TIDMLFI
LONDON FINANCE & INVESTMENT GROUP PLC
Final Results
30 September 2022
LONDON FINANCE & INVESTMENT GROUP PLC
("Lonfin", "the Company" or "the Group")
Final Results for the year ended 30 June 2022
and Final Dividend Declaration
London Finance & Investment Group PLC. (LSE: LFI, JSE: LNF), the investment
company whose assets primarily consist of Strategic Investments and a General
Portfolio, today announces its audited Final Results for the year ended 30 June
2022 and the Board's Final Dividend Declaration.
Strategy, Business Model and Investment Policy
Lonfin is an investment company whose objective is to generate growth in
shareholder value in real terms over the medium to long term whilst maintaining
a progressive dividend policy.
The Group's investment policy is to invest in a range of 'Strategic', 'General
Portfolio' and from time to time 'Other Investments'. General Portfolio
Investments comprise liquid stock market investments, both in equity
instruments and bonds, and, at the Board's discretion, 'Other Investments' are
typically property and other physical assets. Strategic Investments are
significant investments in smaller UK quoted companies. These are balanced by
the General Portfolio, which consists of a broad range of investments in major
USA, UK and other European companies which provides a diversified exposure to
international equity markets.
Further information on the Group's Investment Policy can be found in the
Directors' Report set out in the Company's 2022 Annual Report which will be
published shortly.
The Group's net assets per share for 2022 have decreased from the previous year
to 54.8p and decreased 16.2% over the last five years. Shareholders' total
dividends for 2022 remains the same at 1.15p. Information on the Group's
performance against the Board's key performance indicators (KPIs) is included
in the Strategic Report set out in the Company's 2022 Annual Report.
Results
* Net assets have decreased to 54.8p per share (2021 - 60.5p per share)
* The sale of 4,200,000 shares in Finsbury Food Group Plc for £3,445,000 has
led to decrease in value of the Strategic Investments, from £8,202,000 to £
3,957,000.
* The value of the General Portfolio has increased, including investment
purchases and sales, over the year, by 16.3% from £12,081,000 to £14,055,000
* The fair value of the General Portfolio investments over the period has
decreased by £508,000.
* No significant increase in Group operating costs
* A final dividend of 0.60p per share is recommended, making a total of
1.15p per share for the year (2021 - 1.15p)
The Company and its subsidiaries ("Group") recorded an operating profit for the
year, before interest, tax and changes to the fair value adjustments of
investments of £180,000, compared to operating profit for the previous year,
before tax and changes to the fair value adjustments of investments, of £
225,000. The significant decrease in fair value of Strategic Investments that
occurred during the year has led to Total Comprehensive loss for the year of £
1,439,000 compared to Total Comprehensive income of £3,241,000 for the previous
year. Basic and headline losses per share are (1.4)p (2021- profit of 4.8p).
Strategic Investments
The value of the Strategic Investments has decreased by £4,245,000 due to the
disposal of Finsbury Food Group Plc shares during the year and the market
movements in the share prices.
Western Selection PLC ("Western")
The Group holds 7,860,515 ordinary shares, being 43.8% of the issued share
capital of Western.
On 28 September 2022, Western announced unaudited preliminary results showing a
loss after tax of £438,000 for the year to 30 June 2022 (2021 loss - £109,000).
Losses per share are 2.4p (2021 - losses of 0.62p).
Western's Board has not recommended payment of an interim or a final dividend
for the year.
Western's net assets at market value at 30 June 2022 were £9,963,000 equivalent
to 56p per share, which remains the same level with the 56p last year.
Our share of the net assets of Western, including the value of Western's
investments at market value, was £4,364,000 (2021 - £4,396,000). The fair value
for Western recorded in the Statement of Financial Position is the market value
of £2,751,000 (2021 - £2,712,000). This represents 15.8% (2021 - 14.2%) of the
net assets of the Group.
Western's objective is to generate growth in value for shareholders over the
medium to long-term. Western also aspires to pay a progressive dividend, when
in the best interest of the shareholders and the company, including ensuring
any dividend paid would not have a negative effect on the ability to maintain
continued growth.
Recently some of the Core Holdings held by Western have not performed well. The
Western Board has fully engaged with those companies' boards to encourage
change and ensure a focus on shareholder value. The Western Board is delighted
to see a recovery in value in some cases and continues to be fully engaged
investors. At present, Western is not seeking to invest in new Core Holdings.
Western continues to actively invest through its treasury operations which
consist of a mix of cash and debt facilities as well as the liquid investments.
