (1,816) (134) (1,950)
(1,795) 2,062 267
Market Value of General Portfolio
31st December 2012 Current
Value
£000 %
Nestlé 276 5.8
British American Tobacco 270 5.7
Diageo 269 5.7
Henkel 259 5.4
Schindler 253 5.3
Pernod Ricard 245 5.2
Royal Dutch Shell 240 5.1
L’Oreal 241 5.1
Heineken 238 5.0
Investor 220 4.6
Imperial Tobacco 210 4.4
Unilever 209 4.4
Novartis 202 4.3
BASF 203 4.3
Koninklijke DSM 197 4.1
Reckitt Benckiser 191 4.0
ABB 168 3.5
Holcim 168 3.5
Danone 162 3.4
BHP Billiton 150 3.2
Others 375 8.0
4,746 100.0
Notes:-
1. The results for the half-year are unaudited. The information
contained in this report does not constitute statutory accounts
within the meaning of the Companies Act 2006. The statutory
accounts of the Group for the year ended 30th June 2012 have
been reported on by the Company's auditors and have been
delivered to the Registrar of Companies. The report of the
auditors was unqualified.
2. This report has been prepared in accordance with the accounting
policies contained in the Company’s Annual Report and Accounts
2012, International Financial Reporting Standards and comply
with IAS34.
3. The calculation of earnings per share is based on the weighted
average number of shares in issue for the period and the profit
on ordinary activities after tax.
28 February 2013
Johannesburg
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Date: 28/02/2013 04:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
