TIDMCMB
RNS Number : 0463B
Cambria Africa PLC
27 February 2014
Cambria Africa Plc
("Cambria" or the "Company")
Results for the full year ending 31 August 2013
Cambria Africa Plc (AIM:CMB) is pleased to announce its full
year results for the year ending 31 August 2013.
The audited Financial Statements will be made available shortly
on the Company's website and are being sent to shareholders
today.
All references to continuing operations relate to the Group's
Payserv Africa and Millchem Holdings investments and head office
activities. 2012 and any prior years comparative figures have been
restated to reflect this definition of continuing vs discontinued
operations.
Highlights for the year are as follows:
-- Cambria continues the disposal of its remaining non-core
assets, completion of which will mark the re-alignment away from
multiple investments operating in a single country, to a select
number of investments operating regionally. It is the Board's
conviction this strategy marks the best route towards maximising
shareholder value and ensuring continued future growth
-- As a result of this strategy, the Company is now solely
focused on Payserv Africa (Payserv) and Millchem Holdings
(Millchem), growing their scale and scope, and pursuing their
regionalisation
-- A multi-year, regional and product roll-out strategy for both
Millchem and Payserv has been developed and Cambria is excited
about the return prospects offered by these two investments
o Initial steps have successfully been made. Millchem now has a
warehouse and offices in Zambia, where it is commencing operations,
and is opening the same in in Malawi. Payserv has received its
National Payments Licence in Zambia, signed its first customers and
is processing payments
o Cambria anticipates growth for both investments and may make
smaller acquisitions to accelerate their regionalisation
strategy
-- During the year ended 31 August 2013, Payserv Africa and
Millchem Holdings combined, organically grew revenues and gross
profit by 10% and 6% year-on-year, respectively
-- Cambria's central costs were reduced by 54% when compared to
the equivalent period last year
-- Cambria's EBITDA loss from continuing operations for the year
ended 31 August 2013 was US$3.6 million, a 52% reduction when
compared to last year
-- The Group recorded a loss from continuing operations of $5.0
million for the year ended 31 August 2013. Discontinued operations,
including write downs of property and assets, generated a loss of
US$6.9 million
About Cambria Africa Plc
Cambria Africa Plc, quoted on the AIM market of the London Stock
Exchange, is a long term, active investment company, building a
portfolio of investments primarily in Southern Africa.
Contacts
Cambria Africa Plc www.cambriaafrica.com
+44 (0) 796 4908
Ian Perkins 951
+44 (0) 796 4908
Edzo Wisman 950
WH Ireland Limited www.wh-ireland.co.uk
+44 (0) 20 7220
James Joyce / Nick Field 1666
Peterhouse Corporate Finance www.pcorpfin.com
Limited
Charles Goodfellow / Duncan +44 (0) 207 220
Vasey 9791
Chief Executive's Review
Introduction
During the period under review revenues and gross profit of the
continuing operations of Cambria, being the Payserv and Millchem
investments, were US$8.5 million (2012: US$7.7 million) and US$4.6
million (2012: US$4.3 million) respectively, representing
corresponding increases of 10% and 6% to the equivalent prior
period.
There was a slowdown in the rate of growth when compared to last
year (when, for example, revenues grew 64% year-on-year) which can
largely be attributed to a high level of uncertainty in the
business environment during the second half of the financial year
in Zimbabwe as a result of the elections, which, irrespective of
country, always negatively impact economies. During this election
year, Zimbabwe experienced periods of liquidity shortages,
resulting in cautious consumer spending which directly contracted
growth within our portfolio. This slowdown continues to impact
current performance of our investments.
Our pursuit of scale for both Payserv and Millchem, together
with the prudent strategy to regionalise, has meant Cambria
continued to invest for the future throughout this period. We are
confident that the positive impact of regional expansion into
Zambia (and subsequent entry into Malawi for Millchem), together
with the launch of various new products, will yield results in the
coming periods.
