Disposals boost Lonrho: Newcomer Bock picks up pounds 2.9m in dividend payments on 22% holding

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Andrew Feinberg

White House Correspondent

DIETER BOCK, the enigmatic businessman who bought a 22 per cent holding in Lonrho, the international trading group, has gained pounds 2.9m in dividend payments from his investment.

Mr Bock, who is joint chief executive with Roland 'Tiny' Rowland, built up his interests in Lonrho at the end of last year after acquiring a significant shareholding from Mr Rowland's personal stake.

Lonrho yesterday announced a marked improvement in performance and a maintained dividend of 2p a share, with pre-tax profits for the six months to 31 March up by pounds 37m to pounds 87m. Group borrowings were put at less than pounds 600m.

However, much of the improvement was fuelled by disposals of assets, which yielded pounds 56m to overall profits.

In Africa, Ashanti Goldfields had a good first half, with gold production up 16 per cent to 380,000 ounces. Projected production for the year at 760,000 ounces is ahead of target. 'The mine will benefit further in the second half from the recent substantial rise in the price of gold,' Lonrho said.

The platinum division also improved profitability, despite a fall in the price of rhodium. Production of platinum group metals increased by 39 per cent to 430,000 ounces and the strength of the dollar benefited the division. Pre-tax profits from Africa rose from pounds 16m to pounds 33m during this period.

Lonrho said two recently concluded transactions would have a significant impact in the second half. The sale of GEWOG, which owns properties in Germany, has reduced gearing to 35 per cent and net borrowings to below pounds 600m.

It also said the sale of the Observer would have 'an immediate impact on profitability and cash flow'.

Capital expenditure in the first half was pounds 62m, which mainly related to expenditure on the platinum mines in South Africa and expansion of the sugar operations. Capital expenditure for the year will be considerably lower than in 1992.

'Trading has improved since last year, and provided commodity prices do not deteriorate, the board view the remainder of 1993 with optimism,' Lonrho said.

Paul Spicer, Lonrho's deputy chairman, said yesterday: 'We are on track for a better year.'

Analysts expect that Lonrho could make up to pounds 140m pre-tax profits this year, including the proceeds of asset disposals.

The share price rose 71 2 p to 121p.

(Photograph omitted)