London Finance & Investment Group Plc - Annual Financial Report
Final Results
(“Lonfin”, “the Company” or “the Group”)
Final Results for the year ended
and 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’. ‘Other Investments’ are typically property and other physical assets. Strategic Investments are significant investments in smaller
Further information on the Group’s Investment Policy can be found in the Directors’ Report in the Company’s 2024 Annual Report & Accounts.
The Group’s net assets for 2024 have increased from £18,640,000 for the previous year (restated) to £22,343,000 and have increased 41.5% over the last five years. Shareholders’ total dividends for 2024 will be 1.2p per share. Information on the Group’s performance against the Board’s key performance indicators (KPIs) is set out in the Strategic Report in the Company’s 2024 Annual Report & Accounts.
Results
Net assets per share have increased to 71.6p (2023 – 59.2p per share)
The restructuring of
The value of the General Portfolio has decreased, including investment purchases and sales, over the year, by 9.4% from £15,496,000 to £14,032,000.
The unrealised fair value adjustment to the General Portfolio investments over the period has decreased by £1,925,000.
The decrease in Group operating costs is mainly a result of lower office costs
A final dividend of 0.60p per share is recommended, making a total of 1.2p per share for the year (2023 – 1.15p)
The Company and its subsidiaries (the “Group”) recorded an operating profit for the year, before interest, tax, profit on bargain purchase and changes to the fair value adjustments of investments of £3,830,000, compared to operating profit for the previous year, before tax and changes to the fair value adjustments of investments, of £762,000. Basic and headline earnings per share are 13.6p (2023 restated – 5.7p).
The Company’s remaining strategic investment has decided to cease operations and return capital to shareholders. As a consequence, in
At
Following the year-end, Western shareholders approved a final return of capital and a capital reduction. As a result, Western’s issued share capital has reduced from 104,555 ordinary shares to one ordinary share which is held by the Company’s subsidiary,
Western did not pay an interim dividend this year and does not propose a final dividend (2023 – Nil).
General Portfolio
The portfolio is diverse with material interests in Food and Beverages, Natural Resources and Chemicals. 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
As at
Directors, Operations and Employees
On
On
All of the Group’s operations, with the exception of investment selection, are outsourced to our subsidiary,
Dividend
The Board recommends a final dividend of 0.60p (
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,
-- 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, 3 December 2024 | |_____________________________|___________________________| |Shares trade ex-dividend (SA)|Wednesday,4 December 2024 | |_____________________________|___________________________| |Shares trade ex-dividend (UK )|Thursday,5 December 2024 | |_____________________________|___________________________| |Record date (UK and SA) |Friday, 6 December 2024 | |_____________________________|___________________________| |Pay date |Wednesday, 18 December 2024| |_____________________________|___________________________|
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
Share certificates may not be de-materialised or re-materialised between Wednesday
Outlook
Early in 2022,
The staunch defence put up by the Ukrainians has been remarkable. Casualties are estimated by the United Kingdom’s Ministry of Defence to total in the hundreds of thousands.
Extensive dis-investment by Western companies from
On
The conflicts between
Chinese data also points to a diminution in the historical growth rates previously achieved and a polarised election campaign with no clear front runner in the world’s only true superpower -
In this context, respected commentators the world over give a myriad of differing views on the effect these global issues have on equities, bonds and other investments.
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. The cost of being a listed company continues to rise inexorably, and the Board is reviewing methods of achieving a step change in size in order that costs become more proportionate to the size of the business and/or to make savings wherever possible in the general and administrative costs burden. audit costs have risen at rates that exceed inflation by a large quantum and so the frictional costs of merely being listed erode, to a degree, the advantages of common purpose in a listing – for the smaller company. The Board continues to seek out investments which will generate growth in shareholder value. Innovations in medicine especially in pharmacology continue to be made and can result in spectacular outperformances. Similar outperformances in some technology and software stocks are also increasingly in evidence and the global nature of these behemoth successful companies has also given them specific size advantages that further lead to productivity and synergistic effects of some magnitude. The Board continues to pursue its current Investment Policy and will advise shareholders of any proposed changes.
