TIDMCMB
RNS Number : 4253O
Cambria Africa PLC
29 May 2020
Cambria Africa Plc
("Cambria" or the "Company")
Interim Results ("the Results")
for the 6 Months ended 29 February 2020
EPS of 0.02 US cents and NAV of 1.32 US cents
Cambria Africa PLC ( AIM: CMB ) ("Cambria" or the "Company")
announces its interim results for the six months ended 29 February
2020 ("the Period"). A copy of this announcement is available on
the Company's website ( www.cambriaafrica.com ).
The Company, reported a Consolidated Profit After Tax of US
$36,000 and Earnings Per Share (EPS) of 0.02 US cents for Half Year
(HY) 2020 despite a 70% drop in revenues to $1.31 million from
$4.39 million in HY 2019, by reducing Operating Costs 65% to
$555,000 from $1.58 million reported in HY 2019.
In a significant subsequent event, Governor John Mangudya
reiterated his written commitment that the Reserve Bank of Zimbabwe
(RBZ) will expunge the remainder of Paynet's external debts of US
$632,000. On 22 May 2019, US $100,000 of the above balance was paid
through Paynet's bankers, First Bank Corporation (FBC), leaving US
$150,000 to be expunged by 31 May 2020, with the balance expected
by end-July. The continued good faith shown by the Governor gives
the Company confidence that the remaining balance will continue to
be honoured against the receipt of local funds advanced by the
company to the RBZ against these debts in November 2019.
In a further subsequent event, a dispute has arisen between the
RBZ and EcoCash (a subsidiary of Casava) over the application of
limits to bulk payment accounts. This has resulted in the inability
of Paynet to fund its EcoCash bulk payment accounts to delivery
payment instructions on behalf of clients. As a consequence, the
Company has decided to initiate the termination of its fee-sharing
agreement with EcoCash. Given the deterioration of the local
currency, and the ceilings imposed by EcoCash on transaction
income, the impact of this decision will not be material.
During the Period, Cambria continued to implement defensive
strategies focused on reducing expenses, hedging its assets and
cashflow, and minimising its cost of capital. The Company's
Statement of Financial Position remains healthy with a Net Asset
Value (NAV) per share of 1.32 US cents (1.07p) at the end of HY
2020. NAV is down 2% from 1.35 US cents (1.10p) at HY 2019. This
drop is primarily a result of foreign exchange differences arising
on the translation of the results from our subsidiaries in Zimbabwe
into Cambria's presentation currency of USD.
As expected, the Company's results were significantly impacted
by the re introduction of the Zimbabwe Dollar (ZWL) in February
2019, replacing the US Dollar (USD) as the country's functional
currency. Further, in June 2019 Paynet failed in its attempts to
maintain the economic value of its revenues from its banking
clients. The resulting dispute ended the Company's revenue stream
from Zimbabwe's banking sector. The Company is confident that its
Fintech solutions for bulk payment and interbank clearing remains
the most cost-effective and tested solution for the country's
national payments system.
In interpreting HY 2020 results, the reader must bear in mind
that the Zimbabwe Dollar "interbank rate" has now been abandoned in
favour of a fixed exchange rate. In both cases, the rate has not
reflected the actual market value of the local currency.
Half Year 2020 Results highlights:
6 Months ended 29 February 2020 (US$'000) HY 2020 HY 2019 % Change
----------------------------------------------- -------- --------- ---------
- Revenue 1,306 4,387 (70%)
- Operating costs 555 1,579 (65%)
- Consolidated EBITDA 222 2,058 (89%)
- Consolidated Profit after tax (PAT) 36 1,656 (98%)
- PAT attributable to shareholders (excluding
minority interests) 105 1,482 (93%)
- Central costs 137 98 40%
- EPS - cents 0.02 0.27 (93%)
- NAV 7,172 7,344 (2%)
- NAV per share - cents 1.32 1.35 (2%)
- Weighted average of shares in issue 544,576 544,576 -
- Shares in issue at year end 544,576 544,576 -
Divisional:
- Payserv - consolidated PAT 53 1,510 (96%)
- Payserv - consolidated EBITDA 180 2,047 (91%)
- Millchem - EBITDA 185 112 65%
Group:
-- Net Equity (NAV) decreased by $172,000 (2%) to $7.17 million
from $7.34 million at 29 February 2020 caused primarily by Foreign
Currency Translation losses arising on consolidation of our
Zimbabwe subsidiaries.
-- NAV per share decreased by 2% from 1.35 US cents (1.10p) in
HY 2019 to 1.32 US cents (1.07p) in HY 2020 demonstrating the
continued success of the Company's strategy to preserve shareholder
equity and to hedge its Statement of Financial Position against
currency disruptions in Zimbabwe.
-- Consolidated operating costs decreased 65% to $555,000 from
$1.58 million following drastic cost saving measures introduced by
the Group in response to the significantly reduced operational
activity.
-- Cambria's Consolidated PAT decreased 98% to $36,000 from
$1.67 million in HY 2019, mainly as a result of the suspension of
Paynet's operations and the impact of ZWL devaluation on local
operations.
