REG-London Finance & Investment Group Plc: Interim Results
28/01/2025 10:30
London Finance & Investment Group PLC
("Lonfin" or the "Company'")
Unaudited Condensed Interim Financial statements for the six months ended 31
December 2024
The Company today announces its unaudited interim results for the six months
ended 31 December 2024 (the “Interim Statement”).
Introduction
Shareholders were advised in December of the Board’s intention to send out a
circular in January setting out the process for returning cash to
shareholders. This process is taking longer than expected due to having to
obtain clearance for the circular from both the FCA in the UK and the
Johannesburg Stock Exchange in South Africa, and South African exchange
control approval. We do not now expect to be able to send out the circular
before the middle of February.
The process will have two stages: first a general meeting to approve the
delisting of the Company’s shares and the return of capital and then a High
Court hearing to approve the capital reduction. Factoring in the notice
period required for general meetings, and court timetables, the payout to
shareholders will not happen before May.
The exact amount of the return of capital can only be finalised at the time of
the High Court hearing, and is dependent on exchange rates when US Dollar
denominated deposits mature, but is expected to be approximately 71p per
share.
Results
Lonfin’s net assets per share decreased by 0.3% to 71.4p at 31 December 2024
from 71.6p at 30 June 2024 as profits for the period were marginally less than
the dividend paid to shareholders in the period.
We have sold all the General Portfolio Investments, realising a loss of
£397,000 (compared to their market value at 30 June 2024), and remaining
Strategic Investments, realising a loss of £111,000. As a consequence,
dividend income has reduced to £165,000 from £241,000 last year. Cash
balances arising from these sales have been held in short term, interest
bearing, deposits in £ Sterling and US Dollars. Interest income of £355,000
and exchange gains of £482,000 were booked on those deposits in the period.
The profit before tax for the Company and its subsidiaries (the “Group”)
for the half year was £230,000 (2023: profit of £3,755,000), resulting in
earnings per share after tax of 0.5p (2023: earnings per share 11.7p).
Strategic Investments
Western Selection PLC (“Western”)
At 30 June 2024, the Group held 45,786 ordinary shares in Western, being 43.8%
of the issued share capital of Western, with a carrying value of £36,000.
In August 2024 Western shareholders approved a final return of capital and a
capital reduction. Western’s issued share capital has reduced from 104,555
ordinary shares to one ordinary share which is owned by the Company. We
received £93,000 from this capital reduction and the carrying value of this
investment is now nil. Steps are now being taken to wind up Western.
Edward Beale and Warwick Marshall are non-executive directors of Western.
City Group Ltd (“City Group”)
City Group has for many years provided company secretarial and head office
finance services to the Company and other quoted companies, many of them
related parties. The cessation of trade by the Company makes City Group
unviable. To ensure continuation of the provision of services by City Group,
Marshall Monteagle plc, a major customer of City Group, and a related party
due to common directors and shareholders, has acquired City Group for
£90,000, a loss of £167,000. This related party sale which was approved by
the independent directors of the Company, and the independent directors of
Marshall Monteagle plc, takes into account the closure costs that would
otherwise have been incurred and, in part, reverses the gain on acquisition of
the minority interest of £83,000 recognised last year.
General Portfolio
All of the stocks in the General portfolio were sold in the period generating
cash of £16,751,000, realising a loss of £397,000 compared to their market
value at 30 June 2024, and a profit of £1,453,000 compared to their historic
cost. The cash balances were invested in US Dollar and £ Sterling short
term deposits generating interest income of £355,000 and exchange gains of
£482,000 in the period. Deposits of £10,800,000 and US$14,400,000 maturing
in January 2025 were outstanding at 31 December 2024. The cash receivable on
maturity of the US Dollar deposits will differ from their 31 December 2024
carrying value of £11,506,000 depending on exchange rates at their maturity
dates.
Conclusion
The Board is working to return capital to shareholders as expeditiously as
possible, while containing transaction costs. Shareholders will be kept
fully informed.
