TIDMCMB
RNS Number : 4721M
Cambria Africa PLC
18 September 2012
Cambria Africa Plc
("Cambria" or the "Company")
Trading update for the twelve months ending 31 August 2012
Cambria Africa Plc (AIM:CMB) is pleased to provide an update to
its financial performance for the twelve months ending 31 August
2012.
Highlights
-- Focused on four core investments: Payserv, the Leopard Rock Hotel, Millchem and Celsys
-- During the twelve months ending 31 August 2012 these core
investments organically grew revenues and gross profit by 52% and
54% year-on-year, respectively
-- Continued high organic growth rates by our core investments
are an indication of their solid position in Zimbabwe and their
strong growth potential
-- Particularly high growth was achieved by Millchem and Celsys,
growing gross profits year-on-year by 93% and 159%,
respectively
-- Payserv and Millchem have made initial inroads in Zambia, and
will continue to pursue regional expansion
-- Payserv is in advanced stages of upgrading its current Paynet
EDI product into a real-time EFT system
-- As at 17 September 2012, Cambria's shares traded at an
approximate discount of approximately 70% to net tangible assets
per share at its interim balance sheet date of 29 February 2012
Contacts
Cambria Africa plc www.cambriaafrica.com
Ian Perkins +44 (0) 7831 674 585
Edzo Wisman +263 (0) 4 852 434
WH Ireland Limited www.wh-ireland.co.uk
James Joyce / Nick Field +44 (0) 20 7220 1666
Trading update
Cambria has continued to accelerate a further focusing of the
Company on its four core investments: Payserv, the Leopard Rock
Hotel, Millchem and Celsys.
During the 2012 financial year (FY2012) revenues and gross
profit of Cambria grew to US$ 12.9 million (FY2011: US$ 9.6
million) and US$ 6.9 million (FY2011: US$ 5.1 million (adjusted for
reallocation of certain labour costs at the Leopard Rock Hotel)),
respectively, representing corresponding growth of 35% and 35% to
the equivalent prior period.
Combined revenue and gross profit of Cambria's four core
investments during FY2012 was US$ 12.0 million and US$ 6.8 million,
respectively, during the period under review. This compares to US$
7.9 million and US$ 4.4 million (adjusted for reallocation of
certain labour costs at the Leopard Rock Hotel) during the prior
year, representing an increase of 52% and 54%, respectively.
There is currently a significant discount between the value of
the Company's net tangible assets and its market capitalization on
the AIM market. As at September 17 2012 this discount was
approximately 70% when compared to net tangible assets per share as
at 29 February 2012, the date of the Company's interim balance
sheet.
Given the growth rates of the Company's investments, and its
increasingly attractive outlook towards group wide profitability,
the Board continues to be cognisant of this discount. Were this
position to continue the Board may review strategic alternatives
for one or more of its investments to unlock (and/or make more
apparent) some of the value built-up within its underlying
investments. If this review were undertaken it may include, but
would not be limited to, a potential sale of certain assets.
In this context, the Company's Board may consider targeted
buy-backs of its own shares were a realisation of any assets
completed.
Operational Update Core Investments
Consolidated results of core investments
Cambria's core portfolio consists of the Payserv, Leopard Rock
Hotel, Millchem and Celsys. These investments jointly had a
consolidated revenue and gross profit performance as per the
following table:
(Unaudited; 2012 2011 Growth
US$ mm)
Revenues 12.0 7.9 52%
Gross profit
(1) 6.8 4.4 54%
Gross margin 57% 56% 2%
(1) For comparison, FY2011 gross profit adjusted for
re-allocation of certain Hotel labour costs to SGA
Growth during FY2012 was entirely organic and based on adding
new offerings in existing markets, adding new markets for existing
offerings, as well as more efficient exploitation of existing
platforms.
Millchem and Celsys achieved particularly high year-on-year
gross profit growth of 93% and 159%, respectively.
Payserv (100% holding)
Payserv, previously trading as Paynet Group, provides EDI
switching services (Paynet), 'payslip' processing (Autopay), and
payroll based microfinance loan processing (Tradanet (51%
holding))
(Unaudited; 2012 2011 Growth
US$ mm)
Revenues 4.0 3.0 30%
Gross profit 3.6 2.2 62%
Gross margin 92% 74% 25%
Paynetprovides Electronic Data Interchange (EDI) services to all
22 banks and building societies in Zimbabwe, as well as to over
1,500 corporates (FY2011: over 1,100). Paynet processed 12.3
million transactions (FY2011: 8.3 million) during the period under
review, or a 48% increase.
Autopay, providing payroll services to 172 customers (FY2011:
113), processed over 286 thousand pay slips (FY2011: 241 thousand)
during the period under review, or an 18% increase.
Tradanet has seen significant growth in the value of payroll
based micro-finance loans processed, which grew to US$ 140 million
(FY2011: US$ 76 million), representing an 86% increase. At the end
of the period the loan book under management stood at US$ 100
million (FY2011: US$ 42 million), an increase of 138% when compared
to last year.
