CMB Cambria Africa Plc

Cambria Africa Plc

("Cambria" or the "Company")

Interim Results (the "Results") 

Loss per share of 0.01 US cents and NAV 1.12 US cents

For the 6 Months ended 28 February 2024

Cambria Africa PLC (AIM:CMB) ("Cambria" or the "Company") is pleased to announce its interim results for the six months ended 28 February 2024 (the "Period"). A copy of this announcement is available on the Company's website (www.cambriaafrica.com). 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 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 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 is due to be lifted shortly on publication of these results, as a result Shareholders will only have the 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.

The Group realised a loss after tax of US$44,000 for the 6 months ended 28 February 2023 compared to $99,000 achieved in the same period in 2022. This was due to a decline in revenue and earnings contributions from Tradanet. Tradanet`s performance was impacted by the slower growth in the US dollar value of its loan processing portfolio which value slowed as a consequence of inflation and the devaluation of Zimbabwe's currency (ZWL). Tradanet's revenues were further adversely impacted by liquidity constraints in the banking sector. Autopay also experienced a decline in the real value of its Payroll processing revenues caused by the depreciation of ZWL relative to the US dollar.

The Group's Net asset value of $6.12 million remained in line with the audited NAV reported for the financial year ended

31 August 2023 of $6.1 million.  

Group Highlights HY 2024:

·      Net Equity (NAV) increased by 6% from US $5.763 million (1.06 US cents per share) in HY 2023 to $6.119 million (1.12 US cents per share) in HY 2024.

·      Group revenue decreased by 59% compared to the prior period from $451,000 to $185,000. This is mainly due to Tradanet revenues decreasing as a result of declining loan advances by CABS in United States dollar terms during the period. The operations in Zimbabwe, despite challenging market and currency devaluation conditions, operate at break even with minimal impact at the holding level.

Net Equity (Net Asset Value)

The company's net asset value increased by 6% from $5.763 million at HY 2023 to $6.119 million at HY 2024. The HY2024 NAV corresponds with the audited NAV at 31 August 2023 of $6,104 million.

Components of NAV at 28 February 2024

The Group NAV of $6.119 million as at the end of HY 2024 consists of the following 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 (after HY 2024) 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 $1.56 million. 

Old Mutual and Nedbank shares - the Company holds 204,047 Old Mutual Limited shares and 2,692 Nedbank shares valued on at US $156,971 based on the closing price of the shares on the Johannesburg Stock Exchange at the interim period end. 

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, is the largest contributor to the Company's earnings. Tradanet 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

The Company has released its Annual Report for the financial year ended 31 August 2023 simultaneously with its 2024 half year results.  As covered in my CEO report attached to the audited year end results, Cambria's story is now focused on realizing its NAV. Investors might find value in examining our estimate of realizable NAV at US $7.2 million (1.3 US cents per share). Our estimate draws from the following actual and anticipated components:

·      Cash: As at the half year ended 2023, the Group held cash reserves of US$1.56 million. As at 30 September 2024, in addition to  Zimbabwe-held US dollar-denominated cash, shares and gold coins, the Company holds Fixed Deposits of $2.4 million in the United Kingdom.

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

·      Recovery of Legacy Debts: The Company is actively pursuing the recovery of "Legacy Debts" or "Blocked Funds" owed by our Zimbabwe subsidiaries to the 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. However, post FY 2022, the Ministry of Finance began repaying these debts and assures us of the balance, as funds become available. As a result, our NAV after the financial year end will see an increase, accounting for the recovered debts.

·      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 $192,469 based on JSE closing prices on 10 October 2024.

·      Sale of Radar equivalent shares: At the holding Company level, we will realise $1.743 million from the sale of our indirect stake in Radar after the fulfilment of all conditions precedent to the agreement of sale. $1.1 million has been received, with the balance accruing 10% interest, expected to be settled by the end of the calendar year.

·      Intellectual Property Value: The Board is committed to deriving maximum value from our intellectual property, both in our current operations and future endeavours. The Company's Statement of Financial Position lists a goodwill value of $717,000.

These estimates, culminating in a projected NAV of US $7.2 million, come with the following considerations:

1.     Maintenance of stable commercial real estate prices in Harare and successful sales realization at the holding Company level.

2.     Repayment of US $1.2 million in Legacy Debts.

3.     Effective utilization of intellectual properties for profit.

4.     The resumption of fungibility of dual-listed shares.

We remain cautiously optimistic about achieving full value for the Company's assets beyond its NAV.

With the publishing of the Group`s FY 2023 and HY 2024 results, 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.

Albeit for one day only, the lifting of the suspension should enable shareholders to trade with a comprehensive understanding of the updated financial position and the investment landscape confronting Cambria. At the time of suspension, Cambria shares were valued at 0.225p, contrasting with a book NAV of 0.88p and our estimate of 1.3 US cents per share or 1.07p per share. Shareholders must determine whether the market has aptly gauged the discount to the Company's book NAV and management's estimates of realizable NAV, which we are committed to achieving.

Samir Shasha

10 October 2024

Cambria Africa Plc

Interim consolidated income statement

For the six month period ended 28 February 2024