London Finance & Investment Group Plc - Half-year Report
(“Lonfin” or the “Company’”)
Unaudited Condensed Interim Financial statements for the six months ended 31
and dividend declaration
The Company today announces its unaudited interim results and interim dividend declaration for the six months ended
Introduction
As an investment company, Lonfin’s
target is to achieve growth in shareholder value in real terms over the medium to long term while maintaining a progressive dividend policy. In the short term, our results can be influenced by overall stock market performance, particularly the valuation of our Strategic Investments. Whilst we have not identified any suitable Strategic Investments for acquisition in recent years, we continue to believe that a combination of Strategic Investments and a General Portfolio is the most effective way of achieving our aims; whilst keeping this under review. Strategic Investments are significant investments in smaller
As at
Results
Lonfin’s net assets per share increased by 19.1% to 70.3p at
The profit before tax for the Company and its subsidiaries (the “Group”) for the half year was £572,000 including revaluation of General Portfolio investments only (2022 - £1,313,000), resulting in earnings per share of 1.5p (2022: earnings per share 3.1p).
The Group’s total comprehensive profit after tax and minority interest, including revaluation of all investments, was £3,639,000 (2022: £943,000)
Strategic Investments
Western Selection PLC (“Western”)
As at
On
Western’s proposals were approved by shareholders at General Meetings held on 25 January and
The market value of the Company’s investment in Western at
General Portfolio
Lonfin’s general portfolio is diverse with a spread of high-quality equities, as shown in the composition of our General Portfolio at the end of this announcement. . We believe that the portfolio of quality companies we hold has the potential to outperform the market in the medium to long term.
Board Changes
Mr.
The Board is pleased to announce that Mr
Warwick is a non-executive director of the Board, the Chief Executive Officer of Marshall Monteagle PLC and is also a director of various other group operating companies. Warwick has extensive investment experience in his private capacity and brings his extensive skills, knowledge and experience to his new role as Chairman of Lonfin. The Board welcomes Warwick and thanks him for taking on the responsibility of Chairman.
Outlook
£6,291,000 has just been received from Western Selection and, over time, these funds will be utilised to increase the General Portfolio. This substantial increase in the General Portfolio will increase dividend income. The economic outlook globally remains uncertain so the General Portfolio will remain invested in major blue chip international stocks.
The Board has declared an interim dividend of 0.60p per share (2022: 0.55p).
Interim Dividend
The Board recommends an interim gross dividend of 0.60p per share (14.39034 SA cents) (2022: 0.55p) which will be paid on Thursday
JSE Disclosure Requirements
In respect of the normal gross cash dividend, and in terms of the South African Tax Act, the dividend tax ruling set out below only applies to those shareholders who are registered on the South African register on Friday 22
-- The number of shares in issue now and as at the interim dividend
declaration date is 31,207,479;
-- The interim gross dividend is 14.39034 SA cents;
-- The interim net dividend is 11.51227 SA cents;
-- The dividend has been declared from income reserves, which funds are
sourced from the Company’s main bank account in Switzerland 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) |Monday18 March 2024 | |_____________________________|______________________| |Shares trade ex-dividend (SA)|Tuesday19 March 2024 | |_____________________________|______________________| |Shares trade ex-dividend (UK )|Thursday 21 March 2024| |_____________________________|______________________| |Record date (SA andUK ) |Friday22 March 2024 | |_____________________________|______________________| |Dividend Payment date |Thursday 4 April 2024| |_____________________________|______________________|
Share certificates may not be de-materialised or re-materialised between Tuesday
The JSE Listing Requirements require disclosure of the following additional information in relation to any dividend payments.
Dividend tax ruling
Shareholders registered on the South African register are advised that the dividend withholding tax will be withheld from the gross final dividend amount of 14.39034 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 11.51227 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
Statement of Directors’ responsibility
The Directors confirm that, to the best of their knowledge:
-
the unaudited interim results for the six months ended
- 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 Suite 1.01,
Central Court, 25 Southampton Buildings , London , WC2A 1AL.
This announcement contains information that was previously classified as inside information for the
purposes of the
is considered to be in the public domain.
