Interim Results

RNS Number : 8478S

LonZim PLC

27 May 2009

 



27 May 2009

LonZim Plc

('LonZim' or the 'Company')

Interim Results 2009

LonZim Plc (AIM: LZM), an investment company focussed on Zimbabwe, is pleased to announce its interim results for the period from 1 September 2008 to 28 February 2009. 

David Lenigas, Executive Chairman of LonZim commented:

'We are extremely pleased with the progress made by the Company during the period to 28 February 2009. The results showing a loss of £746,000 reflect that the Company has continued to deliver on its mandate to identify key investment opportunities in strategic sectors in Zimbabwe. These will position the Company to grow and expand in the event of an economic recovery. We remain confident that our chosen sectors demonstrate considerable potential to create value for shareholders as well as benefit the people of Zimbabwe as change occurs.'

'Recently we have seen some very positive progress made in Zimbabwe as international support for the country grows. We are positive that the investment potential in Zimbabwe remains strong and that Zimbabwe has a very bright future as it looks to re-establish its presence as one of the major economies on the African continent.'

Enquiries

LonZim Plc	[phone]
David Lenigas, Executive Chairman	[phone]
Geoffrey White, Chief Executive Officer	[phone]
Pelham PR
Charles Vivian	[phone]
	[phone]
James MacFarlane	[phone]
	[phone]
WH Ireland Ltd: NOMAD
James Joyce	[phone]

The interim report and financial statements are being posted to shareholders and will be published on the Company's website (www.lonzim.co.uk) today.

Chief Executive Officer's Statement

Zimbabwe has seen a difficult six months and both the economic and political environment have been challenging. However, significant progress has been made since the period end and there is optimism that Zimbabwe has entered a period of consolidation and the economic decline of a country, once so successful, is coming to an end. 

• The Government of National Unity was formed on 5 February 2009 and the coalition, although fractious, is a positive step forward and has created a platform capable of change and development.

• The economy has now formally become US dollar based. This has brought significant stability to the business environment and sets the stage for normal business practices to be reintroduced and for commerce to be able to move forward. However, a lack of foreign currency exchange still remains a major economic issue. 

• The Zimbabwe stock exchange resumed trading on the 25 February 2009.

• US dollarisation has curbed the recent rampant hyperinflation and January inflation was reported as 2.3% with deflation of 3.4% in February. This introduces new challenges for the economy as it enters a period of realignment and adjustment.

• In excess of US$1 billion has now been structured by SADC and other bodies to stimulate recovery.

Results for the period:

The loss for the period of £746,000 (£716,000 for the 7 month period to 31 May 2008) reflects the ongoing development of the Group's investments and is in line with expectations.

LonZim continues to focus on commercial opportunities in Zimbabwe and the Beira corridor and looks to invest in industries that the Board believes will show strong and speedy recovery when Zimbabwe begins economic growth.

The historic investments made by LonZim in Zimbabwe continue to trade in the difficult economic environment. The focus for each company has been to retain quality staff and the capabilities necessary to grow and gain market share as and when Zimbabwe recovers. Each is well positioned to do so, and with LonZim backing, the portfolio of investments is strategically placed to be able to benefit from the recovery.

During the period: 

Aldeamento Turistico de Macuti, SARL 

The design and feasibility study for the 300,000m2 site acquired for development in Beira, Mozambique, (known as the 'coast of Zimbabwe') has been completed. This key site in Beira will be developed to contain a beach front hotel, beach club and sports facilities, retail mall, office complex and conference centre. This seaside site will also sell housing on a 1.5km beach front residential area adjacent to the hotel. 

Paynet Limited (''Paynet'')

LonZim completed the acquisition of 100% of Paynet in October 2008, announced in March 2008, for US$3.19 million (£2.03 million). The purchase included a newly built commercial property valued provisionally at US$1.0 million (£0.66 million). Paynet provides an electronic funds transfer (EFT) system for sixteen banks in Zimbabwe and over one thousand of the largest Zimbabwean corporate clients.

Paynet automates company bulk payment transactions to corresponding banks and includes the largest private sector outsourced salary bureau utilised by the majority of large corporations in Zimbabwe for payments of electronic payrolls.

ForgetMeNot Africa Limited ('FMN Africa'')

LonZim has taken up an option to acquire a 51% stake of FMN Africa which provides a 'message optimiser' application for mobile phones for the sum of US$0.58 million (£0.35 million), with a further payment related to the growth of the business of US$1.0 million (£0.66 million). This system provides a unique two-way SMS - SMS instant messaging and email technology platform whereby emails and interactive messages can be received and sent on a basic mobile phone. The system does not require a G3 capability.

