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Half-yearly Report

Date : 02/29/2012 @ 9:30AM
Source : UK Regulatory (RNS & others)
Stock : Lon.Fin&Inv.Grp (LFI)
Quote : 32.5  0.0 (0.00%) @ 2:52AM
London Finance share price Chart

Half-yearly Report


 
TIDMLFI 
 
Date:            29th February 2012 
 
On behalf of:    London Finance & Investment Group P.L.C. ("Lonfin", "the 
                 Company" or "the Group") 
 
Embargoed until: 14.30hrs (UK Time) 16.30hrs (SA Time) 
 
London Finance & Investment Group P.L.C. 
 
Interim Results 
 
 
 
Lonfin (LSE: LFI, JSE: LNF), today announces its unaudited interim results for 
the six months ended 31st December 2011 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 2011, we held three Strategic Investments in which we have 
board representation: our associated company Western Selection P.L.C., MWB 
Group Holdings Plc and Finsbury Food Group plc. Detailed comments on our 
Strategic Investments are given below. 
 
Results 
 
Our net assets per share decreased 7% to 32.7p at 31st December 2011 from 35.0p 
at 30th June 2011. Our Strategic Investments decreased in value by 8%. Our 
General Portfolio decreased by 9%, compared with the increases of 21% in the 
FTSE 100 index, a decrease of 10% in the FTSEurofirst 300 index and a decrease 
of 19% in AIM over the half year. At the close of business on 15th February 
2012, our net asset value was 34.6p. 
 
The Group profit before exceptional items and tax for the half year was GBP32,000 
compared to a profit of GBP250,000 for the same period last year. This was in the 
main due to no profits being realised from the General Portfolio. Including the 
exceptional profit of GBP2,132,000 arising from the disposal of the property and 
the recognition of the net decrease in the fair value of our investments, our 
profit after tax and minority interest was GBP1,108,000 (2010 profit: GBP2,005,000) 
giving profits per share of 3.6p (2010 - 6.4p). 
 
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 2012, Western announced a loss after tax of GBP86,000 for its 
half year to 31st December 2011 and a loss per share of 0.5p (2010: profit 
1.8p). Western's net assets at market value were GBP12,113,000 equivalent to 67p 
per share, a decrease of 19% from 84p at 30th June 2011. Western has announced 
an increased interim dividend of 0.8p per share, an increase of 23% on the 
prior year. 
 
The market value of the Company's investment in Western at 31st December 2011 
was GBP2,987,000 representing 29% of the net assets of Lonfin. The underlying 
value of the investment in Western, valuing Western's own investments at market 
value, was GBP5.4 million (30th June 2011: GBP5.6 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. Creston's results for the half-year to 30th September 2011 
     show a profit after tax of GBP2,821,000 (2010: loss - GBP133,000). Creston 
     declared an interim dividend of 0.83p per share, an increase of 11% on the 
     prior year. 
 
     Creston has recently announced the acquisition of the Corkery Group, a New 
     York based health and medical public relations company, complementing 
     Creston's US healthcare company Cooney/Waters. Further information about 
     Creston is available on its website: www.creston.com. 
 
     Western owns 3,000,000 shares in Creston (4.9%) with a market value at 
     31st December 2011 of GBP2,070,000 (30th June 2011: GBP2,752,000), being 16% 
     of Western's assets. 
 
     Northbridge Industrial Services plc ("Northbridge") 
 
     Northbridge hires and sells specialist industrial equipment to utility 
     companies, the oil and gas sector, shipping, construction and the public 
     sector. The product range includes loadbanks, transformers, generators, 
     compressors and oil tools. It has grown by acquisition of companies in the 
     UK, Dubai, Azerbaijan and Australia and through investing further in those 
     companies to make them more successful. Further information about 
     Northbridge is available on its website: www.northbridgegroup.co.uk. 
 
     Northbridge's latest results, for the half year to 30th June 2011, showed 
     profit of GBP1,656,000 (2010: GBP1,024,000). Northbridge declared an interim 
     dividend of 1.75p per share, an increase of 13% on the prior year. 
 
     Western owns 2,200,000 shares, representing 14.4% of Northbridge's share 
     capital. The value of this investment has been volatile and at 31st 
     December 2011 was GBP4,576,000 (30th June 2011: GBP6,094,000), representing 
     37% of Western's assets. The value of this investment has increased 
     substantially since 31st December 2011. 
 