These liquid investments are primarily in blue-chip companies in the USA, UK
and Europe.
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.
David Marshall is the Chairman of Western and Edward Beale is non-executive
director.
Western's main Core Holdings are Crestchic Plc (formerly Northbridge Industrial
Services plc) and Kinovo Plc (formerly Bilby plc).
An extract from Western's announcement on 28 September 2022 relating to its
main Core Holdings is set out below:
Core Holdings
Crestchic Plc (previously Northbridge Industrial Services Plc)
Crestchic designs, manufactures 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, China and Singapore,
Crestchic 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
Crestchic is available on their website: www.crestchicplc.com
Crestchic, which is admitted to trading on AIM, announced its results for the
year ended 31 December 2021 on 12 April 2022 and recorded a total comprehensive
loss of £5,515,000 for the year (2021- total comprehensive loss of £7,400,000).
A final dividend of £0.01p was announced and paid by Crestchic in June this
year (2021 - £Nil).
Western has disposed of 2,234,500 shares in Crestchic and now holds 1,065,500
Crestchic shares which represents 3.6% of Crestchic's issued share capital.
Following the disposal, the market value of this investment on 30 June 2022 was
£2,024,450 (2021 - £3,828,000) which represents approximately 20.3% (2021 -
38.1%) of Western's net assets.
Kinovo Plc ("Kinovo") (formerly Bilby Plc)
Kinovo 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 Kinovo is
available on their website: www.kinovoplc.com.
Kinovo, which is admitted to trading on AIM, announced its results for the year
ended 31 March 2022 on 19 August 2022 showing a total comprehensive loss[DEL:,:
DEL] of £10,882,000 compared to a total comprehensive profit[DEL:,:DEL] of £
157,000 for the previous year ended 31 March 2021. Interim dividends of £0.05p
per share were paid during the year (2021 - Nil). No final dividend (2021 - £
0.05p per share) was recommended.
Western holds 7,500,000 Kinovo shares which represents 12.07% of Kinovo's
issued share capital. The market value of this investment on 30 June 2022 was £
1,125,000 (2021- £2,775,000), which represents approximately 11.3% (2021 -
27.7%) of Western's net assets.
Associated Companies
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, whose shares are
admitted to trading on AIM, is available on its website:
www.finsburyfoods.co.uk
At 30 June 2022, Lonfin held 1,800,000 Finsbury shares, representing 1.4% of
Finsbury's issued share capital. The market value of the holding was £1,206,000
as at 30 June 2022 (cost - £517,065) and represents approximately 7% (2021 -
29%) of Lonfin's net assets.
On 21 February 2022, Finsbury announced their interim results, with total
comprehensive profit of £4,667,000 for the 26 weeks ended 25 December 2021 (52
weeks to 26 June 2021 -£13,645,000).
A total of £154,030 in dividends were received from Finsbury during the year
(2021 - £Nil).
As of 8 September 2022, all the remaining 1,800,000 shares have been disposed
of.
General Portfolio
The investments comprising the General Portfolio at 30 June 2022 are listed in
the Company's 2022 Annual Report.
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 30 June 2022, the number of holdings in the General Portfolio was 40 (2021 -
36). The value of the General Portfolio over the year has increased by £
1,974,000 (2021 - increased by £2,133,000) from £12,081,000 to £14,055,000.
This 16.3% increase includes investment purchases during the year of £5,152,000
and investment sales (including selling expenses) during the same period of £
1,735,000.
The fair value of the General Portfolio investments, after adjusting for sales,
has decreased by 12.2% as at 30 June 2022.
Board Changes
Whilst the Board is satisfied that it has a sufficient spread of skills,
experience and support within the Board to operate the Company and to develop
the Company's investment business, the Board will continue to seek further
suitable Board candidates who can add value to the Board.
Operations, Directors and Employees
All of our operations and those of Western, with the exception of investment
selection, are outsourced to our subsidiary, City Group PLC ("City Group").
City Group also provides office accommodation, company secretarial, finance and
head office services to a number of other companies. City Group is responsible
for the initial identification and appraisal of potential new strategic
investments for the Company and the day to day monitoring of existing strategic
investments and employs 6 people.
Dividend
The Board recommends a final dividend of 0.60p (ZAR 11.89206 cents) per share,
making a total of 1.15p (ZAR 22.7932 cents) per ordinary share for the year
(2021 - 1.15p). Subject to shareholders' approval at the Company's Annual
General Meeting ("AGM") to be held on 10 November 2022, the dividend will be
paid on 21 December 2022 to those shareholders on the register at the close of
business on 9 December 2022. Shareholders on the South African register will
receive their dividend in South African rand converted from Pounds sterling
("Sterling") at the closing rate of exchange on Thursday, 22 September 2022
being GBP1= ZAR 19.8201.