-- Earnings Per Share (EPS) decreased by 93% to 0.02 US Cents from 0.27 US Cents in HY 2019.
-- Consolidated EBITDA decreased 89% to $222,000 from $2.06 million in HY 2019.
-- Cambria's central costs increased by $39,000 to $137,000 from
$98,000 in HY 2019. Cambria's CEO and Directors rendered services
to Cambria without compensation during the Period.
-- The Statement of Comprehensive Income includes a foreign
currency translation adjustment (loss) of $256,000 attributable to
Cambria.
Divisional:
-- Paynet's HY 2020 results in comparison to the same period in
2019 reflects the significant impact of the suspension by Paynet
Zimbabwe of its services to Bank customers following their refusal
to settle invoices in the contractual currency of US Dollars and
the disruptions caused by the introduction of ZWL as a new currency
in Zimbabwe:
- 85% decrease in revenues to $564,000 from $3.67 million,
- 91% decrease in consolidated EBITDA to $180,000 from $2.05
million,
- 95% decrease in PBT to $100,000 from $1.91 million,
- 96% decrease in consolidated PAT to $53,000 from $1.51
million.
-- Despite the significant macro-economic challenges, Millchem
reported an improvement in results:
- 3% increase in revenues to $742,000 from $719,000,
- 65% increase in EBITDA to $185,000 from $112,000,
- 56% reduction in overheads to $56,000 from $126,000,
- 52% increase in PBT to $178,000 from $117,000 in HY 2019.
Net Asset Value (NAV):
Cambria continued its focus on shareholder value preservation in
its Statement of Financial Position.
The Company reported NAV at 29 February 2020 of $7.17 million
(1.32 US cents per share), a decrease of $172,000 (0.03 US cents
per share) caused mainly by Foreign Currency Translation
differences, compared to $7.34 million (1.35 US cents per share) at
28 February 2019. NAV is underpinned by the following material
components:
- Investment Property at fair value of $2.5 million included in
property, plant and equipment,
- Investment in Radar at $1.74 million (net of minority interests),
- Listed Marketable Securities at fair value of $577,000,
- Cash and cash equivalents of $2.3 million, of which $1.4
million was held outside Zimbabwe at 29 February 2020 and $632,000
covered by the RBZ's commitment to honour Paynet Zimbabwe's Legacy
Foreign Debt at ZWL1.00:USD1.00. On 25 May a further amount of
$100,000 was transferred against funds deposited with the RBZ at
parity to Payserv Africa, our wholly owned subsidiary in Mauritius
,
- Liabilities include Loans and Borrowings of $517,000 of which
$467,000 is owed to Cambria's majority shareholder, Ventures Africa
Ltd (VAL). VAL's ultimate beneficial owner is Cambria's CEO, Mr
Samir Shasha.
Radar - Fair Value Adjustment:
On 28 February 2020, the Company's wholly owned subsidiary
Paynet Zimbabwe (Pvt) Ltd (Paynet), increased its effective
shareholding in Radar Holdings Limited (Radar) to 9.74% from 8.98%
through the subscription for additional shares in AF Philip &
Company (Pvt) Ltd (AF Philip) . The Radar investment is held
through Paynet's 78.2% (HY 2019: 72.07%) interest in A F Philip. AF
Philip holds a 15.65% interest in Hinshaw (Pvt) Ltd (Hinshaw)
which, through its wholly owned subsidiaries, holds a 79.65%
interest in Radar.
Subsequent to the end of the Period, Cambria accepted an offer
by Mangwana Capital for the disposal of AF Philip's entire interest
in Hinshaw at an effective offer price of USD 35 cents per Radar
share (the Offer). The acceptance of the Offer was subject to a
pre-emptive process affording other Hinshaw shareholders the right
to match the Offer. While AF Philip awaited the 30-day period
prescribed by the Hinshaw's shareholders' agreement, Mangwana
Capital withdrew its offer, reportedly because of a dispute arising
with another Hinshaw shareholder which Mangwana Capital expected
would honor a commitment to sell its shares to Mangwana Capital at
a previously agreed lower price. It's noted that in attempting to
enforce its pre-emptive rights, the Company failed to convince the
Arbitrator, Retired Justice Chinhengo, that such an offer
existed.
AF Philip is consolidated into Cambria's Statement of Financial
Position with the Radar investment reflected at a fair value of
$2.23 million ($1.74 million after minority interests) translating
into 35 US cents per Radar share, down from 40 US cents reported at
31 August 2019 following a re-assessment by the Board of the
carrying value of the Radar investment in light of the Offer. The
resultant Fair Value Adjustment of $318,000 ($229,000 net of
minority interests) has been included in the Consolidated Income
Statement for the Period and disclosed under Exceptional Item. The
Radar Fair Value Adjustment has been countered by a $307,000 gain
on our marketable securities included in Other Income, of which
$93,000 were realised during the Period.
