Cambria Africa confident MillChem and Payserv investments will yield results

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By Zimbabwe Investor on February 27, 2014. No Comments

Cambria Africa (LON:CMB) told investors that it continued to invest in the future last year as put together regional expansion plans for the MillChem and Payserv businesses.

“We are confident that the positive impact of regional expansion into Zambia, together with the launch of various new products, will yield results in the coming periods,” chief executive Edzo Wisman said in the group’s results statement this morning.

The figures themselves show that earnings (EBITDA) losses halved for the group’s continuing operations in 2013, at US$3.6mln the loss was 52% reduced from the year before.

The group loss for the year was US$5mln for the continuing operations. Discontinued operations generated a loss of US$6.9mln, including write-offs.

Revenues and gross profits from the Payserv and MillChem businesses increased 10% and 6% respectively to US$8.5mln and US$4.6mln.

The rate of growth had slowed from prior years though, as a result of disruptions during the run up to the elections in Zimbabwe – when cautious consumer spending impacted on the level of economic activity in the country.

Cambria said the slowdown has continued to impact on current performance.

Looking forward, however, expanding both businesses into Zambia – and for MillChem, into Malawi aswell – is expected to deliver fresh catalysts for growth.

There is also the possibility of further disposals of non-core assets. Once achieved this will mark the completion of the company’s restructuring to focus solely on MillChem and Payserv.

It will have changed from a portfolio of multiple investments operating in a single country into having select investments operating regionally.

Cambria says in the coming years it will expand the two primary businesses into new geographies in a careful and co-ordinated manner. It also anticipates making small bolt-on acquisitions, which it says may be paid in Cambria shares.

“It is the board’s conviction this strategy marks the best route towards maximising shareholder value and ensuring continued future growth.

“As a result of this strategy, the company is now solely focused on Payserv and Millchem, growing their scale and scope, as well as, importantly, their regionalisation.

“A multi-year, regional and product roll-out strategy for both Millchem and Payserv has been developed and Cambria is excited about the growth and return prospects of the two investments.”

– Proactive Investors