Cambria's EBITDA loss for the period for continuing operations
for the year ended 2013 was US$3.6 million, a 52% reduction when
compared to last year. The Group loss for the year is $5.0 million
for continuing operations. Discontinued operations, including write
downs, generated a loss of US$6.9 million. Cambria's loss per share
for the year was 18.4c, compared to 47.1c for the same period last
year representing a decrease in loss per share of 61%.
On 1 October 2012 the Company raised US$1.4 million gross by way
of a placing with institutions of 8,615,115 new ordinary par value
shares of GBP0.0001 each at 10p per share.
Results for the Period
Consolidated results
Payserv Africa and Millchem Holdings jointly had a consolidated
performance as follows:
(US$ '000) 2013 2012 Growth
Revenues 8,487 7,721 10%
Gross profit 4,581 4,326 6%
Gross margin 54% 56% (4)%
SG&A (4,209) (3,194) 32%
EBITDA 372 1,132 (67)%
EBITDA margin 4% 15% (70)%
The decrease in EBITDA can be attributed to three factors: (i)
Significant investments made by Payserv into new products as well
as product upgrades, with the associated costs expensed rather than
capitalised; (ii) investments into regional expansion pursued by
both Payserv and Millchem; and, (iii) an unforeseeable and
unavoidable US$294 thousand multi-year VAT liability related to
Tradanet, accounting for 40% of the decrease in combined EBITDA for
the year.
As Cambria continues to actively pursue scale and scope through
regional expansion and development of new products it will continue
to expense rather than capitalise these investments. This will
continue to impact EBITDA performance in the coming periods.
Payserv Africa
Payserv provides EDI switching services (Paynet), 'payslip'
processing (Autopay), and payroll based microfinance loan
processing (Tradanet).
(US$ '000) 2013 2012 Growth
Revenues 4,164 3,951 5%
Gross profit 3,811 3,614 5%
Gross margin 91% 91% -%
SG&A (3,369) (2,274) 48%
EBITDA 442 1,340 (67)%
EBITDA margin 11% 34% (69)%
Paynet provided Electronic Data Interchange (EDI) services to
all 22 banks and building societies in Zimbabwe, as well as to over
1,500 corporates. Paynet processed 15.2 million transactions (2012:
12.3 million) during the period under review, a 24% increase.
Autopay, provided payroll services to 150 customers, processed
over 303 thousand pay slips (2012: 286 thousand) during the period
under review, a 6% increase.
Tradanet processed approximately 66,000 (2012: 55,000) loans
during the period, representing a value of US$131 million (2012:
US$140 million), a 19% increase and a 6% decrease respectively. At
the end of the period the loan book under management stood at
US$110 million (2012: US$100 million), an increase of 10%.
Over the period, Payserv has invested significantly into product
upgrades, new offerings, entry into the Zambian market, as well as
exploration of other geographic markets. These investments have not
been capitalised and have therefore directly impacted the income
statement during the period under review.
New Paynet products recently launched include, among others,
eSchedules and PayZIMRA. It is also launching PayFT, a joint
venture with South African based BankServ. Geographically, Paynet
has established a presence in Zambia, received its Zambian National
Payments Licence during December 2013, signed its first customers
in that country, and has commenced processing payments. Moreover,
Autopay now has a presence in Zambia as well, processed its first
payslips in Uganda, and reached agreement with a trial customer
regarding processing payslips in Botswana.
The bottom line effect of these investments should come through
in the coming periods through enhanced revenue growth as well as
diversification of revenue streams.
There was an exceptional item of a US$294,000 adjustment to
Payserv (and group) EBITDA resulting from a multi-year VAT
liability related to Tradanet dating back to March 2010 that was
charged in one tranche during 2013.
Millchem Holdings
Millchem is a value-added chemicals distributor with leading
market positions in Zimbabwe. It recently established a presence in
Zambia, and is working towards a presence in Malawi.