Divisional Review
Payserv Africa Group
6 Months ended 29 February
(US$ '000) H Y 2020 HY 2019 Change
------------------------------------ --------- -------- -------
Revenues 564 3,668 (85%)
------------------------------------ --------- -------- -------
Gross profit 410 3,383 (88%)
Gross margin 73% 92% (19%)
Overheads (230) (1,336) (83%)
------------------------------------ --------- -------- -------
EBITDA 180 2,047 (91%)
==================================== ========= ======== =======
Profit before interest and tax 111 1,898 (94%)
Interest (11) 9 ($20)
------------------------------------ --------- -------- -------
Profit before tax 100 1,907 (95%)
------------------------------------ --------- -------- -------
Profit after tax 53 1,510 (96%)
------------------------------------ --------- -------- -------
PAT (excluding minority interests) 122 1,070 (89%)
==================================== ========= ======== =======
Payserv's revenues decreased by 85% to $564,000 from $3.67
million in HY 2019 as a result of the suspension of Paynet's
services and the currency devaluation following the introduction of
ZWL as Zimbabwe's new functional currency. Consolidated EBITDA
decreased by 91% to $180,000 from $2.05 million in HY 2019. PBT
decreased by 95% to $100,000 from $1.91 million and consolidated
PAT decreased by 97% to $53,000 from $1.51 million in HY 2019.
Payserv continues to focus its efforts to identify alternative
revenue streams, containing its overheads and rebuilding its
business through the development of new FinTech initiatives using
its current and new technologies.
Paynet Zimbabwe
Paynet Zimbabwe suspended its services to Zimbabwe's Banks on 10
June 2019 resulting in a significant reduction in revenues. No
transactions are currently being processed for Paynet's historic
portfolio of bank clients while 14.4 million EDI transactions were
facilitated by Paynet during the first half of the 2019 Fiscal
Year.
Paynet Zimbabwe concluded a fee-sharing arrangement with EcoCash
Zimbabwe for the use of bulk payment software developed by Payserv
Africa in FY 2019. EcoCash is the largest mobile solutions operator
in Zimbabwe by a dominant margin. Subsequent to the end of the
Period, Paynet has initiated the termination of this relationship.
More details appear in the Subsequent Events section below.
Paynet's software was used by merchants to distribute salaries and
initiate payments to other merchants through Ecocash, the mobile
money solution provider. While we expected revenues to grow through
this fee-sharing arrangement, the arrangement has failed to deliver
the initially anticipated revenues. The termination is not expected
to have a material impact on the Company's future earnings.
Paynet has developed a number of exciting technologies and
solutions which are being positioned for additional markets in
Zimbabwe and regionally.
Autopay Zimbabwe
Autopay is a leading payroll management business offering 1) a
full-service Payroll Bureau; 2) Software and licensing of payroll
and HR Products to major corporates and; 3) Online SME payroll
processing.
Autopay traded profitably during HY 2020 and continues the
realignment of its strategy to increase its penetration into the
SME market. The number of payslips processed decreased 10.18% to
170,665 from 190,000 in HY 2019.
Autopay's existing agency agreement with Paywell SA will
terminate from July 2020. In accordance with its Paywell Software
License Agreement, Autopay's Paywell licenses will continue to be
active for 12 months until end December 2020. Unless the Company
renews its license with Paywell for the operation of its salary
bureau, it will source or develop an alternative platform to
migrate its significant client base from the Paywell platform.
Tradanet (51% owned)
Tradanet provides proprietary loan processing and management
software for Zimbabwe's largest Building Society CABS. It also
provides hosted loan management solutions for emerging microfinance
entities.
Tradanet loan volumes increased in ZWL terms to ZWL 72 million
from ZWL 49.9 million in the same period in 2019, whilst the number
of loans processed decreased to by 10% to 386,000 from 431,000. The
loan book increased to ZWL 265 million from ZWL 186 million in HY
2019.
Tradanet aims to continue its defensive approach with the
objective of breaking even and re-establishing a base from which to
grow its revenues and profitability capitalising on its meaningful
product portfolio and relationship with CABS.
Millchem Zimbabwe
6 Months ended 29 February
(US$ '000) HY 2020 HY 2019 Change
---------------------------- -------- -------- -------
Revenues 742 719 3%
---------------------------- -------- -------- -------
Gross profit 241 238 1%
Gross margin 32% 33% (1%)
Overheads (56) (126) (56%)
---------------------------- -------- -------- -------
EBITDA 185 112 65%
---------------------------- -------- -------- -------
PBT 178 117* 52%
---------------------------- -------- -------- -------
PAT 150 117* 28%
============================ ======== ======== =======
* Reported PAT for HY 2019 was $210,000 which included a
once-off reversal of an inventory provision amounting to $93,000,
excluded here for purposes of comparison.
Millchem had commendable performance for the Period, recording a
28% increase in normalised PAT to $150,000 from $117,000 for HY
2019 with:
-- $742,000 in revenues, an increase of 3%,
-- 32% gross profit margin, a 1% decrease from 33% gross profit margin in HY 2019,
-- 65% increase in EBITDA to $185,000 from $112,000 in HY 2019,
-- 56% reduction in overheads to $56,000 from $126,000 in HY 2019.
