LONDON (Alliance News) - Anglo African Agriculture PLC on Monday said revenue fell in its most recent year due to lower customer orders for key spice lines of paprika and chilli-based products, although margins were considerably improved.
Shares in Anglo African Agriculture were down 5.4% at 0.40 pence on Monday.
Anglo African Agriculture was set up to develop an agricultural trading group in Africa, and in 2014 it acquired Dynamic Intertrade Pty Ltd, which is now a wholly-owned subsidiary. Dynamic makes herbs and spices, as well as producing and trading in other agricultural goods.
Group revenue fell 19% to GBP1.7 million in the financial year that ended October 31 from GBP2.1 million the year before. Anglo African Agriculture attributed this to a reduction in orders for its core spice lines as well as "a concerted focus [by Dynamic] on higher-margin, lower-value, value-added blended products".
The company's gross margin increased to 36% from 24%, largely as a result of being able to source more raw products and a move toward introducing its premium spice ranges for fish and meat manufacturing. This meant that the company's gross profit was higher in its most recent year, reaching GBP620,048 from GBP517,747.
Anglo African Agriculture's pretax loss widened slightly to GBP573,374 from GBP550,257. This was largely due to expenses. Administrative expenses increased to GBP909,145 from GBP860,417 the year before and admission expenses rose to GBP276,306 from GBP106,992. However, the company said these admission expenses were "not comparable given that the current charges relate to a significant equity raise" which was announced in September.
During the year, Anglo African Agriculture raised GBP1.1 million in equity and from the issue of a convertible note instrument. These funds were used to provide a loan of USD1 million after the financial year-end to Kenyan port operator Comarco Group, the security for which was a charge against land owned by a Comarco subsidiary.
Comarco has signed an agreement with "a multinational [liquefied petroleum gas] trading and transportation group" to create a liquefied petroleum gas important and distribution facility on the subsidiary land.
At the end of August, Anglo African signed a memorandum of understanding to finance the growth of Kenya-based port and logistics group Comarco.
"The company continues to work with Comarco to help develop its future which the board believes will bring additional value to [Anglo African Agriculture]. Additionally, the board has reviewed, and continues to focus on reviewing, a number of new and exciting potential acquisitions to add value to [Anglo African Agriculture] and its shareholders," said Non-Executive Chair David Lenigas.