The Company’s 2024 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:
Johannesburg Sponsor:
Questco Corporate Advisory:
+27 11 011 9212
Consolidated Statement of Total Comprehensive Income
For the year ended 30 June
Restated*
Operating Income 2024 2023
£000 £000
Dividends receivable 614 586
Management service fees 361 352
Rental and other income 138 97
Profit on disposal of General portfolio investments 403 633
Profit on disposal of Western Selection 3,183 -
4,699 1,668
Administrative expenses
Investment operations (425) (495)
Management services (444) (411)
Total administrative expenses (869) (906)
Operating profit 3,830 762
Unrealised changes in the carrying value of General Portfolio 512 956
investments
Unrealised changes in the carrying value of Western Selection 1 393
Profit on bargain purchase 83 -
Interest payable 6 (7)
Profit before taxation 4,432 2,104
Income tax expense (222) (312)
Profit after taxation 4,210 1,792
Non-controlling interest 24 (16)
Profit attributable to shareholders 4,234 1,776
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss
Profit on disposal of Strategic investments - 118
Unrealised changes in the carrying value of Strategic - -
investments
Other taxation -
Income tax on disposal of strategic investments - (146)
Total Other Comprehensive (Loss)/Income attributable to - (28)
shareholders
Total Comprehensive Income attributable to owners of the parent 4,234 1,748
Reconciliation of headline earnings
Basic and diluted earnings per share 13.6p 5.7p
Adjustment for the unrealised changes in the carrying value of - -
investments, net of tax
Headline earnings per share 13.6p 5.7p
*Correction of error, see note 3
Consolidated Statement of Financial Position
Restated* Restated*
30 Jun 2024 30 Jun 2023 1 Jul 2022
£000 £000 £000
Non-current Assets
Property, Plant and Equipment 3 3 12
Right of use asset - 17 81
Strategic investments at fair value though 37 3,144 2,751
profit or loss
Strategic investments at fair value though - - 1,206
other comprehensive income
40 3,164 4,050
Current Assets
General portfolio investments at fair value 14,032 15,496 14,055
through profit or loss
Investment held for sale 50 - -
Trade and other receivables 59 100 109
Cash and cash equivalents 9,460 1,264 407
23,601 16,860 14,571
Current Liabilities
Overdraft - - (66)
Trade and other payables (149) (151) (171)
Lease liabilities - (33) (75)
Current tax liabilities (581) (188) (198)
(730) (372) (510)
Net Current Assets 22,871 16,488 14,061
Non-current Liabilities
Lease liabilities - - (33)
Deferred tax liabilities (568) (1,012) (843)
(568) (1,012) (876)
Total Assets less Total Liabilities 22,343 18,640 17,235
Capital and Reserves
Ordinary share capital 1,560 1,560 1,560
Share premium 2,320 2,320 2,320
Unrealised profits and losses on 1,850 225 11
investments
Share of retained realised profits and 160 4,906 5,331
losses of subsidiaries
Company’s retained realised profits and 16,453 9,472 7,872
losses
Capital and reserves attributable to owners 22,343 18,483 17,094
Non-controlling interests - 157 141
Total Capital and Reserves 22,343 18,640 17,235
*Correction of error, see note 3
Consolidated Statement of Cash Flows
For the year ended 30 June
Restated*
2024 2023
£000 £000
Cash flows from operating activities
Profit before tax 4,432 2,104
Adjustments for non-cash items -
Finance expense (6) 7
Depreciation charges 4 9
Depreciation on right of use asset 11 64
Unrealised changes in the fair value of general portfolio 1,925 (679)
investments
Unrealised changes in the fair value of Western Selection (1,816) (393)
Realised gain on disposal of investments (4,207) (911)
Gain on bargain purchase (83) -
Lease termination adjustment (12) -
Decrease in trade and other receivables 42 8
Decrease in trade and other payables (2) (20)
Taxes paid (272) (300)
Net cash (outflow)/inflow from operating activities 16 (111)
Cash flows from investment activity
Acquisition of general portfolio investments (6,512) (4,258)
Acquisition of Minority Interest in subsidiary (50) -
Acquisition of other investments – held for sale (50) -
Proceeds from disposal of general portfolio investments 8,891 4,407
Proceeds from disposal of strategic investments 6,291 1,325
Acquisition of equipment (4) -
Net cash inflow from investment activity 8,566 1,474
Cash flows from financing activities
