ANALYSTS
Ritesh Anand [email protected]
Simbiso Musa [email protected]
Equity Research
Diversified
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Contents
Market Data
Index Market: UK-AIM
Stock Code Reuters: CMBC.L
Sector : Equity Investments Instruments
Country of operation: Zimbabwe
Market Capitalisation: US$13.6 million
Shares outstanding: 59.1 million
52 week range: $0.40/$0.18
Average daily traded volume: 100 762
NAVPS: $0.42
EPS: (12.4)
Target price: $0.49
Current price: $0.26
Exchange rate [GBP/USD] 1.54:1
Equity Research
Cambria Africa Limited
Diversified growth play in Zimbabwe July 2012
Zimbabwe Stock Exchange
PRIME Draft Copy Only: Not for external distribution or to Sales.
P
Convertibles
PLEASE SEE THE IMPORTANT DISCLAIMER, COMPANY DISCLOSURES AND ANALYST CERTIFICATION ON THE LAST PAGE OF THIS REPORT
Cambria Africa (formerly known as LonZim) is an AIM listed investment company
with primary focus on Zimbabwe. Cambria Africa listed on the AIM market in 2007
through an IPO that raised £29.2m (US$46.5m). Cambria Africa recently
announced its intention to list on the Zimbabwe Stock Exchange through a reverse
listing of one of its listed subsidiary’s Celsys. Upon listing Cambria would be
amongst the top 25 companies in terms of market capitalisation and net assets.
Cambria has achieved compliance with Indigenisation and Economic
Empowerment Act (2007), and is well positioned to benefit from the recovery in
Zimbabwe.
Cambria has appointed an almost entirely new board and now operates wholly
independent from one of its major shareholders Lonrho Plc. The new board and
management are focussed solely on creating shareholder value through growth,
restructuring and cost cutting. Much of this has been achieved over the last 24
months and we believe that Cambria is well positioned to benefit from the strong
recovery in Zimbabwe’s economy.
The company currently has direct exposures in the tourism sector (Leopard Rock
Hotel) Manufacturing and Distribution sector (Millchem), Printing (Celsys), and
indirect exposure in the financial services sector (Payserv). The company’s
investment objective is to provide shareholders with long term capital appreciation
through the investment of its capital primarily in Zimbabwe. While the company will
not be sector specific, it will seek to identify individual companies in sectors best
positioned to benefit from the anticipated radical improvements in the economy.
Cambria will seek to improve on management expertise, growth capital, and
international network.
Zimbabwe’s economy continues to recover. GDP grew by 9.3% in 2011 and is
projected to grow by circa 5-6% in 2012. Since 2009 GDP growth has averaged
8% making it one of the fastest growing economies in the region. Zimbabwe
currently enjoys the lowest rate of inflation in the region and the rate is expected to
remain contained in the single digit zone below 8% up to 2015. The downside on
Zimbabwe remains the uncertain political environment, restricted fiscal space,
limited financial instruments and unsustainable debt levels. Cambria is well
positioned to benefit from a strong recovery in the Zimbabwean economy.
The strong management team at Cambria continues to facilitate an
instrumental role in cutting costs, transforming key business and
disposing of non-core entities. Cambria is expected to achieve
profitability by end of FY13 and is well positioned to benefit from a
recovery in the Zimbabwean economy. Cambria offers the investor a
solid, diversified growth investment in Zimbabwe and has well-
diversified investments across growing sectors of the economy. We
recommend investors to BUY.