28 January 2025
Statement of Directors’ responsibility
The Directors confirm that, to the best of their knowledge:
- the unaudited interim results for the six months ended 31
December 2024, have been prepared in accordance with IAS 34, ‘Interim
financial reporting’, as adopted by the UK; and
- 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 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 +44(0) 20 3709 8740
JSE Sponsor to the Company:
Questco Corporate Advisory Proprietary Limited
Condensed Consolidated Statement of Total Comprehensive Income
Notes Half year ended Year Ended
31 December 30 June
2024 2023 2024
Restated
£000 £000 £000
Operating Income
Dividends receivable 165 241 614
Management service fees 111 192 361
Other income 837 25 138
(Loss)/Profit on disposal of Strategic Investments (111) - 3,183
(Loss)/Profit on disposal of General Portfolio Investments 7 (397) 52 403
605 510 4,699
Administrative expenses
Investment operations (197) (187) (425)
Management services (178) (205) (444)
Total administrative expenses (375) (392) (869)
Operating profit 230 118 3,830
Unrealised changes in the carrying value of Strategic Investments - 3,183 84
Unrealised changes in the carrying value of General Portfolio investments 7 - 453 512
Net interest income - 1 6
Profit before taxation 230 3,755 4,432
Tax expense (71) (110) (222)
Profit after taxation 159 3,645 4,210
Non-controlling interest - (6) 24
Profit attributable to shareholders 159 3,639 4,234
Total comprehensive income attributable to shareholders 159 3,639 4,234
Basic, Diluted and Headline earnings per share 0.5p 11.7p 13.6p
Interim dividend - 0.60p 0.55p
Final dividend - - 0.60p
Total in respect of the period - 0.60p 1.15p
Condensed Consolidated Statement of Changes in Shareholders’ Equity
Ordinary Share Capital Share Premium Account Unrealised Profits and Losses on Investments Share of Retained profits and losses of Subsidiaries Retained Realised Profits & Losses Total Non-Controlling Interests Total Equity
£000 £000 £000 £000 £000 £000 £000 £000
Period ended 31 Dec 2024
Balances at 1 July 2024 1,560 2,320 1,850 160 16,453 22,343 - 22,343
Profit for the Period - - (1,850) (160) 2,169 159 - 159
Other Comprehensive Income - - - - - - - -
Total comprehensive income - - (1,850) (160) 2,169 159 - 159
Issue of share capital 4 26 - - - 30 - 30
Dividends paid to shareholders - - - - (187) (187) - (187)
Balances at 31 Dec 2024 1,564 2,346 - - 18,435 22,345 - 22,345
Ordinary Share Capital Share Premium Account Unrealised Profits and Losses on Investments Share of Retained profits and losses of Subsidiaries Retained Realised Profits & Losses Total Non-Controlling Interests Total Equity
£000 £000 £000 £000 £000 £000 £000 £000
Period ended 31 Dec 2023
Balances at 1 July 2023 1,560 2,320 225 4,906 9,472 18,483 157 18,640
Profit for the Period - - 1 1 454 456 6 462
Other Comprehensive Income - - 3,183 - - 3,183 - 3,183
Total comprehensive income - - 3,184 1 454 3,639 6 3,645
Dividends paid and total transactions with shareholders - - - - (187) (187) - (187)
Balances at 31 Dec 2023 1,560 2,320 3,409 4,907 9,739 21,935 163 22,098
Condensed Consolidated Statement of Financial Position
31 December 30 June
Notes 2024 2023 2024
Restated
£000 £000 £000
Non-current assets
Property, plant and equipment - 3 3
Strategic Investments at fair value through profit or loss 6 - 6,328 37
- 6,331 40
Current assets
Listed investments at fair value through profit or loss 6,7 - 16,736 14,032
Investments held for sale - - 50
Trade and other receivables 18 198 59
Accrued interest income on term cash deposits 183 - -
Cash and cash equivalents 22,401 211 9,460
22,602 16,864 23,601
Current liabilities
Trade and other payables falling due within one year (105) (97) (149)
Corporation tax liability (152) (263) (581)
(257) (360) (730)
Net Current Assets 22,345 16,785 22,871
Non-current liabilities
Deferred taxation - (1,018) (568)
Total Assets less Total Liabilities 22,345 22,098 22,343
Capital and Reserves
Called up share capital 1,564 1,560 1,560
Share premium account 2,346 2,320 2,320
Unrealised profits and losses on investments - 3,409 1,850
Share of retained profits and losses of subsidiaries - 4,907 160
Company’s retained realised profits and losses 18,435 9,739 16,453
Total Capital and Reserves attributable to owners 22,345 21,935 22,343
Non-controlling equity interest - 163 -
22,345 22,098 22,343
Net assets per share 71.4p 70.3p 71.6p
Number of shares in issue 31,287,479 31,207,479 31,207,479
Condensed Consolidated Statement of Cash Flows
Half year ended Year ended
31 December 30 June
2024 2023 2024
Restated
£000 £000 £000
Cash flows from operating activities
Profit before tax 230 3,755 4,432
Adjustments for non-cash items-
Net finance (income)/expense (355) (1) (6)
Depreciation charges 3 4 4
Depreciation on right of use of asset - 11 11
Profit on early lease termination - (15) (12)
Unrealised changes in the fair value of General Portfolio investments - (7) 1,925
Loss/(Profit) on sales of General Portfolio investments 397 (509) (4,207)
