If you’re wondering why Lonrho (LONR.L, LNAFF), one of my core stocks, took a beating today in London, it’s because they released really weak results — just as we’re expecting them to achieve a sustainable profitability and start rewarding shareholders for those years of capital investment, we learn that they had several segments with “revenue problems” in the latter part of 2012 and will be recording a surprising loss for the year.

They still say they’re on track for margin improvement, with management jettisoning some projects that were not appealingly profitable and with some delayed or troubled projects that were planned for late 2012 now hitting the first quarter of 2013, and most of their businesses are now “cash flow positive” as we’ve been expecting … but we’re on the verge of these surprising reported losses becoming an endemic issue with Lonrho — I’m inclined to be a bit more patient with them, given the new management team and major transition of late last year with the spinoff of the airline into Fastjet … but I need to dig into this in more detail to see just how much patience I can have. The results announcement is here.

I don’t want to rush to judgement, since the shares took their 20% hit immediately and there’s little to be gained from immediately selling after something like that unless you like the cleanliness and clarity of firm stop loss rules (I don’t, but I know many do) — I do still think the businesses they own are well-positioned in what should be one of the world’s fastest growing regions (sub-Saharan Africa), but that was a really weak quarter. Was it really a confluence of bad luck or minor project slippage (a weak catch at Oceanfresh, delays in Kwikbuild projects, delays in hotel openings), or is this just a sign that management can’t get over that profitability hurdle? I’ll let you know where my thinking stands after I’ve gone through it in more detail.

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