     Swallowfield plc ("Swallowfield") 
 
     Swallowfield is a full service provider for global and household brands 
     operating in the cosmetics and personal care and household goods 
     marketplace. It offers a flexible and tailored service including: contract 
     filling, market analysis, design, formulation and testing of products, 
     packaging design and sourcing and distribution of stock. Further 
     information about Swallowfield is available on its website: 
     www.swallowfield.com. 
 
     Swallowfield's latest results, for the half year to 31st December 2011, 
     showed profit of GBP535,000 (31st December 2010: GBP519,000) against a 
     background of customer uncertainty and rising input costs. Swallowfield 
     declared an interim dividend of 2.2p, unchanged on the prior year. 
 
     At 31st December 2011, Western owned 1,869,149 shares in Swallowfield 
     (16.53% of their issued share capital). The market value of the Company's 
     holding in Swallowfield on 31st December 2011 was GBP2,187,000 (30th June 
     2011: GBP2,444,000) representing 18% 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 2011 showed a 
     profit of GBP168,000 (2010 GBP540,000) after tax and before exceptional items. 
     These results are explained above, are a credible achievement under 
     challenging world wide conditions, and still represent a reasonable return 
     on our investment. 
 
     At 31st December 2011, Western owned 49.5% of Hartim. The carrying value 
     of the Company's investment in Hartim on 31st December 2011 was GBP1,300,000 
     (30th June 2011: GBP1,465,000) representing 11% of the Company's assets. 
 
Finsbury Food Group plc ("Finsbury Food") 
 
The Group owns 8,000,000 shares in Finsbury Food, representing 15.2% of their 
share capital. The market value of our holding was GBP2,160,000 on 31st December 
2011 compared to a cost of GBP1,893,000; this represents 21% of the net assets of 
Lonfin. 
 
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. Further information about Finsbury Food is available on its 
website: www.finsburyfoods.co.uk. 
 
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 market value of the holding at 31st December, 2011 was GBP290,000 
(30th June 2011 - GBP775,000) which represents 3% of the net assets of Lonfin. 
 
MWB is a hotel, serviced offices and retail group that is in the process of 
realising its assets through an orderly disposal programme. Further information 
about MWB is available on its website: www.mwb.co.uk. 
 
I am a Non-Executive Director of MWB. 
 
General Portfolio 
 
The General Portfolio is diverse and consists of U.K. and European blue chip 
equities, most of which have significant international exposure. The list of 
these investments is set out at the end of this announcement. 
 
Dividends 
 
The Board has declared an interim of 0.35p payable on Thursday 12th April 2012 
to shareholders on the register at the close of business on Friday 23rd March 
2012. 
 
Outlook 
 
World stock markets have rebounded considerably over the last six months, 
however we remain cautious about the outlook for 2012 and have positioned the 
general portfolio accordingly. It is the intention of the Board to reinvest the 
proceeds of the sale of our property into our General Portfolio, as and when 
buying opportunities arise. 
 
David C. Marshall 
 
Chairman 
 
 
 
 
 
Interim dividend 
 
The declared interim dividend is 0.35p per share (2010 - 0.30p) and will be 
paid on Thursday 12th April 2012 to those members registered at the close of 
business on Friday 23rd March 2012. Shareholders on the South African register 
will receive their dividend in South African Rand converted from sterling at 
the closing rate of exchange on Friday 24th February 2012. 
 
Salient dates for dividend 
 
Last day to trade (SA)           Thursday 15th March 2012 
 
Shares trade ex dividend (SA)    Friday 16th March 2012 
 
Shares trade ex dividend (UK)    Wednesday 21st March 2012 
 
Record date (UK & SA)            Friday 23rd March 2012 
 
Pay date                         Thursday 12th April 2012 
 
Shareholders are hereby advised that the exchange rate to be used will be GBP 1 
= ZAR 12.04. This has been calculated as the average of the bid/ask spread at 
16h00 (United Kingdom time) being the close of business on Friday 24th February 
2012. Consequently the dividend of 0.35p will be equal to 4.214 South African 
cents. 
 
No dematerialisation or rematerialisation of share certificates, nor transfer 
of shares between the registers in London and South Africa will take place 
between Friday 16th March 2012 and Friday 23rd March 2012, both dates 
inclusive. 
 
 
 
 
 
Unaudited Consolidated Statement of Comprehensive Income 
 
                                                                          Year 
                                                   Half year ended       ended 
                                                     31st December   30th June 
                                                       2011    2010       2011 
 
                                                           Restated 
 
                                                       GBP000    GBP000      GBP000 
 
Operating Income                                                   . 
 
