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'Mr Marmite' David Lenigas has a spicy proposition

So what is AAAP? Well, it is a Cape Town-based blender of paprika, chilli, pepper and assorted other food liveners.

jar of marmite
Lenigas is like this savoury spread - he divides opinion
Opinionated and passionate, David Lenigas is a bit of a Marmite figure in the Square Mile – although he has almost cult status with a small army of fans who follow him on social media.
 
Not wishing to the gild the lily here with this analogy, but he has developed a Trump-like ability to get his message out to a mass audience. 
 
Yet the irrepressible Aussie has been notably silent on his latest venture – Anglo African Agriculture (LON:AAAP).
 
That was until Thursday. For the link, included here, provides his insight on this main board-listed latter-day spice trader, which, he reckons, has the potential to be a dividend-paying little fire-cracker of a stock.
 
The shackles it seems are off now after the business has filed its prelims – figures that showed this business as work in progress.
 
So what is AAAP? Well, it is a Cape Town-based blender of paprika, chilli, pepper and assorted other food liveners.
 
This isn’t the stuff that’s found in those Shwartz jars that were a staple of most 1970s kitchens.
 
No, its mixes go into burgers, sausages and fish on an industrial scale as well as being used as a meat rub.
 
As well as selling spices, AAAP also owns a 47% stake in a trading operation that sources raw ingredients used by the main business. In other words this small company (market cap £2.8mln) is vertically integrated.
 
What Lenigas organised was a surprisingly modest injection of cash to place the business on a sounder financial footing. 
 
More importantly he has opened a contact book built up over many decades doing business in Africa. 
 
His approach appears to be working. It is understood the company is now running at 140-150 tonnes a month (which takes it well past break-even).
 
Meanwhile, steps have been taken to push capacity up to 250 tonnes.
 
If revenues were £1.8mln on just 80 tonnes a month, then annual sales would be £5-6mln at full capacity.
 
That’s not an earth-shatteringly huge number – but it is a start. And it would represent a profitable start to proceedings.
 
It is understood that Lenigas thinks he can very quickly transform AAAP into a 100mln rand or £6mln a year turnover business.
 
Longer-term, by driving up capacity and adding export orders to the mix, annual turnover could grow significantly. Lenigas is thought to be eventually targeting revenues of 1bn rand a year.
 
This is all pie in the sky at this stage. However, we know from Thursday’s results statement the turnaround well is underway. Does the current lowly share price recognise this fact? 
 
If it doesn’t then I suspect Lenigas will be fairly forthright in letting us all know.
 
David Lenigas can be found tweeting at @DavidLenigas

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