London Finance & Investm... Share Discussion Threads

[jhan66] 08/9/2005 15:43

true nav being ignored here at the moment, but should come good eventually.

1p divi next week
52p NAV at the start of Sept,
since then Swallowfield+5%, Finsbury +15%, & warrants 20%+.

adds up to a big discount

[mart] 08/9/2005 15:13

The recent rise in FIF doesn't seem to be having much impact on LFI.

[robin_of_loxley] 02/9/2005 16:21

Final Results

LONDON FINANCE & INVESTMENT GROUP P.L.C.

Preliminary announcement of Unaudited results for the year ended 30th June 2005





Introduction

We are an investment company whose assets primarily consist of three Strategic
Investments and a General Portfolio. Strategic Investments are significant
investments in smaller UK quoted companies and these are balanced by a General
Portfolio, which consists mainly of investments in major U.K. and European
equities.

At 30th June 2005, we held three Strategic Investments in which we have board
representation: our associated company Western Selection P.L.C., Marylebone
Warwick Balfour Group Plc and Finsbury Food Group plc. Detailed comments on our
Strategic Investments are given below.

Our objective is to achieve capital growth in real terms over the medium term,
while maintaining a progressive dividend policy.

Results

The Group made a profit before tax for the year of ?202,000 (2004 - ?208,000).
Our operating profits have increased from ?141,000 to ?228,000 as a result of
higher profits realised on sales of investments and increased dividend income.
Our profit after tax and minority interest was ?212,000 (2004 - ?190,000)
giving earnings per share of 0.81p (2004 - 0.74p).

To reflect the improvement in the earnings and our progressive dividend policy,
the Board has decided to increase the dividend for the year to 1.0p per share
(2004 - 0.9p).

Our net assets per share have increased 23% to 44p at 30th June 2005 from 36p
last year. Our Strategic Investments have increased in value by 31% and our
General Portfolio by 10% after taking into account additions and disposals of
investments. This compares with the increase in the FTSE 100 index of 15% and
the FTSE Eurotop 300 index of 14% over the year.

Strategic Investments

Western Selection P.L.C. ("Western")

The Company owns 4,402,982 shares, being 40.48% of the issued share capital,
and 809,518 warrants, of Western. On 31st August 2005, Western announced a
profit after tax of ?153,000 for its year to 30th June 2005, earnings per share
of 1.40p (2004 - 2.84p), and a 5% increase in dividend to 2.32p (2004 - 2.20p).
Western's net assets at market value were ?9.4 million, equivalent to 86.5p per
share, a fall of 7% from 92.7p last year. The fall in value of Western during
the year is due to a significant fall in the value of its investment in The
Sanctuary Group plc, following a profit warning by that company. Sanctuary used
to be a strategic investment of Western's and 3.5 million shares still owned at
the time of the profit warning and at 30th June 2005 have subsequently been
sold at the year end balance sheet value. During the six year course of
Western's involvement it realised a substantial profit on this investment.

The market value of the Company's investment in Western at 30th June 2005 was ?
2.4 million and the book value was ?4.1 million. At market value this
represents 21% of the net assets of Lonfin. The underlying value of the
Company's investment in Western, valuing Western's investments at market value,
was ?3.9 million (2004 - ?4.1 million).

I am the Chairman of Western and Mr. Robotham is a non-executive director.
Western has strategic investments in Creston plc, Swallowfield plc and
Industrial & Commercial Holdings PLC. An extract from Western's announcement of
its strategic investments is set out below:

Creston plc

Creston is a marketing services group whose strategy is to grow within its
sector both by organic growth and through selective acquisition to become
a substantial diversified international marketing services group. The
results for the year to 31st March 2005, show a profit after tax of ?
2,640,000 (2004 - ?1,449,000), equivalent to earnings of 10.7p per share
(2004 - 9.0p).

At 1st July 2004, Western owned 2,000,000 shares in Creston. During the
year we acquired an additional 873,998 shares at a cost of ?1,224,141 as a
result of the exercise of our warrants and participation in Creston's
fundraising to bring our total holding to 2,873,998 shares, being 8.2% of
Creston's issued share capital. The market value of the Company's holding
in Creston on 30th June 2005 was ?4,455,000 (2004 - ?2,620,000), being 47%
of Western's net assets.