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Contents
Cambria: Investment Thesis ............................................................. 3
Zimbabwe: Strong Economic Growth .................................................. 3
Strong Management Team .................................................................... 3
Underlying business a lot more focussed… ....................................... 3
Successful turnaround over last two years beginning to bear fruit… 4
Attractive valuations and excellent corporate profitability recovery . 5
Zimbabwe: Economic Outlook ......................................................... 6
Zimbabwe to outperform Sub-Sahara and World growth ................... 6
Cambria: Business Overview ............................................................ 8
Cambria`s Investment strategy ............................................................ 8
Rationalisation of Investment Portfolio ............................................... 8
Payserve: Spearheading Zimbabwe`s digital revolution .................... 9
Millchem: Strong growth prospects ................................................... 12
Leopard Rock: Unique tourist destination ........................................ 13
Celsys: Building a leading position ................................................... 15
C.E.S.: Bridging the gap between IT and Business ......................... 16
Forget Me Not Africa (FMNA) .............................................................. 16
Discontinued Operations ................................................................. 17
Aldeamento Turistico de Macuti SARL (Mozambique) ..................... 17
Aviation ................................................................................................ 17
Financials ............................................................................................. 18
Summary Financial Performance ....................................................... 18
Key valuation ...................................................................................... 19
Risks .................................................................................................... 20
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Cambria: Investment Thesis
Zimbabwe: Strong Economic Growth
Since the formation of the government of national unity (GNU) and adoption of the multi-
currency regime in Feb 2009, Zimbabwe’s economy has grown at an average rate of 8%,
making it one of the fastest growing economies in the region. “Dollarisation” of the economy
destroyed hyperinflation and led to price stability. Real GDP growth accelerated from 6% to
9% in 2011. Zimbabwe’s economic recovery is underpinned by the following:
One of the most diversified economies in Africa (agriculture, manufacturing, natural
resources, and tourism).
Second largest reserves in platinum after South Africa
Significant untapped mineral reserves (coal methane gas, gold, copper and nickel)
Highly educated population, high literacy rates
Good basic infrastructure; roads, rail, water, electricity.
Strong Management Team
Cambria has a strong management team led by CEO, Edzo Wisman. Edzo was appointed
CEO in January 2010 and has been instrumental in restructuring the business, cutting costs
and driving the performance of it’s underlying investments. Cambria recently appointed
Tania Sanders as Chief Financial Officer. Since January 2010, gross profit has organically
increased 2.3x to Feb 2012. Management teams in the underlying companies have been
strengthened; Roy Meiring – CEO, Hotels Division; David Kuwana-MD, Payserve, Ewald
Rienks – MD, Millchem. The team comprises of an effective mix of successful
entrepreneurs, industry specialists, investors, wealth managers, investment and corporate
bankers. Management is supported by an active, “hands on” board. Management have
focussed on restructuring and cost cutting while relentlessly growing gross profit.
Underlying business a lot more focused…
Over the last two years Cambria has adopted a more focused approach and has disposed of
a number of non-core businesses. Cambria’s portfolio comprises of 5 core business;
Payserve, Celsys, Millchem, Leopard Rock, and CES. Cambria will continue to dispose of
other non-core assets which include certain properties, airlines, Forget Me Not Africa
(FMNA), and Automated Teller Machines (ATM’s).
Payserve is a leading provider of Electronic Data Interchange (EDI) switching, “payslip
processing” and payroll based microfinance loan processer. Paynet is the leading business
process outsourcing service provider and contributes approximately 50% to group gross
profit. Operations include Paynet which is the leading payment switching provider, Autopay
the country’s largest commercial salary bureau and Tradanet, Zimbabwe’s only outsourced
loan processing service.
Leopard Rock which was acquired for $8.5m in 2009 is a historic, iconic, luxury hotel and
resort in the eastern Highlands of Zimbabwe. Leopard Rock boasts a championship golf
course, casino, and fine dining restaurants. The resort has a prestigious 6,164 metre golf
course and a 450 hectare private game park. A total of approximately US$ 3.0m has been
used to refurbish the hotel. Occupancy levels have improved to average 60% and Average
Daily Revenues (ADR) are approximately $130. The leisure segment contributes
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approximately 40% of occupancies while the balance is conferencing. The casino also
brings additional revenues of approximately US$ 0.4m p.a. The group acquired The Castle
at Leopard Rock in March 2012 for a total consideration of approximately US$ 0.7m. “The
Castle” operates as a guesthouse with six rooms.
Millchem is a leading chemicals distributor in Zimbabwe, with dominant market positions in
solvents and metal treatment. Millchem is well positioned to benefit from the strong recovery
in the mining sector. Millchem has installed capacity of 150,000 litres in underground storage
facilities and 100,000 litres above the ground and the unit commands a market share of
approximately 60% in the solvents and 90% in the metal treatment industries. Margins are
generally low at c20% and EBITDA of approximately 7%.
Celsys is a leading provider of commercial and security print services in Zimbabwe. Celsys
is arguably the best equipped printer in Zimbabwe has leading market positions. Business is
likely to expand as the economy recovers and demand for print services increases. The
main business is commercial printing then security printing. Approximately US$ 0.8m
was invested to retool the operations. The unit contributes approximately 10% to group
gross profits. Gross profit margins are approximately 39%.