Dividends received                                     102       97       251 
 
Interest and sundry income                              25       20        94 
 
Profit on sales of investments, including                -      255       266 
provisions 
 
                                                   -------- --------  -------- 
 
                                                       127      372       611 
 
Management services income                             199      245       398 
 
                                                   -------- --------  -------- 
 
                                                       326      617     1,009 
 
                                                   -------- --------  -------- 
 
Administrative expenses 
 
Investment operations                                 (144)    (142)     (314) 
 
Management services                                   (150)    (225)     (435) 
 
                                                   -------- --------  -------- 
 
Total administrative expenses                         (294)    (367)     (749) 
 
                                                   -------- --------  -------- 
 
Operating profit                                        32      250       260 
 
Unrealised changes in the carrying value of           (925)   1,828     1,995 
investments 
 
Exceptional profit on sale of property               2,132        -         - 
 
Interest payable                                        (6)     (53)     (110) 
 
                                                   -------- --------  -------- 
 
Profit on ordinary activities before taxation        1,233    2,025     2,145 
 
Tax on result of ordinary activities                  (102)      (5)      (19) 
 
                                                   -------- --------  -------- 
 
Profit on ordinary activities after taxation         1,131    2,020     2,126 
 
Minority interest                                      (23)     (15)       (8) 
 
                                                   -------- --------  -------- 
 
Total comprehensive income - profit attributable     1,108    2,005     2,118 
to members of the holding company 
 
                                                   -------- --------  -------- 
 
 
 
Reconciliation of headline earnings 
 
Earnings per share                                    3.6p     6.4p      6.8p 
 
Adjustment for unrealised changes in the carrying    (3.6)p   (5.8)p    (6.4)p 
value of investments and exceptional items, net of 
tax 
 
                                                    --------  --------  ------- 
 
Headline (loss)/earnings per share                   (0.0)p    0.6p      0.4p 
 
                                                    --------  --------  ------- 
 
Interim dividend                                     0.35p     0.30p     0.30p 
 
Final dividend                                                           0.30p 
 
Total in respect of the year                                             0.60p 
 
 
 
 
 
Unaudited ConsolidatedChanges in Shareholders' Equity 
 
                                                     31st December   30th June 
                                                       2010    2011      2011 
                                                       GBP000    GBP000      GBP000 
 
Total comprehensive income                            1,108   2,005     2,118 
 
Shares issued                                             -       -         2 
 
Dividends paid to equity shareholders                   (94)    (94)     (187) 
 
                                                   --------  -------  -------- 
 
                                                      1,014    1,911    1,849 
 
Equity shareholders' funds at start of period         9,189    7,256    7,340 
 
                                                   --------  -------  -------- 
 
Equity shareholders' funds at end of period          10,203    9,167    9,189 
 
                                                   ========  =======  ======== 
 
 
 
 
 
Unaudited Consolidated Statement of Financial Position 
 
Non-current assets 
 
Tangible assets                                           -      372      367 
 
Principle investments:- 
 
MWB Group Holdings Plc                                  290      880      775 
 
Finsbury Food Group plc                               2,160    1,840    1,700 
 
Western Selection P.L.C.                              2,987    3,262    3,458 
 
                                                    --------  --------  ------ 
 
                                                      5,437    6,354    6,300 
 
                                                    --------  --------  ------ 
 
Current assets 
 
Listed investments                                    4,240    4,691    4,668 
 
Trade and other receivables                             348      269      260 
 
Cash, bank balances and deposits                      2,591       50       21 
 
                                                    --------  --------  ------- 
 
                                                      7,179    5,010    4,949 
 
                                                    --------  -------- -------- 
 
Total Assets                                         12,616   11,364   11,249 
 
                                                    ========  ======   ======= 
Capital and Reserves 
 
Called up share capital                               1,560     1,560   1,560 
 
Share premium account                                 2,320     2,320   2,320 
 
Revaluation reserve                                       -       330     330 
 
Unrealised profits and losses on investments         (2,675)   (1,827) (1,750) 
 
Share of undistributed profits and losses of            996       854     904 
subsidiaries and associates 
 
Company's retained realised profits and losses        8,002     5,930   5,825 
 
                                                    --------  --------  ------ 
 
Equity shareholders funds                            10,203     9,167   9,189 
 
Trade and other payables falling due within one       2,298     2,098   1,968 
year 
 
Non-controlling equity interest                         115        99      92 
 
                                                    --------  --------  ------- 
 
                                                     12,616    11,364  11,249 
 
                                                    ========  ======== ======== 
 
 
 
