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LONDON (Alliance News) - Obtala Resources Ltd Monday said it will be trading from a new African retail business which will sell its own branded products in the fourth quarter, as it swung to profit in the first half.
The company, which is engaged in the development of agricultural and timber projects, posted pretax profit of GBP283,000 for the six months to June 30, compared with a GBP7.0 million loss a year earlier.
In the previous year, the company suffered a non-cash loss of GBP4.9 million in respect of buying back shares from fellow AIM listing Bushveld Minerals Ltd and GBP300,000 from its share of losses from Bushveld.
Revenue rose to GBP1.2 million from GBP148,000 a year earlier. The company said this was driven by strong sales in its forestry and agriculture operations.
Obtala said operating margin for the forestry division was exceptionally high at 81% and for the agriculture division it was 20%.
At an operating level, Obtala said Montara Continental business made significant progress in developing its sustainable agricultural and forestry operations in Tanzania and Mozambique.
"This is now supported by the launch of a range of branded sauces and packaged dried fruits along with plans to open a chain of distribution outlets in Africa to benefit from the strong local consumer demand," the company said.
Obtala also said it is now ready to begin trading from its newest business concept - African Homes Store - in the fourth quarter.
The new business aims to create distribution outlets to sell the company's branded products and other lines in Africa. Obtala said pricing will be lower than local department stores and retail outlets.
The company has secured supply lines of clothing, footwear, fashion accessories, household consumables, timber products and furniture.
Looking ahead, the company said: "With the increase of activity in our main agriculture and forestry divisions along with our new divisions coming on line we look to build on these results for the remainder of 2014."
Obtala Resources shares were quoted down 7.5% at 9.25 pence Monday morning.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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