The trading statement, which the company issued to slow its share price which had appreciated 36 per cent in the past three months, followed hot on the heels of speculation in the weekend press that Lonrho is having problems negotiating the sale of its Princess hotels chain to Saudi investor, Prince al Waleed.
The planned break-up of Lonrho into its constituent parts has been dogged by delays including the abandonment of proposals to make a public offering of its Metropole and Princess hotel chains. It has declined to put a timetable on the final stage of Lonrho's dismemberment, the spin-off of its African trading operations to leave the company as a pure mining play.
Lonrho is one of the world's largest gold and platinum producers. It owns 41 per cent of Ghana's Ashanti Goldfields, the world's eighth-largest gold producer, and has majority stakes in Western Platinum and Eastern Platinum, which together produce a tenth of the world's production.
Gold traded recently at $351 an ounce, down 15 per cent from its recent high of $415 in February 1996. Platinum slumped to as little as $350 an ounce in February of this year, down about 11 per cent from its high of $430 a year ago.
Lonrho said the price drops, combined with the pound's strength against African currencies, would push pre-tax profit down as much as 33 per cent in the six months that end in March.
That would imply a profit fall of about pounds 19m from the pounds 58m pre-tax profit in the same period a year ago. Lonrho reports its figures in late June.
Analysts took a sanguine view of the announcement. "We all know that bullion prices were low; really there shouldn't have been any surprise," said Ian Rennardson, an analyst with Credit Lyonnais Laing. "But the share price has run ahead of itself, and the company was getting concerned about expectations." He said he would cut his forecast for the full year by pounds 20m to about pounds 160m.Reuse content