Basis of Presentation and Foreign Currency Translation
The Consolidated Financial Statements are presented in US
Dollars (USD), the Group's presentational currency. All the
Company's Zimbabwe subsidiaries have adopted the US Dollar as
presentation currency with Zimbabwe 's Dollar (ZWL) as the
functional currency. In translating the results of its Zimbabwe
subsidiaries from functional (ZWL) to presentation currency (USD),
the Company applied IAS 21 - Effects of Changes in Foreign Exchange
Rates and IAS 29 - Financial Reporting in Hyperinflationary
Economies.
All ZWL transactions for the Period were adjusted for
Hyperinflationary conditions in accordance with IAS 29 before
translation at the official interbank rate at the 29 February 2020.
At 29 February 2020, all monetary ZWL asset and liability balances
of its Zimbabwe subsidiaries were converted at the closing
interbank rate with the exception of $632,000 in monetary assets
covered by the Reserve Bank of Zimbabwe (RBZ)'s commitment to
honour "Legacy Foreign Debts" originating before 22 February 2019
(when ZWL was introduced) at parity. Non-monetary assets were
recorded at their original historical USD cost after considering
the applicable provisions of IAS 29.
Net monetary gains or losses were not material and have been
included directly in reserves. Resultant foreign exchange
translation differences were accounted for through the foreign
currency translation reserve in the Statement of Other
Comprehensive Income reflecting a foreign currency translation
adjustment (loss) of $256,000 attributable to Cambria.
The interbank rate has decreased from ZWL10.71:USD1:00 at the
end of the Company's financial year ended 31 August 2019 to
ZWL17.94:USD1:00 at 29 February 2020. At this writing, the
interbank rate stands at ZWL25.00 against the USD.
Subsequent Events
Termination of Bulk Payment Services to EcoCash
A dispute over limits between the RBZ and EcoCash, Zimbabwe's
largest mobile payment solution provider, has adversely impacted
the Company's bulk payment operations through EcoCash. However,
given the impact of hyperinflation on maximum transaction revenues
derived from the commercial arrangement with EcoCash, the Company
does not anticipate a major impact on its revenues.
As directed by the RBZ, EcoCash has with effect from 27 May
2020, prevented access to all bulk accounts transacting over ZWL
100,000 per month (USD $4,000 at the fixed rate of 25:1). Despite
being a member in good standing of the RBZ National Payment
Services, EcoCash felt compelled to apply the RBZ directive to
Paynet and closed access to its EcoCash bulk payment accounts.
These accounts were used for funding corporate salary payments to
nearly 15,000 recipients with an average value of ZWL 1,279 (USD
$51) per transaction. No single recipient received more than the
RBZ stipulated limit of ZWL 10,000 (USD $400) in any one day and
only 82 recipients received over ZWL 10,000 through multiple
payments in the month of April 2020. The maximum cumulative payment
received by any individual recipient was ZWL 89,750 (USD $3,950)
and the average cumulative payment to any of the 82 individuals
receiving a salary of greater than ZWL 10,000 was ZWL 21,716 (USD
$869).
The Company has found itself with no choice but to withdraw
EcoCash payment services to clients served through the bulk account
dedicated to it by EcoCash for this service. Client funds of ZWL
1.6 million (USD $64,000) remain in EcoCash's Trust account at
Steward Bank. Paynet has requested the assistance of Steward Bank
and EcoCash to either return these funds to its clients or enable
Paynet to finish funding the mobile wallets of the intended
recipients.
Paynet also provides EcoCash clients, holding their own bulk
payment accounts, with proprietary software allowing them to
directly interact with these accounts to process bulk payments.
EcoCash clients whose access to bulk payment accounts has not been
closed, are able to continue using Paynet's standalone software to
manage their bulk payments.
The impact of lost revenue from this withdrawal will not
materially affect the Company's earnings. Over the last three
months, at the official fixed rate of 25:1, Paynet earned an
average monthly gross revenue of USD $2,400 in fees from its
EcoCash activities. While Paynet held high hopes for recovering its
market presence through EcoCash, the potential liability and
reputational risk outweigh any potential for improved commercial
optics. The Directors of Payserv Zimbabwe, the parent company of
Paynet Zimbabwe, believe there is cause under the signed agreement
with EcoCash to give notice of termination and have instructed
Paynet's management to do so.
Radar - Rescinded Offer
On 14 April 2020 Cambria accepted an offer by Mangwana Capital,
a Zimbabwe private equity firm led by Mr Ted Galante, for the
disposal of AF Philip's entire interest in Hinshaw. This offer was
at an effective offer price of USD 35 cents per Radar share (the
Offer). As prescribed by the Hinshaw Shareholders Agreement, the
acceptance of the Offer was subject to a pre-emptive process
affording other Hinshaw shareholders the right to match the Offer.
Mangwana Capital unexpectedly rescinded the offer prior to the
expiry of the pre-emptive rights of other shareholders to match
Mangwana Capital's offer.
Legacy Debts
On 18 May 2020, following constructive engagement with the RBZ,
Governor Dr. Mangudya issued a revised written commitment to
expunge Paynet's remaining Legacy debts of $632,000 by 31 July
2020. Of this, $100,000 was successfully transferred on 25 May 2020
at parity to the USD. A further $150,000 is to be settled by 31 May
2020, $250,000 by 30 June 2020 and the balance by 31 July 2020.