CES (Complete Enterprise Solutions) is an IT services company in Zimbabwe. Most
companies in Zimbabwe have not upgraded their systems since 2000. IT spend is likely to
increase as the economy recovers given the significant backlog in IT spending in recent
years. Margins range from 5-10% on global customer sales and 40%-60% on service
offering.
Successful turnaround over last two years beginning to bear fruit…
Over the last two years Cambria has focused on businesses with dominant market positions
in growing industries, strong management teams, and strong underpinning cash-flows. In
companies where management has been weak, Cambria has replaced management
including the CEO. Cambria has focused on restructuring underlying businesses both
operationally and financially through a rigorous process and has disposed of businesses that
no longer make commercial sense.
Over the last two years revenues have grown circa 3 fold while gross profit has increased
2.3x, with the difference resulting from a change of ‘sales mix’, rather than margin erosion.
Over the last 12 months gross profit has increased 1.6x reflecting the positive impact new
management has brought. Management will continue to focus on driving growth while
rationalising costs. Cambria`s intention to list on the ZSE through Celsys is an effort to
broaden its investor base and encourage local participation.
Over the next 12-24 months Cambria`s management will continue to focus on cost cutting at
Leopard Rock, resolve governance issues, and renovate the recently acquired “castle”. Over
the next 24-36 months Cambria will seek to acquire a second hotel. Cambria expects to
turn profitable by year-end (FY13) and results for the first half of the year was in line
with expectations.
Over the last two years revenues have organically
grown circa 3 fold while gross profit has increased 2.3x. Over the last 12 months gross profit
has increased 1.6x reflecting the positive impact new
management has brought.
Based on a Net Assets Value Cambria`s share is trading at a
huge discount (60%) on the London`s AIM, the valuation gap
is expected to be closed by, among others, listing on the Zimbabwe Stock Exchange
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Attractive valuations and excellent corporate profitability recovery
Cambria`s stock price is hugely undervalued despite the fact that a considerable amount of
money has been put into recapitalising the business and the subsidiaries are making a
turnaround, with profitability now ‘in sight’. Based on a Net Asset Value, Cambria`s share is
trading at a huge discount (60%) on the London`s AIM, the valuation gap is expected to be
closed by, among others, listing on the Zimbabwe Stock Exchange. Based on a combined
multiples valuation, DCF method and Sum of The Parts valuation we arrive at a target price
of 32.7p representing an upside potential of 92%. Cambria used its free cash flows to invest
in their businesses thus resulting in earnings growth, which we believe will ultimately be
reflected in the stock price and again benefit shareholders in the long run.
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2009 2010 2011 2012 2013
Overview of the World Economic Outlook Projections
World Emerging and developing countries Sub-Sahara Zimbabwe
Zimbabwe: Economic Outlook
Zimbabwe to outperform Sub-Sahara and World growth
After a decade of economic downturn in which more than 40% of GDP was lost, Zimbabwe has
turned a corner, and has been transformed into a growth economy anticipated to outpace sub-
Saharan growth over the next five years. Growth in Zimbabwe looks set to remain attractive
versus the rest of sub- Saharan Africa, while official estimates are as high as 9.4%. We forecast
lower GDP growth of circa 5-6% in 2012, due to political headwinds and regulatory uncertainty.
Growth will be driven primarily by the agriculture, mining, tourism, financial services sector, and
improving capacity utilisation in the manufacturing sector.
F FIG: 1 Zimbabwe to outperform Sub-Sahara and World Growth
Source: IMF, Invictus Estimates
Commodities Sectors to propel growth
The economic potential of Zimbabwe is vast. After a period of hyperinflation and collapse of
the banking sector in 2008, stability has since been restored through a coalition government
and dollarisation of economy in 2009. The economy is widely expected to remain on a
growth path. GDP has been on the rise, growing 8.4% in 2010 to an estimated 9.3% in 2011
and is projected to grow c5-6% in 2012. Major drivers of economic growth have been the
mining and agricultural sectors, and are likely to remain so, with mining in particular
benefitting from high global commodity prices and private capital injections.
