African Home Stores Introduces Apple to Lesotho

RNS Number : 4218D

Obtala Resources Limited

29 January 2015

 



29 January 2015

Obtala Resources Limited

("Obtala" or the "Company")

 (AIM: OBT)

African Home Stores Introduces Apple to Lesotho

Obtala Resources Limited (AIM:OBT), the vertically integrated agri-processing, farming, timber and retail company, is pleased to provide a brief update on activities relating to African Home Stores in Lesotho.

Trading Update

Since the acquisition of Lifes' Comfort Solutions ("LCS") and its chain of shops in Lesotho on the 23^rd October 2014 to the 31^st December 2014, LCS has generated revenues of M24.4 million (US$2.1 million). This is in line with our expectations and gives a gross profit margin of 21%.  We have taken significant steps to improve these margins and expect these to increase through a process of improved buying, new suppliers (both regionally and internationally) together with optimising stock and inventory management  We are confident of LCS' success going forward.

LCS has agreed terms with a supplier to open the first iStore for Apple consumer technology products within the country. There will be a specifically designated area within the LCS shops with shop fitting which will be funded by suppliers commencing in February 2015. We expect the successful launch of iProducts in Lesotho to significantly enhance our IT and telecoms revenue and customer foot fall generally. Also, LCS is currently re-negotiating agreements with MultiChoice, the regional satellite TV provider, to increase the revenue received for services provided by LCS to MultiChoice.

Additional Outlets

LCS has also now signed binding terms for lease agreements on 2 additional outlets within Lesotho (totalling 7 units) and a further unit in Bloemfontein, South Africa to facilitate and expand the customer base, revenues and profitability. These new units will be operational in Q2 2015, and will be expected to add approximately 15-20% to the overall sales revenues on a monthly basis.

LCS is also in the process of establishing a workwear wholesale section which will seek to supply into Government contracts, the mining industry and private sector businesses.

Managing Director's comment

Simon Rollason, Managing Director, commented: "We are pleased to provide this update on African Homes Stores to our shareholders. Revenues and margins are very encouraging and the improvements in buying and cost management will generate higher margins going forward. The implementation of improved management policy and procedures, particularly focusing on stock and inventory control and re-ordering systems will provide for better cost efficiencies. The introduction of the Apple product range is an exciting opportunity to bring a truly international brand name to Lesotho. Our intention is to use the business model in Lesotho as the blueprint for rolling out the business into neighbouring states in 2015. We continue to advance the other segments of our vertically integrated business and look forward to providing further updates as these project plans develop."

Obtala Resources Francesco Scolaro - Chairman Simon Rollason - Managing Director www.obtalaresources.com	[phone]
ZAI Corporate Finance Limited (Nomad)	[phone]
Ray Zimmerman Richard Morrison
Brandon Hill Capital  (Broker)	[phone]
Jonathan Evans
Square 1 Consulting (Public Relations)	[phone]
David Bick Mark Longson

 

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