REG-London Finance & Investment Group Plc: Final Summarised Audited Financial Results for the year ended 30 June 2023 & Final Dividend Declaration
29/09/2023 09:30
London Finance & Investment Group PLC (Incorporated in England with registered number 201151) LSE code: LFI JSE code: LNF ISIN: GB0002994001 (“Lonfin”, “the Company” or “the Group”) London Finance & Investment Group PLC
Final Summarised Audited Financial Results for the year ended 30 June 2023
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 2023 and the Final Dividend Declaration by the Board of directors of the
Company (the “Board”).
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 United Kingdom (“UK”)
quoted companies. These are balanced by the General Portfolio, which consists
of a broad range of investments in major United States of America 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 2023 Annual Report which will
be published shortly.
The Group’s net assets per share for 2023 have increased 8.14% from the
previous year to £18,640,000 and increased 1.2% over the last five years.
Shareholders’ total dividends for 2023 remains the same at 1.15p.
Information on the Group’s performance against the Board’s key performance
indicators (KPIs) is set out in the Strategic Report of the Company’s 2023
Annual Report.
Results
- Net assets have increased to 59.2p per share (2022 – 54.8p per
share)
- The sale of all 1,800,000 shares in Finsbury Food Group Plc for
£1,325,000 has led to a decrease in value of the Strategic Investments, from
£3,957,000 to £3,144,000.
- The value of the General Portfolio has increased, including investment
purchases and sales, over the year, by 10.2% from £14,055,000 to
£15,496,000.
- The unrealised fair value adjustment to the General Portfolio
investments over the period has increased by £678,000.
- 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 (2022 – 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 £761,000, compared to operating profit for the previous
year, before tax and changes to the fair value adjustments of investments, of
£180,000. The profit on disposal of strategic investments has led to Total
Comprehensive profit for the year of £1,748,000 compared to Comprehensive
loss of £1,440,000 for the previous year. Basic and headline earnings per
share are 4.4p (2022- loss per share of 1.4p).
Strategic Investments
The value of the Strategic Investments has decreased by £813,000 due to the
disposal of Finsbury Food Group Plc shares during the year and the market
movements in the share prices.
Finsbury Food Group plc (“Finsbury”)
As of 8 September 2022, all the remaining 1,800,000 shares in Finsbury have
been sold.
Western Selection PLC (“Western”)
The Group holds 7,860,515 ordinary shares, being 43.8% of the issued share
capital of Western.
Western’s preliminary results for the year to 30 June 2023 are expected to
be announced at the end of October 2023, in line with the financial reporting
requirements of its listing on the AQSE Growth Market.
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 and Edward Beale is a non-executive director of
Western.
General Portfolio
The Company’s General 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 2023, the number of holdings in the General Portfolio was 37 (2022
– 40). The value of the General Portfolio over the year has increased by
£1,441,000 (2022 - increased by £1,974,000) from £14,055,000 to
£15,496,000. This 10.2% increase includes investment purchases during the
year of £4,258,000 and investment sales (including selling expenses) during
the same period of £4,407,000.
The fair value of the General Portfolio investments, after adjusting for
sales, has increased by 18.5% as at 30 June 2023.
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, 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 13.98817 cents) per share,
making a total of 1.15p (ZAR 26.81065 cents) per ordinary share for the year
(2022 – 1.15p). Subject to shareholders’ approval at the Company’s
Annual General Meeting (“AGM”) to be held on 28 November 2023, the
dividend will be paid on 20 December 2023 to those shareholders on the
register at the close of business on 8 December 2023. 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, 21 September 2023 being GBP1 = ZAR 23.31361.
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, 8
December 2023.
* 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, 5 December 2023
Shares trade ex-dividend (SA) Wednesday, 6 December 2023
Shares trade ex-dividend (UK) Thursday, 7 December 2023
Record date (UK and SA) Friday, 8 December 2023
Pay date Wednesday, 20 December 2023
Share certificates may not be de-materialised or re-materialised between
Wednesday, 6 December 2023 and Friday, 8 December 2023, both days inclusive.
Shares may not be transferred between the registers in London and South Africa
during this period either.
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 13.98817 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 11.19054 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 Proprietary Limited, Tel: +27 11 370 5000.
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 effects of
Russia’s invasion of Ukraine and the subsequent war 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 remains 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. 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 and the more recent concerns with the continuing 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 2023, the
Company held 37 investments in the General Portfolio.
29 September 2023
The Company’s 2023 Annual Report and Audited Financial Results will be
finalised shortly and sent to shareholders.