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2008 2009 2010 2011 2012
Growth in Subsectors of the economy
Mining Tourism Manufacturing Financial Services
The manufacturing sector is expected to grow by 6% in 2012 albeit from a very low base,
with growth driven mainly by food (6%), wood and furniture (8%), metals and metal products
(11%), and non-metal products (25%). The manufacturing sector capacity utilisation has
picked up in some subsets including the consumer goods sector. For example foodstuffs
capacity utilisation is expected to reach 57% in 2012 from 38% recorded in 2010, whilst for
drinks, tobacco & beverages it is expected to reach a high of 95% in 2012. In some
subsectors such as clothing, textiles and printing it has however remained low, averaging
around 25% while the textile and ginning industry capacity utilisation is expected to decline
further to 19.0% from about 23.0% achieved in 2010.
Tourism appears to be the most promising sector, with the drive coming from major hotel
chains and airlines that are planning to expand their presence on the continent. Tourism is
at the heart of economic re-launch and the type of sustainable development that can create
permanent jobs. Central to both quantitative and qualitative growth in tourism will be
marketing initiatives to penetrate new markets and develop new tourism products, against
the background of increased competition, given challenges related to overall global
economic slow-down. Significant is Zimbabwe securing the opportunity to co-host the 20th
session of the United Nations World Tourism Organisation (UNTWO) in 2013.
Microfinance has also emerged as one of the best performers in the financial services
sector. Microfinance has been able to boost consumer spending of individuals with modest
incomes. However, as microfinance grows, so does the need to regulate this sub sector by
way of a credit bureau. The sector offers huge opportunities in the informal and the
unbanked in general. Payserve is set to benefit immensely from this robust growth with
Tradanet having the infrastructure to support it.
Fig:3 Growth in Zimbabwe`s Subsectors
Source: Ministry of Finance
Manufacturing sector is expected to benefit from the spillover effect and grow by 6% for 2012
Tourism: the most promising sector with the drive coming from major hotel chains and airlines expanding their presence
in Zimbabwe.
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Cambria: Business Overview
Cambria`s Investment strategy
Cambria`s key objective is building a portfolio of companies that are well-positioned to
benefit from Zimbabwe’s economic growth and from formalization and modernization of
Zimbabwe’s economy. Moreover, Cambria seeks investments that have current sector
leadership in Zimbabwe, or, in Cambria’s view, are able to achieve this. Cambria generally
seeks control as it prefers to become actively involved in the companies it acquires. For
example, assisting in setting focused strategic objectives, building “first class” management
teams, creating globally focused companies and efficiently deploying the necessary funds to
build on, or achieve leading market positions and therewith by associated higher margins.
Cambria’s approach is a fusion between a conglomerate and a publicly traded private equity
firm. Cambria takes a longer term perspective of a ‘going concern’ and seeks the value
enhancing, efficiencies of an investment company. Even though within Cambria
investments are referred to as ‘subsidiaries’ and Cambria seeks synergies between its
subsidiaries, Cambria has the discipline to enter and exit investments when appropriate for
maximizing shareholder returns. These companies are in several sectors and selected
according to their ability to be amongst the first to benefit as Zimbabwe continues on a
growth recovery path. Cambria offers a unique position as a European based company with
listing investment in Zimbabwe, allowing bridge role in terms of knowledge, relationships and
ability to manoeuvre in global financial centers and raise capital.
Cambria benefits from the presence of two very active, well-respected shareholders in the
form of Concilium and Jutland (jointly holding 39%) as well as another less-active but also
well-respected shareholder in the form of Contrarian (another 8%). This type of institutional
ownership for a Company the size of Cambria should provide potential shareholders
comfort.
Rationalisation of Investment Portfolio
Since the appointment of Edzo Wisman in 2010, Cambria has adopted a more focussed
strategy and has disposed of non-core businesses. Costs have been contained and a
number of businesses have returned to profitability. The portfolio is now substantially
streamlined, consolidated and focussed on a group of 5 core subsidiaries. The remaining
non-core businesses will be disposed of (see chart below).
Cambria seeks control as it prefers to become actively involved in the companies it acquires.
Cambria offers a unique position as a European
based company with listing investment in
Zimbabwe, allowing bridge role in terms of
knowledge, relationships and ability to manoeuvre in global financial centres
and raise capital.
