Lon.Fin.&Inv.Grp. Half-yearly Report

 
TIDMLFI 
 
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 2015 and dividend declaration. 
 
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.S., U.K. and European equities. 
 
At 31st December 2015, 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 16.0% to 58.1p at 31st December 2015 from 
50.1p at 30th June 2015.  Our Strategic Investments, adjusting for the disposal 
of part of the investment in Finsbury Foods, which realised a profit of GBP 
1,409,000, increased in value by 14.0% during the period, reflecting a strong 
performance in Finsbury Food's share price.  Our General Portfolio increased by 
4.5%, compared with decreases of 3.8% and 4.5% in the FTSE 100 index and the 
FTSEurofirst 300 Index respectively, over the half year.  At the close of 
business on 22nd February 2016, our net asset value was 57.5p per share. 
 
The Group profit before tax for the half year was GBP3,296,000 compared to a 
profit of GBP1,017,000 for the same period last year, which reflects the profit 
realised from the disposal of part of the investment in, and the unrealised 
profit arising from the strong performance of, Finsbury.  Our profit after tax 
and minority interest was GBP2,683,000 (2014: GBP810,000) giving profits per share 
of 8.6p (2014: 2.6p). 
 
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 22nd February 2016, Western announced a profit after tax of GBP77,000 for its 
half year to 31st December 2015 and a profit per share of 0.4p (2014: profit 
1.2p).  Western's net assets at market value were GBP14,272,000 equivalent to 80p 
per share, an increase of 6% from 75p at 30th June 2015.  Western has announced 
an interim dividend of 1.05p per share (prior year: 1.05p). 
 
The market value of the Company's investment in Western at 31st December 2015 
was GBP3,537,000     representing 19% of the net assets of Lonfin.  The 
underlying value of the investment in Western, valuing Western's own 
investments at market value, was GBP6.3 million (30th June 2015: GBP5.9 million).I 
am the Chairman of Western and Mr. Robotham is a Non-Executive Director. 
Western's principal core holdings are in Northbridge Industrial Services plc, 
Swallowfield plc, Bilby Plc and Hartim Limited.  Extracts from Western's 
announcement on its core holdings are set out below: 
 
     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 their website: 
     www.northbridgegroup.co.uk. 
 
     Northbridge's latest results, for the half year to 30th June 2015, showed a 
     loss after tax of                 GBP1,936,000 (2014: GBP2,568,000 profit). 
     Northbridge declared an interim dividend of 1p per share (2014: 2.2p. 
 
     During the period we increased our investment in Northbridge by 600,000 
     shares at a cost of GBP422,000 and Western now owns 2,500,000 shares, 
     representing 13.57% of the total voting rights in Northbridge's issued 
     share capital.  The market value of this investment at 31st December 2015 
     was GBP2,050,000 (30th June 2015: GBP3,895,000), representing 14% of Western's 
     assets. 
 
     I am a Non-Executive Director of Northbridge. 
 
     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 announced its annual results to 30th June 2015 in September 
     2015 showing a profit after tax of GBP746,000 compared to a profit of GBP 
     157,000 for the prior year.  We received a dividend from Swallowfield 
     during the period of GBP37,383 (2014 - Nil). 
 
     Western owns 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 2015 was GBP3,570,000 (30th June 2015: GBP2,019,000), 
     representing 25% of the Company's assets. 
 
     Mr Beale is a Non-Executive Director of Swallowfield. 
 
     Bilby Plc 
     In July 2015 we invested GBP1,500,000 in acquiring 1,875,000 shares in Bilby 
     which is 5.5% of their issued share capital. 
 
     Bilby is an established, and award winning, provider of gas installation, 
     maintenance and general building services to local authority and housing 
     associations across London and South East England.  They have a strategy of 
     growing organically and by acquisition.  Further information about Bilby is 
     available on their website: www.bilbyplc.com. 
 
     Bilby announced its interim results for the six month period to 30 
     September 2015 on 9th December 2015 showing a profit after tax of GBP55,000. 
     Bilby paid a final dividend of 2.32p per share in August 2015 which 
     provided us with income of GBP43,500 and an interim dividend of 0.75p per 
     ordinary share in January 2016 which provided us with an income of GBP14,063. 
 
     The market value of the Company's holding in Bilby on 31st December 2015 
     was GBP2,775,000, representing 19% of the Company's assets. 
 
     Hartim Limited ("Hartim") 
     Hartim offers a complete export sales, marketing and logistical service to 
     a number of well known UK branded fast moving consumer goods companies. 
     This investment is accounted for as an associated company. 
 
     Our share of Hartim's estimated results for the period ended 31st December 
     2015 is a profit after tax of GBP51,000 (2014 - GBP23,000). 
 
     At 31st December 2014, Western owned 49.5% of Hartim.  The carrying value 
     of the Company's equity investment in Hartim on 31st December 2015 was GBP 
     613,000 (2014: GBP591,000) representing 4% of the Company's assets.  In 
     addition, loans of GBP660,000 (equivalent to a further 5% of the Company's 
     assets) have been made to Hartim and its executive directors. 
 
     Mr. Beale is a Non-Executive Director of Hartim. 
 
Finsbury Food Group plc ("Finsbury Food") 
 
Finsbury Food is a leading manufacturer of cakes and bread to the major UK 
multiple grocers and recently acquired the Fletchers Group, suppliers of fresh 
and frozen bread and morning goods to the major UK multiple grocers and the UK 
foodservice sector.  Further information about Finsbury Food is available on 
its website: www.finsburyfoods.co.uk. 
 
