Lonrho plans 100m pounds more disposals

A FURTHER pounds 100m of disposals is expected to be made by Roland 'Tiny' Rowland's international trading group Lonrho in the wake of a slump in pre-tax profits in the first half of its current financial year.

For the six months to 31 March pre- tax profits dived from pounds 109m to pounds 38m.

'We have been buffeted by the economic climate and by depressed commodity prices, but Lonrho's wide range of businesses has enabled the group to remain profitable and strong,' Mr Rowland has told shareholders.

He said that since January Lonrho had sold or contracted to sell peripheral businesses which would realise pounds 500m. The sales are designed to reduce group debt, which at the beginning of the year stood at pounds 1.4bn.

'Borrowings at 31 March were pounds 903m, with future meaningful reductions before the end of the financial year as the disposal programme is realised,' he added.

Although Lonrho refused to confirm what businesses might be disposed of, the sale of engineering businesses in the UK and of a holding company which owns 4,300 flats in Germany are 'possibilities', according to the joint deputy chairman Paul Spicer.

Mr Rowland said that the largest sale so far had been Lonrho's controversial deal with the investment agency of the Libyan government.

In March this year Lonrho sold a third stake in its Metropole Hotel chain for pounds 177.5m to the Libyans in spite of worldwide outrage over Libya's alleged involvement in terrorism.

There has been widespread speculation that Lonrho had passed control of the hotel chain over to the Libyans in a move that would have compromised the position of Lonrho's second bgiggest shareholder, the US-based Fidelity Management and Research, which has a near 10 per cent stake.

Fidelity might have been forced to sell its holding as a result of US policy towards Libya.

'The share issue does not contravene either the United Nations limited economic sanctions or the US directive on Libyan investments,' Mr Rowland has told shareholders. The deal, he added 'has the approval of the Department of Trade and Industry in the UK'.

'We are in control at Metropole,' said Mr Spicer. 'We took advice from the American and British foreign departments.'

Mr Rowland said that the pounds 177.5m derived from the sale of the Metropole stake was banked in London. 'As a result the Metropole chain chose to clear borrowings and substantially improve profitability,' he added.

According to Lonrho pounds 100m has been spent in expanding successful businesses within the group 'to underpin future growth and profit'.

Mr Rowland said that the group intended to pay out a much reduced half year dividend to shareholders of 2p compared with the 8p that had been paid by this stage a year ago.

On the group's important African mining interests, Mr Rowland said that low prices in the first half and some processing problems at the smelter complex had badly dented profits.

But on a brighter note he continued: 'With throughput back to normal, the second half looks set to see a substantial increase in the contribution to the group from the world-class mines of Western Platinum.'

For the full year ending in September City analysts expect Lonrho to report pre-tax profits of between pounds 100m and pounds 125m compared with pounds 207m in the previous financial year.

Mr Spicer said: 'This is a year of good housekeeping for Lonrho. We are cleaning up and climbing back.'

On the stock market the share price rose 1p to 78p.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Sir Bruce Forsyth with Tess Daly in the BBC's Strictly Come Dancing Christmas Special
tvLouis Smith wins with 'Jingle Bells' quickstep on Strictly Come Dancing's Christmas Special
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
Arts and Entertainment
Left to right: Stanley Tucci, Sophie Grabol and Christopher Eccleston in ‘Fortitude’
tvSo Sky Atlantic arrived in Iceland to film their new and supposedly snow-bound series 'Fortitude'...
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there