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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| London Finance & Investment Group Plc | LSE:LFI | London | Ordinary Share | GB0002994001 | 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 50.00 | 45.00 | 55.00 | 50.00 | 50.00 | 50.00 | 0.00 | 08:00:01 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Finance Services | 2.62M | 1.38M | 0.0443 | 11.29 | 15.6M |
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TIDMLFI
London Finance & Investment Group PLC
('Lonfin' or the 'Company')
Unaudited Interim Results for the six months ended 31st December 2018 and
interim dividend declaration
The Company today announces its unaudited interim results and interim dividend
declaration for the six months ended 31st December 2018 (the 'Interim
Statement').
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.S., U.K. and European equities.
At 31st December 2018, we held two Strategic Investments: Western Selection
PLC, and Finsbury Food Group plc. Detailed comments on our Strategic
Investments are given below.
Results
Our net assets per share decreased 5.2% to 62.0p at 31st December 2018 from
65.4p at 30th June 2018. Our Strategic Investments decreased in value by 4%
during the period. Our General Portfolio decreased by 8%, compared with
decreases of 11.9% and 10.5% in the FTSE 100 index and the FTSEurofirst 300
Index respectively, over the half year. At the close of business on 31st
January 2019, our net asset value was 59.9p per share.
The Group loss before tax for the half year was GBP721,000 compared to a profit
of GBP615,000 for the same period last year. Our total comprehensive loss after
tax and minority interest was GBP872,000 (2017: GBP524,000) giving a loss per share
of 1.7p (2017: earning per share 1.8p).
Strategic Investments
Western Selection PLC ("Western")
The Group owns 7,860,515 Western shares, representing 43.8% of Western's issued
share capital. Western is a strategic investment which is technically a
subsidiary of the Company that has not been consolidated due to the application
of the investment entity exemption under IFRS 10.
On 22nd February 2019, Western announced a loss before tax of GBP427,000 for its
half year to 31st December 2018 and a loss per share of 2.4p (2017: restated
earnings per share of 0.9p). Western's net assets at market value were GBP
13,425,000 equivalent to 75p per share. Western also announced an interim
dividend of 1.1p per share (2017: 1.1p per share).
The market value of the Company's investment in Western at 31st December 2018
was GBP4,087,000 representing 21% of the net assets of Lonfin. The underlying
value of the investment in Western, valuing Western's own investments at market
value, was GBP4,117,000 (30th June 2018: GBP4,329,000).
I am the Chairman of Western and Edward Beale is a non-executive director.
Western's main Core Holdings are Northbridge Industrial Services Plc,
Swallowfield Plc, Bilby Plc and Tudor Rose International Limited.
An extract from Western's interim results announcement relating to its main
Core Holdings is set out below:
Core Holdings
Northbridge Industrial Service plc ("Northbridge")
Northbridge hires and sells specialist industrial equipment to a non-cyclical
customer base. With offices or agents in the UK, USA, Dubai, Germany, Belgium,
France, Australia, New Zealand, Singapore, 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 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 2018, showed a
loss after tax of GBP1,472,000 for the period (2017: loss after
tax of GBP2,308,000). No interim dividend was declared (2017: none).
Western owns 3,300,000 Northbridge shares, representing 11.8% of Northbridge's
issued share capital. The market value of this investment at 31st December
2018 was GBP3,564,000 (30th June 2018: GBP4,290,000), representing 26.5% of
Western's net 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 for the 53 weeks ended 30th June 2018
in September 2018 showing a profit after tax of GBP3,633,000 compared to a profit
of GBP2,572,000 for the comparable period last year. Swallowfield paid a final
dividend of 4.2 per share in December 2018 which provided us with income of GBP
54,600.
The market value of the Company's holding of shares in Swallowfield on 31st
December 2018 was GBP2,730,000 (30th June 2018: GBP4,095,000), representing 20% of
the Company's net assets.
Western owns 1,300,000 Swallowfield shares (representing 7.6% of Swallowfield's
issued share capital).
