Lonfin to maintain its dividend, despite a decline in investment, Newsline

DURBAN – London Finance and Investment Group plc (Lonfin) yesterday maintained its total dividend of 1.15pence (R0.24) a share for the year to end June, despite reporting a 17.24 percent decline in its strategic investments amid volatile markets.

The investment company’s portfolio primarily consists of strategic investments and a general portfolio.

This comes after the group declared a final dividend of 00.6p, taking the total dividend to 1.15p, the same dividend declared compared to last year.

Strategic investment declined to £6.29million during the year, down by £1.31m from last year’s £7.60m, due to the market movements in the share prices. London Finance & Investment holds a 43.8percent stake in investment firm Western Selection, which also reported a loss for the year to end June and skipped a dividend payment.

However, Western Selection managed to reduce its loss after tax to £180000 during the year, down from last year’s loss of £2.61m.

Overall London Finance & Investment reported an operating profit for the year, before interest, tax and changes to the fair value adjustments of investments of £130 000 compared to an restated operating profit for the previous year, before tax and changes to the fair value adjustments of investments of £366 000.

“The significant decrease in fair value of strategic investments that occurred during the year has led to total comprehensive loss for the year of £2.11m compared to restated loss of £1.77m compared to last year,” the group said. Basic and headline losses a share amounted to 02.6p a share compared to basic and headline earnings of 02.9p reported last year, while its net asset value declined by 13.5percent to 50.6p a share, compared to a restated 58.5p reported a year earlier.

The group’s general portfolio decreased by 13 percent to £9.95m, down from £11.38m compared to last year. The general portfolio consists of investments in companies such as Nestlé, Unilever, British American Tobacco and Richemont.

Looking ahead, the group said the continued political and economic uncertainty in Europe, where a Brexit trade deal had yet to be delivered, and globally, with Covid-19 and the negative effect from tariff issues, would clearly effect on world economies and expected further volatility and turbulence in the markets ahead.

“While we can expect further challenges ahead, the board is confident that the group has a solid base of investments which can lead to further capital growth in the medium to long term,” the group said.

Lonfin’s share price closed flat at R6.05 on the JSE yesterday.