In October 2015, the Group disposed of 2,000,000 shares in Finsbury Food for GBP 
1,985,000 and now holds 8,000,000 shares, representing 6.25% of their issued 
share capital. The market value of our holding was GBP9,040,000 on 31st December 
2015 compared to a cost of GBP2,300,000; this represents 50% of the net assets of 
Lonfin. 
 
Finsbury Food will be announcing their interim results on 16th March 2016. 
 
Mr Beale is a Non-Executive Director of Finsbury Food. 
 
General Portfolio 
 
The list of investments included in the General Portfolio is set out at the end 
of this announcement.  We continue to hold 26 investments, having taken GBP60,000 
out of the amount invested. 
 
Outlook 
 
 The Board expect to see a continuation of the volatility in equity and 
currency markets and remain cautious about the remainder of the year. 
 
The Board has declared an interim dividend of 0.50p per share (prior year: 
0.50p). 
 
Statement of directors' responsibility 
 
The directors confirm that, to the best of their knowledge: 
 
- the unaudited interim results for the six months ended 31st December 2015, 
have been prepared in accordance with IAS 34 as adopted by the EU; and 
 
- the interim management report includes a fair review of the information 
required by DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules. 
 
                                                          By order of the Board 
 
                                                              David C. Marshall 
 
                                                                       Chairman 
 
Interim Dividend 
 
The declared interim dividend is 0.50p per share (ZAR 10.73075 cents) (prior 
year: 0.50p) and will be paid on Friday, 8th April 2016 to those members 
registered at the close of business on Friday 18th March 2016 (SA and UK). 
Shareholders on the South African register will receive their dividend in South 
African Rand converted from sterling at the closing rate of exchange on 22nd 
February 2016. 
 

February 23, 2016 08:30 ET (13:30 GMT)

Equity dividends paid                              (162)           (141)        (296) 
 
Net cash inflow/(outflow) from financing         (1,678)            667           231 
 
Increase/(Decrease)  in cash and cash                534                           76 
equivalents                                                     44 
 
Cash and cash equivalents at start of period         115             39            39 
 
Cash and cash equivalents at end of period           649             83           115 
 
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 
 
2015 
 
Cash at bank                                         115          534          649 
 
Bank loan                                        (1,500)        1,500            - 
 
                                                 (1,385)        2,034          649 
 
2014 
 
Cash at bank                                         39           44           83 
 
Bank loan                                          (650)        (825)      (1,475) 
 
                                                   (611)        (781)      (1,392) 
 
Year ended 30th June 2015 
 
Cash at bank                                          39           76          115 
 
Bank loan                                          (925)        (575)      (1,500) 
 
                                                   (886)        (499)      (1,385) 
 
Notes:- 
 
1.   Basis of preparation: 
     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 2015 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. 
 
 
     This report has been prepared in accordance with the accounting policies 
     contained in the Company's Annual Report and Accounts 2015, International 
     Financial Reporting Standards and comply with IAS34. 
 
2.   Earnings per share: 
     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. 
 
3.   Going Concern: 
     Based on the Group's cash flow forecasts and projections, the Board is 
     satisfied that the Group will be able to operate within the level of its 
     facilities for the foreseeable future. For this reason the Board considers it 
     appropriate for the Group to adopt the going concern basis in preparing its 
     financial statements. 
 
4.   Principal risks and uncertainties: 
     The principal risks and uncertainties which could impact the Group's 
     long-term performance remain on pages 8-9 of the Group's Annual Report and 
     Accounts 2015. The key risks and mitigating activities have not changed from 
     these: 
     -           Stock market vulnerability and economic uncertainty; 
     -           Possible volatility of share prices of investments; 
     -           Dividend income; 
     -           Ability to make strategic investments; and 
     -           Liquidity of equity investments in strategic investments. 
 
Composition of General Portfolio 
 
                                                  31st December 2015 
 
                                                    Value 
 
                                                     GBP000            % 
 
British American Tobacco                              330          5.5 
 
Investor                                              328          5.4 
 
Imperial Tobacco                                      319          5.3 
 
Heineken                                              317          5.2 
 
Schindler-Holdings                                    315          5.2 
 
Reckitt Benckiser                                     309          5.1 
 
Nestle                                                307          5.1 
 
Henkel                                                300          5.0 
 
Pernod-Ricard                                         269          4.5 
 
Diageo                                                269          4.5 
 
Philip Morris International                           266          4.4 
 
Unilever                                              258          4.3 
 
L'Oreal                                               244          4.0 
 
Anheuser Busch Inbev                                  233          3.9 
 
Novartis                                              195          3.2 
 
3M                                                    191          3.2 
 
Exxon                                                 190          3.2 
 
Danone                                                186          3.1 
 
BASF                                                  181          3.0 
 
Procter & Gamble                                      179          3.0 
 
Chevron                                               164          2.7 
 
ABB                                                   162          2.7 
 
United Technologies                                   156          2.6 
 
Givaudan                                              151          2.5 
 
Linde                                                 118          2.0 
 
LVMH                                                  103          1.7 
 
                                                    6,040        100.0 
 
 
 
END 
 

(END) Dow Jones Newswires

February 23, 2016 08:30 ET (13:30 GMT)