Legacy debts or Blocked Funds are debts which were owed by Zimbabwe
companies prior to abolishing the US Dollar as the country's
functional currency. The RBZ has committed to provide foreign
currency for these debts at parity to the US Dollar.
Changes to the board:
The Cambria board remains unchanged.
About Cambria Africa Plc:
Cambria Africa Plc (AIM: CMB), is an AIM listed investment
company holding controlling interests and active management control
in companies well-positioned to benefit from a turnaround and
modernisation of Zimbabwe's economy. Its wholly owned operations in
Zimbabwe are:
-- Payserv Africa, a FinTech company. Payserv's Paynet Zimbabwe
subsidiary has a proven track record of offering secure
transactions to financial institutions and MNO's. Paynet also cuts
a wide swath in Zimbabwe's payroll management and consumer loan
processing markets. Payserv's objective is to leverage its
technology platforms to exploit opportunities which arise from
FinTech disruptions.
-- Millchem Zimbabwe is a value-added chemicals distributor. The
company is currently focused on ethanol-based solvents due to the
significant local availability of ethanol. Millchem continues to
trade profitability following the successful implementation of
Cambria's turnaround program.
Contacts
Cambria Africa Plc www.cambriaafrica.com
Samir Shasha +44 (0)20 3287 8814
WH Ireland Limited www.wh-ireland.co.uk
James Joyce / Matthew Chan +44 (0) 20 7220 1666
Chief Executive's Report
While Cambria managed to preserve its Balance Sheet and
breakeven during the six months ended 29 February 2020, we realise
the importance of rebuilding our subsidiaries to meaningful
profitability.
Macroeconomic conditions in Zimbabwe have deteriorated
significantly since the last reporting period with the interbank
rate falling against the US dollar from ZWL 10.71 at the end of 31
August 2019 to ZWL 17.94 on 29 February 2020. The interbank rate of
the US dollar is now fixed at ZWL 25.00 while parallel market rates
are reported at above ZWL 60.
Zimbabwe has not been spared by the economic impact of COVID-19.
The country is exposed to elevated economic risks given its
depleted infrastructure and impaired fiscal position. Both our
subsidiaries are considered essential services and have been
allowed to operate through the lockdown periods. The Company, while
strictly apolitical, is concerned that Zimbabwe has been left out
from G-20 debt forgiveness initiatives in response to the COVID-19
pandemic.
Millchem: In response to COVID-19, Millchem has successfully
commenced production of hand sanitizers in a joint venture with
Merken (Pvt) Ltd . Merken will package and market the sanitizers
through its retail distribution network. Millchem aims to become a
meaningful producer of disinfection products and to participate in
tenders for their production and distribution in Zimbabwe and the
region, while continuing to supply value-added chemicals to
industry.
Paynet remains the only encrypted, interbank bulk payment and
clearing solution in Zimbabwe. Up to 27 May, Paynet's clients could
only use this service through EcoCash. While we expected to grow
with EcoCash, the country's largest mobile payments operator, the
growth has not met expectations and following the dispute between
RBZ and EcoCash resulting in EcoCash preventing access to our bulk
accounts, we decided to initiate termination of the current EcoCash
arrangement. Meaningful bulk salary and merchant payments face
significant obstruction from traditional players and the limits
imposed by the National Payment Services of the Reserve Bank of
Zimbabwe. This has meant that mobile payments cannot match the
unlimited payments allowed through the banking system, despite
availability of granular sender and recipient details. The entire
national payment system has experienced a significant drop in
transaction revenues since lockdown began in Zimbabwe at the end of
March 2020.
Despite these setbacks, Paynet has developed a number of
exciting technologies and solutions which we believe can find
additional markets in Zimbabwe and regionally. Recent changes to
payment regulations in Zimbabwe may provide additional
opportunities for Paynet's suite of FinTech software.
AutoPay continues to provide full-service payroll processing for
the largest companies in Zimbabwe. Our charges are expressed as a
percentage of clients' payroll, to reduce the impact of inflation
and currency devaluation on our revenue stream. AutoPay is now
Paynet Zimbabwe's largest revenue contributor.
Tradanet , the 51% owned subsidiary of Paynet, continues to
provide consumer loan processing services to CABS - Zimbabwe's
largest building society owned by Old Mutual. Whilst our revenues
and earnings are negligible, any turnaround in consumer buying
power, in particular an increase in government salaries, will have
a direct positive impact on our earnings.
Legacy Debts:
I'm very pleased that constructive discussions with the Dr. John
Mangudya, the Governor of the Reserve Bank of Zimbabwe (RBZ)
continue to prove successful in funding the external debts of
Paynet Zimbabwe at parity to the US Dollar.
By way of background, in March 2019 the Governor committed the
RBZ to expunge USD $1.2 million of Paynet Zimbabwe's prior debts to
external creditors, including Cambria Subsidiaries. This was to be
funded at parity to the local currency by September 2019. As of the
end of this reporting period, USD $632,000 in external debts
remained outstanding and progress on the repayment had stalled. I
am pleased to report that on 18 May 2020 Governor Mangudya
reconfirmed in writing the commitment to expunge the remaining
Legacy debts by 31 July 2020. Further, almost immediately
thereafter USD $100,000 was funded. A further USD $150,000 is
expected to be settled by 31 May 2020.