US$ '000 2013 2012 Growth
Revenues 4,323 3,770 15%
Gross profit 770 712 8%
Gross margin 18% 19% -6%
SG&A (840) (920) -9%
EBITDA (70) (208) 66%
EBITDA margin (2)% (6)% 71%
In general, chemicals distribution tends to outpace economic
growth, but it also tends to shrink faster when an economy
stagnates. Millchem was thus strongly affected by the uncertain
business environment during the year. During some weeks over the
period it was generating 50% less gross profit when compared to
equivalent weeks during the prior year. Importantly, despite
decreased revenue Millchem did not lose market share or customers
over the period, in fact new customers were added as competitors
were struggling.
Despite the challenging environment in Zimbabwe, the Millchem
team, under new leadership after the appointment of Matthijs Mulder
as the CEO of Millchem Holdings, remained focused on the long term
and continued to launch new products as intended, opened up a
branch in Bulawayo, opened up warehouse space and offices in
Zambia, made its first steps towards opening of a warehouse and
offices in Malawi, established buying entities in the Netherlands
and South Africa, and was able to add relationships with various
attractive new suppliers (e.g. BASF, ENI (Cent-Lube), Sasol and
others). Moreover, in addition to the NACD, Millchem Africa is now
also a member of the FECC, as it seeks to position itself as a
Responsible Distributor in this territory.
Alongside a new CEO, Millchem also appointed two Non-Executive
Directors to the Millchem Board. Bernard West and David Edgington,
who jointly bring over 80 years of chemicals industry experience,
as well as extensive industry relationships.
Discontinued operations, other and central costs
Celsys Limited
The Company sold its investment in Blueberry International Ltd
on 25 July 2013 for US$1. This sale included, among others, a 60%
stake in Celsys Limited. During the period, Celsys generated US$1.8
million in sales and negative US$2.5 million EBITDA, excluding
certain write backs related to intercompany balances. Including
write backs Celsys generated US$0.5 million of EBITDA losses.
The Leopard Rock Hotel Group
During the period under review, the Leopard Rock Hotel was
classified by Cambria as held for sale. During the period, the
Leopard Rock Hotel Group generated US$2.3 million in sales and
negative US$669 thousand in EBITDA, before write downs recognised
in the income statement of US$2.8 million.
LonZim Air (B.V.I.) Limited
Through LonZim Air (BVI) Limited Cambria previously owned three
aircraft. Over the years a number of disputes arose in relation to
these aircraft and certain associated contracts. At this point, in
summary, Cambria will pursue recovery of claims related to these
disputes that are now estimated to be in excess of US$10 million.
These amounts relate to, inter alia, maintenance reserve and lease
charges and related contractual interest, payment of insurance
proceeds, deterioration in market value of the aircraft, and the
significantly lower amount the Company was able to obtain through a
sale, due to the poor condition the aircraft were found to be in.
LonZim Air incurred US$205 thousand in operating losses for the
period under review, largely related to extra-ordinary legal
expenses related to the above mentioned claims.
Settlement with Lonrho
On 19 July 2013 Cambria reached final settlement with Lonrho Plc
with regards to all on-going disputes, other than claims related to
three aircraft previously owned by Cambria and leased to
subsidiaries of Lonrho. As a result of this settlement, Cambria
received from Lonrho US$2.7 million. The settlement agreed related
to, among others, the Aldeamento Turistico de Macuti, S.A.R.L loan,
the Churchill Estates (1995) (Private) Limited loan, the Lonrho
Management Services Agreement, and the Hotel Refurbishment and
Management Agreement.
Central costs
Cambria incurred US$4.0 million in central EBITDA costs for the
period under review, compared to US$8.6 million last year, a
reduction of 54%.
Events following the end of the period under review
On 19February 2014, Cambria announced that approximately US$4
million (before expenses) or UKGBP2.4 million, has been raised by
placing with new and existing institutional and other investors of
32,406,139 new ordinary shares in the Company.
The placing price was 7.5 pence per Ordinary Share being a 9.6%
discount to the 30-day volume weighted average market price on 10
February 2014.
