Cambria Africa PLC Corporate Update (7208D)
11 October 2018 - 7:00PM
UK Regulatory
TIDMCMB
RNS Number : 7208D
Cambria Africa PLC
11 October 2018
Cambria Africa Plc
("Cambria" or the "Company")
Cambria Reacts to Parallel Market Developments in Zimbabwe
A number of events have occurred in Zimbabwe which may
negatively impact Cambria's future earnings. The Reserve Bank of
Zimbabwe has assured the public that the multi-currency system
remains in place and that funds in bank accounts remain equivalent
to US dollars. However, the parallel market is reflecting
significant premiums to this rate - rumoured as high as 500%. We
cannot say with certainty what the impact will be on Cambria going
forward but to date our Zimbabwe investments have been able to fund
their foreign obligations at one to one to the US dollar.
Payserv Zimbabwe has been able to remit license fees and loan
repayments to Payserv Africa. The latest payment of US$38,000 was
remitted this week. Payserv Africa holds a US dollar balance in
excess of US$400,000.
Millchem Zimbabwe repaid Cambria Africa Zimbabwe US$500,000,
before the end of the Fiscal Year. This in turn enabled Cambria
Africa Zimbabwe to repay Paynet Zimbabwe US$500,000 strengthening
the balance sheet of these subsidiaries.
Paynet Zimbabwe invested US$1.6 million on 30 August 2018 to
acquire a 7.83% beneficial ownership in Radar Holdings Ltd, an
unlisted public company in Zimbabwe. Radar is literally a "brick
and mortar" company owning a brick manufacturing plant and real
estate holdings, providing a hedge against the possible
deterioration in the purchasing power of cash and cash-equivalents
in Zimbabwe.
At present, subsidiary cash positions in Zimbabwe are equally
balanced with liabilities to entities in Zimbabwe.
Some of the funds in Paynet Zimbabwe have been utilised to
implement a restructuring during July 2018. This process entailed
making certain administrative executives redundant resulting in
minimum savings of $400,000 per annum. These savings are being
invested in recruiting technical staff and developers to improve
Paynet's response to its customers' needs.
Paynet Zimbabwe, Tradanet, and Millchem have all prepaid October
2018 salaries to cushion their employees from price hikes.
Whilst we hope that our bankers and the Reserve Bank of Zimbabwe
will continue to facilitate the external payments for imports to
Millchem, Payserv license fees and repayment of external loans for
Paynet Zimbabwe, we cannot accurately predict the impact of these
significant parallel market developments on our operations and
earnings.
It is important to note that our auditors have to date taken the
position that our earnings, assets and liabilities are fairly
presented in US dollars. Even if this reporting regime continues,
we can assume there will be significant pressure on overhead costs
in the Zimbabwe subsidiaries and central Zimbabwe expenses.
We believe that once the situation stabilises, we should be able
to achieve commensurate increases in revenue through consultation
with our customers. However it is incumbent on us to communicate to
shareholders the risks faced by the Company and the mitigations
being implemented by management to hedge against a possible
impairment of our assets.
The Company remains with significant cash resources of almost
US$1.2 million and low central costs placing it in an enviable
position to take advantage of further acquisition opportunities in
Zimbabwe which it has been actively pursuing. The Company remains
confident that Zimbabwe has the best investment horizon of any
country in Southern Africa.
Contacts
Cambria Africa Plc: www.cambriaafrica.com
Samir Shasha +44 (0) 207 669 0115
Email: info@cambriaafrica.com
WH Ireland Limited: www.wh-ireland.co.uk
James Joyce / Chris Viggor +44 (0) 20 7220 1666
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END
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