Cambria Africa Excited by Millchem and Payserv Growth

Cambria Africa says it is excited by the prospects of the Millchem and Payserv businesses, which are being rolled out regionally.

The two business units have made good progress and achieved significant milestones in their regional expansion. The latest update shows that, with the focus on Millchem and Payserv, Cambria is now looking forward positively for the first time since the new management began the considerable restructuring process of the company 18 months ago.

In the meantime, Cambria says it is continuing the process of disposing of its last remaining non-core assets, while continuing to significantly reduce central costs, which were already down well over 50% when compared to last year. The strategy has been to refocus and reorganise the company, transforming it from a multi-investment single country operation to a regional business focused on select investments. The Payserv and Millchem businesses are being advanced through a well-thought out and determined rollout strategy, spanning a number of years.

Millchem, a chemical distributor, has set up a warehouse and offices in Zambia, where operations are now beginning. It then hopes to replicate this in Malawi, where initial steps have been made. It has also opened up a branch in Bulawayo, Zimbabwe’s second largest city, and launched buying entities in Europe and South Africa, to enhance its ability to deal with leading chemicals suppliers.

Payserv, meanwhile, is now processing payments for its first customers in Zambia, following the receipt of a National Payments Licence in the country, an important step for the company. It is also rolling out a number of new products such as eSchedules, PayZIMRA and PayFT.

Cambria said it anticipates growth for both companies in the year ahead, and said it may also make some smaller acquisitions to accelerate the regional expansion.

In 2013, the Payserv and Millchem businesses grew revenues by 10% and 6%. Even though this rate of growth was again strong, it has slowed somewhat from prior periods; over the last two years, Millchem and Payserv almost doubled revenues and gross profits.

The slow-down in growth was attributed to the high level of uncertainty in Zimbabwe’s business environment in the second half of last year, relating to the government elections. Cambria said that in Africa, irrespective of country-specific issues, elections often have this kind of negative economic impact.

During the election year, the country experienced liquidity shortages, which in turn led to cautious consumer spending and, according to Cambria, this continues to have an impact on the current performances of its businesses.

“Cambria has had a year of transition, which has seen the end of ongoing legal disputes and completion of the strategy to focus on companies that can effectively pursue growth and scale through regionalisation,” the company said. “We close out the financial year with a platform of two very strong companies, which have made significant progress in their product rollout and regional strategy, and which have a clear strategy for the next few years. Implementing this strategy over the last 18 months came with difficult choices for Cambria’s board. However, having brought Cambria to where it is now, the board’s conviction is stronger than ever that our current portfolio and focus marks the best route forward towards maximising shareholder value.”

Cambria also announced it has appointed Peterhouse Corporate Finance as its joint broker.

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