 
 
Unaudited Statement of Cash Flow 
 
                                                                           Year 
                                                    Half year ended       ended 
                                                     31st December    30th June 
 
                                                     2011      2010        2011 
 
                                                     GBP000      GBP000        GBP000 
 
Profit before taxation                               1,233    2,025       2,145 
 
                                                    -------- --------    ------- 
 
Adjustments for non-cash and non-operating 
expenses:- 
 
Depreciation charges                                     -        5          10 
 
Unrealised changes in the carrying value of fixed      496   (1,919)     (1,995) 
asset investments 
 
Exceptional profit on sale of property              (2,132)       -           - 
 
Net interest paid                                        6       53         110 
 
                                                   -------- --------    -------- 
 
                                                    (1,630)  (1,861)     (1,875) 
 
                                                    --------  --------  -------- 
 
Tax paid                                              (102)      (5)        (19) 
 
                                                    --------  --------  -------- 
 
Changes in working capital:- 
 
(Increase)/Decrease in debtors                         (88)      24          34 
 
Increase/(Decrease) in creditors                       196        7          (6) 
 
Decrease in current asset investments                  429      139         285 
 
                                                    --------  --------  -------- 
 
                                                       537      170         313 
 
                                                    --------  --------  -------- 
 
Cash inflow on operating activities                     38      329         564 
 
                                                    --------  --------  -------- 
 
Investment activities 
 
Net proceeds from sale of property                   2,498        -           - 
 
                                                    --------  --------  -------- 
 
Cash flows from financing 
 
Net interest paid                                       (6)     (53)       (110) 
 
Shares issued                                            -        -           2 
 
Drawdown/(Repayment) of loan facilities                 134    (149)       (265) 
 
Equity dividend paid                                    (94)    (94)       (187) 
 
                                                    --------  --------  -------- 
 
Net cash inflow/(outflow) from financing                 34    (296)       (560) 
 
                                                    --------  --------  -------- 
 
Increase in cash and cash equivalents                 2,570        33         4 
 
Cash and cash equivalents at start of period             21        17        17 
 
                                                    --------  --------  -------- 
 
Cash and cash equivalents at end of period            2,591        50        21 
 
                                                     =======  ========  ======== 
 
Reconciliation of net cash flow to movement in net debt 
 
                                                    At start    Cash  At end of 
                                                   of period    Flow     Period 
Half year ended 31st December                         GBP000      GBP000      GBP000 
 
2011 
 
Cash at bank                                             21    2,570      2,591 
 
Bank loan                                            (1,816)    (134)    (1,950) 
 
                                                    -------- --------   -------- 
 
                                                     (1,795)   2,436        641 
 
2010                                                ========  =======   ======== 
 
Cash at bank                                             17       33         50 
 
Bank loan                                            (2,081)      149    (1,932) 
 
                                                    -------- --------   -------- 
 
                                                     (2,064)     182     (1,882) 
 
                                                    ======== ========   ======== 
 
Year ended 30th June 2011 
 
Cash at bank                                             17        4         21 
 
Bank loan                                            (2,081)     265     (1,816) 
 
                                                    -------- --------   -------- 
 
                                                     (2,064)     269     (1,795) 
 
                                                    ========  =======   ======== 
 
 
 
 
 
Market Value of General Portfolio 
 
31st December 2011                             Current 
 
                                                 Value 
 
                                                  GBP000         % 
 
Royal Dutch Shell                                  268       6.3 
 
British American Tobacco                           266       6.3 
 
Nestle                                             254       6.0 
 
Imperial Tobacco                                   217       5.1 
 
Schindler                                          215       5.1 
 
Diageo                                             208       4.9 
 
Pernod-Ricard                                      207       4.9 
 
Novartis                                           192       4.5 
 
Unilever                                           190       4.5 
 
L'Oreal                                            189       4.5 
 
Henkel                                             189       4.5 
 
Heineken                                           173       4.1 
 
Investor                                           168       4.0 
 
Beiersdorf                                         165       3.9 
 
Total                                              156       3.8 
 
Danone                                             162       3.8 
 
ABB                                                161       3.8 
 
BASF                                               157       3.7 
 
Reckitt Benckiser                                  156       3.7 
 
DSM                                                155       3.7 
 
Carlsberg                                          132       3.1 
 
BHB Billiton                                       131       3.1 
 
Holcim                                             128       3.0 
 
                                              --------  -------- 
 
                                                 4,240     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 2011 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 2011, 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. 
 
 
 
END 
 

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