Trading update and sale of hotel

RNS Number : 0873V

Cambria Africa PLC

23 October 2014

 



Cambria Africa Plc

 ("Cambria" or the "Company")

Trading update for the period ending 31 August 2014 and sale of Hotel

Cambria Africa Plc (AIM:CMB), the Southern Africa focussed investment company,is pleased to announce a trading update for the period ending 31 August 2014 in advance of its final results. All performance figures and comparisons quoted in this statement are unaudited pending completion of the 2014 audit.

·        During the period ended 31 August 2014, Payserv Africa and Millchem Holdings organically grew combined revenue and gross profit by 11% and 11% year-on-year, respectively

·        Millchem completed its acquisition of leading Malawi chemical distributor C&M, which will be consolidated into Cambria's results during FY2015

·        Over the period, Millchem also added a significant number of high profile new suppliers, including Ashland, Clariant, Sealed Air, Donau Carbon, Celatom, EP Minerals and Centlube / AGIP. This resulted in revenue growth of 54% in the fourth quarter year-on-year

·        Payserv saw growth, with particularly strong results being achieved by Tradanet, which grew loan issuance by 106% in the fourth quarter of the financial year, when compared to the same period last year

·        Paynet obtained its National Payment license in Zambia and commenced processing Paynet transactions and Autopay payslips in that country. It also launched a variety of new Paynet products during the period

·        Cambria also announces it has sold the Leopard Rock Hotel, including its external debt of US$ 0.2 million, for cash consideration of US$ 2.5m, marking the end of a significant cash-drain on the Company

Introduction

During a period where the Zimbabwean economy was struggling, revenues and gross profit of the continuing operations of Cambria, being the Payserv and Millchem investments, were US$ 9.4 million (2013: US$ 8.5 million) and US$ 5.1 million (2013: US$ 4.6 million) respectively, representing corresponding increases of 11% and 11% to the equivalent prior period.

During the period, the Company also raised US$ 4 million gross by way of a placing of 32,406,139 new ordinary par value shares of £0.0001 each at 7.5p per share.

Payserv Africa

Payserv's Electronic Data Interchange (EDI) switching service, 'Paynet' provided services to all 21 banks and building societies in Zimbabwe over the period, as well as to over 1,990 corporates. It also serviced one bank and 169 corporates in Zambia. Paynet processed a combined 16.5 million transactions (2013: 15.2 million) during the period, a 9% increase.

Payserv's payslip processing product, 'Autopay' provided payroll services to 195 customers and processed over 314,000 payslips (2013: 303,000) during the period; a 4% increase. This was achieved through a significant increase in the number of customers against a backdrop of many companies downsizing and shutting down.

Payserv's payroll based microfinance loan processing product, 'Tradanet' processed approximately 121,000 (2013: 66,000) loans during the period, representing a value of US$ 154 million (2013: US$ 131 million), an 83% increase and an 18% increase respectively. At the end of the period the loan book under management stood at US$ 134 million (2013: US$ 110 million), an increase of 22%.

Payserv significantly increased its EBITDA over the period.

(US$ '000)	2014	2013	Growth
Revenues	4,595	4,164	10%
Gross profit	4,219	3,811	11%
Gross margin	91%	91%	0%

Millchem Holdings

Milchem, the value-added chemicals distribution subsidiary of Cambria, regained high growth during the second half of the period. The fourth quarter in particular saw high year on year revenue growth of 54%, among others resulting from signing on of high-profile new suppliers during the period, including Ashland, Clariant, Sealed Air, Donau Carbon, Celatom, EP Minerals and Centlube / AGIP.

It also completed the acquisition of C&M, a leading distributor in Malawi, for 5,500,000 new ordinary shares. Integration of C&M into MiIlchem is progressing according to strategy.

Post period end Millchem also made its first sales in Namibia.

Milchem's investment in geographic expansion has impacted the bottom line, and saw strongly reduced EBITDA for the period. EBITDA performance, alongside the achieved rapid sales growth, started improving again strongly during the fourth quarter of the financial year.

Millchem also became a full member of both the NACD and the FECC, the only African chemical distributor to do so.

US$ '000	2014	2013	Growth
Revenues	4,806	4,323	11%
Gross profit	848	770	10%
Gross margin	18%	18%	0%

Sale of The Leopard Rock Hotel

Following the end of the period and a long process, Cambria announces the sale of the Leopard Rock Hotel to African Ventures Limited for US$ 2.5 million in cash and US$ 0.2 million in assumed debt. The Company will use the proceeds to further its remaining investments and on going working capital.

In the year ended 31 August 2013 the Hotel's EBITDA loss was approximately US$ 370,000 prior to write downs and costs incurred in the sale process.

This sale ends a significant cash drain on the Company and enables capital to be allocated elsewhere in the business for more profitable operations.

Future operations

The Company will continue to review its remaining investments and its options to raise further funds for ongoing working capital. This may include disposal of investments as well as the raising of additional equity or debt capital.

Contacts
Cambria Africa Plc	www.cambriaafrica.com
Ian Perkins	[phone]
Edzo Wisman	[phone]
WH Ireland Limited	www.wh-ireland.co.uk
James Joyce / Mark Leonard	[phone]
Peterhouse Corporate Finance Limited	www.pcorpfin.com
Charles Goodfellow / Duncan Vasey	[phone]
FTI Consulting	www.fticonsulting.com
Edward Westropp / Adam Cubbage	[phone]

 

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