The RBZ has registered a further US$1.3 million in legacy debts
due to Cambria from its other local subsidiaries. Unlike the
exceptional case of Paynet's external debts, these debts like those
of most corporations in Zimbabwe, have no specific time
commitment.
Outlook:
The circumstances in Zimbabwe remain fluid. The onset of the
COVID-19 pandemic which has stalled the global economy, has
exacerbated the challenges our subsidiaries face. As new policies
are introduced with increasing frequency, the Company has to
continually adjust its outlook and strategy. Our chemicals
business, Millchem responded positively, producing hand sanitizers
and is actively looking to expand its disinfection business. This
should have a positive impact on Millchem's profitability in the
second half of FY 2020, but we remain mindful of the competition in
this segment.
We continue to develop financial technologies which are designed
to ease payments. However, until there is a realistic market
translation of ZWL income into repatriated US dollars earnings, the
resultant earnings from financial services will remain exposed to
currency devaluation.
Any excess cash from our local operations will be considered for
investment in select blue-chip marketable securities, the prices of
which have been significantly discounted following recent market
turmoil, whilst offering an attractive liquidity profile.
The utilisation of our internal cash resources is limited to
keeping our operations, which are all locally profitable, afloat
and prepared for a turnaround. Allocation of our external cash
resources depends on realistic prospects to pursue profitable
opportunities and remit those returns. As with any dislocation,
opportunities may present themselves and so will concomitant
risks.
Cambria has cash and perhaps the best asset in these times is
cash. We are actively looking for opportunities to deploy our cash
in the context of dislocations and ethical investments. I
personally believe we will be able to identify these opportunities
and seize them quicker than others due to our cash position.
Samir Shasha
Chief Executive Officer
29 May 2020
Cambria Africa Plc
Interim consolidated income statement
For the six-month period ended 29 February 2020
Unaudited Unaudited Audited
6 months 6 months
to to Year to
29-Feb-20 28-Feb-19 31-Aug-19
US$'000 USS'000 US$'000
------------------------------------- ---------- ---------- ----------
Revenue 1,306 4,387 4,996
Cost of sales (655) (766) (983)
------------------------------------- ---------- ---------- ----------
Gross profit 651 3,621 4,013
Operating costs (555) (1,579) (2,155)
Other income 368 20 66
Exceptional item - Radar Fair Value
Adjustment (318) 3 (72)
------------------------------------- ---------- ---------- ----------
Operating profit 146 2,065 1,852
Finance income 1 12 11
Finance costs (35) (24) (51)
Net finance costs (34) (12) (40)
------------------------------------- ---------- ---------- ----------
Profit before tax 112 2,053 1,812
Income tax (76) (397) (150)
------------------------------------- ---------- ---------- ----------
Profit for the Period 36 1,656 1,662
===================================== ========== ========== ==========
Attributable to:
Owners of the company 105 1,482 1,405
Non-controlling Interests (69) 174 257
Profit for the year 36 1,656 1,662
===================================== ========== ========== ==========
Earnings/(loss) per share
Basic and diluted earnings/(loss)
per share (cents) 0.02c 0.27c 0.26c
Weighted average number of shares
for EPS ('000) 544,576 544,576 544,576
Cambria Africa Plc
Interim consolidated statement of comprehensive income
For the six-month period ended 29 February 2020
Unaudited Unaudited Audited
6 months 6 months
to to Year to
29-Feb-20 28-Feb-19 31-Aug-19
US$'000 USS'000 US$'000
------------------------------------------ ---------- ---------- ----------
Profit / (loss) for the year 36 1,656 1,662
Other comprehensive income
Items that will not be reclassified
to income statement:
Increase in investment in subsidiary
- impact on equity (72) - (164)
Foreign currency translation differences
for overseas operations (256) 107 251
Foreign currency translation impact
on non-controlling interests - (330) -
Total comprehensive profit / (loss)
for the year (292) 1,433 1,749
========================================== ========== ========== ==========
Attributable to:
Owners (223) 1,589 1,492
Non-controlling interests (69) (156) 257
Total comprehensive profit / (loss)
for the year (292) 1,433 1,749
========================================== ========== ========== ==========
Cambria Africa Plc
Interim consolidated statement of financial position
As at 29 February 2020
Unaudited Unaudited Audited
Group Group Group
29-Feb-20 28-Feb-19 31-Aug-19
US$'000 US$'000 US$'000
-------------------------------------------- ---------- ---------- ----------
Property, plant and equipment 2,680 2,632 2,757
Goodwill 717 717 717
Intangible assets 1 7 2
Investments in subsidiaries and associates 2,228 2,341 2,546
Total non-current assets 5,626 5,697 6,022
--------------------------------------------- ---------- ---------- ----------
Inventories 134 277 286
Financial assets at fair value through
profit and loss 577 141 496
Trade and other receivables 191 490 481
Cash and cash equivalents 2,328 2,880 1,920
Assets for discontinued operation - 1 -