The information contained in this announcement was previously classified as
inside information for the purposes of the UK Market Abuse Regulation. Upon
the publication of this announcement, this information 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: 020 3709 8740
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 2023 2022
£000 £000
Dividends receivable 586 652
Management service fees 352 327
Rental and other income 97 136
Profit/(Loss) on disposal of General portfolio investments 633 (111)
1,688 1,004
Administrative expenses
Investment operations (495) (394)
Management services (411) (430)
Total administrative expenses (906) (824)
Operating profit 762 180
Unrealised changes in the carrying value of General Portfolio investments 956 (508)
Interest payable (7) (6)
Profit/(Loss) before taxation 1,711 (334)
Income tax expense (312) (96)
Profit/(Loss) after taxation 1,399 (430)
Non-controlling interest (16) (12)
Profit/(Loss) attributable to shareholders 1,383 (442)
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss
Profit/(Loss) on disposal of Strategic investments 118 (398)
Unrealised changes in the carrying value of Strategic investments 393 (402)
Other taxation -
Income tax on disposal of strategic investments (146) (198)
Total Other Comprehensive Income/(Loss) attributable to shareholders 365 (998)
Total Comprehensive Income/(Loss) attributable to owners of the parent 1,748 (1,440)
Reconciliation of headline earnings
Basic and diluted earnings/(loss) per share 4.4p (1.4)p
Adjustment for the unrealised changes in the carrying value of investments, net of tax - -
Headline earnings per share 4.4p (1.4)p
Consolidated Statement of Financial Position
At 30 June
2023 2022
£000 £000
Non-current Assets
Property, Plant and Equipment 3 12
Right of use asset 17 81
Strategic investments at fair value though other comprehensive income 3,144 3,957
3,164 4,050
Current Assets
General portfolio investments at fair value through profit or loss 15,496 14,055
Trade and other receivables 100 109
Cash and cash equivalents 1,264 407
16,860 14,571
Current Liabilities
Overdraft - (66)
Trade and other payables (151) (171)
Lease liabilities (33) (75)
Current tax liabilities (188) (198)
(372) (510)
Net Current Assets 16,488 14,061
Non-current Liabilities
Lease liabilities - (33)
Deferred tax liabilities (1,012) (843)
(1,012) (876)
Total Assets less Total Liabilities 18,640 17,235
Capital and Reserves
Ordinary share capital 1,560 1,560
Share premium 2,320 2,320
Unrealised profits and losses on investments 225 11
Share of retained realised profits and losses of subsidiaries 4,906 5,331
Company’s retained realised profits and losses 9,472 7,872
Capital and reserves attributable to owners 18,483 17,094
Non-controlling interests 157 141
Total Capital and Reserves 18,640 17,235
Approved and authorised by the Board
on 28 September 2023
Edward Beale
Director
Company Statement of Financial Position
At 30 June
2023 2022
£000 £000
Non-current Assets
Investments in Group companies 89 89
Current Assets
General portfolio investments at fair value through profit or loss 15,496 14,055
Trade and other receivables 19 13
Cash and cash equivalents 987 124
16,502 14,192
Current Liabilities
Overdraft - (66)
Trade and other payables (121) (90)
Current tax liabilities (66) -
(187) (156)
Net Current Assets 16,315 14,036
Non-current Liabilities
Deferred tax liabilities (1,012) (843)
(1,012) (843)
Total Assets less Total Liabilities 15,392 13,282
Capital and Reserves
Ordinary share capital 1,560 1,560
Share premium 2,320 2,320
Unrealised profits and losses on investments 2,040 1,530
5,920 5,410
Realised Profit and Loss
Balance at 1 July 7,872 5,749
Net Profit for the period 1,959 2,482
Dividends paid (359) (359)
Balance at 30 June 9,472 7,872
Equity shareholders’ funds 15,392 13,282
Total Comprehensive income 2,469 1,002
Under Section 408 of the Companies Act 2006, the Parent Company is exempt from the requirement to present its own income statement. Approved and authorised by the Board on 28 September 2023 Edward Beale Director London Finance & Investment Group PLC Registered in England and Wales – Number 201151
Consolidated Statement of Cash Flows
For the year ended 30 June
2023 2022
£000 £000
Cash flows from operating activities
Profit/(Loss) before tax 1,711 (334)
Adjustments for non-cash items -
Finance expense 7 6
Depreciation charges 9 10
Depreciation on right of use asset 64 64
Unrealised changes in the fair value of general portfolio investments (679) 508
Realised gain on disposal of general portfolio investments (911) 111
(Increase)/Decrease in trade and other receivables 8 17
Decrease in trade and other payables (20) (49)
Taxes paid (300) (59)
Net cash (outflow)/inflow from operating activities (111) 274
