Lonrho narrows losses in 2009 with African businesses delivering strong growth

Lonrho (AIM: LONR) said its African businesses are delivering real growth and strong tangible businesses in Africa as it reported that during the twelve months ended 30 September 2009, it increased turnover by 266% on a like-for-like basis. Reported revenue rose 111% to £90.9m and net asset value also rose, increasing by 16% to £81.1m. Consequently Lonrho significantly narrowed its losses to £4.5m compared with £38.7m in the previous year.

“The solid foundations that are now in place across all five divisions, in seventeen countries, provide the building blocks for further development and profitable growth this year”, Lonrho executive chairman David Lenigas said. “Lonrho has minimal debt and with these impressive full year results, each of the divisions is in a good position to raise local debt to help fund further expansion”.

According to Lonrho, 2009 was a pivotal as it has demonstrated the effectiveness of Lonrho's investment strategy. The company said all its operating subsidiaries and associate businesses contributed towards the considerable increase in both turnover and profitability.

In the year, Lonrho’s operating cash outflow was £14.5m, compared with £35.7m in the previous year. Given the current global financial situation, the company said it is carefully monitoring cash resources within the group and has instigated a number of initiatives to ensure funding will be available for its planned projects.

The group is convinced emerging African markets are taking on global significance. According to the International Monetary Fund, Sub Saharan Africa (SSA) is forecast to achieve 7% GDP growth in 2010, Lonrho said, adding its strategy is to provide the services and industries the emerging region requires and as such it will assist the development of the continent. Moreover the company believes that in Africa the strong Lonrho brand adds tangible commercial value to its operations.

“The future African economy is being driven by oil, mineral resources and agriculture. Lonrho is ideally placed to participate in and benefit from these specific market opportunities across the continent", Lenigas concluded.

http://www.proactiveinvestors.co.uk/companies/news/13947/lonrho-narrows-losses-in-2009-with-african-businesses-delivering-strong-growth-13947.html