Telecom company Econet Lesotho has already instigated a new trial for the service and negotiations continue to launch this exciting product across a range of telecom users in Zimbabwe and the surrounding countries.

Fly540

LonZim has allocated funding to establish a franchise in Zimbabwe of Lonrho's regional aviation company, Fly540, and is working to obtain the necessary flying permissions and Air Operators Certificate to start a domestic and regional focused airline for both passenger and freight operations. 

Post period end transactions

Medalspot (Pvt) Limited ('Medalspot')

In January 2009 LonZim purchased 100% of Medalspot from the Kingdom Banking Group for US$0.95 million (£0.64 million).

Medalspot owns two, combined, industrial properties in Harare which are currently rented to Celsys (LonZim 60% holding). The property is 6,600m2 providing 2,650m2 of office and factory space. 

Leopard Rock Hotel Company (Pvt) Limited ('Leopard Rock Hotel')

In April 2009, Lonzim, acquired 100% of the iconic Leopard Rock Hotel in Vumba in the Eastern Highlands of Zimbabwe for US$8.5 million (£5.8 million). This was historically one of the great African destination hotels and LonZim believes the opportunity to develop the hotel to once again become a prominent destination for African tourism is significant. Since its acquisition, LonZim has had the hotel's 18 hole golf course classified as a PGA excellence course, and has commenced a major refurbishment programme to bring it back up to international standards.

Ongoing due diligence is in process on a strong pipeline of further acquisitions.

LonZim remains the only company on the London Stock Exchange (AIM) that is solely focused on investing in the economic recovery of Zimbabwe. The Board continues to believe that Zimbabwe will become, once again, one of the leading economic drivers in Africa in the medium term and that the commercial opportunities to partake and invest in Zimbabwe's eventual recovery are significant.

Geoffrey White
Director and Chief Executive Officer
27 May 2009

  LonZim Plc

Consolidated interim income statement

	Unaudited  6 months 28 February 2009					Unaudited  Period 25 October 2007 to 31 May 2008	Audited  Period 25 October 2007 to   31 August 2008
	Note	Continuing operations £000		Acquisitions £000	Total £000	Total  £000	Total £000
Revenue		190		305	495	290	188
Cost of sales		(101)		(149)	(250)	(107)	(66)
Gross profit		89		156	245	183	122
Monetary adjustment		-		-	-	-	(1)
Administrative expenses		(1,393)		(274)	(1,667)	(1,304)	(2,056)
Operating loss before  Financing income		(1,304)		(118)	(1,422)	(1,121)	(1,935)
Financial income		393		283	676	503	974
Financial expenses		-		-	-	(81)	(129)
Net financing income		393		283	676	422	845
(Loss)/profit before tax		(911)		165	(746)	(699)	(1,090)
Income tax expense		-		-	-	(17)	(142)
(Loss)/profit for the period		(911)		165	(746)	(716)	(1,232)
Attributable to:
Equity holders of the parent			(878)	198	(680)	(700)	(1,193)
Minority interest			(33)	(33)	(66)	(16)	(39)
(Loss)/profit for the period		(911)		165	(746)	(716)	(1,232)
Basic loss per share	3				(2.0)p	(1.9)p	(3.4)p
Diluted loss per share	3				(2.0)p	(1.9)p	(3.4)p

LonZim Plc

Consolidated interim balance sheet

As at 28 February 2009

		Unaudited  28 February 2009	Unaudited 31 May 2008	Audited  31 August 2008
		£000	£000	£000
Assets
Property, plant and equipment		7,859	373	4,284
Goodwill and other intangibles		5,827	3,561	3,450
Non-compete agreement		5,633	6,554	6,296
Other investments		-	86	-
Total non-current assets		19,319	10,574	14,030
Financial assets		-	-	213
Inventories		54	11	21
Trade and other receivables		1,567	190	1,277
Cash and cash equivalents		13,220	23,052	20,282
Other short term investments		2,999	-	-
Total current assets		17,840	23,253	21,793
Total assets		37,159	33,827	35,823
Equity
Called up share capital		4	4	4
Share premium		33,619	33,672	33,697
Revaluation reserve		148	-	148
Share option reserve		165	63	165
Foreign currency reserve		(94)	-	-
Retained earnings		(1,862)	(700)	(1,182)
Total equity attributable to equity holders of the parent		31,980	33,039	32,832
Minority interest		853	5	904
Total equity		32,833	33,044	33,736
Liabilities
Interest-bearing loans and borrowings		1,281	138	-
Deferred tax liabilities		107	21	107
Provisions		759	-	759
Total non-current liabilities		2,147	159	866
Bank overdraft		3	1	2
Interest-bearing loans and borrowings		-	11	-
Trade and other payables		2,141	612	1,178
Current tax liabilities		35	-	41
Total current liabilities		2,179	624	1,221
Total liabilities		4,326	783	2,087
Total equity and liabilities		37,159	33,827	35,823

