CMB Cambria Africa Plc

Cambria Africa Plc

("Cambria" or the "Company")

Audited FY 2023 Results ("the Results")

Earnings per Share of 0.03 US cents and NAV of 1.12 US cents (0.88p GBP)

Cambria Africa Plc (AIM: CMB) ("Cambria" or the "Company") announces its audited results for the year ended 31 August 2023 ("FY 2023"). The Audited Financial Statements are available on the Company's website (www.cambriaafrica.com) and will be sent to shareholders tomorrow. With the publishing of the Group`s FY 2023 and HY 2024 results, the suspension of the Company`s shares on the AIM will be lifted at 7.30am on 11 October 2024.

A loss attributable to Cambria Shareholders of $156,492 (0.03 US cents per share) was recorded for FY 2023. The Company's subsidiaries in Zimbabwe continued to operate above or near breakeven EBITDA, with revenues
US $922,104 in FY 2023 comparable with US $920,047 million in FY 2022.  The Company's subsidiaries are expected to continue reporting at breakeven levels in FY 2024.  The Company's FY 2023 consolidated profits stem mainly from Tradanet, the 51% owned subsidiary of Paynet Zimbabwe with revenues of US$528,834. 

Net Equity (NAV) increased by 6% from US $5.75 million (1.06 US cents per share) in FY 2022 to
$6.1 million FY 2023 (1.12 US cents per share). The increase is mainly attributable to receipt of "Legacy Debts" or "Blocked Funds" totalling $407,350 which had previously been written down offset by foreign currency translation losses of $226,000 related to the translation of the Zimbabwean operations.

FY 2023 Results highlights:

Group Highlights:

·      Net Equity (NAV) increased by 6% from US $5.75 million (1.06 US cents per share) to US $6.1 million
(1.12 US cents per share).

·      Revenues were almost comparable with the prior year at $922,000 while operating costs decreased by 6% to $584,769.

·      Consolidated EBITDA before exceptional items decreased by 13% to $298,000 from $344,000 in FY2022. 

·      Cambria's central costs comprising the listing and associated operating costs decreased by 9% to $115,509 in
FY2023. Cambria's CEO and Directors rendered services to Cambria without compensation during FY2023.

·      The Statement of Comprehensive Income includes the receipt of $407,350 of the "Legacy Debts" or "Blocked Funds" registered with and received from the Zimbabwean Ministry of Finance during the year.

Divisional Highlights:

·      Tradanet (Pvt) Ltd, Paynet Zimbabwe's 51% owned subsidiary, continued to provide loan management services to CABS, the country's largest building society.  The persistent devaluation of the country's currency led to an increase in salary-based loans. However, due to liquidity constraints in the banking sector, this increase was not in proportion to the depreciation of the currency.

·      Autopay, Paynet Zimbabwe's payroll processing division, performed as expected under a new management team with extensive payroll experience. Autopay established an independent contract relationship with payroll managers on a pure profit share basis.

Net Equity (Net Asset Value):

Components to the decrease of NAV in 2023

The Group reported an increase in NAV to $6.1 million (1.12 US cents per share) at 31 August 2023, compared to
$5.75 million (1.06 US cents per share) at 31 August 2022. The net increase was due to the following material factors:

·      Receipt of $407,350 of the "Legacy Debts" or "Blocked Funds" from the Zimbabwean Ministry of Finance. $1.2 million remains outstanding and represents the amounts owing by our Zimbabwean subsidiaries to their holding companies registered with the Ministry of Finance. These amounts were marked down to a negligible value in prior financial years. Accordingly any recovery of these Legacy Debts will represent an increase to the Group`s NAV upon receipt.

·      Foreign currency translation adjustments (losses) of $226,000

·      Profit after tax attributable to the owners of the Company $156,492

Components of NAV at 31 August 2023

The Group NAV of $6.1 million as at the end of FY 2023 includes the following material tangible and intangible assets:

Building and properties valued at $2.3 million - The Company`s real estate holding company, Lonzim Holdings Limited, has received multiple offers, with a transaction yet to be finalised.

Investment in Radar Holdings Limited  - 9.74% or 4.98 million shares valued at US $1.743 million (net of minority interests) based on 35 US cents per equivalent Radar share. In the post balance sheet period, the sale of the Group`s 78.2% shareholding in A.F Philips (Pvt) Ltd ("AFP") (which holds the Investment in Radar Holdings Limited) has been concluded with all conditions precedent to the deal being successfully completed. The purchasers have settled $1.1 million of the purchase price with the balance, which accrues interest at a rate of 10% per annum, expected to be settled by the end of the calendar year.     

