Cambria Africa Regulatory News (CMB)

8 Dec 2009 07:00



8 December 2009

LONZIM PLC

("LonZim" or the "Company")

Update on Celsys Limited

LonZim plc ( AIM : LZM ) is pleased to note that Celsys Limited, which is owned 60% by LonZim, has made the following announcement to the Zimbabwean Stock Exchange this morning:

Celsys Limited Quarterly Update December 2009

Celsys Limited is pleased to report significant improvements in the trading performance of the Company for the first quarter of the 2009/2010 financial year, with revenues having increased to US$650 000 for the three months to 30 November.

Comms Division

The Comms division has enjoyed major revenue growth through the recently introduced scratch card, airtime promotion, initiated by Celsys Marketing and launched in partnership with Coca Cola Central Africa and Spar Zimbabwe. The division is also preparing to re-launch its C-phone mobile payphone services with the introduction of new state-of-the-art Adondo payphones from Psitek in South Africa and anticipates significant revenue contributions from these in the second quarter.

Print Division

The Print Division has also undergone a recapitalization exercise, and has recently received and commissioned an additional 4 colour press, a two colour press and two single colour presses, as well as new print preparation and finishing equipment to position itself as a leading commercial printer alongside its existing pre-eminent position as a leading security printer.

The division was recently awarded a contract to print study texts for a Zimbabwe university valued at more than US$250 000 which will filter through into the second quarters results and is also accepting toll manufacturing jobs from other commercial printers with its increased capacity.

In addition the Division is also benefiting from the appointment of new experienced management and technical skills, has made significant investments in raw material stocks and has received new orders that firmly demonstrate that the market is recovering and that the Company is well positioned to provide services to its clients. 

IT Division

The IT Division has also enjoyed recent improvements to its trading conditions and in anticipation of changes in the market has recently signed a new ATM and POS leasing agreement with Kingdom Bank. The first 10 new Diebold ATMs are expected to be deployed alongside the first 200 POS devices, in January 2010 and we expect to see a meaningful contribution to revenues from this infrastructure coming through towards the end of the second quarter.

The Sophos operation continues to meet its sales and renewal targets and is an important contributor to the Company's margin.

Outlook.

The continuing improvements to the economy are being reflected in increasing confidence by international investors, specifically Lonzim, who as majority shareholder of Celsys has provided lines of credit and working capital support to the Company that have facilitated the company being in a strong position to rapidly gain market share as the Zimbabwe economy recovers..

The process of "re-inventing" the Company is ongoing and there are numerous initiatives in place that will be an important part of returning the business to profitability and delivering strong growth. 

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