The placing will provide working capital to support the
Company's expansion strategy for Millchem and Payserv as outlined
below.
Strategy going forward
Cambria is continuing the disposal of its remaining non-core
assets, completion of which will mark the re-alignment away from
multiple investments operating in a single country, to a select
number of investments operating regionally. It is the Board's
conviction this strategy marks the best route towards maximising
shareholder value and ensuring continued future growth.
As a result of this strategy, the Company is now solely focused
on Payserv and Millchem, growing their scale and scope, as well as,
importantly, their regionalisation.
A multi-year, regional and product roll-out strategy for both
Millchem and Payserv has been developed and Cambria is excited
about the growth and return prospects of the two investments.
Initial steps in the regional expansion have been made
successfully. For example, Millchem now has warehouse and offices
in Zambia, has commenced operations there, and is in the process of
opening the same in Malawi. In Zambia, Payserv has received its
National Payment Licence, signed on its first customers, and
commenced the processing of payments.
In the coming years, both Millchem and Payserv will continue to
expand in additional geographies in a careful and coordinated
manner. Moreover, Cambria anticipates growth for both investments
will include smaller acquisitions, which may or may not be made
using Cambria shares.
The Company requires funds for the expansion of Millchem and
Payserv, as well as for the Group's working capital. The Company is
reviewing its options regarding funding in this regard and this may
include funds realised from the disposal of its non-core operations
and assets as well as the raising of additional equity or debt
capital.
In closing
Cambria has had a year of transition, which has seen the end of
ongoing legal disputes and completion of the strategy to focus on
companies that can effectively pursue growth and scale through
regionalisation. We have significantly reduced operating costs,
including central costs, streamlined our business model, and
significantly invested into new products and into new markets. We
close out the financial year with a platform of two very strong
companies, which have made significant progress in their product
rollout and regional strategy, and which have a clear strategy for
the next few years.
Implementing this strategy over the last 18 months came with
difficult choices for Cambria's Board. However, having brought
Cambria to where it is now, the Board's conviction is stronger than
ever that our current portfolio and focus marks the best route
forward towards maximising shareholder value.
Edzo Wisman
Chief Executive Officer
27(th) February 2014
Cambria Africa Plc
Audited consolidated income statement
For the year ended 31 August 2013
*Restated
2013 20112
Total Total
US $000 US $000
------------------------------------------------- --------- -------------
Revenue 8,487 7,721
Cost of sales (3,906) (3,395)
------------------------------------------------- --------- -------------
Gross profit 4,581 4,326
Operating costs (8,647) (9,434)
Other income 289 -
Accelerated write-off of intangibles and
goodwill impairment - (2,475)
Net losses on disposal of investments and
impairment of assets (348) (451)
------------------------------------------------- --------- -------------
Operating loss (4,125) (8,034)
------------------------------------------------- --------- -------------
Finance income 282 312
Finance costs (967) (545)
------------------------------------------------- --------- -------------
Net finance costs (685) (233)
------------------------------------------------- --------- -------------
Loss before tax (4,810) (8,267)
Income tax (204) (349)
------------------------------------------------- --------- -------------
Loss for the period from continuing operations (5,014) (8,616)
------------------------------------------------- --------- -------------
Discontinued operations
Loss for the year from discontinued operations,
net of tax (6,890) (17,072)
------------------------------------------------- --------- -------------
Loss for the year (11,904) (25,688)
------------------------------------------------- --------- -------------
Attributable to:
Owners of the Company (12,048) (27,271)
Non-controlling interests 144 1,583
------------------------------------------------- --------- -------------
Loss for the year (11,904) (25,688)
------------------------------------------------- --------- -------------
Earnings per share
------------------------------------------------- --------- -------------
Basic and diluted loss per share (cents) (18.4c) (47.1c)
------------------------------------------------- --------- -------------
Earnings per share - continuing operations
------------------------------------------------- --------- -------------
Basic and diluted loss per share (cents) (7.6c) (18.6c)
------------------------------------------------- --------- -------------
*Amounts have been restated due to reclassification of certain
entities to discontinued operations.
