TIDMINQO
RNS Number : 5185M
Inqo Investments Limited
11 May 2020
Inqo Investments Limited
COVID-19 Company Portfolio Update
11 May 2020
Inqo Investments Ltd, the Aquis Stock Exchange-listed ('INQO')
social impact investment company today released an update on the
response of their portfolio companies to the COVID-19 pandemic
Inqo is working closely with the management teams in their
portfolio of companies in response to the COVID-19 pandemic. All of
Inqo's portfolio companies serve the most vulnerable communities in
sub Saharan Africa in some way - as such, protecting employees and
customers is a high priority for both Inqo and portfolio company
management at this time. At present, Inqo's focus is on mitigating
risk and contingency planning in support of portfolio companies in
what is a fluid and dynamic situation. Conversations with
prospective portfolio companies are ongoing, but full due diligence
will not be resumed until the COVID-19 situation is resolved.
Kuzuko Lodge (South Africa)
Kuzuko Lodge ('KUZUKO") closed down in early April due to the
lockdown restrictions in South Africa. Prior to the COVID-19
pandemic Kuzuko was performing well with strong bookings in place
for 2020. The COVID-19 pandemic has had a severe effect on the
tourism industry globally and at this stage it is unclear what the
full impact will be. Inqo anticipates that disruption through
travel restrictions and the depression on sales due to economic
downturn will last for a minimum of two years. As such, reductions
in staff numbers at Kuzuko are regrettably inevitable. Inqo and
Kuzuko management are deeply committed to their staff and are
currently working with the operator, Legacy Hotels and Resorts, to
look at ways to support staff during this time. One measure that
has been agreed so far is the provision of a food bank for staff
members and their families which will also help to support Kuzuko's
suppliers.
The reserve management of Kuzuko has been largely unaffected by
the COVID-19 pandemic. The recent emergence of pioneer grasses
across the reserve indicates strong signs of veldt and soil
recovery after many years of historical overgrazing prior to the
formation of Kuzuko. Kuzuko's rewilding program with the Ashia
Cheetah Foundation continues to be a success. To date, Kuzuko have
released five cheetahs (three females and two males) to five
different reserves contributing valuable diversity to the genetics
of the metapopulation. Kuzuko's rewilding program has enabled new
connections in the conservation space leading to a number of
potential new conservation initiatives in the pipeline.
Spekboom Trading (South Africa)
The spekboom thicket restoration at Kuzuko is likely to re-start
once the COVID-19 crisis has passed and restoration work can
commence. A memorandum of understanding is being negotiated with a
leading carbon fund to restore 5,000 hectares of spekboom on the
Kuzuko property in order to generate carbon credits.
There has recently been a renewed interest in the carbon markets
in response to the growing global awareness of the impact of
climate change with nature-based solutions, such as spekboom, being
a high priority. Inqo anticipates scaling up spekboom restoration
activities once the COVID-19 situation has resolved, providing
valuable employment opportunities and sequestering carbon.
A small scale trial plot has just been planted to test the best
method for growing spekboom based on the latest scientific
research. The next step is to undertake large-scale trials over 40
hectares to refine the cost model of the investment. This will take
place as soon as it is feasible (in the context of COVID-19
lockdowns) to run the trials.
South Lake Medical Centre (Kenya)
As a low-cost hospital, South Lake Medical Centre (SLMC) has an
important role to play in the COVID-19 pandemic. At present, the
majority of Kenya's 281 confirmed coronavirus cases are in Nairobi
County and there are no confirmed cases in Naivasha County (where
SLMC is based). The SLMC management team are working closely with
the government hospital, local communities and local businesses to
mitigate the risks of COVID-19 and put procedures in place should
Naivasha County experience an outbreak.
Economically, this will be a challenging time for SLMC. The
major industry of the area is cut flowers for the European market -
a sector that has all but ceased trading in the current climate.
There is however a strong vegetable growing industry in Naivasha
that continues to trade. SLMC have placed a high priority on
employee and patient safety during this time and their actions in
support of their community have been highly commendable.
Kentegra Biotechnology Ltd (Kenya)
Kentegra Biotechnology Ltd ('KENTEGRA') continue to operate in a
scaled down manner and still report demand during the COVID-19
pandemic. They have recently installed a new factory that is in the
process of being commissioned ready for production. The senior
management team have responded quickly and professionally drawing
up well considered contingency plans for all eventualities and are
re-evaluating the situation on a regular basis. Kentegra has shown
a strong commitment to both their sub contracted farmer partners
and their employees during this time going above and beyond to
minimise the economic impact while ensuring safety for the
organization.
Bee Sweet Honey Ltd (Zambia)
After a very successful harvest in 2019, Bee Sweet now face
challenging conditions exporting their honey product during the
COVID-19 pandemic. Bee Sweet provides invaluable additional income
to over 9,000 small farmers in Northern Zambia and the senior
management team are working hard to secure sales and minimise costs
in order to purchase the first harvest of 2020. Inqo is in regular
contact with the Bee Sweet management team.
Four One Financial Services (Uganda)
Four One Financials ('FOUR ONE') operates the Mazima Retirement
Scheme, a regulated voluntary pension scheme for the informal
sector. Prior to the COVID-19 pandemic, FOUR ONE was performing
well having endured challenging operating conditions for the
previous 18 months. The impact of the lockdown and subsequent
economic downturn is likely to be severe in Uganda and so for FOUR
ONE. The senior management have a strong track record in navigating
a difficult business environment through lean operations and agile
response to market demands. Inqo are in regular contact with the
FOUR ONE management team and will monitor the situation as it
progresses.
Stock Exchange Listing
AQSE Exchange PLC (AIM:AQX) acquired the NEX Exchange in March
2020, which has now been renamed the Aquis Stock Exchange (AQSE).
Shares on AQSE will remain exempt from Capital gains Tax and
Inheritance Tax as they were on the NEX Exchange.
Financial Reporting
According to the rules of the AQSE stock exchange rules,
companies listed on the exchange are required to publish annual
audited accounts by no later than six (6) months after the end of
their financial year. Inqo's audited financials would normally have
to be submitted by 31 August 2020.
ASQE have recognised the impact of Covid-19 and realised it may
lead to unforeseen challenges for listed companies and their
auditors. To accommodate these challenges AQSE shall allow, as a
temporary measure, AQSE Growth Market companies seven (7) months
from the end of their financial year within which to publish their
annual audited accounts.
Inqo advise that their February 2020 annual audited accounts may
thus only be released in September 2020 due to the fact that audit
processes may take longer as a result of the lockdown in South
Africa.
Corporate Adviser and Broker
Our Corporate Adviser and Broker has been novated to Hobart
Capital Markets LLP. The new contact details can be found
below.
Enquiries
Inqo Investments Limited Tel: +27 (0)83 6254069
Chris Bertie, Chief Financial Officer and Chief Email: cbertie@acland.co.za
Operating Officer
Hobart Capital Markets LLP
Aquis Stock Exchange Corporate Adviser and Broker Tel: +44 (0)20 7070 5665
Dr Wang Chong Email: wang.chong@hobartcapital.com
About Inqo Investments Limited
'INQO' (www.inqo.co.za) is a South Africa-based social impact
company listed on the London Aquis Stock Exchange Growth Market. It
makes strategic acquisitions and investments in businesses designed
to tackle poverty and provide employment, products and services to
the poor in Low Income Countries (LICs).
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