Swallowfield plc

Swallowfield has a long history of developing and producing aerosol,
cosmetic and toiletry products stretching back to 1950. As one of Europe's
premier contract manufacturers of toiletries and cosmetics it offers an
unrivalled breadth of product capabilities. Its skill in design,
developing and producing gift packs and themed product ranges compliments
its production capability.

Swallowfield's latest published results were for the 28 weeks to 8th
January 2005 and showed a profit of ?431,000 (28 weeks to 10th January
2004 - ?263,000).

Industrial & Commercial Holdings plc

ICH is a small unlisted PLC in which Western holds 29.9%. It holds land
pending planning permission for housing at Milngavie, adjacent to
Dougalston golf course, just north east of Glasgow. As it may take many
years for the development to progress, we are in discussion with the board
of ICH to consider an acquisition of an active business.

Marylebone Warwick Balfour Group Plc ("MWB")

The Company owns 3,000,000 shares in MWB, representing 2.73% of its issued
share capital. The market value at 30th June 2005 was ?3.2 million, compared
with the book value of ?2.5 million, and represents 28% of the net assets of
Lonfin.

MWB is in the process of maturing and realising its assets for the benefit of
all stakeholders through an orderly disposal programme, which is under constant
review.

Both Mr Robotham and I are non-executive directors of MWB.

Finsbury Food Group plc ("Finsbury Food")

During the year we acquired a further 300,000 shares in Finsbury Food at a cost
of ?100,000 to bring our holding, at 30th June 2005 to 4,800,000 shares and
3,000,000 warrants representing 21.59% of their share capital and 47.03% of
their warrants. The market value of our holding was ?3.2 million on 30th June
2005 (cost - ?847,000) and represents 28% of the net assets of Lonfin.

Finsbury Food's main subsidiary, Memory Lane Cakes, is a supplier of boxed
ambient cakes to most of the UK's major supermarket chains, which include Asda,
Morrisons, Sainsbury, Somerfield, Tesco and Waitrose. Ambient cakes are baked
cakes that have not been frozen and are generally retailed at room temperature.

Finsbury Food has now repositioned itself as a speciality foods business
focused on niche markets. Its directors believe that the UK food sector is
increasingly polarised between substantial manufacturers and a large number of
smaller independent businesses and that, in this environment, opportunities
exist to acquire and develop profitable niche businesses. Finsbury Food's
directors, of which I am one, continue to monitor the sector and seek further
suitable acquisitions.

General Portfolio

The General Portfolio has material interests in Oil, Natural Resources,
Pharmaceuticals and Healthcare, Banking, Food and Beverages. These sectors
accounted for 73% of the portfolio by value at 30th June 2005 (76% at 30th June
2004). We believe that the companies in these sectors in which we have invested
have the potential to outperform the market in the medium to long term.

The number of holdings in the General Portfolio has increased to 39 from 36. We
have invested ?114,000 (2004 - ?124,000) in the General Portfolio over the year
and the average value of each holding has increased from ?102,000 to ?110,000.

We have a ?2 million bank facility and at 30th June 2005 had drawn down ?1.6
million. This leaves ?400,000 available for further investment when the Board
feels appropriate; together with the ?936,000 we anticipate receiving during
October on the final date of exercise of our remaining outstanding warrants.

The year ahead

Despite weak consumer demand, we remain confident in the underlying strength of
the U.K.'s equity markets and will utilise the balance of our available
facilities both cautiously and "stock specific". Since our year end, the stock
markets have had a good run and, at the time of writing, our net asset value
has moved up to 51.94p from 44.05p at 30th June 2005. Barring unforeseen
circumstances, your Directors intend to maintain the dividend in the year
ahead.

D.C. MARSHALL

Chairman

2nd September 2005





Unaudited Consolidated Profit and Loss Account

For the year ended 30th June 2005 2004

?000 ?000

Operating Income

Investment operations 572 407

Management services 501 533

Administrative expenses

Investment operations (294) (281)

Management services (551) (518)

-------- --------

Operating profit 228 141

Share of result of associated undertaking 90 139

Interest payable (116) (72)

-------- --------

Profit on ordinary activities before taxation 202 208

Tax on result of ordinary activities (12) (9)

-------- --------

Profit on ordinary activities after taxation 190 199

Equity minority interest in subsidiary 22 (9)

-------- --------

Profit attributable to members of the holding company 212 190

Proposed dividend (262) (233)

-------- --------

Retained loss for the financial year (50) (43)

===== =====

Basic earnings per share 0.81p 0.74p

Headline earnings per share 0.81p 0.74p

Diluted earnings per share 0.80p 0.73p



There are no other recognised gains or losses.





