Rowland promises Lonrho will make large acquisition: 'Household name' in South African mining industry expected to be target

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The Independent Online
ROLAND 'Tiny' Rowland, joint chief executive of Lonrho, yesterday promised that the company would make a large acquisition, probably adding to its mining interests in South Africa, by the end of the year.

Mr Rowland refused to give further details, although he said he had something in mind, and the company concerned was a 'household name. We would like to do something sizeable, perhaps in South Africa, which is open to us and offers huge opportunities.'

Dieter Bock, also joint chief executive, said the group had 'offers from financial institutions to supply funds without increasing borrowings.' Joint ventures and mergers were possible as well as acquisitions, he said.

South Africa already accounts for about 15 per cent of the group's sales, most of that in mining of gold, platinum and coal, and it also has mining interests in Ghana, Zimbabwe and Zambia. It has previously held discussions with Gencor about selling its 73 per cent stake in Western Platinum, the South African mine, but the price was too low.

Ashanti Goldfields, the gold mining business in Ghana, was recently floated but Lonrho retained its 45 per cent stake. It recently announced that it was considering floating a minority stake in its African businesses, excluding mining and possibly sugar.

The comments on acquisitions were made as the group reported a pounds 41m pre-tax profit for the six months to March, on sales of pounds 951m. That compared with pounds 75m the previous year, which was boosted by pounds 53m profits from the disposal of businesses. Earnings per share were 2.2p, compared with 6.4p, and the interim dividend was held at 2p.

Profits from mineral extraction and mining rose from pounds 11m to pounds 19m, despite a fall in profits from the platinum business as rhodium prices dropped. Ashanti's profits rose slightly, despite a rise in costs.

Manufacturing, including textiles and construction both here and in Africa, fell to a pounds 6m loss from a pounds 3m profit last time. The group attributed that to the British construction downturn and problems at Lonrho Textiles.

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