Net Interest received/(paid) 6 (1)
Interest paid on lease liabilities - (5)
Repayment of lease liabilities (15) (75)
Equity dividends paid (374) (359)
Net cash outflow from financing activities (383) (440)
Increase in cash and cash equivalents 8,196 923
Cash and cash equivalents at the beginning of the year 1,264 341
Net Cash and cash equivalents at end of the year 9,460 1,264
*Correction of error, see note 3
Consolidated Statement of Changes in Shareholders’ Equity
Share of Company’s
Ordinary Share Unrealised retained retained
Share Premium profits and realised realised Total Non-Controlling Total
Capital Account losses on profits and profits Interests Equity
Investments losses of andlosses
Subsidiaries
£000 £000 £000 £000 £000 £000 £000 £000
Year ended 30
June 2024
Balances at 1 1,560 2,320 225 4,906 9,472 18,483 157 18,640
July 2023
Profit for the - - 1,625 (4,746) 7,355 4,234 (24) 4,210
Year
Total
comprehensive - - 1,625 (4,746) 7,355 4,234 (24) 4,210
income
Acquisition of
Non-Controlling - - - - - - (133) (133)
Interest
Dividends paid
and total
transactions - - - - (374) (374) - (374)
with
shareholders
Balances at 30 1,560 2,320 1,850 160 16,453 22,343 - 22,343
June 2024
Year ended30 June 2023 Restated* Balances at 1 July 2022 1,560 2,320 11 5,331 7,872 17,094 141 17,235 Profit for the Year - - 903 (1,086) 1,959 1,776 16 1,792 Other Comprehensive Income - - (689) 661 - (28) - (28) Total comprehensive income - - 214 (425) 1,959 1,748 16 1,764 Dividends paid and total - - - - (359) (359) - (359) transactions with shareholders Balances at 30 June 2023 1,560 2,320 225 4,906 9,472 18,483 157 18,640
*Correction of error, see note 3
Notes:
1. Reconciliation of basic and headline (loss)/earnings
Basic and headline (loss)/earnings per share, based on the profit attributable to the shareholders after tax and non-controlling interests of £4,234,000 (2023 (Restated) – a profit of £1,776,000) and on 31,207,479 shares issued .
Diluted (loss)/earnings per share, based on the profit attributable to the shareholders after tax and non-controlling interests of £4,234,000 (2023 (Restated) –a profit of £1,776,000) 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 (2023 – 31,207,479) being the weighted average of the number of shares in issue during the year.
1. Change of accounting policy and Correction of error
The Group previously accounted for its investment in
Following a review, the Group has reconsidered its accounting treatment. This treatment was incorrect as the investment in Western is not consolidated because of the IFRS 10 investment entity exemption. Any investment not consolidated under the IFRS 10 investment exemption is required to be held at fair value through profit or loss.
The error has been corrected by restating the affected financial statements for the prior periods as follows:
There has been no effect on the Statement of financial position.
Statement of Total comprehensive income (extract)
Profit Increase/ 2023
Operating Income 2023
(Decrease Restated
£000 £000 £000
Unrealised changes in the carrying value of - 393 393
Western Selection
Profit before taxation 1,711 393 2,104
Income tax expense (312) - (312)
Profit after taxation 1,399 393 1,792
Non-controlling interest (16) - (16)
Profit attributable to shareholders 1,383 393 1,776
Other comprehensive income/(expense)
Items that will not be reclassified to profit
or loss
Profit on disposal of Strategic investments 118 - 118
Unrealised changes in the carrying value of 393 (393) -
Strategic investments
Other taxation -
Income tax on disposal of strategic (146) - (146)
investments
Total Other Comprehensive (Loss)/Income 365 (393) (28)
attributable to shareholders
Total Comprehensive Income attributable to 1,748 - 1,748
owners of the parent
1. Financial information
The financial information in this preliminary announcement does not constitute the Company’s statutory accounts for the year ended
The consolidated financial statements of the
The accounts have been prepared in accordance with
The accounts are prepared on the historical cost bases, except for certain assets and liabilities which are measured at fair value, in accordance with
1. Copies of this Announcement
Copies of this announcement are held at the Company’s registered office, Central Court, Suite 1.01,
