Cambria Africa Plc (AIM: CMB) ('Cambria' or the 'Company') announces its audited results for the year ended 31 August 2021 ('FY 2021'). Audited Financial Statements are available on the Company's website (www.cambriaafrica.com) and will be sent to shareholders tomorrow.
Profit Attributable to Cambria Shareholders of $82,000 (0.02 US cents per share) was recorded for FY 2021. The Company's subsidiaries in Zimbabwe continued to operate above breakeven in both EBITDA and accounting profit despite shrinkage in its revenue footprint by 8% from US $1.32 million in 2020 to US $1.22 million in 2021. Based on the current trajectory, the Company's subsidiaries are expected to continue reporting at breakeven levels in FY 2022. The Company's FY 2021 consolidated profits stem mainly from Payserv revenues of US$1.13 million. Net Asset Value (NAV) fell by 1.63% from US $6.42 million in FY 2020 to $6.32 million FY 2021 (1.16 US cents per share). The reduction in NAV was attributable in part to a $200,000 downward adjustment in the valuation of its commercial property conducted by Hollands Harare Estate Agents (Hollands). The Company's property was valued by Hollands at $2.3 million as of January 2022.
NAV was further impacted by the change in the closing value of the Company's Old Mutual Limited shares on the Johannesburg Stock Exchange (JSE) compared to the last closing price on the Zimbabwe Stock Exchange (ZSE).
In its efforts to realize its NAV, the Company is actively pursuing avenues to sell its property and its indirect interest in Radar Holdings Limited ('Radar') shares. While we believe there is firm interest in our investment, the Company will only sell such investments if it can achieve value at the holding level.
Group Highlights:
NAV decreased by 1.63% from US $6.42 million (1.18 US cents per share) to US $6.32 million (1.16 US cents per share).
Group Finance costs dropped by 63% to $22,000 in FY 2021 from $60,000 in FY 2020 after rising 17.6% from $51,000 in FY 2019. Finance costs are expected to decrease significantly in FY 2022.
Revenues declined by 8% to $1.22 million while operating costs declined by 0.8% to $838,000. As a result of careful cost management, such as line item cost control and orderly reductions in staffing, the Company has managed to avoid significant losses from the shrinkage of its revenue as a consequence of the impact of the COVID-19 pandemic and its inability to regain traction for its bulk payment and clearing software for banks.
Cambria's Attributable PAT was positive at $82,000 (0.02 cents per share) as operations edged above breakeven. Central Costs associated with listing and interest expense dropped by 33% to $151,000 from $224,000. The balance of Central Costs was associated with hyperinflationary adjustments, foreign currency translation and the loss of value in the shares of Old Mutual Limited.
Consolidated EBITDA before fair value adjustments to investments and marketable securities increased by 131% to $369,000 from $160,000 in FY 2020. FY 2020 EBITDA was negatively impacted by the fair value adjustment of the Company's indirect holding of Radar Holdings Limited shares from 40 US cents to 35 US cents.
Cambria's central costs dropped by 33% to $151,000 in FY 2021. Cambria's CEO and Directors continued to render their services to Cambria without compensation during FY 2021.
The Statement of Comprehensive Income includes a small foreign currency translation adjustment (loss) of $4,000 attributable to Cambria.
Divisional Highlights:
Tradanet (Pvt) Ltd, Paynet Zimbabwe's 51% held subsidiary, continued to provide loan management services to Central African Building Society (CABS), the country's largest building society. The continued devaluation of the country's currency led to a slight increase in salary-based loans.
Autopay, Paynet Zimbabwe's payroll processing division, saw an increase in its revenue base due to a new management team with extensive payroll experience and established an independent contract relationship with payroll managers on a pure profit share basis.
Millchem, through its partnership with Merken (Pvt) Ltd. still sees profitability, though diminishing, in the sanitizer sector.
Net Equity (Net Asset Value):
Components of Loss to NAV in 2021
The Group reported a slight drop of $106,000 in NAV to $6.32 million (1.16 US cents per share) in August 2021, compared to $6.42 million (1.18 US cents per share) at 31 August 2020. This marginal decrease was caused by the following material factors:
Downward adjustment of $200,000 in the valuation of Company's Mt. Pleasant Business Park commercial property by Hollands from $2.5 million to $2.3 million. Hollands cited business and economic conditions for the change in their valuation.
