Anglo African Ag PLC Update on business and corporate activities
05 September 2018 - 6:43PM
UK Regulatory
TIDMAAAP
5 September 2018 For Immediate Release
Anglo African Agriculture plc
("AAAP" or the "Company")
Update on business and corporate activities.
Highlights:
Dynamic Intertrade - 100% owned Southern African spice business update
* 3rd Quarter ending 31 July 2018 revenue in food manufacturing increases
year on year by 14.8% to South African Rand 11,152m (from R9.713m)
* Tonnage of product sold increased by 11.34% to 321 tonnes 3Q 2018 vs 3Q
2017.
Kenya Port - Proposed loan facility, as announced on 30 August 2018
* Progress made on finalising loan to be made, subject to the raising of
necessary finance and fulfilment of final conditions precedent, to Comarco
port in Kenya.
* Comarco trading positively
+ has signed contracts with global oil and gas major ENI to provide
storage, handling and offshore drilling support services for 2 years
with annual extensions thereafter.
+ has secured extensions for existing supply base tenants, including
Marubeni Itochu, Halliburton, BGP and Exalo Drilling.
+ Iron ore shipments have commenced. Iron ore port handling contracts now
in place for over 1,000,000 of iron ore movement, with further optional
extensions of 1,000,000 tonnes.
+ has signed a 10 year renewable contract with a major LPG distributor to
provide space, mooring and throughput access. Ground is to be broken in
September 2018.
David Lenigas, Chairman of AAAP, comments; "We are seeing a good uptrend in
business activities from our core food manufacturing business in South Africa.
The Company also believed it was important to update shareholders on Comarco's
business activities in recent months. The Comarco commentary is important as,
as announced on 30 August 2018, the Company is considering a secured loan to
Comarco that, if closed, will be secured by a number of the port's assets. A
strong Comarco provides a much better level of security for the proposed loan."
Anglo African Agriculture plc (LSE: AAAP), the London Main Board listed company
trading under the ticker symbol AAAP:LN, is pleased to provide the following
update on its 100% owned Dynamic Intertrade (Pty) Limited ("Dynamic") spices
and seasoning manufacturing business and a general update on the proposed loan
facility to be provided to the Comarco port in Kenya in recent months.
Update on South African food manufacturing business
Dynamic has achieved a solid growth in 3rd quarter volumes and revenues for the
quarter ending 31 July 2018. Sales for the quarter are up 14.8% in South
African Rand terms from R9.713m (GBP0.575) to R11.152m (GBP0.641). In
addition, gross margins have increased due to better buying and an increase in
efficiencies. Volumes increased from 288 tonnes to 321 tonnes. Dynamic has
increased its sales force by 3 sales people and anticipates delivering better
performances over the next period. Dynamic had previously announced that new
equipment purchased would reduce the cost structure, and this is evident in the
increased margins. With that said, the underlying ingredients of the spice
blends manufactured and sold by Dynamic are commodities and are subject to
price fluctuations. Dynamic is continually expanding its product range and,
working with AAAP's 46.8% owned subsidiary, Dynamic Intertrade Agri (Pty) Ltd,
has just sold its first 20 tonnes of sugar.
Turning to management, Ronel Putter and Dave Ransom were appointed to the board
of Dynamic Intertrade in South Africa as Financial and Sales director
respectively.
Dynamic is based in a modern 3,000 m² FSSC compliant facility in Cape Town,
South Africa and is involved in the importation, milling, blending and
packaging of food products for the food manufacturing sector with bespoke lines
that include herbs, spices, additives and seasonings for both the domestic and
export markets.
Update on Comarco Group
As announced on 30 August 2018, the Company has entered into a Memorandum of
Understanding whereby it is proposed, subject to funding, that AAAP will
provide a 24 month loan to help fund the growth of the privately owned port and
marine logistics group, Comarco Group, based in Mombasa, Kenya. All proposed
transactions between the Comarco Group and AAAP are subject to the completion
of due diligence, the completion of legal documentation and the production of
such valuations and opinions as the company shall consider appropriate, in each
case satisfactory to AAAP in its sole discretion and subject to board approval.
This is intended to be the first step of a diversification for AAAP, which the
Directors believe will allow the Company to significantly grow its business.
During this calendar year, the Comarco Group has secured some new contracts and
re-signed most of their existing major port clients. In January 2018 Comarco
signed a contract with global oil major ENI to provide storage, handling and
offshore drilling support services for two years with annual extensions
thereafter. It also signed extensions for existing port tenants, including
Marubeni Itochu, Halliburton, BGP and Exalo Drilling. During the year a
handling and export contract of 1,000,000 tonnes of iron ore was secured, with
further optional extension of 1,000,000 tonnes, using Comarco barges for
stevedoring the cargo to bulk vessels at anchorage. Comarco has already moved
110,000 tonnes of iron ore to date. In June 2018 Comarco signed an additional
contract for the handling and export of a further 200,000 tonnes of iron ore to
be completed before December 2018.
In May 2018, Comarco signed a 10 year renewable contract with a major LPG
distributor to provide space, mooring and throughput access. Ground is to be
broken in September 2018.
Importantly, Comarco received confirmation in June 2018 of the extension of its
stevedoring licence issued by the Kenya Government to operate the Comarco port
on a private basis. The Comarco port is the only privately licensed facility in
East Africa properly authorised to handle bulk, breakbulk and project cargoes.
The port is also in final contract negotiations with a large multinational to
provide storage, handling and transport services of cargoes for the UN to East
Africa.
For further information please contact:
Anglo African Agriculture plc +44 (0) 20 7440 0640
David Lenigas, Non-Executive Chairman
Rob Scott, Executive Director +27 (0) 84 600 6001
VSA Capital Limited (Financial Adviser and +44 (0) 20 3005 5000
Corporate Broker)
Andrew Raca
END
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