Lonrho's shares plummeted Monday as the British industrial group announced it would post a loss for the full year following a number of setbacks in projects and delivery of contracts.

The company - which has interest in Africa and operates through its divisions in agricultural operations, infrastructure, support services and hotels - expects to report a net operating loss of between £3.0m and £5.0m for the year to December 31st.

Market forecasts had pegged a pre-tax profit of £10.45m on revenue of £223.5m, according to Thomson Reuters.

Shares fell 22.30% to 6.90p at 10:50 following the trading update.

Chief Executive Officer, Geoffrey White, said the results largely reflected delays in new product lines and in implementing some projects in its core agribusiness during the fourth quarter.

"Whilst the reporting of a net operating loss in 2012 is disappointing, the shortfalls have largely reflected delays in the timing of delivery of major contract or project implementation delays and not any weakness in the underlying business models, which remain very positive," he said.

He added that revenue had increased 44.3% to £186.1m for the full year on the back of strong performance across all four of its operating divisions.

One of the setbacks came from the Lonrho John Deere distributor in Mozambique which experienced significant import delays of tractors and other equipment arriving into Mozambique in the fourth quarter due to port congestion in Maputo port.

Delivery by Oceanfresh of hake volumes to fulfil the Costco Lent promotion for Kirkland Signature Hake Loins also fell short of expectations. Smaller-than-normal fish sizes hurt supply at its seafood production business even though fish volumes were sturdy in November and the first part of December.

The company was also hit by the postponement in opening the Lansmore Hotel in Libreville, Gabon, and the first easyHotel in Johannesburg. The hotels were due to begin business in the fourth quarter but will now open this year.

"Over the past five months the group has realigned itself to move away from a short term trading focus to concentrate on building long term, sustainable, businesses with large, global corporate clients," White said.

"Lonrho is in the right markets at the right time, and the opportunities facing the goup as we move into 2013 are clear for the board and the management team to deliver strong, profitable and reliable growth for shareholders."

RD

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