Cash flows from investment activity
Acquisition of general portfolio investments (4,258) (5,152)
Proceeds from disposal of general portfolio investments 4,407 2,559
Proceeds from disposal of strategic investments 1,325 3,445
Net cash inflow from investment activity 1,474 852
Cash flows from financing activities
Net Interest paid (1) (5)
Interest paid on lease liabilities (5) (9)
Repayment of lease liabilities (75) (71)
Equity dividends paid (359) (359)
Net repayments of loan facilities - (650)
Net cash outflow from financing activities (440) (1,094)
Increase in cash and cash equivalents 923 32
Cash and cash equivalents at the beginning of the year 341 309
Net Cash and cash equivalents at end of the year 1,264 341
Cash and cash equivalents 1,264 407
Overdraft - (66)
Net Cash and cash equivalents 1,264 341
Company Statement of Cash Flows
2023 2022
£000 £000
Cash flows from operating activities
Profit before tax 2,780 1,098
Adjustments for non-cash items -
Net finance expense/(income) 2 (3)
Unrealised changes in the fair value of general portfolio investments (679) 508
(Gain)/loss on disposal of general portfolio investments (911) 111
Decrease in trade and other receivables 1 4
Decrease/(Increase) in trade and other payables 25 (6)
Overseas Taxes paid (77) (59)
Net cash inflow from operating activities 1,141 1,653
Cash flows from investment activity
Acquisition of general portfolio investments (4,258) (5,152)
Proceeds from disposal of general portfolio investments 4,407 2,559
Net cash inflow/(outflow) from investment activity 149 (2,593)
Cash flows from financing activities
Net interest paid (2) (6)
Equity dividends paid (359) (359)
Decrease in loan to subsidiary - 1,990
Net repayment of loan facilities - (650)
Net cash (outflow)/inflow from financing activities (361) 975
Increase in cash and cash equivalents 929 35
Cash and cash equivalents at the beginning of the year 58 23
Net Cash and cash equivalents at end of the year 987 58
Cash and cash equivalents 987 124
Overdraft - (66)
Net Cash and cash equivalents 987 58
Consolidated Statement of Changes in Shareholders’ Equity
Ordinary Share Capital Share Premium Account Unrealised profits and losses on Investments Share of retained realised profits and losses of Subsidiaries Company’s retained realised profits and losses Total Non-Controlling Interests Total Equity
£000 £000 £000 £000 £000 £000 £000 £000
Year ended 30 June 2023
Balances at 1 July 2022 1,560 2,320 11 5,331 7,872 17,094 141 17,235
Profit for the Year - - 510 (1,086) 1,959 1,383 16 1,399
Other Comprehensive Income - - (296) 661 - 365 - 365
Total comprehensive income - - 214 (425) 1,959 1,748 16 1,764
Dividends paid and total transactions with shareholders - - - - (359) (359) - (359)
Balances at 30 June 2023 1,560 2,320 225 4,906 9,472 18,483 157 18,640
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 Income - - (3,039) 2,041 - (998) - (998)
Total comprehensive income - - (4,519) 597 2,482 (1,440) 12 (1,428)
Dividends paid and total transactions with shareholders - - - - (359) (359) - (359)
Balances at 30 June 2022 1,560 2,320 11 5,331 7,872 17,094 141 17,235
Company Statement of Changes in Shareholders’ Equity
Ordinary Share Capital Share Premium Account Unrealised profits and losses on Investments Realised profits and losses Equity Total
£000 £000 £000 £000 £000
Year ended 30 June 2023
Balances at 1 July 2022 1,560 2,320 1,530 7,872 13,282
Profit for the Year and total comprehensive income - - 510 1,959 2,469
Dividends paid and total transactions with shareholders - - - (359) (359)
Balances at 30 June 2023 1,560 2,320 2,040 9,472 15,392
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 comprehensive income - - (1,480) 2,482 1,002
Dividends paid and total transactions with shareholders - - - (359) (359)
Balances at 30 June 2022 1,560 2,320 1,530 7,872 13,282
Notes:
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 £1,383,000
(2022 – a loss of £442,00) 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 £1,383,000 (2022 –a
loss of £442,000) 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 (2022 – 31,207,479) being the weighted average of the
number of shares in issue during the year.
1. Financial information
The financial information in this preliminary announcement does not constitute
the Company’s statutory accounts for the year ended 30 June 2023 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
2023 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.
1. Copies of this Announcement
Copies of this announcement are held at the Company’s registered office,
Central Court, Suite 1.01, 25 Southampton Buildings, London WC2A 1AL (tel. 020
3709 8740) and are available for a period of 14 days from the date of this
announcement.
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