Cambria Africa Regulatory News (CMB)

Cambria Africa Plc

("Cambria" or the "Company")

Results for the six months ending 28 February 2015

Delayed by extenuating circumstances, Cambria Africa Plc (AIM: CMB) announces its six months results for the period ending 28 February 2015 (the "Period").

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 period were:

· On 21 October 2014 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. The related write down of the Company's investment in the Leopard Hotel Group to its net realisable value has been recorded in the results for the year ended 31 August 2014. Accordingly, the Leopard Rock Hotel Group had no material impact on the financial performance of the group for the period.

· 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 period, Payserv and Millchem combined, grew revenues and gross profit by 33% and 26% year-on-year, respectively.

· Cambria's central costs were 4% higher than the equivalent period last year mainly as a result of US$0.6 million legal fees incurred, US$0.5million of which related to the Lonzim Air litigation. As noted in the 31 August 2014 results announcement, an aggressive cost reduction and central overhead restructuring have been implemented after the reporting period.

· Cambria's EBITDA loss from continuing operations for the period was US$1.1 million (2014: US$1.2 million).

· The Group recorded a loss from continuing operations of US$1.8 million for the period (2014: US$2.2 million). The loss from discontinued operations totalled US$0.5 million, reflecting legal costs incurred on the Lonzim Air litigation.

Audit opinion in respect of year ended 31 August 2014

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:

Mr Shasha, was appointed as director on 3 June 2015 following the VAL subscription. He was nominated by the board and appointed as CEO with effect from 3 August 2015.

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, together with my report on the results for the year ended 31 August 2014, are my first reports to shareholders albeit almost 6 months after the period 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 Company 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 interim period ended 28 February 2015 is provided. These results should be read in conjunction with the commentary to the annual results, also published today.

During the period, revenues and gross profit of the continuing operations of Cambria, being the Payserv and Millchem, were US$5.6m (2014: US$4.2m) and US$2.9m (2014: US$2.3m) respectively, representing corresponding decreases of 33% and 26% to the equivalent prior period.

The Company recorded a loss of US$2.2m for the six month period ended 28 February 2015, compared to US$2.7m loss during the first half of 2014. Cambria's loss per share for the period was 2.4c, compared to a loss of 4.1c per share for the same period last year.

Divisional reviews

Payserv Africa

Payserv provides EDI switching services (Paynet), 'payslip' processing (Autopay), and payroll based microfinance loan processing (Tradanet). It is well-established with all three products in Zimbabwe, and recently commenced operations in Zambia with its Paynet and Autopay products.

Paynet provided Electronic Data Interchange (EDI) services to all the banks and building societies in Zimbabwe, as well as to over 1,500 corporates. Paynet processed 8.88 million transactions (2014: 8.21 million) during the period under review, a 8.2% increase.

Autopay provided payroll services to more than 150 customers, processed over 173,000 pay slips (2014: 156,000) during the period under review, a 10.9% increase.

Tradanet had an excellent performance over the period. It processed approximately 81,000 (2014: 50,000) loans, representing a value of US$105.3 (2014: US$63.2m), a 62% increase and a 66.7% increase respectively. At the end of the period the loan book under management stood at US$152.6m (2014: US$112.5m), an increase of 35.6%.

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 a remarkable 56%.

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

As highlighted in the annual results announcement, 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 and central costs

The Leopard Rock Hotel Group

On 21 October 2014 the group disposed of its 100% interest in the Leopard Rock Hotel Group, for a total consideration of US$2.5 million. The related write down of the Company's investment in the Leopard Rock Hotel Group's to its net realisable value has been recorded in the results for the year 31 August 2014. Accordingly, the Leopard Rock Hotel Group had no material impact on the financial performance of the group for the period.

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$$0.5 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$1.234 million in central costs for the period under review, compared to US$1.183 million last year, an increase of 4.3%.

At the date of this report, central costs have been further reduced to an estimated annual cost of US$0.7 million, significantly lower than the US$3.1 million in respect of the financial year ended 31 August 2014.

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

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 related 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 will 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.

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 VAL subscription was implemented in April 2015, following shareholder approval. 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.

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

Interim consolidated income statement

For the six month period ended 28 February 2015

Cambria Africa Plc

Interim consolidated statement of comprehensive income

For the six month period ended 28 February 2015

Cambria Africa Plc

Interim consolidated statement of financial position

As at 28 February 2015

Cambria Africa Plc

Interim consolidated statement of changes in equity

For the six month period ended 28 February 2015

Cambria Africa Plc

Interim consolidated statement of changes in equity

For the six month period ended 28 February 2014

Cambria Africa Plc

Interim consolidated statement of cash flows

For the six month period ended 28 February 2015

Cambria Africa Plc

Notes to the interim consolidated financial statements

1. Reporting Entity

Cambria Africa Plc is a public limited company which is listed on the AIM London Stock Exchange and is incorporated in the Isle of Man under the Isle of Man Companies Act 2006.

2. Basis of preparation

The condensed consolidated interim financial information for the six months ended 28 February 2015, has been prepared in accordance with the accounting policies that are expected to be adopted in the Group's full financial statements for the year ending 31 August 2014 and are not expected to be significantly different to those set out in the Group's audited financial statements for the year ended 31 August 2015.

The financial information for the half years ended 28 February 2015 and 28 February 2014 is neither audited nor reviewed. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the period ended 31 August 2014, which are available upon request from the Company's registered office at Appleby Trust (Isle of Man) Limited, 33-37 Athol Street, Douglas, Isle of Man, IM1 1LB or at www.cambriaafrica.com.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly condensed consolidated financial statements.

3. Note to the cash flow statement