Lonrho ‘well positioned’ for 2013 – board
JSE-listed Lonrho on Monday said it believed the strategic action taken by it in the third and fourth quarters of 2012, to focus on increasing margins through operational efficiencies and to build long-term sustainable customer relationships, coupled with its decision to withdraw from less profitable lines of business, had positioned it well for 2013.
Throughout 2012, the group continued to develop its operational businesses and Lonrho remained confident that these were aligned with the strongest growth opportunities in Africa.
CEO Geoffrey White highlighted that the group’s strategic decision to focus on improving margins across the group had not had a demonstrable impact on the latter part of 2012 but had positioned the group to approach 2013 from a stronger and more reliable base with much improved budgeting.
“Each business division has, during the year, transitioned to become cash generative for the group and the balance sheet is satisfactory to support the group and the board’s plans,” he stated.
Lonrho noted, however, that progress in certain areas had been slower than expected in the fourth quarter of the year, impacting on revenue and profitability for the full year.
The board expected to report a net operating loss of between £3-million and £5-million for the full year.
“Quarter four has been demanding in several areas of the business where the lead times on delivering new product lines have proven longer than previously expected. While the reporting of a net operating loss in 2012 is disappointing, the shortfalls have largely reflected delays in the timing of delivery of major contracts or project implementationand not any weakness in the underlying business models, which remain very positive,” said White.
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