Payserv is, in cooperation with its bank clients, concluding
design and tests to upgrade the EDI Paynet product into a real-time
Electronic Fund Transfer (EFT) system. Furthermore, Payserv has
been encouraged by its Zimbabwean bank clients to explore
opportunities in Zambia and is currently actively pursuing
this.
During the twelve months under review, Payserv continued to
return increasing amounts of cash to Cambria.
The Leopard Rock Hotel (100% holding)
The Leopard Rock Hotel is a four star hotel and resort located
in the Eastern Highlands of Zimbabwe. It boasts a world-class golf
course, noted as one of the finest in Africa, a family-friendly
game park, a casino and some of the finest food in Zimbabwe.
(Unaudited; 2012 2011 Growth
US$ mm)
Revenues 2.5 2.1 17%
Gross profit
(1) 1.9 1.6 20%
Gross margin 78% 76% 2%
(1) For comparison, FY2011 gross
profit adjusted for
re-allocation of certain labour
costs
When compared to last year, the Leopard Rock Hotel saw
occupancies of 46% (FY2011: 38%), an increase of 21%. Average room
rates decreased by 6% to US$ 111 (FY2011: US$ 117). During the
period, Revenue Per Available Room (RevPAR) increased to US$ 51
from US$ 44, an increase of 16%.
At 31 August 2011, certain labour costs were allocated to 'costs
of goods sold' (COGS), which were included in Selling, General and
Administrative costs in the prior year. These amounts have been
excluded from COGS again in FY2012 and the comparative FY2011
figures adjusted. Unadjusted, consolidated gross profit for FY2011
was US$ 1.0m.
Celsys (60% holding)
After significant investment by Cambria, Celsys has become, in
the Company's view, one of the best equipped printers in Zimbabwe.
As a result, it now commands leading market positions in security
and commercial printing.
(Unaudited; 2012 2011 Growth
US$ mm)
Revenues (1) 1.8 1.1 65%
Gross profit
(1) 0.6 0.2 159%
Gross margin 32% 20% 57%
(1) Adjusted figures relate to continuing businesses
Print and ATM leasing only
During the period, Celsys has been able to further consolidate
its position as one of the leading commercial printers in Zimbabwe,
allowing it to grow sales rapidly while increasing margins.
In May 2012 Cambria stated its intention to acquire the
remaining 40% of Celsys shares not already owned by the Company.
This process will be completed as Cambria lists on the Zimbabwe
Stock Exchange.
Millchem (100% holding)
Millchem, previously trading as Millpal Chemicals, is a
value-added chemicals distributor with leading market positions in
Zimbabwe in solvents and metal treatment products. It recently
started distributing mining chemicals and alkyd resins.
(Unaudited; 2012 2011 Growth
US$ mm)
Revenues 3.8 1.7 126%
Gross profit 0.7 0.4 93%
Gross margin 19% 22% (15%)
Millchem continues to regularly expand its existing product
lines, while also actively exploring entry into new sectors.
Moreover, Millchem, during the second half of FY2012, was able to
make initial sales into Zambia, and will continue to pursue
regional expansion.
Net Tangible Assets
As at 29 February 2012 net tangible assets of the Group were US$
33.6 million. Net tangible assets excluded certain contingent
assets not included on the balance sheet of US$ 2.9 million.
Full year results
The information provided in this announcement is based on
unaudited management information. The Company expects to announce
its audited results for the year ended 31 August 2012 by 30
November 2012.
As reported in the interim results, the new Board took a prudent
view on the various assets on the Company's balance sheet incurring
accelerated write-offs relating to intangible assets (US$ 10.8
million at 29 February 2012), mainly related to the Celsys Limited
and FMNA investments. This had a negative impact on group wide
operating results for the interim period and, as such, will impact
results for FY2012.
Further write-offs of US$ 3.3 million were incurred on 7 August
2012 related to the sale of the ATR and F27 aircraft (see RNS
5278J). As disclosed then, the total amount recognized by Cambria
as being owed by its aircraft leasing customer is US$ 7.0 million,
of which US$ 5.6 million are Contingent Assets. We understand the
aircraft leasing customer claims it is owed US$ 1.4 million, which
is a claim Cambria will vigorously defend.
In addition, the changes made to the Board on 24 February 2012
came with significant one-off costs which included legal fees and
various other charges associated with the transition away from
Cambria's then largest shareholder (US$ 439 thousand as at February
2012). Again, this had a negative impact on group wide operating
results for the interim period and, as such, will impact results
for FY2012. The Board expects some of these costs to continue to be
incurred by the Company in the forthcoming half of FY2013.
Notes for editors:
Cambria is a long term, active investment company, building a
portfolio of investments primarily in Zimbabwe. The name of the
Company is inspired by the Cambrian period in the earth's
development, also referred to as the "Cambrian explosion". It
represents an anticipated period of rapid development and a
promising new era for the Company, its shareholders and employees -
alongside the current economic renaissance of Zimbabwe.
Cambria has been listed on the AIM market of the London Stock
Exchange since 2007.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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