View from City Road: Lonrho begins to open up

CAN IT be that Lonrho and Roland 'Tiny' Rowland have started to heed the concerns of the City over the past few months? The answer is, on the evidence of yesterday's figures, up to a point.

Instead of springing a nasty surprise on the City, as the group did in January when the shock 1990-91 full-year profit slump was revealed, Lonrho reported pre-tax profits at pounds 38m for the first half of the current year, compared with pounds 109m a year earlier, rather better than most analysts' expectations. The figures were accompanied by a split of revenues and profits by activity and region, the first time that Lonrho has provided this at the halfway stage.

Since the row over the last financial year's slump, Lonrho has been making strenuous efforts to talk to analysts to ensure that they are not entirely unprepared.

That said, the statement is peppered with the usual Lonrho vagueness. Since January, it says, it 'has sold or contracted to sell peripheral businesses which will realise pounds 500m'. How much is banked or yet to be received is not specified. Further disposals are contemplated 'with future meaningful reductions' in borrowing levels of pounds 903m in mind. By what amount is not vouchsafed to shareholders but it is thought that a further pounds 100m of sales are planned.

The market reacted cautiously to Lonrho's version of glasnost, with the share price rising 1p to 78p. Pre-tax profits for this year could be around pounds 100m- pounds 125m, compared with pounds 207m. That still leaves the basic questions about management style and the succession to Mr Rowland unanswered. The shares will remain a nervous market.

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