Total current assets 3,230 3,789 3,183
--------------------------------------------- ---------- ---------- ----------
Total assets 8,856 9,486 9,205
============================================= ========== ========== ==========
Equity
Issued share capital 77 77 77
Share premium account 88,459 88,459 88,459
Revaluation reserve - 602 -
Share based payment reserve - - -
Foreign exchange reserve (10,502) (10,538) (10,251)
Non- distributable reserves 2,371 2,371 2,371
Retained losses (73,233) (73,627) (73,266)
--------------------------------------------- ---------- ---------- ----------
Equity attributable to owners of the
company 7,172 7,344 7,390
Non-controlling interests 507 511 747
Total equity 7,679 7,855 8,137
============================================= ========== ========== ==========
Liabilities
Loans and borrowing 7 - 49
Trade and other payables 29 98 18
Provisions 12 34 8
Deferred tax liabilities 215 89 204
Total non-current liabilities 263 221 279
--------------------------------------------- ---------- ---------- ----------
Current tax liabilities 56 177 24
Loans and borrowings 510 428 503
Trade and other payables 348 785 262
Liabilities for discontinued operation - 20 -
-------------------------------------------- ---------- ---------- ----------
Total current liabilities 914 1,410 789
--------------------------------------------- ---------- ---------- ----------
Total liabilities 1,177 1,631 1,068
============================================= ========== ========== ==========
Total equity and liabilities 8,856 9,486 9,205
============================================= ========== ========== ==========
Cambria Africa Plc
Interim consolidated statement of changes in equity
For the six-month period ended 29 February 2020
Foreign
Share Share Revaluation Exchange Retained Non-controlling
US$'000 Capital Premium Reserve Reserve Earnings NDR Total Interest Total
------------------ -------- -------- ------------ --------- --------- ------ ------ ---------------- ------
Balance at 31
August 2018 77 88,459 602 (10,645) (75,109) 2,371 5,755 991 6,746
Profit for the
period - - - - 1,482 - 1,482 174 1,656
Foreign currency
translation
differences
for overseas
operations - - - 107 - - 107 - 107
Foreign currency
translation
differences
for overseas
operations - NCI - - - - - - - (330) (330)
-------- -------- ------------ --------- --------- ------ ------ ---------------- ------
Total
comprehensive
profit for the
period - - - 107 1,482 - 1,589 (156) 1,433
-------- -------- ------------ --------- --------- ------ ------ ---------------- ------
Contributions
by/distributions
to
owners of the
Company
recognised
directly in
equity
Dividends paid to
minorities - - - - - - - (164) (164)
NCI on further
investment in A F
Philip & Company - - - - - - - (160) (160)
-------- -------- ------------ --------- --------- ------ ------ ---------------- ------
Total
contributions by
and distributions
to owners of the
Company - - - - - - - (324) (324)
Balance at 28
February 2019 77 88,459 602 (10,538) (73,627) 2,371 7,344 511 7,855
=================== ======== ======== ============ ========= ========= ====== ====== ================ ======
Foreign
Share Share Revaluation Exchange Retained Non-controlling
US$'000 Capital Premium Reserve Reserve Earnings NDR Total Interest Total
------------------ -------- -------- ------------ --------- --------- ------ ------ ---------------- ------
Balance at 1
September 2018 77 88,459 602 (10,645) (75,109) 2,371 5,755 991 6,746
-------- -------- ------------ --------- --------- ------ ------ ---------------- ------
Profit for the
period - - - - 1,405 - 1405, 257 1,662
Increase in
investment in
subsidiary
- impact on
equity - - - - (164) (164) (235) (399)
Transfer between
reserves - IAS 29
application - - (602) - 602 - - - -
Foreign currency
translation
differences
for overseas
operations - - - 251 - - 251 - 251
Foreign currency
translation
differences
for overseas
operations - NCI - - - 143 - - 143 (143) -
-------- -------- ------------ --------- --------- ------ ------ ---------------- ------
Total
comprehensive
profit for the
year - - (602) 394 1,843 - 1,635 (121) 1,514
Contributions
by/distributions
to
owners of the
Company
recognised
directly in
equity -
Dividends paid to
minorities - - - - - - - (123) (123)
Total
contributions by
and distributions
to owners of the
Company - - - - - - - (123) (123)
Balance at 31
August 2019 77 88,459 - (10,251) (73,266) 2,371 7,390 747 8,137
=================== ======== ======== ============ ========= ========= ====== ====== ================ ======
Foreign
Share Share Revaluation Exchange Retained Non-controlling
US$'000 Capital Premium Reserve Reserve Earnings NDR Total Interest Total
------------------ -------- -------- ------------ --------- --------- ------ ------ ---------------- ------
Balance at 1
September 2019 77 88,459 - (10,251) (73,266) 2,371 7,390 747 8,137
Profit for the
period - - - - 105 - 105 (69) 36
Increase in
investment in
subsidiary
- impact on
equity - - - - (72) - (72) (136) (208)
Foreign currency
translation
differences
for overseas
operations - - - (256) - - (256) - (256)
Foreign currency
translation
differences
for overseas
operations - NCI - - - 5 - - 5 (5) -
-------- -------- ------------ --------- --------- ------ ------ ---------------- ------
Total
comprehensive
loss for the