Cambria`s subsidiaries will benefit directly and indirectly for the growth
of Zimbabwe`s subsectors
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The group will be concentrating on five major subsidiaries as the non- core businesses are
being disposed of. Payserv which is one of the fastest growing subsidiaries in the portfolio is
set to benefit from the growth of the financial services sector, the banking sector and the
microfinance sector. The chemical distribution department division will benefit immensely
from the growth of the mining sector. Celsys is fully equipped to be amongst the top printing
companies in Zimbabwe and a significant market share has been acquired post
recapitalisation. Leopard rock has been refurbished to become a four star hotel and is
expected to benefit from the growth in the tourism sector.
Cambria continues to own two aircraft through its subsidiary LonZim Air (B.V.I.) Limited: a
Fokker F27-500 Cargo (F27) and an ATR 42-320 (ATR). The F27 was leased to 540
(Uganda) Limited in September 2008 and the ATR was leased to Five Forty Aviation Limited
in July 2009. Both entities are subsidiaries of Lonrho. A third aircraft leased by 540 was
destroyed in an accident in January 2011.
FMNA’s messaging technology has now been deployed at 9 networks across Africa,
reaching over 60 million subscribers continent wide, of which 1.2 million subscribers have
registered to date with FMNA. Despite successful deployment of the technology, revenues
generated by FMNA have been deeply disappointing and significant operating losses
continue month-on-month. As a result Cambria can no longer be confident that any of its
investment will be recovered and the Board has hence decided to write off Cambria’s
FMNA’s shareholder loans, as well any goodwill associated with Cambria’s shareholding in
FMNA.
Source: Company data
Despite successful deployment of the
technology, revenues generated by FMNA have been deeply disappointing and significant operating
losses continue month-on-month.
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0
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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Growth in Transaction volumes for Paynet
Transaction volumes (000)
Payserv: Spearheading Zimbabwe`s digital revolution
Payserv Group is Zimbabwe’s leading Business Process Outsourcing service provider, with
a particularly strong presence in the financial services sector. Current offerings include
Zimbabwe’s leading payment switching provider (Paynet), the country’s largest commercial
salary bureau (Autopay), and Zimbabwe’s only outsourced loan processing service
(Tradanet). Adoption of electronic settlement of transactions represents an opportunity for
SMEs in Zimbabwe to compensate for their inherent weaknesses in areas such as access to
new markets, gathering and disseminating information on a world wide scale.
Paynet
Paynet is the leading electronic data interchange company in Zimbabwe. It was acquired for
US$ 3.2 million in October 2008 and now it’s worth almost $10 million. Through its Electronic
Data Interchange (EDI) system Paynet provides EDI switch services to all 25 banks and
over 1 000 corporate and institutional clients nationwide. The company is the flagship of the
Payserv group as it is growing even faster than the financial services sector itself. Indeed its
threshold lies in the banking sector as it seeks to automate almost all transactions whilst
eliminating inefficiencies in banking transactions. The sector can best be described as a high
cost environment, with high lending rates and lack of a functional money market caused by
liquidity problems. The business is to a greater extent volumes based and it has thrived on
the increase in volumes in RTGS payments since 2009. Paynet plans on extending the EDI
product into the insurance sector, pension funds and healthcare sector. Although still at the
preliminary marketing stages the product is likely to be well received in all the three sectors.
Over the past years Paynet has been marketed through the banks, this time around it has
adopted a different approach which involves marketing directly to the end user and thus
tapping into the unbanked sector. This strategy has proved to be successful as evidenced
by the increase in volumes illustrated below
Facilitating settlement of transactions with plastic money is going to be the greatest
innovation to calm the liquidity crisis currently prevailing. From Paynet`s point of view new
bank roll out and existing bank customer roll outs is a sign that the sector is starting to stand
on its feet and greater opportunities await. The micro finance sector presents great
opportunities for the company as well Opportunities also lie in countries like Zambia where
they are technologically behind, it is estimated that if Paynet plays its cards well its Zambian
operations will turn profitable in the next three years. Opportunities also lie in Tanzania and
Kenya.
