HARARE - Zimbabwe-focused investment group Cambria Africa Plc (Cambria) is tipped to grow its revenue by 147 percent from $11,64 million in 2014 to $28,78 million in 2016, analysts projected.
United Kingdom-based equities advisory firm GECR said the Alternative Investment Market (Aim)-listed Cambria — owning a chemicals distribution company, a hotel and Payserv, a transaction-processing firm in Zimbabwe — is also set to record a gross profit of $5,69 million this year.
It forecast the profits to rise to $7,83 million in 2015 and then $12,28 million in 2016.
However, the group is in the process of disposing the Mutare-based hotel, Leopard Rock.
In the 2013 financial year, Cambria reduced central costs by 54 percent to $4 million from $8,6 million prior year.
“Going forward, we expect to see a further reduction in these costs and are forecasting central costs to reach $2 million by 2015, at which point we have assumed that they stay at this level going forward,” GECR said.
It projected Earnings Before Interest, Tax, Depreciation and
Amortisation (Ebitda) of a negative $2,54 million this year, narrowing to negative $1,88 million next year and then to $502 000 in 2016.
The group is forecasting earnings of a negative $3,47 million in 2014, falling to a negative $2,38 million in 2015 and a negative $1,12 million in 2016.
Cambria is now almost entirely focussed on expanding its chemicals distribution company Millchem and Payserv.
Market experts are anticipating Cambria to break even in 2017, with earnings of $2,81 million.
The group has announced that it requires funding for the expansion of Millchem and Payserv as well as for the group’s working capital.
“We expect that this additional funding should come from the sale of its non-core assets, including the Leopard Hotel, and the raising of additional equity and or debt capital,” said GECR.
Going forward, Cambria’s strategy, in a nut-shell, is to transform the company’s business from a portfolio of multiple investments operating in a single country into select investments operating regionally.
“New management completely rationalised what had become an unwieldy portfolio with an unsustainable cost base,” Raymond Greaves an analyst.
In 2013, revenues and gross profits from the Payserv and Millchem businesses increased 10 percent and six percent respectively to $8,5 million and $4,6 million.
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.
Such disruption underlines the importance of Cambria’s regional expansion, which will add greater diversity and reduce exposure to single country risk. Zambia is the first new territory in Cambria’s plans, and it has already begun establishing its presence there.
“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,” said Cambria chief executive Edzo Wisman.