Cambria Africa Regulatory News (CMB)

Cambria Africa Plc

("Cambria" or the "Company")

Results for the full year ending 31 August 2014

Delayed by extenuating circumstances, Cambria Africa Plc (AIM:CMB) announces its full year results for the year ending 31 August 2014.

The audited Financial Statements will be made available on the Company's website (www.cambriaafrica.com) and will be sent to shareholders today.

As the Company has now published both its audited 2014 Full Year Results for the twelve months ended 31 August 2014, and its 2015 Interim Results for the six months ended 28 February 2015, the Company has requested for its shares to be readmitted to trading and it is expected that this will happen tomorrow, 8 September 2015.

Following the investment in the Company by Ventures Africa Limited ("VAL") in April 2015 and the resultant changes to the board of directors, considerable time and resources have been invested in improving the financial reporting functions of the Company. The board is confident that the previous factors causing delays in the publication of results have been satisfactorily addressed ensuring future results will be published timeously.

All references to continuing operations relate to the Group's Payserv Africa and Millchem Holdings investments and head office activities.

Key events for the 2014 financial year were:

· On 8 May 2014, the Company disposed of the Southerton property, which was previously occupied by the Group's previously owned printing business, Celsys Limited, for a total consideration of US$0.7 million (before costs and related taxes). The Southerton property had a carrying value of US$1 million as at the previous reporting period;

· On 21 October 2014, in the post balance sheet period, the Group disposed of its 100% interest in Lonzim Hotel Holdings Limited ("the Leopard Rock Hotel Group"), the owner of the Leopard Rock Hotel and related entities, for a total consideration of US$2.5 million. Accordingly, the net asset value of the Leopard Rock Hotel Group has been impaired by US$8.9 million at 31 August 2014 to reflect this investment's net realisable value of US$2.5 million;

· Following the above disposals, the Company's only remaining assets are Payserv Africa ("Payserv") and Millchem Holdings ("Millchem").

· The board is of the view that the remaining assets provide significant value creation opportunities to Cambria and its shareholders.

· We are now focussed on:

o Rationalising and simplifying the head office function including head office roles, responsibilities and reporting lines. An aggressive reduction in overheads has been accelerated following the investment by VAL in April 2015;

o Restoring the momentum lost in Millchem by re-establishing key supplier and customer relationships and performing a critical financial and operational analysis of the underlying subsidiaries including Millchem Zambia;

o Accelerating the development of Payserv Zambia to achieve breakeven and profitability; and

o Further enhancing the value of Payserv by replicating its successful technology platforms, products and services in the rest of Sub-Saharan Africa.

Results summary:

· During the year ended 31 August 2014, Payserv and Millchem combined, grew revenues and gross profit by 11% and 10% year-on-year, respectively.

· The Payserv results were impacted by a significant once-off loss US$0.7 million on the failed proposed acquisition of CelPay Zambia.

· Cambria's central costs were reduced by 22.5% when compared to the equivalent period last year. As noted above, a further cost reduction has been implemented after the financial year-end.

· Cambria's EBITDA loss from continuing operations for the year ended 31 August 2014 was US$3.75 million (2013: US$3.58 million).

· The Group recorded a loss from continuing operations of US$5.7 million for the year ended 31 August 2014. The loss from discontinued operations, including the loss on disposal of the Southerton property and the write down of the Company's investment in the Leopard Rock Hotel Group, totalled US$10.2 million.

Audit opinion

The Company's auditors, Baker Tilly Isle of Man LLC, have issued their opinion on the Group's financial statements for the year ended 31 August 2014. The audit was conducted in accordance with International Standards On Auditing (UK and Ireland). They have issued an unmodified audit opinion.

The Group, which at 31 August 2014 had net liabilities of $1.24m and reported an operating loss of $4.25m for the year, has external borrowings which mature during 2016. $5.1 million is due for repayment in April 2016 and a further $2 million is due for repayment in July 2016. Although the directors are taking steps to refinance these loans, material uncertainty exists which may cast significant doubt about the Group's ability to continue as a going concern. Whilst the full year results for the year ended 31 August 2014 have been prepared on the going concern basis, the audit opinion contains an emphasis of matter regarding the existence of the material uncertainty.

Working Capital

On 3 September 2015 the Company concluded a settlement agreement with Lonrho with respect to the claims and counterclaims ("the Claims") between the parties, in terms of which the Company will receive US$4.752 million in full and final settlement of the Claims. After outstanding litigation and other associated costs, the net proceeds are estimated to be US$3.5 million.

Taking account the external borrowings mentioned above, the Company is therefore expected to have sufficient working capital until April 2016. The Company's Board is however confident that it will be able to refinance or raise additional finances to cover the contractual debt obligations before they become due.