The directors of the Company accept responsibility for the contents of this announcement.
For further information, please contact:
London Finance & Investment Group PLC
JSE Sponsor to the Company: +44(0) 20 3709 8740
Questco Corporate Advisory Proprietary Limited
Condensed Consolidated Statement of Total Comprehensive Income
Notes Half year Year Ended
ended
31 December 30 June
2023 2022 2023
£000 £000 £000
Operating Income
Dividends receivable 241 243 586
Management service fees 192 179 352
Rental and other income 25 64 97
Profit on disposal of General portfolio 7 52 - 633
investments
510 486 1,668
Administrative expenses
Investment operations (187) (225) (495)
Management services (205) (203) (411)
Total administrative expenses (392) (428) (906)
Operating profit 118 58 762
Unrealised changes in the carrying value of 7 453 1,259 956
General Portfolio investments
Net interest income/( expense) 1 (4) (7)
Profit before taxation 572 1,313 1,711
Tax expense (110) (315) (312)
Profit after taxation 462 998 1,399
Non-controlling interest (6) (18) (16)
Profit attributable to shareholders 456 980 1,383
Other comprehensive income –
Profit on sales of Strategic Investments - 119 118
Unrealised changes in the carrying value of 3,183 (79) 393
Strategic Investments
Corporation tax expense on these items - (77) (146)
Total other comprehensive (expense)/income 3,183 (37) 365
Total comprehensive income attributable to 3,639 943 1,748
shareholders
Basic, Diluted and Headline earnings per share 1.5p 3.1p 4.4p
Interim dividend 0.60p 0.55p 0.55p
Final dividend - - 0.60p
Total in respect of the period 0.60p 0.55p 1.15p
Condensed Consolidated Statement of Changes in Shareholders’ Equity
Unrealised Share of Retained
Ordinary Share Profits and Retained Realised Non-Controlling Total
Share Premium Losses on profits and Profits Total Interests Equity
Capital Account Investments losses of &Losses
Subsidiaries
£000 £000 £000 £000 £000 £000 £000 £000
Period ended
31Dec 2023
Balances at 1 1,560 2,320 225 4,906 9,472 18,483 157 18,640
July 2023
Profit for - - 1 1 454 456 6 462
the Period
Other
Comprehensive - - 3,183 - - 3,183 - 3,183
Income
Total
comprehensive - - 3,184 1 454 3,639 6 3,645
income
Dividends
paid to - - - - (187) (187) - (187)
shareholders
Balances at 1,560 2,320 3,409 4,907 9,739 21,935 163 22,098
31 Dec 2023
Unrealised Share of Retained
Ordinary Share Profits and Retained Realised Non-Controlling Total
Share Premium Losses on profits and Profits Total Interests Equity
Capital Account Investments losses of & Losses
Subsidiaries
£000 £000 £000 £000 £000 £000 £000 £000
Period ended
31 Dec 2022
Balances at 1 1,560 2,320 11 5,331 7,872 17,094 141 17,235
July 2022
Profit for - - 916 17 47 980 18 998
the Period
Other
Comprehensive - - (79) 42 - (37) - (37)
Income
Transfer of
gain on
disposal of
investments
at fair value - - (689) 689 - - - -
through other
comprehensive
income to
retained
earnings
Total
comprehensive - - 148 748 47 943 961
income
Dividends
paid and
total - - - - (187) (187) - (187)
transactions
with
shareholders
Balances at 1,560 2,320 159 6,079 7,732 17,850 159 18,009
31 Dec 2022
Condensed Consolidated Statement of Financial Position
31 December 30 June
Notes 2023 2022 2023
£000 £000 £000
Non-current assets
Property, plant and equipment 3 7 3
Right of use of leased offices - 49 17
Investments at fair value through other 6 6,328 2,673 3,144
comprehensive income
6,331 2,729 3,164
Current assets
Listed investments at fair value 6,7 16,736 16,113 15,496
through profit or loss
Trade and other receivables 198 127 100
Cash and cash equivalents 211 624 1,264
17,145 16,864 16,860
Current liabilities
Trade and other payables falling due (97) (109) (151)
within one year
Lease liability - (70) (33)
Corporation tax liability (263) (275) (188)
(360) (454) (372)
Net Current Assets 16,785 16,410 16,488
Non-current liabilities
Deferred taxation (1,018) (1,130) (1,012)
Total Assets less Total Liabilities 22,098 18,009 18,640
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 3,409 159 225