Edward Beale is a non-executive director of Swallowfield.
Bilby Plc ("Bilby")
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. It has a strategy of
growing organically and by acquisition. Further information about Bilby is
available on its website: www.bilbyplc.com.
Bilby announced its interim results for the six-month period to 30th September
2018 on 11th December 2018 showing a profit after tax of GBP1,133,000 (2017: GBP
1,966,000). Bilby paid an interim dividend of 0.5p per share in January 2019
which provided us with income of GBP13,500.
Western owns 2,700,000 Bilby shares, which represent 6.7% of Bilby's issued
share capital. The market value of the Company's holding in Bilby on 31st
December 2018 was GBP1,647,000 (30th June 2018: GBP2,835,000) representing 12% of
the Company's net assets.
Tudor Rose International Limited (previously Hartim Limited) ("Tudor Rose
International")
Tudor Rose International works closely with a number of leading UK branded
fast-moving consumer goods companies, offering a complete sales, marketing and
logistical service. Based in Stroud, Gloucestershire, Tudor Rose International
sells into 78 countries worldwide including USA, Spain, Portugal, Italy, Czech
Republic, Russia, Turkey, South Africa, Saudi Arabia, UAE, Malaysia, Australia
and China.
Our share of Tudor Rose International's estimated results for the period ended
31st December 2018 is a loss after tax of GBP92,000 (2017 - profit after tax of GBP
81,000).
At 31st December 2018, Western owned 49.5% of Tudor Rose International. The
carrying value of the Company's equity investment in Tudor Rose International
on 31st December 2018 was GBP1,542,000 (2017: GBP1,674,000) representing 11.5% of
the Company's net assets. In addition, loans of GBP191,756 (equivalent to a
further 1% of the Company's net assets) were outstanding at 31st December 2018
from Tudor Rose's executive directors.
Edward Beale and I are non-executive directors of Tudor Rose International.
Finsbury Food Group plc ("Finsbury")
Finsbury is one of the largest producers and suppliers of premium cakes, bread
and morning goods in the UK and currently supplies most of the UK's major
supermarket chains. Further information about Finsbury, which is admitted to
trading on AIM, is available on its website: www.finsburyfoods.co.uk
At 31st December 2018, Lonfin held 6,000,000 Finsbury shares, representing
approximately 4.6% of Finsbury's issued share capital. The market value of the
holding was GBP6,120,000 as at 31st December 2018 (cost - GBP1,724,000) and
represents approximately 32% (2017: 31%) of Lonfin's net assets.
On 18th September 2018, Finsbury announced audited profits on continuing
operations after tax and minority interests of GBP2,037,000 for the 52 weeks
ended 30th June 2018 (2017: GBP5,638,000).
Finsbury paid a final dividend of 2.2 per share, making 3.3p for the year
(2017: 3p). This provided the Company with income of GBP132,000.
General Portfolio
The portfolio is diverse with material interests in Food and Beverages, Natural
Resources, Chemicals and Tobacco. We believe that the portfolio of quality
companies we hold has the potential to outperform the market in the medium to
long term.
At 31st December 2018, the number of holdings in the General Portfolio was 30
(2017: 30).
Outlook
The Company's investment performance since the year end has been affected by
the volatility in the markets and by the reduction in value of our Strategic
Holdings. Although global stock markets have shown resilience and strength
over the course of the last year, they are now close to all-time highs at a
time when there is continued economic and political uncertainty. Accordingly,
the Board remains cautious about the potential impact of major geo-political
risks and expects to see continued volatility in the equity and currency
markets. These may impact further on the value of our investments.
The Board has declared an interim dividend of 0.55p per share (2017: 0.55p).
25th February 2019
D.C. MARSHALL
Chairman
Interim Dividend
The Board recommends an interim gross dividend of 0.55p per share (10.28561 SA
cents) (2017: 0.55p) which will be paid on Friday 5th April 2019 to those
members registered at the close of business on Friday 15th March 2019 (SA and
UK). Shareholders on the South African register will receive their dividend in
SA Rand converted from sterling at the closing rate of exchange on Thursday
14th February 2019 being GBP 1 = SA Rand 18.7011.
