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Lonrho hit by Fastjet charge

RESULTS: Africa-focused conglomerate Lonrho is still growing sales rapidly - but a hefty impairment charge against its stake in regional airline Fastjet meant a headline loss
March 28, 2013

African conglomerate Lonrho (LONR) delivered a full-year loss after taking a £7.7m impairment charge on its 55 per cent stake in regional airline venture Fastjet, launched in June. There could be further pain to come, too - the stake is currently valued at £37.4m in Lonrho's accounts but, following a collapse in Fastjet' shares, the stake is now only worth £28.4m.

IC TIP: Hold at 6.2p

Still, Lonrho grew sales across its core operating divisions and, on a like-for-like basis, group revenue rose 23.6 per cent to £186.3m. The agriculture business - which generates 65 per cent of group revenue - grew sales 30.8 per cent to £123.6m, although net operating profit here fell from £32.5m in 15 months to December 2011 to just £2m after a management change and restructuring exercise. Elsewhere, Lonrho's infrastructure unit generated a £2.8m net operating profit - reversing the previous period's loss. That was down to Lonrho's oil services logistics port off the west coast of Africa having benefited from increased exploration activity. The support services business, meanwhile, increased profit 50 per cent to £2.1m, although the hotels business made a £1.9m loss.

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