investments
Share of retained profits and losses of 4,907 6,079 4,906
subsidiaries
Company’s retained realised profits and 9,739 7,732 9,472
losses
Total Capital and Reserves attributable 21,935 17,850 18,483
to owners
Non-controlling equity interest 163 159 157
22,098 18,009 18,640
Net assets per share 70.3p 57.2p 59.2p
Number of shares in issue 31,207,479 31,207,479 31,207,479
Condensed Consolidated Statement of Cash Flows
Half year ended Year ended
31 December 30 June
2023 2022 2023
£000 £000 £000
Cash flows from operating activities
Profit before tax 572 1,313 1,711
Adjustments for non-cash items-
Net finance (income)/expense (1) 4 7
Depreciation charges 4 5 9
Depreciation on right of use of asset 11 32 64
Profit on early lease termination (15) - -
Unrealised changes in the fair value of General (7) (1,202) (679)
Portfolio investments
Profit on sales of General Portfolio investments (509) (57) (911)
Foreign exchange - 10 -
(Increase)/Decrease in trade and other receivables (98) (19) 8
Decrease in trade and other payables (54) (63) (20)
Taxes paid (28) (28) (300)
Net cash outflow from operating activities (125) (5) (111)
Cash flows from investment activity
Acquisition of IT equipment (4) - -
Acquisition of current investments (2,979) (1,785) (4,258)
Proceeds from disposal of current investments 2,256 988 4,407
Proceeds from disposal of strategic investments - 1,325 1,325
Net cash (outflow)/inflow from investment activity (727) 528 1,474
Cash flows from financing
Net Interest received/(paid) 1 (2) (1)
Interest paid on lease liabilities - (3) (5)
Repayment of lease liabilities (15) (37) (75)
Equity dividends paid (187) (187) (359)
Net cash outflow from financing (201) (229) (440)
(Decrease)/Increase in cash and cash equivalents (1,053) 293 923
Cash and cash equivalents at the beginning of the 1,264 341 341
period/year
Effects of exchange rate changes on cash and cash - (10) -
equivalents
Cash and cash equivalents at end of the period 211 624 1,264
Notes to the condensed financial statements
1. Basis of preparation
This condensed interim financial report has been prepared in accordance with the accounting policies contained in the Company’s 2023 Annual Report and Accounts except for our Strategic holding valuation as explained in “Estimates and judgments” below. This condensed interim financial report complies with the
The information contained in this interim financial report does not constitute statutory accounts within the meaning of the Companies Act 2006. The statutory accounts of the Company and its subsidiaries (the “Group”) for the year ended
The Group had only one operating lease and the right of use of asset and lease liability were estimated based on a 5% discount factor and the cash flow predicted over 5-year lease life. The Income statement has also been affected with additional depreciation and interest charges which replace the rent costs. The lease was terminated on
New standards and interpretations
A number of new standards and amendments to standards and interpretations are effective for financial periods beginning after
Estimates and judgements
When preparing the condensed interim consolidated financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results. The judgements, estimates and assumptions applied in the condensed interim consolidated financial statements, including the key sources of estimation uncertainty, were the same as those applied in the Group’s last annual financial statements for the year ended
At
2. Earnings per share
Earnings per share are based on the profit on ordinary activities after taxation and non-controlling interests of £456,000 (2022: £980,000) and on 31,207,479 shares (2022: 31,207,479 shares) being the weighted average of number of shares in issue during the period. 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 of £456,000 (2022: £980,000) and on 31,207,479 shares (2022: 31,207,479 shares) being the weighted average of number of shares in issue during the period.