In respect of the normal gross cash dividend, and in terms of the South African
Tax Act, the following dividend tax ruling only applies to those shareholders
who are registered on the South African register on Friday 15th March 2019. All
other shareholders are exempt.
Shareholders registered on the South African register are advised that the
dividend withholding tax will be withheld from the gross final dividend amount
of 10.28561 SA cents per share at a rate of 20% unless a shareholder qualifies
for an exemption; shareholders registered on the South African register who do
not qualify for an exemption will therefore receive a net dividend of 8.22849
SA cents per share. The dividend withholding tax and the information contained
in this paragraph is only of direct application to shareholders registered on
the South African register, who should direct any questions about the
application of the dividend withholding tax to Computershare Investor Services
(Pty) Limited, Tel: +27 11 370 5000
- The number of shares in issue now and as at the dividend declaration
date is 31,207,479;
- The interim gross dividend is 10.28561 SA cents;
- The interim net dividend is 8.22849 SA cents;
- The dividend has been declared from income reserves, which funds are
sourced from the Company's main bank account in London and is regarded as a
foreign dividend by South African shareholders; and
- The Company's UK Income Tax reference number is 948/L32120.
Dividend dates:
Last day to trade (SA) Tuesday 12th March 2019
Shares trade ex-dividend (SA) Wednesday 13th March 2019
Shares trade ex-dividend (UK) Thursday 14th March 2019
Record date (SA and UK) Friday 15th March 2019
Pay date Friday 5th April 2019
Share certificates may not be de-materialised or re-materialised between
Wednesday 13th March 2019 and Friday 15th March 2019, both dates inclusive.
Shares may not be transferred between registers in London and South Africa
between Wednesday 13th March 2019 and Friday 15th March 2019, both dates
inclusive.
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 2018,
have been prepared in accordance with IAS 34, 'Interim financial reporting', as
adopted by the EU; and
- the Interim Statement includes a fair review of the information required by
DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules.
Neither this Interim Statement nor any future interim statements of the Company
will be posted to shareholders. The Interim Statement is available as follows:
- on the Company's website at www.city-group.com/
london-finance-investment-group-plc/; and
- by writing to City Group PLC, the Company Secretary, at 1 Ely Place,
London EC1N 6RY
This Interim Statement contains inside information for the purposes of Article
7 of EU Regulation 596/2014.
The Directors accept responsibility for the contents of this Interim Statement.
For further information, please contact:
London Finance & Investment Group PLC +44(0) 20 7796 9060
Sponsor:
Sasfin Capital (a member of the Sasfin
Group).
Consolidated Statement of Total Comprehensive Income (Unaudited)
Half year ended Year Ended
31st December 30th June
2018 2017 2018
GBP000 GBP000 GBP000
Operating Income
Dividends received 335 311 674
Rental and other income 55 50 107
Profit on sales of investments, including 15 26 26
provisions
405 387
Management service fees 132 118 274
537 505 1,081
Administrative expenses
Investment operations (209) (229) (411)
Management services (191) (162) (364)
Total administrative expenses (400) (391) (775)
Operating profit 137 114 306
Unrealised changes in the carrying value of (814) 501
General Portfolio investments (117)
Exceptional costs - office move (35) - -
Interest payable (9) (1) (14)
(Loss)/Profit before taxation (721) 615 175
Tax expense 182 (49) 20
(Loss)/Profit after taxation (539) 566 195
Non-controlling interest 19 (3) (8)
(Loss)/Profit attributable to shareholders (520) 563 187
Other comprehensive income/(expense) -
Unrealised changes in the carrying value of (443) (87) (23)
Strategic Investments
Deferred tax 90 48 42
Corporation tax - - 50
Total other comprehensive (expense)/income (353) (39) 69
Total comprehensive (expense)/income (873) 524 256
attributable to shareholders
Basic and Diluted (loss)/earnings per share (1.7)p 1.8p 0.6p
Adjustment for the unrealised changes in the 2.0p (1.5)p 0.2p
carrying value of investments, net of tax
Headline earnings per share 0.3p 0.3p 0.8p
Interim dividend 0.55p 0.55p 0.55p
Final dividend 0.60p
-
Total in respect of the period 0.55p 1.15p