JSE Disclosure Requirements
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, 9 December 2022.
* The number of shares in issue as at the dividend declaration date is
31,207,479;
* The dividend has been declared from income reserves. 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 date to trade (SA) Tuesday, 6 December 2022
Shares trade ex-dividend Wednesday, 7 December 2022
(SA)
Shares trade ex-dividend Thursday, 8 December 2022
(UK)
Record date (UK and SA) Friday, 9 December 2022
Pay date Wednesday, 21 December 2022
The JSE Listings Requirements require disclosure of additional information in
relation to any dividend payments.
Shareholders registered on the South African register are advised that a
dividend withholding tax will be withheld from the gross final dividend amount
of ZAR 11.89206 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 ZAR
9.51365 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.
Share certificates may not be de-materialised or re-materialised between
Wednesday, 7 December 2022 and Friday, 9 December 2022, both days inclusive.
Shares may not be transferred between the registers in London and South Africa
during this period either.
Outlook
The UK economy continues to adapt to the effects of Covid-19 and Brexit which
have led to staff shortages across the UK and continued disruption to supply
chains. The UK is now having to deal with new challenges. The invasion of
Ukraine by Russia has significantly increased geopolitical risk and created
considerable uncertainty in the UK and internationally. Supply chains have been
disrupted further, interest rates and inflation are rising rapidly and the
prospect of recession is a major concern for the UK's new administration.
Further volatility and turbulence in the markets, as interest rates continue to
increase, can be expected. The last 12 months have been challenging, and will
continue to be so, for the Group's investments, particularly its Strategic
Investments, However, the Board is pleased to see its Strategic Investments
reporting positive trading results and that one of the Strategic Investments
has already committed to return to the payment of dividends. The Board is
confident that the Group has a solid base of investments which can lead to
further capital growth in the medium to long term.
Future Developments
The Group's development and its financial performance are dependent on the
success of its Investment Strategy and the continued support of its
shareholders. Against a background of challenging and uncertain times in the
markets due to the continued presence of Covid-19 and the emergence of new
variants, and the more recent concerns with the war in Ukraine, energy supply
and food shortages and the rising cost of living alongside increasing
inflation, the Board continues to seek out investments which will generate
growth in shareholder value. The Board also continues to monitor and enhance
the quality of investments in the General Portfolio. The Board continues to
pursue its current Investment Policy and has no plans to make any further
changes to the policy in the near future. As at 30 June 2022, the Company held
40 investments in the General Portfolio.
30 September 2022
The Company's 2022 Annual Report and Accounts will be finalised shortly and
sent to shareholders.
This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014.
The directors of the Company accept responsibility for the contents of this
announcement.
For further information, please contact:
London Finance & Investment Group PLC: 020 7796 9060
David Marshall/Edward Beale)
Johannesburg Sponsor:
Questco Corporate Advisory: +27 11 011 9212
Consolidated Statement of Total Comprehensive Income
For the year ended 30 June
Operating Income 2022 2021
£000 £000
Dividends receivable 652 326
Management service fees 327 304
Rental and other income 136 154
(Loss)/Profits on disposal of General (111) 245
portfolio investments
1,004 1,029
Administrative expenses
Investment operations (394) (392)
Management services (430) (412)
Total administrative expenses (824) (804)
Operating profit 180 225
Unrealised changes in the carrying value of
General Portfolio investments (508) 1,651
Other income - 36
Interest payable (6) (39)
(Loss)/Profit before taxation (334) 1,873
Tax expense (96) (337)
(Loss)/Profit after taxation (430) 1,536
Non-controlling interest (12) (26)
(Loss)/Profit attributable to shareholders (442) 1,510
Other comprehensive income/(expense)
Items that will not be reclassified to
profit or loss
Loss on disposal of Strategic investments (398) -
Unrealised changes in the carrying value of