Cambria Africa Plc
Audited consolidated statement of comprehensive income
For the year ended 31 August 2013
*Restated
2013 2012
US $000 US $000
---------------------------------------------- ---------- ---------
Loss for the year (11,904) (25,688)
Other comprehensive income
Items that will never be reclassified
to income statement:
Revaluation of property, plant and equipment 422 273
Related deferred tax adjustment (110) (2,839)
Impairment of previously revalued land
and buildings in disposal group classified (1,873) -
as held for sale
Shareholder loans provided for in the (392) -
prior year
Items that are or may be reclassified
to income statement:
Foreign currency translation differences
for overseas operations (1) (1,601)
Total comprehensive loss for the year (13,858) (29,855)
---------------------------------------------- ---------- ---------
Attributable to:
Owners of the Company (14,002) (31,438)
Non-controlling interests 144 1,583
---------------------------------------------- ---------- ---------
Total comprehensive loss for the year (13,858) (29,855)
---------------------------------------------- ---------- ---------
* Amounts have been restated due to reclassification of certain
entities to discontinued operations.
Cambria Africa Plc
Audited consolidated statement of changes in equity
For the year ended 31 August 2013
Attributable to owners of the Company
----------------------------------------------------------------------------------------
Share Share Re-valuation Foreign Share Retained NDR Total Non-control- Total
Capital premium reserve exchange based earnings ling Equity
reserve payment interests
reserve
US $000 US $000 US $000 US $000 US $000 US $000 US $000 US $000 US $000 US $000
Balance at 31
August
2012 11 77,399 3,124 (10,629) 355 (47,312) 2,128 25,076 (1,785) 23,291
Loss for the year - - - - - (12,048) - (12,048) 144 (11,904)
Adjustment to
opening
reserves in
respect
of shareholders
loans - - - - - (392) - (392) - (392)
Revaluation of
property - - 422 - - - - 422 - 422
Deferred tax
adjustment - - (110) - - - - (110) - (110)
Impairment of
(previously
revalued) land
and
buildings in a
disposal
group classified
as
held for sale - - (1,873) - - - - (1,873) - (1,873)
Foreign currency
translation
differences for
overseas
operations - - - (1) - - - (1) - (1)
------------------ -------- -------- ------------- ---------- -------- --------- -------- ---------- ------------- ----------
Total
comprehensive
income for the
year - - (1,561) (1) - (12,440) - (14,002) 144 (13,858)
------------------ -------- -------- ------------- ---------- -------- --------- -------- ---------- ------------- ----------
Contributions by and distributions
to owners
of the Company recognised directly
in equity
Reclassification
of
reserves - - (621) - - - 621 - - -
Disposal of
business - - (865) (11) - - (508) (1,384) 1,808 424
Dividends paid - - - - - - - - (247) (247)
Issue of ordinary
shares 1 1,399 - - - - - 1,400 - 1,400
Share based
payment
transactions - - - - (269) - - (269) - (269)
------------------ -------- -------- ------------- ---------- -------- --------- -------- ---------- ------------- ----------
Total
contributions
by and
distributions
to owners of the
Company 1 1,399 (1,486) (11) (269) - 113 (253) 1,561 1,308
------------------ -------- -------- ------------- ---------- -------- --------- -------- ---------- ------------- ----------
Balance at 31
August
2013 12 78,798 77 (10,641) 86 (59,752) 2,241 10,821 (80) 10,741
------------------ -------- -------- ------------- ---------- -------- --------- -------- ---------- ------------- ----------
Cambria Africa Plc
Audited consolidated and company statements of financial
position
As at 31 August 2013
*Restated *Restated
Group Company Group Company
2013 2013 2012 2012
US $000 US $000 US $000 US $000
-------------------------------- --------- --------- --------- ---------
Assets
Property, plant and equipment 2,881 56 25,250 97
Biological assets - - 83 -
Goodwill 717 - 717 -
Intangible assets 179 - 1,551 -
Long-term receivables 361 - 3,229 3,229
Total non-current assets 4,138 56 30,830 3,326