Reduction of $16,000 in the carrying value of Old Mutual Limited shares which were suspended from trading on the Zimbabwe Stock Exchange (ZSE) on 31 July 2020.
Foreign Currency Translation loss of $4,000 from the deterioration of the official bank rate from ZWL 83.4/USD on 31 August 2020 to 85.91/USD on 31 August 2021. The foreign currency translation loss was nominal in FY 2021 due to less cash held in Zimbabwe dollars compared to FY 2020.
Components of NAV at 31 August 2021
The Group NAV of $6.32 million as at the end of FY 2021 consists of the following tangible and intangible assets:
Building and properties valued at $2.3 million - This number, down $200,000 from the prior valuation, was prepared by Hollands Harare Estate Agents in February 2022. Holland conducted the previous valuations of this prominently located commercial office space and its equally well-positioned vacant plot in Harare's Mount Pleasant Business Park.
Indirect shareholding of 9.74% of Radar Holdings Limited - (4.98 million shares) valued at US $1.743 million (net of minority interests) based on 35 US cents per equivalent Radar share.
USD Cash and Cash Equivalents - US dollar cash net of liabilities Zimbabwe totalled $1.34 million at the end of FY 2021.
Old Mutual Limited shares - the Company holds 204,047 Old Mutual Limited common shares that were suspended on the Zimbabwe Stock Exchange (ZSE) on 31 July 2020 and valued on its FY 2021 Statement of Financial Position at US $184,000 based on the closing price of Old Mutual Limited on the JSE at year end. The value of Old Mutual shares closed at US $196,000 on the JSE on 29 March 2022.
Goodwill - The Company has a goodwill value of $717,000 on its Statement of Financial Position. The Company believes this is a fair assessment of its intangible assets. Despite the shrinkage of Paynet's operations, it continues to maintain turnaround opportunities particularly in Tradanet and Autopay as real salaries catch up with inflation. The Company continues to believe that the Paynet's intellectual property has value and the amalgamation of the above should exceed the book value of its goodwill.
The Company therefore believes its tangible, intangible and realizable NAV are not subject to significant negative shocks and will probably benefit from any positive events.
Chief Executive's Report
Cambria Africa earned 0.02 US cents per share during the 2021 financial year compared to a loss of 0.07 US cents per share in the 2020 financial year. The Company continues to rationalise its operations by reducing staff costs and ensuring a more effective model to realise earnings from its intellectual property and cash holdings.
At this point in time, the Company's investment attraction is realizable NAV within the constructs of Zimbabwe's current economic policy and its outlook. It is important to consider the components of NAV and efforts of the Company to ensure that any disposal is realized at the holding level. The Company's investment in Zimbabwe since its establishment has been over $100 million. Almost $6 million of this investment was my direct contribution to this investment since taking the helm of Cambria when it was at the brink of bankruptcy.
Strategy
The strategic goals of the Company have been and continue to be:
Conserving cash resources of US$1.65 million as at 31 August 2021 (US$1.56 million at 28 Feb 2022)
Realizing value for US $1.35 million held by the Reserve Bank of Zimbabwe (RBZ) as 'Legacy Debts' or 'Blocked Funds' and owed to the Company. This asset has been depreciated in our accounts to the official value until such time as the RBZ honours this commitment. Therefore its contribution to NAV is practically zero but remains a legal obligation of the RBZ to Cambria Africa plc.
Achieving value for US $196,000 of Old Mutual shares (based on JSE closing price on 29 March 2022) through repatriation of these shares to the South African register.
Maximizing value at the holding level for disposals of about $4 million in marketable securities and property.
Achieving value for the Company's intellectual property both in current and future operations.
Contact:
Cambria Africa Plc
Samir Shasha
T: +44 (0)20 3287 8814
WEB: www.cambriaafrica.com
WH Ireland Limited
James Joyce
Ben Good
T: +44 (0) 20 7220 1666
WEB: https://www.whirelandplc.com
CAMBRIA AFRICA PLC 
