www.cambriaafrica.com
Cambria Africa plc is a long term, active investment company, building a portfolio of investments primarily in Zimbabwe.
The name of the Company is inspired by the Cambrian period in the earth's development, also referred to as the "Cambrian explosion".
It represents an anticipated period of rapid development and a promising new era for the Company, its shareholders and employees – alongside the current economic renaissance of Zimbabwe.
It has been listed on the AIM market of the London Stock Exchange since 2007. Until February 2012 the Company was known as LonZim plc.
LonZim on track for growth as economic recovery in Zimbabwe takes root
LonZim PLC (AIM: LZM), an investment company focused on Zimbabwe, said significant milestones have been passed to stimulate economic recovery in the country, and it is currently reviewing a number of potential further investments.
Since its IPO in December 2007 which raised £28.7 million, the company completed seven significant transactions and built a portfolio of businesses in Zimbabwe that are well positioned to benefit from economic recovery.
In a market update, LonZim noted several recent developments that it expects to help lift Zimbabwe out of the economic stupor of late, namely that a Government of National Unity is established and operating, and that hyperinflation has disappeared as a result of the country formally adopting the US dollar as a currency, thus producing a stable economic platform for business.
Also, international institutions such as the IMF and the South African Development Community (SADC) are subscribing to debt relief and financial support to help stimulate and rebuild the economy.
Its current market capitalization stands at approximately a 62 percent discount to the acquisition cost for the portfolio of LonZim businesses, ignoring rises in Zimbabwean market values.
LonZim said its portfolio is focused on market sectors it believes will recover quickly as the economic status quo in Zimbabwe normalises.
It bought the Leopard Rock Hotel in Vumba mountains in the east of Zimbabwe for US$8.5 million. It is undergoing a US$1.7 million refurbishment which is expected to be completed in March 2010. The purchase included a world class golf course and a 400 hectare game reserve. A feasibility study is under way to add further accommodation, a world class spa and upgrade the hotel to one of the premier locations in Africa. The Government of National Unity has identified the tourism sector as one for rapid recovery and has introduced tax exemptions on the import of materials for refurbishment and development of tourism projects.
Lonzim spent US$4.25 million on a 79 percent holding of a 300,000 square metre plot of prime development land on the coast at Beira, Mozambique, with the government holding the remainder. The site, called Aldamento Turistico de Macuti , had two large four star hotel properties that were popular destinations for Zimbabwean businessmen - Beira is the nearest port to Zimbabwe - and for Zimbabwean holidaymakers. The company plans to develop a new five star beach front hotel and bring in third party developers for a retail shopping mall with offices. The site includes 1.5 kilometres of pristine beach front which is planned to be sold off plan and developed as high quality costal housing.
Paynet, which provides electronic transfer services for 19 of the 21 banks in Zimbabwe along with payroll services for major companies and a payroll bureau service, was bought for US$3.19 million. The price included the newly built commercial premises and offices in the prime Harare office area from which the company operates which is valued in excess of US$1 million.
LonZim invested US$2.3 million for 51 percent of start-up business Panafmed which imports, wholesales and distributes pharmaceutical products in Zimbabwe. Panafmed supplies NGOs, private and public hospitals, clinics and pharmacies with quality products delivered via a professional, secure and chilled refrigerated logistics chain.
Listed on the Zimbabwe Stock Exchange, Celsys Ltd is a security printing, IT, promotions and telecommunications focused company. LonZim owns 60 percent of the company and the premises from which it operates. Celsys is the country's largest producer of telephone scratch cards and has recently generated a promotion with Spar retailers and Coca-Cola utilising secure promotional scratch cards. Celsys also has the distribution rights for Diebold ATMs and is installing these in Kingdom bank branches along with 2,000 point-of-sale machines across the country.
LonZim controls Millpal Chemicals, a supplier of industrial chemicals. Utilising bespoke underground mixing and blending tanks located in Harare, the company provides chemicals to the leading companies in Zimbabwe. It also makes 'own brand' household and chemical cleaning products.
LonZim is launching operations of African low-cost airline Fly540 in Zimbabwe this year together with Lonrho PLC (AIM: LONR). Lonrho owns Fly540 and holds a 24.53 percent stake in LonZim. Fly540 Zimbabwe will provide domestic and regional aviation services to Zimbabwe. Operated from Harare, the airline will provide safe, reliable and punctual scheduled services to the local market. Good transportation infrastructure is essential to economic growth.
LonZim has invested in an option to acquire 51 percent of FMNA (Africa). The company provides a software for mobile telephone handsets that facilitates two way instant messaging and email technology. With a successful trial with Econet Lesotho and a subsequent full rollout, plans are under development following the stabilisation of the US dollar economy for a significant trial with Econet Zimbabwe. A series of other African countries are also establishing trials for the FMNA technology.
Transactions in Zimbabwe are currently taking between six and eight months to complete from initial discussions. LonZim is currently reviewing a number of potential investment opportunities, including the acquisition and development of a new five star hotel property located in the prime area of Harare to complement the current LonZim hotel portfolio at Beira and Mutare.
It is also looking at buying a large industrial warehousing complex in Harare, developing a new agri-processing facility in Harare and expanding the Leopard Rock hotel.
As previously announced David Armstrong, the Lonrho finance director, has also assumed this role at LonZim. Armstrong is an experienced finance directorwith extensive knowledge of the African market, gained whilst the commercial director at Diageo Africa.
Colin Orr Ewing has been appointed as a non executive director of LonZim. He is experienced in the African resources sector and his career as an investment manager, initially with Shell Pension Fund and thereafter with a series of fund managers focused on Africa, brings a strong set of independent skills to the board, the company added.
