Bock slows on sell-offs

CITY hopes that Lonrho could move swiftly to spin off its hotel and African trading interests could be disappointed this week.

On Thursday, chief executive Dieter Bock reports the mining to trading conglomerate's results for the six months to 31 March. Lonrho will exceed the lower end of analysts' forecasts, which are bunched around pounds 50m-pounds 53m for pre-tax profits, but is unlikely to match estimates at the higher end of the range.

These will be the first figures to reflect Mr Bock's stewardship as his own man, following Tiny Rowland's decision to stand down as joint chief executive in November. The board subsequently sacked Mr Rowland before the March annual meeting. The figures will be scrutinised for progress on improving cash flow, increasing transparency, and boosting asset values.

Mr Bock's two most visible moves since he took over as the sole chief executive have been aimed at the African and hotel businesses. At the time of the full year results in January, he said the group would examine ways to increase the group's value, with a flotation of the African and the hotels businesses likely.

In February, a single company, Lonrho Africa, was set up, to embrace all of Lonrho's African trading interests. Chris Parvin, formerly of Lonrho Zimbabwe, was made chairman. Previously, all the African companies reported independently to London.

Mr Bock also merged the two hotel chains, Metropole and Princess, under one umbrella company. Both these developments are preludes to the planned flotations.

But considerable doubt exists as to whether investors would be attracted to the hotel division, given the involvement of the Libyans, who paid pounds 177m for a one-third stake in the Metropole chain. One analyst said it will be a year at least before Mr Bock's plan to get the African businesses into shape can bear fruit.

Although dissatisfaction has subsided since Mr Rowland was deposed, there are still rumblings that the group is less than open in its dealings. Accounting standards and transparency have been improved, but analysts say the group remains loath to discuss much of its business. A number of fund managers have bought into the stock. But there are plenty who remain cautious.