Changes to the board

The following changes to the board of directors occurred during the period under review and up to the date of this report:

Director resignations:

Director appointments:

About Cambria Africa Plc

Cambria Africa Plc, quoted on the AIM market of the London Stock Exchange, is a long term, active investment company, investing primarily in Southern Africa.

Chief Executive's Review

Introduction

Having been appointed a director in June 2015 and assuming the CEO role with effect from 3 August 2015, this is my first report to shareholders albeit almost a full year after the year under review. With a significant cash equity investment through VAL's subscription in April 2015, my interests as CEO are aligned with that of shareholders. Shareholders of Cambria have suffered a tremendous loss of value in their investment in the Company. It is my aim to guide the Group back to profitability and restore shareholder value.

In addition to the aforementioned asset disposals Cambria has undergone a significant restructuring in the last few months whereby the Company's central overheads have been reduced to be fit-for-purpose. In addition, the Group's financial position has been significantly strengthened following the settlement of the legal dispute with Lonrho.

Despite the diminished relevance of the historical results and management overhaul following VAL's investment in April 2015, commentary on the results for the financial year ended 31 August 2014 is provided.

During the 2014 financial year, revenues and gross profit of the continuing operations of Cambria, Payserv and Millchem, were US$9.4 million (2013: US$8.5 million) and US$5.0 million (2013: US$4.6 million) an increase of 11% and 10% respectively compared to the fiscal year 2013.

Cambria's EBITDA loss from continuing operations for the 2014 was US$3.75 million, an increase of 4.8% from the prior year's EBITDA loss from continuing operations of US3.58 million. The Group loss for the year is US$5.7 million for continuing operations. Discontinued operations, including loss on disposal of property and write downs, had a loss of US$10.2 million. Cambria's loss per share for the financial year was 19.5c per share, compared to 18.4c per share for the same period last year, an increase of 6% in loss per share.

Results for the Period

Consolidated results

Payserv and Millchem jointly had an aggregated performance as follows:

The following factors significantly impacted EBITDA during the year:

· Once-off costs of US$0.7 million incurred on investigating the acquisition of CelPay Zambia which was not concluded following the discovery of a significant deterioration in the financial position of CelPay Zambia;

· Continued investment in expanding its presence and offering in Zambia by Payserv, the costs of which are expensed in full; and

· Investment by Millchem in two new subsidiaries, Millchem Zambia and Millchem Malawi and challenges experienced in the ramp up of these subsidiaries to full trading capacity. Investment in these territories has been suspended to refocus operations and investment in Millchem's core Zimbabwe market.

Payserv Africa

Payserv provides EDI switching services (Paynet), 'payslip' processing (Autopay), and payroll based microfinance loan processing (Tradanet).

Paynet provides Electronic Data Interchange (EDI) services to all the banks and building societies in Zimbabwe, as well as to over 1,500 corporates. Paynet processed 16.4 million transactions (2013: 15.2 million) during the period under review, a 7.9% increase.

Autopay, provides payroll services to more than 150 customers, processed over 313 000 pay slips (2013: 303 000) during the period under review, a 3.3% increase.

Tradanet processed approximately 121,000 (2013: 66,000) loans during the period, representing a value of US$154 million (2013: US$131 million), a 83.3% increase and a 17.5% increase respectively.

During the year under review, Payserv continued to invest significantly into product upgrades, new offerings, entry into the Zambian market, as well as exploration of other geographic markets. These investments have not been capitalised and have therefore directly impacted the income statement during the year under review.

There was an exceptional item of US$0.7 million included in the Payserv results relating to the write-off of transaction costs related to CelPay Zambia discussed above.

Millchem Holdings

Millchem is a value-added chemicals distributor with a leading market position in Zimbabwe and a fledgling presence in Zambia and Malawi.

Despite the challenging and uncertain business environment during the year, Millchem grew revenue by 11%.

Overheads were negatively impacted by the expansion and investment in establishing Millchem Zambia and Millchem Malawi. Millchem Malawi has been closed after the year-end while Millchem Zambia is in the process of being disposed of.

Establishing Millchem as a profitable unit is an important priority. The key focus areas will be:

o Strengthening the executive leadership team following departure of senior executives;

o Rebuilding relationships with key customers;

o Re-establishing credit lines with key suppliers; and

o Streamlining overheads and trading efficiencies.

Discontinued operations, other and central costs

Southerton Property

The Southerton property which was occupied by Celsys Limited, the group's previously owned printing business, was disposed of on 8 May 2014 for a total consideration of US$0,7 million (before costs and related taxes). The Southerton property had a carrying value of US$1 million as at the previous financial year.