Unaudited Consolidated Balance Sheet

at 30th June 2005 2004

?000 ?000

Fixed Assets

Tangible assets 431 437

Investments 7,455 7,390

-------- --------

7,886 7,827

-------- --------

Current Assets

Listed investments 3,534 3,077

Debtors 178 272

Bank balance and deposits 48 30

-------- --------

3,760 3,379

Current Liabilities

Creditors: falling due within one year (2,089) (1,655)

-------- --------

Net Current Assets 1,671 1,724

-------- --------

Total Assets less Current Liabilities 9,557 9,551

===== =====

Capital and Reserves

Called up share capital 1,310 1,295

Share premium account 1,095 1,033

Reserves 361 361

Profit and loss account 6,730 6,780

-------- --------

Equity shareholders' funds 9,496 9,469

Minority equity interests 61 82

-------- --------

9,557 9,551

===== =====





Unaudited Consolidated Cash Flow Statement

For the year ended 30th June 2005 2004

?000 ?000

Cash outflow on operating activities (244) (479)

-------- --------

Returns on investments and servicing of finance

Dividends received 277 246

Interest paid (89) (60)

-------- --------

Net cash inflow from returns on investments and servicing 188 186
of finance

-------- --------

Taxation (15) (9)

-------- --------

Investing activities

Purchase of tangible fixed assets (4) -

Purchase of fixed asset investments (101) -

-------- --------

Net cash outflow from investment activities (105) -

===== =====

Equity dividend paid (233) (218)

Financing

Share capital issued 77 72

Net draw down of loan facility 350 450

-------- --------

Net cash inflow from financing 427 522

-------- --------

Increase in cash 18 2

-------- --------





Notes

1 . The dividend for the year of 1 .0 p per share (2004 - 0.90 p) will be paid
on 7th October 2005 to shareholders on the register on 16th September 2005
.

2 . Earnings per share are based on the result of ordinary activities after
taxation and minority interests and on 26,113,943(2004- 25,809,406) being
the weighted average of the number of shares in issue during the year.

3 . The net assets attributable to shareholders, taking investments at market
value, are before providing for any tax that may arise on realisation.

4 . The financial information in this preliminary announcement of unaudited
group results, which has been reviewed and agreed by the auditors, does not
constitute statutory accounts within the meaning of section 240(5) of the
Companies Act 1985. The accounts have been prepared in accordance with the
Accounting Standards of the Auditing Practices Board of the United Kingdom
and are consistent with those applied in the previous financial year. The
audited accounts of the group for the year ended 30 th June 2004 have been
reported on with an unqualified audit report in accordance with section 235
of the Companies Act 1985 and have been delivered to the Registrar of
Companies.

5 Changes in Equity 2005 2004

?000 ?000

Profit for the financial year 212 190

Proposed dividend (262) (233)

Shares issued during the year 77 72

---------- ----------

27 29

Opening equity shareholders' funds 9,469 9,440

---------- ----------

Closing equity shareholders' funds 9,496 9,469

---------- ----------

[robin_of_loxley] 02/9/2005 16:21

London Finance & Investment FY pretax flat, raises dividend

London Finance & Investment Group PLC made a profit before
tax for the year to end-June of 202,000 stg, compared with 208,000 in 2004.

Operating profits increased from 141,000 to 228,000 stg as a result of
higher profits realised on sales of investments and increased dividend income.

To reflect the improvement in the earnings and the group's progressive
dividend policy, it said the board has decided to increase the dividend for the
year to 1.0 pence per share from 0.9 pence in 2004.

It added that, barring unforeseen circumstances, the board intends to
maintain the dividend in the year ahead.

The group also reported its net asset value per share increased 23 pct in
the year to 44 pence at the end of June from 36 pence last year. Since the year
end the group's net asset value has moved up to 51.94 pence.

Despite weak consumer demand, chairman DC Marshall said the board remains
confident in the underlying strength of the UK's equity markets and will utilise
the balance of available facilities both cautiously and "stock specific".