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 7and 8 of the Company’s 2023 Annual Report and Accounts. The key risks and mitigating activities include the following:
-- Stock market volatility, and economic uncertainty;
-- Dividend income; and
-- Ability to make strategic investments;
5. Reconciliation of net cash flow to movement in net debt
At start Cash Non-cash At end of
of Period Flow Movement Period
Half year ended £000 £000 £000 £000
31December 2023
Cash at bank 1,264 (1,053) - 211
Lease liability (33) 33 - -
Net cash and cash equivalents 1,231 (1,020) - 211
31 December 2022
Cash at bank 407 227 (10) 624
Overdraft (66) 66 - -
Lease liability (108) 40 (2) (70)
Net cash and cash equivalents 233 333 (12) 554
30 June 2023
Cash at bank 407 857 - 1,264
Overdraft (66) 66 - -
Lease liability (108) (80) (5) (33)
Net cash and cash equivalents 407 1,003 (5) 1,231
6. Financial Instruments
Financial assets and liabilities are classified in their entirety into one of the three levels determined on the basis of the lowest input that is significant to the fair value measurement.
Listed prices (unadjusted) in active markets for identical assets or liabilities – Level 1.
Values other than listed prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) – Level 2.
Values for the asset or liability that are not based on observable market data (that is unobservable inputs) –Level 3.
1. Financial Instruments (continued)
The categories of financial instruments used by the Group are:
Fair Value Half year Year
ended ended
Hierarchy Level 31 December 30 June
2023 2022 2023
Financial assets £000 £000 £000
At fair value through Other comprehensive
income
Non-current investments (strategic 1 6,328 2,673 3,144
investments)
At fair value through profit or loss
Current asset investments (listed 1 16,736 16,113 15,496
investments)
Loans and receivables at amortised costs
Trade and other receivables (excluding n/a 180 104 73
non-financial assets)
Cash at bank n/a 211 624 1,264
Financial liabilities
At amortised costs
Trade and other payables n/a (97) (109) (151)
Lease liabilities n/a - (70) (33)
7. Listed investments at fair value through profit and loss (“General Portfolio”)
Half year ended Year
ended
31 December 30 June
2023 2022 2023
£000 £000 £000
Cost 11,154 10,392 10,392
Opening unrealised gains 4,342 3,663 3,663
Balance brought forward 15,496 14,055 14,055
Purchases 2,979 1,785 4,258
Sales proceeds (2,256) (988) (4,407)
Realised gain on disposal 509 57 911
Net unrealised gains transferred to realised gain on (445) (57) (277)
disposal
Unrealised fair value gains in the period 453 1,259 956
Balance carried forward 16,736 16,113 15,496
8. Events after the reporting period
On
Western’s proposals were approved by shareholders at General Meetings held on 25 January and
Composition of General Portfolio
Value
£000 %
Rio Tinto 583 3.5
Legal & General 564 3.4
Unilever 488 2.9
Linde AG 480 2.9
Holcim 479 2.9
Aviva 474 2.8
TotalEnergies SE 470 2.8
Shell 468 2.8
BHP Group 459 2.7
Nestle 455 2.7
Reckitt Benckiser Group 449 2.7
Imperial Brands 445 2.7
Kraft Heinz 443 2.6
Michelin 439 2.6
Coca-Cola 437 2.6
Heineken Holding 427 2.6
Procter & Gamble Co 417 2.5
Deere & Co 414 2.5
L'Oreal 410 2.5
Mercedes-Benz Group 407 2.4
Schindler 400 2.4
Pernod Ricard 399 2.4
Bank of America 397 2.4
British American Tobacco 397 2.4
Chevron Corp 397 2.4
LVMH Moet Hennessey 390 2.3
JPMorgan Chase 388 2.3
Exxon Mobil Corp 386 2.3
BAE Systems 382 2.3
Nutrien Ltd 378 2.3
Diageo 364 2.2
Microsoft 357 2.1
Barclays 354 2.1
NatWest 346 2.1
Glencore 344 2.1
BASF 331 2.0
Caterpillar 322 1.9
Halliburton 322 1.9
Deutsche Post 319 1.9
Fedex 288 1.7
Otis Worldwide Corp 267 1.6
16,736 100