year - - - (251) 33 - (218) (210) (428)
Contributions
by/distributions
to
owners of the
Company
recognised
directly in
equity -
Dividends paid to
minorities - - - - - - - (30) (30)
Total
contributions by
and distributions
to owners of the
Company - - - - - - - (30) (30)
Balance at 29
February 2020 77 88,459 - (10,502) (73,233) 2,371 7,172 507 7,679
=================== ======== ======== ============ ========= ========= ====== ====== ================ ======
Cambria Africa Plc
Interim consolidated statement of cash flows
For the six-month period ended 29 February 2020
Unaudited Unaudited Audited
6 months 6 months
to to Year to
29-Feb-20 28-Feb-19 31-Aug-19
USS'000 USS'000 USS'000
---------------------------------------------- ---------- ---------- ----------
Cash generated from operations 758 769 70
Taxation paid (33) (255) (621)
----------------------------------------------- ---------- ---------- ----------
Cash generated from operating activities 725 514 (551)
----------------------------------------------- ---------- ---------- ----------
Cash flows from investing activities
Proceeds on disposal of property,
plant and equipment 55 28 53
Purchase of property, plant and equipment - (5) (18)
Net proceeds on disposal of marketable
securities 227 - -
Other investing activities (210) (400) (844)
Interest received 1 12 11
----------------------------------------------- ---------- ---------- ----------
Net cash from/(used in) investing
activities 73 (365) (798)
----------------------------------------------- ---------- ---------- ----------
Cash flows from financing activities
Dividends paid to non-controlling
interests (30) (164) (123)
Interest paid (35) (4) (51)
Loans repaid (69) (191) (277)
Proceeds from drawdown of loans - - 210
----------------------------------------------- ---------- ---------- ----------
Net cash (utilised)/generated by financing
activities (134) (359) (241)
----------------------------------------------- ---------- ---------- ----------
Net (decrease)/increase in cash and
cash equivalents 664 (210) (1,590)
Cash and cash equivalents at the beginning
of the Period 1,920 3,259 3,259
Foreign exchange (256) (169) 251
Net cash and cash equivalents at the
end of the period 2,328 2,880 1,920
=============================================== ========== ========== ==========
Cash and cash equivalents as above
comprise the following
Cash and cash equivalents attributable
to continuing operations 2,328 2,880 1,920
Net cash and cash equivalents at the
end of the period 2,328 2,880 1,920
=============================================== ========== ========== ==========
Cambria Africa Plc
Notes to the interim consolidated financial statements
1. Reporting Entity
Cambria Africa Plc is a public limited company which is quoted
on the AIM London Stock Exchange and is incorporated in the Isle of
Man under the Isle of Man Companies Act 2006.
2. Basis of preparation
The condensed interim consolidated financial information for the
six months ended 29 February 2020 has been prepared in accordance
with the accounting policies that are expected to be adopted in the
Group's full financial statements for the year ending 31 August
2020 and are not expected to be significantly different to those
set out in the Group's audited financial statements for the year
ended 31 August 2019.
The financial information for the half years ended 29 February
2020 and 28 February 2019 are neither audited nor reviewed.They do
not include all of the information normally required for full
annual financial statements and should be read in conjunction with
the consolidated financial statements of the Group as at and for
the period ended 31 August 2019, which are available upon request
from the Company's registered office at Peregrine Corporate
Services Ltd, Burleigh Manor, Peel Road, Douglas, Isle of Man IM1
5EP or at www.cambriaafrica.com .
After making enquiries, the directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing these condensed interim consolidated financial
statements.
3. Note to the cash flow statement
Unaudited Unaudited Audited
6 months 6 months
to to Year to
29-Feb-20 28-Feb-19 31-Aug-19
US$'000 US$'000 US$'000
--------------------------------------- ---------- ---------- ----------
Profit for the Period 36 1,656 1,662
Adjusted for:
Amortisation of intangible assets 1 7 14
Depreciation of property, plant and
equipment 75 91 181
Loss/(Profit) on sale of property,
plant and equipment - (6) (28)
Loss/(Profit) on sale of marketable
securities (93) - -
Fair value adjustment of investments
through Profit and Loss 86 (10) 78
Finance income (1) (12) (11)
Finance expense 35 24 51
Increase/(decrease) in provisions 4 (154) (180)
Income tax charge 76 397 150
---------------------------------------- ---------- ---------- ----------
Operating cash flows before movements
in working capital 219 1,993 1,917
Net working capital movement 539 (1,224) (1,847)
Decrease/(increase) in inventories 152 (34) (43)
Decrease/(increase) in trade and
other receivables 290 353 362
Increase/(decrease) in trade and
other payables 97 (1,543) (2,166)
---------- ---------- ----------
Cash from operations 758 769 70
======================================== ========== ========== ==========
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR SEWFIUESSEFI
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