USD Cash and Cash Equivalents - US dollar cash totalling $1.498 million at the end of FY 2023. 

Old Mutual and Nedbank shares - the Company holds 204,047 Old Mutual Limited shares and 2,692 Nedbank shares valued on its FY 2023 Statement of Financial Position at US $167,670 based on the closing price of shares on the Johannesburg Stock Exchange (JSE) at the year end. The Old Mutual Limited shares were suspended on the Zimbabwe Stock Exchange (ZSE) on 31 July 2020.

Goodwill - The Company has a goodwill value of $717,000 on its Statement of Financial Position relating to its investment in the Payserv group of Companies.  The Company believes this is a fair assessment of the intangible asset despite the impact of the decisions made by Zimbabwe`s banking institutions against using its payment platforms. Turnaround opportunities are being explored, as evidenced by the recent granting to Multi-Pay Solutions (Pvt) Ltd (Multi-Pay Solutions) the exclusive rights to use, distribute, and operate Paynet Software in the Southern African Development Community (SADC). Payserv Africa will continue to operate Paynet outside of the SADC. Tradanet, in which the Company holds an effective 51% interest, processes microloans on behalf of CABS, Zimbabwe's largest Building Society.  At their peak in 2019, these microloans comprised about a third of the banks assets and the Directors believe that a return to those levels is fully conceivable. Accordingly, the Company continues to believe that Payserv's intellectual property value and the amalgamation of the above exceeds the book value of the goodwill.

Chief Executive's Report

At this point in time, the Company's investment proposition is underpinned by its realizable Net asset value ("NAV") within the constructs of Zimbabwe's current economic policy and its outlook. It is important to consider the components of NAV and the efforts of the Company to ensure that any disposal is realized at the holding Company level. We believe we are making significant progress in this regard.

Strategies to realise NAV

The Company continues to realize NAV at the holding company level by deploying the following strategies:

·      Cash: As at the 2023 financial year end, the Group held cash reserves of US$1.55 million. As at 30 September 2024, in addition to Zimbabwe-held US dollar-denominated cash, shares and gold coins, the Company holds $2.6 million at the holding level.

·      Recovery of Legacy Debts: The Company is actively pursuing the recovery of "Legacy Debts" or "Blocked Funds"

owed by our Zimbabwe subsidiaries to their holding companies. As at 31 August 2023, we've successfully recovered US$407,350, leaving an outstanding balance of $1.2 million held by the Ministry of Finance. These funds, initially held by the Reserve Bank in ZWL on a one-to-one basis with the USD, were marked down to a negligible value in previous financial years based on the annual official exchange rate.

·      Listed Portfolio Value: We aim to realise the value of the 204,047 Old Mutual shares and 2,692 Nedbank shares by

transferring these shares to the South African register. The total value of this portfolio was $202,924 based on

Johannesburg Stock Exchange (JSE) closing prices on 30 September 2024.

·      Asset Maximization at Holding Level: At the holding Company level, we intend to achieve approximately $4 million

from the sale of our indirect stake in Radar ($1.74 million) and properties ($2.3 million).

·      Intellectual Property Value: We are committed to deriving maximum value from our intellectual property, both in

our current operations and future endeavours.

NAV Discussion

NAV increased by US$337,000 from 1.06 US cents per share to 1.12 US cents per share. As noted above, this excludes the balance of $1.2 million "Legacy Debt" due from the Zimbabwean Ministry of Finance.

The details of Cambria's NAV components are as follows:

·      Commercial Property - This is represented by the prominently located Mt. Pleasant Business Park Commercial Property valued at $2.3 million;

·      Old Mutual and Nedbank Shares - The total value of Old Mutual and Nedbank shares based on JSE closing prices was $167,670 as at 31 August 2023. 204,047 Old Mutual shares are currently suspended on the Zimbabwe Stock Exchange (ZSE), and their fungibility is also halted. By way of an unbundling by Old Mutual in November 2021, the company received 2,692 Nedbank shares, which are still retained in Zimbabwe.