-------------------------------- --------- --------- --------- ---------
Inventories 925 - 936 -
Financial assets at fair value
through profit or loss 58 - 42 -
Trade and other receivables 814 25,648 2,625 24,668
Cash and cash equivalents 2,136 1,210 468 178
Assets held for sale 16,164 - 361 -
-------------------------------- --------- --------- --------- ---------
Total current assets 20,097 26,858 4,432 24,846
-------------------------------- --------- --------- --------- ---------
Total assets 24,235 26,914 35,262 28,172
Equity
Issued share capital 12 12 11 11
Share premium account 78,798 78,798 77,399 77,399
Revaluation reserve 77 - 3,124 -
Share based payment reserve 86 86 355 355
Foreign exchange reserve (10,641) (13,186) (10,629) (13,186)
Non-distributable reserves 2,241 - 2,128 -
Retained losses (59,752) (45,530) (47,312) (40,907)
-------------------------------- --------- --------- --------- ---------
Equity attributable to owners
of the Company 10,821 20,180 25,076 23,672
Non-controlling interests (80) - (1,785) -
-------------------------------- --------- --------- --------- ---------
Total equity 10,741 20,180 23,291 23,672
-------------------------------- --------- --------- --------- ---------
Liabilities
Loans and borrowings 6,553 4,500 2,054 2,000
Provisions 203 29 161 -
Deferred tax liabilities 553 - 4,108 -
-------------------------------- --------- --------- --------- ---------
Total non-current liabilities 7,309 4,529 6,323 2,000
-------------------------------- --------- --------- --------- ---------
Bank overdrafts 398 - 337 -
Current tax liabilities 187 - 284 -
Loans and borrowings 94 - 1,692 1,250
Trade and other payables 1,322 2,205 2,825 1,250
Liabilities held for sale 4,184 - 510 -
-------------------------------- --------- --------- --------- ---------
Total current liabilities 6,185 2,205 5,648 2,500
-------------------------------- --------- --------- --------- ---------
Total liabilities 13,494 6,734 11,971 4,500
-------------------------------- --------- --------- --------- ---------
Total equity and liabilities 24,235 26,914 35,262 28,172
-------------------------------- --------- --------- --------- ---------
* Amounts have been restated due to reclassification of certain
entities to discontinued operations.
Cambria Africa Plc
Audited consolidated statement of cash flows
For the year ended 31 August 2013
2013 2012
US $000 US $000
--------------------------------------------------------- -------- --------
Cash used in operations (1,379) (7,934)
Tax paid (335) (509)
--------------------------------------------------------- -------- --------
Net cash used in operating activities (1,714) (8,443)
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment 20 312
Purchase of property, plant and equipment (400) (1,473)
Other investing activities (361) -
Proceeds from sale of investments - 1,197
Write down of investments - 4,418
Interest received 282 326
Net cash used in investing activities (459) 4,780
Cash flows from financing activities
Dividends paid to non-controlling interests (247) (323)
Interest paid (967) (707)
Proceeds from the issue of share capital 1,400 1,546
Proceeds from the drawdown of loans 3,594 2,249
--------------------------------------------------------- -------- --------
Net cash from financing activities 3,780 2,765
Net increase/(decrease) in cash and cash equivalents 1,607 (898)
--------------------------------------------------------- -------- --------
Cash and cash equivalents at 1 September 131 1,029
Foreign exchange movements - -
--------------------------------------------------------- -------- --------
Cash and cash equivalents at 31 August 1,738 131
--------------------------------------------------------- -------- --------
Cash and cash equivalents as above comprise the following:
Cash and cash equivalents 2,136 468
Bank overdraft (398) (337)
----------------------------------------------- ------- ------
Cash and cash equivalents at 31 August 1,738 131
----------------------------------------------- ------- ------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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