HARARE – Zimbabwe focused investment group, Cambria Africa Plc (Cambria), is eyeing regional markets to cushion itself from the economy melt-down in the country, United Kingdom-based independent research company, GECR says.
“Cambria is currently in the midst of executing its strategic plan that will see it expand into neighbouring regions, thereby diversifying away from the beleaguered Zimbabwe economy,” said GECR.
The investment firm only recently secured several key regional supply and distribution agreements with a number of blue-chip companies that will see it cover the wider Southern Africa region.
“In addition, it has recently acquired the leading Malawi chemicals distributer, Chemicals & Marketing Company - and the acquisition is expected to increase Millchem’s top-line by 50 percent - and we expect to see further smaller acquisitions going forward,” said the research company.
Through the combination of both its Millchem and Payserv investments together, Cambria is forecasting group revenues of $11,64 million in the full year to 2014, rising to $18,37 million next year and then $28,78 million by 2016.
“Similarly, we are forecasting group EBITDA of negative $2,54 million this year, falling to negative $1,88 million in 2015 and then negative $50 000 in 2016,” warned GECR.
Cambria has announced that it requires funding for the expansion of Millchem and Payserv as well as for the group’s working capital, and market watchers expect that this additional funding should come from the sale of its non-core assets, including the Leopard Hotel and certain industrial properties, as well as settlement of its aircraft dispute.
For the first half of its financial year ended February 28, 2014 Cambria’s loss position widened as Millchem Holdings chemicals distribution unit was negatively affected by a difficult operating environment in the country.
For the latest half-year period, the group’s total revenues from continuing operations decreased by 3 percent to $4,18 million, compared to last year’s first half period figure of $4,29 million.
Overall gross profits decreased by 1 percent to $2,34 million, but margins improved by 1,28 percentage points to 56,03 percent, driven by the Payserv Africa subsidiary, which grew gross profits by 6 percent.
Operating expenses increased by 10,26 percent to $3,78 million as the group ramped up investment in long-term growth and central costs remained unchanged.
Accordingly, the operating loss increased by 33 percent to $1,44 million.