0.55p
Consolidated Statement of Changes in Shareholders' Equity (Unaudited)
Ordinary Share Unrealised Share of Retained Total Non-Controlling Total
Share Premium Profits and Retained Realised Interests Equity
Capital Account Losses on profits and Profits
Investments losses &
Results of Losses
Subsidiaries
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Period ended 31st Dec
2018
Balances at 1st July 1,560 2,320 8,056 4,207 4,253 20,396 105 20,501
2017
(Loss)/Profit for the - - (613) 198 (105) (520) (19) (539)
Period
Other Comprehensive - - (353) - - (353) - (353)
Expense
Total comprehensive
(expense)/income - - (966) 198 (105) (873) (19) (892)
Dividends paid and - - - - (187) (187) - (187)
total transactions
with shareholders
Balances at 31st Dec
2018 1,560 2,320 7,090 4,405 3,961 19,336 86 19,422
Ordinary Share Unrealised Share of Retained Total Non-Controlling Total
Share Premium Profits and Retained Realised Interests Equity
Capital Account Losses on profits and Profits
Investments losses &
Results of Losses
Subsidiaries
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Period ended 31st Dec
2017
Balances at 1st July 1,560 2,320 8,265 3,794 4,544 20,483 97 20,580
2017
Profit for the Period - - 288 206 68 563 3 566
Other Comprehensive - - (39) - - (39) - (39)
Expense
Total comprehensive
income - - 249 206 68 524 3 527
Dividends paid and - - - - (172) (172) - (172)
total transactions
with shareholders
Balances at 31st Dec
2017 1,560 2,320 8,514 4,000 4,441 20,835 100 20,935
Consolidated Statement of Financial Position (Unaudited)
31st December 30th June
2018 2017 2018
GBP000 GBP000 GBP000
Non-current assets
Property, plant and equipment 46 15 13
Strategic investments: -
Finsbury Food Group Plc 6,120 6,420 6,720
Western Selection PLC 4,087 4,166 3,930
10,253 10,601 10,663
Current assets
Listed investments 9,829 11,295 10,676
Trade and other receivables 227 63 251
Cash and cash equivalents 495 277 304
10,551 11,635 11,231
Current liabilities
Trade and other payables falling due within (943) (483) (671)
one year
Net Current Assets 9,608 11,152 10,560
Deferred taxation (439) (818) (722)
Total Assets less Total Liabilities 19,422 20,935 20,501
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 7,090 8,514 8,056
Share of retained profits and losses of 4,405 4,000 4,207
subsidiaries
Company's retained realised profits and losses 3,961 4,441 4,253
Total Capital and Reserves attributable to 19,336 20,835 20,396
owners
Non-controlling equity interest 86 100 105
19,422 20,935 20,501
Net assets per share 62.0p 66.8p 65.4p
Number of shares in issue 31,207,479 31,207,479 31,207,479
Consolidated Statement of Cash Flows (Unaudited)
Half year ended Year ended
31st December 30th June
2018 2017 2018
GBP000 GBP000 GBP000
Cash flows from operating activities
(Loss)/Profit before tax (721) 615 175
Adjustments for non-cash -
Finance expense 9 1 14
Depreciation charges 6 4 9
Unrealised changes in the fair value of 814 (501) 117
investments
Realised gain on disposal of investments (15) - (26)
Decrease/(Increase)in trade and other 26 157 (32)
receivables
Increase/(Decrease) in trade and other payables 45 (3) 96
Overseas Taxes paid (11) (11) (230)
Net cash inflow from operating activities 153 262 123
Cash flows from investment activity
Acquisition of property, plant and equipment (39) (5) (8)
Acquisition of current investments (611) (727) (699)
Disposal of current investment 660 698 698
Net cash inflow/(outflow) from investment 10 (34) (9)
activity
Cash flows from financing
Interest paid (9) (1) (14)
Equity dividends paid (188) (172) (343)
Net drawdown of loan facilities 225 - 325
Net cash inflow/(outflow) from financing 28 (173) (32)
Increase in cash and cash equivalents 191 55 82
Cash and cash equivalents at the beginning of 304 222 222
the year
Cash and cash equivalents at end of the year 495 277 304
Reconciliation of net cash flow to movement in net debt
At start Cash At end of
of Period Flow Period
Half year ended GBP000 GBP000 GBP000
31st December 2018
Cash and cash equivalents 304 191 495
Bank revolving credit facility (325) (225) (550)
Net cash and cash equivalents (21) (34) (55)
31st December 2017
Cash and cash equivalents 222 55 277
Year ended 30th June 2018
Cash and cash equivalents 222 82 304
Bank revolving credit facility - (325) (325)
Net cash and cash equivalents 222 (243) (21)
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 2018 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.