Changes in the fair value of Western Selection (56) (3,183) (1,816)
Loss/(profit) on disposal/acquisition of City Group 167 - (83)
(Increase)/Decrease in trade and other receivables (242) (98) 42
Increase/(Decrease) in trade and other payables 40 (54) (2)
Taxes paid (1,068) (28) (272)
Net cash outflow from operating activities (884) (125) 16
Cash flows from investment activity
Acquisition of general portfolio investments (3,054) (2,979) (6,512)
Acquisition of other assets - (4) (104)
Proceeds from disposal of current investments 16,689 2,256 8,891
Net (outflow)/inflow from disposal of strategic investments (8) - 6,291
Net cash inflow/(outflow) from investment activity 13,627 (727) 8,566
Cash flows from financing
Net Interest received 355 1 6
Exercise of share options 30 - -
Repayment of lease liabilities - (15) (15)
Equity dividends paid (187) (187) (374)
Net cash inflow/(outflow) from financing 198 (229) (383)
Increase/(Decrease) in cash and cash equivalents 12,941 (1,053) 8,196
Cash and cash equivalents at the beginning of the period/year 9,460 1,264 1,264
Cash and cash equivalents at end of the period 22,401 211 9,460
Notes to the condensed financial statements
Basis of preparation
This condensed interim financial report has been prepared in accordance with
the accounting policies contained in the Company’s 2024 Annual Report and
Accounts. This condensed interim financial report complies with the UK-adopted
IAS 34 ‘Interim financial reporting’. The financial information contained
in this report has not been audited or reviewed by the Company’s auditors.
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 30 June 2024 have been reported on by the Company’s auditors and have
been delivered to the Registrar of Companies. The report of the auditors was
unqualified.
New standards and interpretations
A number of new standards and amendments to standards and interpretations are
effective for financial periods beginning after 1 January 2024 and have not
been applied in preparing these condensed interim consolidated financial
statements. None of these are expected to have a significant effect on the
financial statements of the Group.
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 30 June 2024.
Earnings per share
Earnings per share are based on the profit on ordinary activities after
taxation and non-controlling interests of £165,000 (2023: £3,639,000) and on
31,207,479 shares (2023: 31,207,479 shares) being the weighted average of
number of shares in issue during the period. Options over 80,000 shares were
exercised on 18 December 2024.
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 £165,000 (2023: £3,639,000) and on
31,207,479 shares (2023: 31,207,479 shares) being the weighted average of
number of shares in issue during the period.
Going Concern
After making enquiries, the Board is satisfied that the Group will be able to
operate 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.
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 include the following:
* Costs associated with the return of capital to shareholders;
* Exchange rates; and
* Interest rates.
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
31 December 2024
Cash at bank 9,460 12,941 - 22,401
Net cash and cash equivalents 9,460 12,941 - 22,401
31 December 2023
Cash at bank 1,264 (1,053) - 211
Lease liability (33) 15 18 -
Net cash and cash equivalents 1,231 (1,020) 18 211
30 June 2024
Cash at bank 1,264 8,196 - 9,460
Lease liability (33) 15 18 -
Net cash and cash equivalents 1,231 8,211 18 9,460
Financial Instruments
Financial assets and liabilities are classified in their entirety into one of
the three levels of the fair value hierarchy 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.
The categories of financial instruments used by the Group are:
Fair Value Half year ended Year ended
Hierarchy Level 31 December 30 June
2024 2023 2024
Financial assets £000 £000 £000
At fair value through profit or loss
Non-current investments (strategic investments) 2 - 6,328 -
Non-current investments (strategic investments) 3 - - 37
At fair value through profit or loss
Current asset investments (listed investments) 1 - 16,736 14,032
Loans and receivables at amortised costs
Trade and other receivables (excluding non-financial assets) n/a - 180 44
Cash at bank n/a 22,401 211 9,460
Financial liabilities
At amortised costs
Trade and other payables n/a (102) (97) (149)
Listed General portfolio investments at fair value through profit and loss
Half year ended Year ended
31 December 30 June
2024 2023 2024
£000 £000 £000
Cost 12,182 11,154 11,154
Opening unrealised gains 1,850 4,342 4,342
Balance brought forward 14,032 15,496 15,496
Purchases 3,054 2,979 6,512
Sales proceeds (16,689) (2,256) (8,891)
Realised gain on disposal 1,453 509 2,840
Net unrealised gains transferred to realised gain on disposal (1,850) (445) (2,437)
Unrealised fair value gains in the period - 453 512
Balance carried forward - 16,736 14,032
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