Strategic investments (402) 1,911
Other taxation -
Tax on disposal of strategic investments (198) -
Total Other Comprehensive (Loss)/Income
attributable to shareholders (998) 1,911
Total Comprehensive (Loss)/Income
attributable to owners of the parent (1,440) 3,421
Reconciliation of headline earnings
Basic and diluted (loss)/earnings per share (1.4)p 4.8p
Adjustment for the unrealised changes in the
carrying value of investments, net of tax - -
Headline earnings per share (1.4)p 4.8p
Consolidated Statement of Financial Position
At 30 June
2022 2021
£000 £000
Non-current Assets
Property, Plant and Equipment 12 22
Right of use asset 81 145
Strategic investments at fair value though 3,957 8,202
other comprehensive income
4,050 8,369
Current Assets
General portfolio investments at fair value 14,055 12,081
through profit and loss
Trade and other receivables 109 125
Cash and cash equivalents 407 309
14,571 12,515
Current Liabilities
Overdraft (66) -
Trade and other payables (171) (228)
Lease liabilities (75) (71)
Corporation tax (198) -
(510) (299)
Net Current Assets 14,061 12,216
Non-current Liabilities
Lease liabilities (33) (107)
Borrowings - (650)
Deferred Taxation (843) (806)
(876) (1,563)
Total Assets less Total Liabilities 17,235 19,022
Capital and Reserves
Ordinary share capital 1,560 1,560
Share premium 2,320 2,320
Unrealised profits and losses on investments 11 4,530
Share of retained realised profits and 5,331 4,734
losses of subsidiaries
Company's retained realised profits and 7,872 5,749
losses
Capital and reserves attributable to owners 17,094 18,893
Non-controlling interests 141 129
Total Capital and Reserves 17,235 19,022
Company Statement of Financial Position
At 30 June
2022 2021
£000 £000
Non-current Assets
Investments in Group companies 89 2,079
Current Assets
General portfolio investments at fair value 14,055 12,081
through profit or loss
Trade and other receivables 13 17
Cash and cash equivalents 124 23
14,192 12,121
Current Liabilities
Overdraft (66) -
Trade and other payables (90) (106)
(156) (106)
Net Current Assets 14,036 11,365
Non-current Liabilities
Borrowings - (650)
Deferred Taxation (843) (806)
(843) (1,456)
Total Assets less Total Liabilities 13,282 12,639
Capital and Reserves
Ordinary share capital 1,560 1,560
Share premium 2,320 2,320
Unrealised profits and losses on investments 1,530 3,010
5,410 6,890
Realised Profit and Loss
Balance at 1 July 5,749 5,498
Net Profit for the period 2,482 577
Dividends paid (359) (326)
Balance at 30 June 7,872 5,749
Equity shareholders' funds 13,282 12,639
Total Comprehensive income 1,002 1,488
Consolidated Statement of Cash Flows
For the year ended 30 June
2022 2021
£000 £000
Cash flows from operating activities
(Loss)/Profit before tax (334) 1,873
Adjustments for non-cash items -
Finance expense 6 39
Depreciation charges 10 10
Depreciation on right of use asset 64 62
Lease adjustment - (36)
Unrealised changes in the fair value of 508 (1,196)
general portfolio investments
Realised gain on disposal of general 111 (700)
portfolio investments
Decrease in trade and other receivables 17 41
(Decrease)/Increase in trade and other (49) 10
payables
Taxes paid (59) (51)
Net cash inflow from operating activities 274 52
Cash flows from investment activity
Acquisition of general portfolio investments (5,152) (1,706)
Proceeds from disposal of general portfolio 2,559 1,469
investments
Proceeds from disposal of strategic 3,445 -
investments
Net cash inflow/(outflow) from investment 852 (237)
activity
Cash flows from financing activities
Interest paid (5) (19)
Interest paid on lease liabilities (9) (28)
Repayment of lease liabilities (71) (52)
Equity dividends paid (359) (326)
Net (repayments)/drawdown of loan facilities (650) 650
Net cash (outflow)/inflow from financing (1,094) 225
activities
Increase in cash and cash equivalents 32 40
Cash and cash equivalents at the beginning 309 269
of the year
Net Cash and cash equivalents at end of the 341 309
year
Cash and cash equivalents 407 309
Overdraft (66) -
Net Cash and cash equivalents 341 309
Company Statement of Cash Flows
2022 2021
£000 £000
Cash flows from operating activities
Profit before tax 1,098 1,825
Adjustments for non-cash items -
Finance (income)/expense (3) 11
Unrealised changes in the fair value of 508 (1,197)
general portfolio investments
Realised gain on disposal of general 111 (700)
portfolio investments
Decreased/(Increase) in trade and other 4 (1)
receivables
Decrease in trade and other payables (6) (18)
Overseas Taxes paid (59) (51)
Net cash inflow/(outflow) from operating 1,653 (131)
activities