LonZim Plc

Consolidated interim statement of recognised income and expense

For the six months ended 28 February 2009

		Unaudited  6 months  28 February 2009	Unaudited  period  25 October  2007 to  31 May 2008	Audited  period 25 October 2007 to  31 August 2008
		£000	£000	£000
Foreign exchange translation differences		(79)	-	26
Revaluation of property, plant and equipment		-	-	232
Loss for the period		(746)	(716)	(1,232)
Total recognised income and expense for the period		(825)	(716)	(974)
Attributable to:
Equity holders of the parent		(774)	(700)	(1,034)
Minority interest		(51)	(16)	60
Total recognised income and expense for the period		(825)	(716)	(974)

LonZim Plc

Consolidated interim statement of cash flows

	Unaudited 6 months 28 February 2009	Unaudited period 25 October 2007 to    31 May 2008	Audited period 25 October 2007 to  31 August 2008
	£000	£000	£000
Cash flows from operating activities	(361)	(385)	(903)
Cash received for inventories	(33)	(11)	1
Cash receipts from customers	(240)	(190)	(601)
Cash paid to suppliers and employees	163	511	351
Cash expensed from operations	(471)	(75)	(1,152)
Interest paid	-	(18)	-
Net cash from operating activities	(471)	(93)	(1,152)
Cash flows from investing activities
Interest received	393	503	832
Acquisition of subsidiaries, net of cash acquired	(2,377)	(3,436)	(5,811)
Acquisition of property, plant and equipment	(1,531)	(373)	-
Acquisition of other investments	(2,999)	(86)	-
Net cash from investing activities	(6,514)	(3,392)	(4,979)
Cash flows from financing activities
Proceeds from the issue of share capital	-	26,386	26,411
Repayment of borrowings	-	(11)	-
Loan advance	-	161	-
Payment of transaction costs	(78)	-	-
Net cash from financing activities	(78)	26,536	26,411
Net (decrease)/increase in cash and cash equivalents	(7,063)	23,051	20,280
Cash and cash equivalents at beginning of period	20,280	-	-
Cash and cash equivalents	13,217	23,051	20,280

   Note of Preparation 

• These interim financial statements for the period ended 28 February 2009, which are neither audited or reviewed have been prepared on a basis consistent with International Financial Reporting Standards ('IFRS') and do not comprise full accounts within the meaning of S240 of the Companies Act 1985.

• This unaudited interim report does not comprise the Group's statutory accounts. The financial information in respect of the period ended 31 August 2008 is extracted from the statutory accounts for this period. The auditor's report on these accounts was unqualified.

• Basic and diluted earnings per share are arrived at by dividing the loss for the period by the average number of shares in issue during the period. 

  Directors

David Lenigas          Chairman

Geoffrey White        Director & Chief Executive Officer

Jean Ellis               Finance Director

Emma Priestley     Executive Director

Paul Turner            Non-Executive Director

Paul Heber            Non-Executive Director

Corporate Information

Registrars Capita Registrars (Isle of Man) Limited 3rd Floor Exchange House 54-62 Athol Street Douglas Isle of Man IM1 1JD Tel: [phone]	Auditors KPMG Audit LLC Heritage Court 41 Athol Street Douglas Isle of Man IM99 1HN
PR Advisors Pelham PR  12 Arthur Street London EC4R 9AB Tel: [phone] Fax: [phone]	Registered Office and Agent Dickinson Cruickshank Fiduciaries Limited 33-37 Athol Street Douglas Isle of Man IM1 1LB Tel: [phone]
Principal Group Bankers Barclays Bank Lord Street Liverpool L2 6PB	Nominated Advisor and Broker WH Ireland Limited 24 Martin Lane London EC4R 0DR Tel: [phone]

 

END

 

 

IR KQLFLKEBZBBF