·      Radar Holdings Limited - The Company has concluded the sale of its 78.2% shareholding in A.F. Philips (Pvt) Ltd ("AFP") for a sum of US $1.74 million in cash. This amount is equivalent to the book value of its shareholding in AFP at 31 August 2023. All conditions precedent to the sale were met in June 2024 at which time the Company received US $800,000 of the sale price and subsequently a further $300,000 was received on 23rd September 2024. The balance accrues interest at a rate of 10% per annum and is expected to be settled before the end of the calendar year.

·      Goodwill - Another component of NAV is the Company's goodwill (intellectual property). Currently, intellectual property is driving the earnings in Tradanet - a significant contributor to the Company's earnings. The 51% owned subsidiary of Paynet, processes microloans on behalf of CABS, Zimbabwe's largest Building Society. At their peak in 2019, these microloans comprised about a third of the bank's assets and the Directors believe that a return to those levels is fully conceivable. In June 2023, the Company announced its intention to license Paynet's intellectual property to Multi-Pay which will attempt to provided bulk payment and clearing services to the banking sector in the SADC region, including Zimbabwe.

Continuing Operations

Tradanet - As mentioned in the discussion of our goodwill above, Tradanet, the 51%-owned subsidiary of Paynet Zimbabwe remains the Company's most profitable operation. With greater reliance on the US Dollar for remuneration, Tradanet expects its ZWL earnings to transition to USD.

Other operations: Autopay and Millchem - These companies provide a modest revenue to the Group, primarily in ZWL. Their operations are beneficial in off-setting local expenses.

Cancellation of admission to trading on AIM of the Ordinary Shares

The Board undertook a review of the Company`s position and future prospects including the benefits and drawbacks to the Company retaining its admission on AIM. The Board concluded that it should recommend to Shareholders that a Cancellation is in the best interests of the Company and its Shareholders. In reaching this conclusion, the Board considered the following key factors:

·      Permanent cost savings to be achieved by the Cancellation;

·      Discount to NAV of the Company's  share price. As at 29 February 2024 (being the last trading day prior to its suspension) the Company's share price was 0.225  pence per Ordinary Share, compared with an unaudited liquid NAV of 0.77 pence (as at 23 August 2024) and a potential recovery of 0.38 pence from illiquid assets (as at 23 August 2024).

·      The free float of the Company is only c.30%, resulting in low trading volumes and significant illiquidity, preventing Shareholders from achieving the best value for their shares.

·      The Company has not utilised its admission on AIM to raise fresh capital or issue paper consideration to fund acquisitions since 2018.

·      The administrative, legal, and regulatory burden associated with maintaining the Company's admission to trading on AIM is, in the Directors' opinion, disproportionate to the benefits.

Under the AIM Rules, it is a requirement that a cancellation is approved by not less than 75 per cent of the votes cast, whether in person or by proxy at a general meeting of shareholders. 

A circular to shareholders was issued on 23 September 2024 convening a general meeting to be held on 10 October 2024 to seek shareholder approval for the proposed Cancellation and to amend the Company's Articles of Association. As the beneficial owner of 69.2% of the Company's issued share capital via Encyclia Logistics Limited, I recused myself from voting in favor of the proposed delisting at the general meeting. As announced on 10 October 2024 all Resolutions were passed. Accordingly, cancellation of admission of the Company's ordinary shares to trading on AIM will become effective at 7.00 a.m. on 22 October 2024.

The suspension of the Company's Ordinary Shares has been lifted and as a result Shareholders will have one day to trade their Cambria Ordinary Shares on AIM, before the Company will again be suspended at 7.00am on 14 October 2024.  As announced on 23 September 2024, the Company will cease to have a nominated adviser with effect from 8.00 a.m. on 14 October  2024. As a result, the Company will again be suspended as of 7:00 a.m. on 14 October 2024, pursuant to AIM Rule 1, for failing to retain a Nominated Adviser. As the Company have decided not to appoint a new Nominated Adviser the suspension will remain in place until the cancellation of admission of the Company's ordinary shares to trading on AIM at 7.00 a.m. on 22 October 2024.

Posting of Annual Report

The Company has posted to shareholders copies of its annual report and financial statements for the year ended
31 August 2023.

A copy of the annual report and financial statements are available from the Company's website www.cambriaafrica.com/investors.

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Cambria Africa Plc

Audited consolidated Statement of Financial Position

As at 31 August 2023

Cambria Africa Plc

Audited consolidated statement of cash flows

As at 31 August 2023

Annual Report

A copy of the annual report and financial statements will be made available on the Company's website www.cambriaafrica.com/investors.

END