[robin_of_loxley] 02/9/2005 16:19

I have just set up a new thread with chart and news etc, if people wish to adopt it

[cwa1] 02/9/2005 08:24

Indeed. NAV of 52p vs price of 36p. Divi up 11%. Confident outlook. Wonder why they don't have an anoouncement flag on ADVFN for the results? Need to go and have a proper look to see if there are any nasties lurking beyond the headines:-)

[jhan66] 02/9/2005 08:15

results out. haven't digested yet, but do like the discount.
share 36p, current NAV 52p that's more than 30% discount. Ought to give us a boost

[cwa1] 16/8/2005 11:03

Apologies if I waken anybody up;-)

Nice little burst of activity of late, maybe in anticipation of results that must be due fairly soon.

[cwa1] 25/7/2005 13:27

Blimey. Some long overdue movement in the share price and some decent sized trades as well. Wonder what's up?

[callumross] 14/7/2005 13:11

I've just topped up with 25000 shares, having just calculated todays NAV at around 51p!!

[topvest] 04/3/2005 18:56

Agreed, but it's been this way for a long time.

[jhan66] 03/3/2005 09:33

today's results quote NAV 47.9p. Thats 50% more than current share price.
that is far too much discount on semi-liquid listed holdings.

[topvest] 01/3/2005 19:19

NAV probably around 45p now. This is really a more conservative play on MWB, FIF and WSE. I'm happy to hold long term and add on weakness.

[robin_of_loxley] 01/3/2005 14:57

cheers!
RoL

[cwa1] 01/3/2005 14:56

and yours RoL :-). This must be a record number of posts for this board if nothing else I would suspect. Will let you know if I come up with anything else.

[robin_of_loxley] 01/3/2005 14:48

cheers for your thoughts CWA1, much appreciated..

RoL

[cwa1] 01/3/2005 14:47

Personally, I do worry a bit about big majority shareholders. I've been legged over a few times in the past by majority holders simply taking their ball away and going home, with little recompense for the shareholders. There aren't even a few institutional shareholders who might(though I agree this is unlikely in reality anyway) get together and block any cheap takeout. I have a holding in Dragon, where Emirates hold over 60% of the equity-but that hasn't stopped the price soaring away as the market begins to rate the potential, so there is hope. I have no detailed knowledge about the majority shareholders intentions here to be honest.

I haven't followed this one long enough to know if the historic discount to NAV has fluctuated much, I may have a look if I get a moment in the next few days.

Re the portfolio selection, don't know either how it is selected but it seems to have much more than mirrored the markets recent upswing, which is a good start at least.

[robin_of_loxley] 01/3/2005 14:24

to be honest, I havent really looked at these for ages...

as far as controlling shareholdings go, do you see that as a particular issue on this one we should be concerned about...i.e. is this being run for shareholders benefit in general or particular...

is the discount to NAV in line with the historic discount to NAV, or are we looking at a re-rating...

...havent looked at how the portfolio is selected or managed...no idea how actively it is managed...

RoL

[cwa1] 01/3/2005 14:18

RoL

Have you looked at their entire portfolio? I had a look at the "major" holdings and they have moved up smartly from the last NAV of 36p on 30/6/04. I didn't look at EVERY holding in the general portfolio, but the ones I looked at had all moved up pretty handsomely as well. At the moment I would guess that the NAV must be well into the 40's, unless I have missed any disasters out there. So a very big discount to NAV for a company who, by and large, is made up of holdings in fairly liquid, quoted companies. I suppose you have to allow for the controlling shareholder, however...

[robin_of_loxley] 01/3/2005 14:08

yes, have been holding these for a few years now... had almost forgotten about them... have also been holding FIF for a while too...

[cwa1] 01/3/2005 14:04

Indeed it is. I bought some yesterday and tried to buy a second lot later on but was quoted 20% ABOVE the offer price, just to get a small 20k bite. I assume, therefore, that there isn't a lot of stock about.

[robin_of_loxley] 01/3/2005 13:42

nice to see the tick up today...

RoL

[jhan66] 28/2/2005 13:12

isn't this the place to be today?
finsbury up 20%+ 23% owned by lfi. creston also up.
& lfi already on a big discount to assets.