Cash flows from investment activity
Acquisition of general portfolio investments (5,152) (1,706)
Proceeds from disposal of general portfolio 2,559 1,469
investments
Net cash outflow from investment activity (2,593) (237)
Cash flows from financing activities
Interest paid (6) (19)
Equity dividends paid (359) (326)
Decrease/(Increase) in loan to subsidiary 1,990 (5)
Net (repayment)/drawdown of loan facilities (650) 650
Net cash inflow from financing activities 975 300
Increase/(Decrease) in cash and cash 35 (68)
equivalents
Cash and cash equivalents at the beginning 23 91
of the year
Net Cash and cash equivalents at end of the 58 23
year
Cash and cash equivalents 8 23
Overdraft (66) -
Net Cash and cash equivalents 58 23
Consolidated Statement of Changes in Shareholders' Equity
Ordinary Share Unrealised Share of Company's Total Non-Controlling Total
Share Premium profits and retained retained Interests Equity
Capital Account losses on realised realised
Investments profits and profits
losses of and
Subsidiaries losses
£000 £000 £000 £000 £000 £000 £000 £000
Year ended 30 June
2022
Balances at 1 July
2021
1,560 2,320 4,530 4,734 5,749 18,893 129 19,022
Profit for the Year - - (1,480) (1,444) 2,482 (442) 12 (430)
Other Comprehensive - - (3,039) 2,041 - (998) - (998)
Income
Total comprehensive
income
(4,519) 597 2,482 (1,440) 12 (1,428)
- -
Dividends paid and - - - - (359) (359) - (359)
total transactions
with shareholders
Balances at 30 June
2022
1,560 2,320 11 5,331 7,872 17,094 141 17,235
Year ended 30 June
2021
Balances at 1 July
2020
1,560 2,320 1,708 4,712 (5,498) 15,798 103 15,901
Profit for the Year - - 911 22 577 1,510 26 1,536
Other Comprehensive - - 1,911 - - 1,911 - 1,911
Income
Total comprehensive
income
1,560 2,320 2,822 22 577 3,421 26 3,447
Dividends paid and - - - - (359) (359) - (359)
total transactions
with shareholders
Unclaimed dividends - - - - 33 33 - 33
Balances at 30 June
2021
1,560 2,320 4,530 4,734 5,749 18,893 129 19,022
Company Statement of Changes in Shareholders' Equity
Ordinary Share Unrealised Realised Equity
Share Premium profits and profits Total
Capital Account losses on and
Investments losses
£000 £000 £000 £000 £000
Year ended 30 June 2022
Balances at 1 July 2021 1,560 2,320 3,010 5,749 12,639
Profit for the Year and total - - (1,480) 2,482 1,002
comprehensive income
Dividends paid and total - - - (359) (359)
transactions with shareholders
Balances at 30 June 2022
1,560 2,320 1,530 7,872 13,282
Year ended 30 June 2021
Balances at 1 July 2020 1,560 2,320 2,099 5,498 11,477
Profit for the Year and total - - 911 577 1,488
comprehensive income
Dividends paid and total - - - (359) (359)
transactions with shareholders
Unclaimed dividends - - - 33 33
Balances at 30 June 2021
1,560 2,320 3,010 5,749 12,639
Notes:
Reconciliation of basic and headline (loss)/earnings
Basic and headline (loss)/earnings per share, based on the loss attributable to
the shareholders after tax and non-controlling interests of £(442,000) (2021 -
profit £1,510,000) and on 31,207,479 shares issued.
Diluted (loss)/earnings per share, based on the loss attributable to the
shareholders after tax and non-controlling interests of £(442,000) (2021 -
profit £1,510,000) and on 31,207,479 shares issued plus 80,000 share options
granted in 2016.
1. Net assets per share
The net assets per share are calculated taking investments at fair value and on
31,207,479 shares (2021 - 31,207,479) being the weighted average of the number
of shares in issue during the year.
2. Financial information
The financial information in this preliminary announcement does not constitute
the Company's statutory accounts for the year ended 30 June 2022 within the
meaning of Section 435 of the Companies Act 2006.
The consolidated financial statements of the London Finance & Investment Group
PLC have been prepared in accordance with UK-adopted international accounting
standards ('UK-adopted IAS') and with Companies Act 2006.
The accounts have been prepared in accordance with UK-adopted IAS and with the
requirements of the Companies Act 2006.
The accounts are prepared on the historical cost bases, except for certain
assets and liabilities which are measured at fair value, in accordance with
UK-adopted IAS . The audited accounts for the Group for the year ended 30 June
2022 were reported on with an unqualified audit report and did not contain an
emphasis of matter paragraph or any statement under section 498 of the
Companies Act 2006 and have been delivered to the Registrar of Companies.
3. Copies of this Announcement
END
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