Together, however, they hold just over a 4 per cent stake in the company, which recently demerged from the parent company and floated. The threat of a bid hangs heavily over the company, after its first set of results, published yesterday, confirmed disappointing figures, six weeks after floating as a separate company holding Lonrho's trading interests in black Africa.
Turnover and profit have been hit hard by the effects of the bad weather that wiped out the Uganda cotton crop, political uncertainties in several markets and the deep devaluation of the currencies in Zambia, Zimbabwe and, especially, Malawi, which reduced turnover by pounds 45m and operating profits by pounds 2m.
Operating profits overall were down 45 per cent to pounds 13.2m; exceptional charges arising from the reorganisation of the motor and distribution businesses cost pounds 4.9m; and the interest on the group debt ballooned to pounds 10.6m while it waited for the capital injection of pounds 48m, received from the Lonrho parent last month as part of the demerger package. Including exceptional items, the group lost pounds 2.3m.
The devaluations have also played havoc with net assets, which fell to pounds 189m prior to the capital injection. Keith Atkinson, the finance director, also played down the prospect of Lonrho Africa going on the acquisition trail with an pounds 80m war chest. The pounds 48m capital injection will be used to reduce debt, especially in Africa, where the group is paying up to 35 per cent interest on soft currency loans. The planned sale of pounds 35m- worth of properties will also be phased over two or three years, and, in the meantime, the company will only consider acquisitions that it can pay for out of its earnings.
But the company has five sound businesses in 14 countries in sub-Saharan Africa, Mr Newman said. The motor business increased its share of a declining market and now operates the top four motor manufacturers in the subcontinent. Sales of cotton and timber have increased and export markets are growing.
Distribution remains the most profitable, contributing over 40 per cent of operating profits. The hotel division has just picked up the largest incentive deal in Africa, providing 12,700 bed-nights for 1,800 top executives of GE Capital. The new golf course outside Harare has been completed and half the adjacent residential plots have now been sold.