Lonzim Hotels Limited ("Leopard Rock Hotel Group")

The Leopard Rock Hotel Group has been classified by Cambria as held for sale during the past two financial years. During the 2014 financial year, the Leopard Rock Hotel Group generated US$2.0 million in revenue (2013: US$2.3 million) and loss before interest, tax, depreciation and amortisation of US$0.4 million (2013: US$0.7 million, before write downs recognised in the income statement of US$2.8 million).

LonZim Air (B.V.I.) Limited

Through LonZim Air (BVI) Limited Cambria previously owned three aircraft. Over the years a number of disputes arose in relation to these aircraft and certain associated contracts. Cambria has been pursuing the recovery of claims related to these disputes. These amounts relate to, inter alia, maintenance reserve and lease charges and related contractual interest, payment of insurance proceeds, deterioration in market value of the aircraft, and the significantly lower amount the Company was able to obtain through a sale, due to the poor condition the aircraft were found to be in.

LonZim Air incurred US$0.8 million in operating losses for the period under review, largely related to extra-ordinary legal expenses associated with the above mentioned claims.

Central costs

Cambria incurred US$3.1 million in central costs for the period under review, compared to US$4.0 million in the prior year, a reduction of 22.5%.

Included in the above are salaries and benefits paid to the Company's previous CEO and Chairman, Messrs E Wisman and I Perkins of US$0.5 million and US$0.13 million, respectively. Subsequent to year end a staff loan of US$100 000 to Mr Wisman had been waived and following VAL's investment in Cambria, Messrs Wisman and Perkins received "change in control" payments combined amounting to US$185 500.

At the date of this report, central costs have been further reduced to an estimated annual cost of US$0.7 million from US3.1 million before VAL's investment.

As the new CEO of Cambria, I will not be collecting compensation including benefits until such time as the cash flow from the Company's underlying operations supports it.

Events following the end of the period under review

The Leopard Rock Hotel Group

On 21 October 2014 the Company entered into an agreement to dispose of its shares and loan claims in Lonzim Hotels Limited to VAL for a total consideration of US$2.5 million settled in cash. Lonzim Hotels Limited holds the Leopard Rock Hotel and related subsidiaries.

VAL equity placement

On 15 February 2015, the Company entered into a Share Subscription Agreement in terms of which VAL agreed to subscribe and the Company agreed to issue, 107,000,000 ordinary shares of GBP0.0001 each at price of 0.85p per share ("the VAL subscription"). The proceeds from the VAL subscription had by 1 June 2015 been fully expended by the previous management to fund the head office and working capital requirements of the Group.

VAL is beneficially owned by Samir Shasha.

Cancellation of Chemicals & Marketing Company Limited acquisition ("the C&M acquisition")

It was announced on 26 August 2013 that the Company had concluded the acquisition of the entire issued share capital of Malawi chemical distributor Chemicals & Marketing Company Limited ("C&M") and that the 5.5 million consideration shares ("consideration shares") had been admitted to listing on AIM.

Following a more in-depth understanding of the financial affairs of C&M, the Company and the C&M vendors entered into a Disengagement Agreement in June 2015 in terms of which the parties agreed that the C&M acquisition would be reversed and the parties be restored to their initial positions.

The consideration shares, net of shares sold to satisfy obligations to C&M, will be held as treasury shares.

The Company's subsidiary MillChem Holdings Limited ("MHL"), has provided guarantees to creditors of C&M to the value of US$0.6 million. C&M has undertaken to release MHL from these guarantees and indemnified MHL for any potential related loss.

Sale of Millchem Zambia

Millchem has agreed in principle to the sale of the Zambian operations for net asset value estimated to be US$50 000. The rights to the name "Millchem Zambia" are not included in the sale.

Settlement with Lonrho

On 3 September 2015, the Company entered into a Settlement Agreement with Lonrho Limited. We expect a net inflow of US$3.5 million which will be used to reduce debt and support the operating companies.

Strategy going forward and closing

The Company is being focused on creating value for shareholders through its investments in Millchem and Payserv. In addition, the Board is in the process of formulating its investment strategy to implement strategic value-creating acquisitions as appropriate opportunities arise. We will continue to focus on Zimbabwe, which we believe provides the best opportunity for successful investment and growth in the short to medium term.

Mr Samir Shasha

Chief Executive Officer

7 September 2015

Cambria Africa Plc

Audited consolidated income statement

For the year ended 31 August 2014

Cambria Africa Plc

Audited consolidated statement of comprehensive income

For the year ended 31 August 2014

Cambria Africa Plc

Audited consolidated statement of changes in equity

For the year ended 31 August 2014

Cambria Africa Plc

Audited consolidated and company statements of financial position

As at 31 August 2014

Cambria Africa Plc

Audited consolidated statement of cash flows

For the year ended 31 August 2014