Under IFRS 9, the Company has elected to classify its long-term Strategic
Investments as financial instruments which are held at fair value with
unrealised changes in value taken directly to Other Comprehensive Income.
General Portfolio investments are held at fair value with unrealised
changes in fair value recognised in Profit or Loss. Strategic and General
Portfolio investments are quoted investments, and their fair value
continues to be calculated using quoted prices.
This report has been prepared in accordance with the accounting policies
contained in the Group's 2018 Annual Report and Accounts and International
Financial Reporting Standards, and complies with IAS 34, 'Interim financial
reporting' as adopted by the EU. The financial information contained in
this report has not been audited or reviewed by the Company's auditors.
2. Earnings per share:
Earnings per share are based on the (loss)/profit on ordinary activities
after taxation and non-controlling interests of GBP(520,000) (2017: GBP563,000)
and on 31,207,479 (2017: 31,207,479) shares being the weighted average of
number of shares in issue during the year. There are options outstanding
over 80,000 shares.
Reconciliation of headline earnings
Headline earnings are required to be disclosed by the JSE. Headline
earnings per share are based on the profit attributable to the shareholders
after tax and non-controlling interests, before unrealised changes in the
fair value of investments net of tax, of GBP93,000 (2017: GBP11,000) and on
31,207,479 (2017: 31,207,479) shares being the weighted average of number
of shares in issue during the year.
3. Going Concern:
After making enquiries, 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 and its performance over the remaining six months of
the financial year are disclosed on pages 9-10 of the Group's 2018 Annual
Report and Accounts. The key risks and mitigating activities have not
changed from these:
- Stock market vulnerability and economic uncertainty including
Brexit;
- 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
Value
GBP000 %
Diageo 475 4.8
LVMH Moet Hennessey 464 4.7
Investor AB 462 4.7
Pernod Ricard 444 4.5
Schindler-Holdings AG 436 4.4
Royal Dutch Shell 421 4.3
Unilever 414 4.2
Nestle 384 3.9
Brown Forman 383 3.9
L'Oreal 381 3.9
Givaudan 381 3.9
Heineken Holding 374 3.8
HSBC Holding 356 3.6
Exxon Mobil Corp 353 3.6
Danone 331 3.4
3M Co 329 3.3
Procter & Gamble Co 325 3.3
Henkel 318 3.2
Antofagasta 313 3.2
Reckitt Benckiser Group 295 3.0
United Technologies Corp 284 2.9
Phillip Morris International Inc 267 2.7
Becton Dickinson & Co 248 2.5
British American Tobacco 245 2.5
BASF 228 2.3
Imperial Brands 212 2.2
Anheuser Busch Inbev 193 2.0
AP Moeller-Maersk 187 1.9
Compagnie Financiere Richemont 166 1.7
Deutsche Post 160 1.6
9,829 100
END
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