Autopay
EDI Transactions include
Salary processing
(transfers, supplier
trade payments, direct
debits, stop orders and
payment schedules)
Banking operations
services
Other competencies
(connectivity wit all
banks)
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0
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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
Growth of loan book under management (US$ million)
Autopay is Zimbabwe’s largest private sector outsourced salary bureau; it processes
salaries for approximately 160 customers, producing over 25,000 pay slips per month. It
provides a complete end-to-end payroll related management service. This includes:
printing pay slips;
depositing salaries;
settling third party payments including pension and medical aid;
generating required management and statutory reports in hard and soft format;
ensuring policy and regulatory compliance;
As well as, managing payroll related statutory relationships on behalf of the company,
including audits.
Autopay is also the sole agent for the Paywell payroll system, licensed out of South Africa. It
has sold and supported the Paywell payroll software at over 100 of the largest companies in
Zimbabwe. The company identifies its sources of growth as focused marketing, overall
economic growth, and strategic relationships. Autopay accounts for close to 15% market
share, with no competitor of even remotely the same size, and the client book continues to
grow as more and more companies are opening up.
Tradanet
Cambria owns 51% of Tradanet . Tradanet is Zimbabwe’s only outsourced processor of high
volume, low value loans. On behalf of financial institutions, Tradanet facilitates loan
origination at the employer’s site, and manages repayments from salary deduction and
subsequently monitors portfolio performance. For employers, Tradanet automates the
administration of internal staff loans.
The business has seen strong growth during the year as workers become more confident in
the employment environment and, as a result, are seeking credit facilities. Defaults on this
type of loan remain very low and the business is seeing the average size and number of
loans increase. The loan book arranged through a local financial institution in Zimbabwe and
administrated by Tradanet has grown to over US$70 million as the banking sector continues
to recover.
Source: Company data/ Invictus estimates
Source of growth
focused
marketing
economic growth
strategic
relationship
moving up the
value chain in the
HR department
current market
share
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SWOT ANALYSIS FOR PAYSERV
Strengths
strong networking skills and existing
long term relationships with banks
Dominant market share
Skilled workforce
Reasonable technological innovations
Weaknesses
Limited marketing brands presence
partially in Zimbabwe and outside
Zimbabwe
Strong reliance on the banking
sector
Opportunities
Untapped markets in Zambia
Lagging technical knowledge in most
enterprises
Horizontal and vertical expansion for
existing customer base into new
markets
Increasing awareness into outsourcing
services
Threats
Lack of confidence in the banking
sector since the 2008 banking crisis.
Lack of lender of last resort
Millchem: Strong growth prospects
With Cambria’s assistance, Millchem has become, one of Zimbabwe’s leading distributors of
industrial solvents and metal treatment products. The company was established in 1986 as
Millpal and rebranded Millchem in 2011. Building on 35 years of supply and delivery to
Zimbabwe’s industrial companies in the paints, inks and coatings, plastics, textile,
automotive, and household products sectors, and now mining, Millchem has established
itself as the preferred value-added chemicals distributor in Zimbabwe.
The company consistently maintains high standards of quality, environmental and safety
performance and has recently become the only African member of the National Association
of Chemical Distributors (NACD.) in the United States, an organisation promoting the
Responsible Distribution code worldwide. This membership provides Millchem customers
with a verified guarantee of global best practices in terms of industrial processes, quality
assurance, as well as health, safety and environmental care. It is expected that NACD
membership will in the long-term be almost a pre-requisite for obtaining key distributorships
from large global chemical producers.
Millchem has one of the largest bulk solvent holding facilities in the country. The company
has in-house blending and formulation capabilities and also provides high level technical
support. Furthermore, the company offers market leading commercial terms that are
responsive to customers’ opportunities and challenges. The company is currently operating
at 70% capacity utilisation
Millchem’s main focus areas are expending its leading role in supplying paints and coatings
companies (including adding new products for this sector) as well as supplying chemicals to
small scale gold producers with initial focus being caustic soda, sodium cyanide and
hydrogen peroxide – small scale gold producers were estimated to be approximately 5,000
in 2010 and having approx. 20% of the market – between Jan’11 to Dec’11 small scale gold
producers increased their share of production from 17% to 32% – the Chamber of Mines
Millchem is one of Zimbabwe`s leading
distributors of industrial solvents and
metal treatment products
Millchem is operating at 70% capacity
utilisation
Small scale gold producers were estimated to be
approximately 5000 in 2010 and having
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predicts that an increase of 445% in gold mining output by 2015 – Nov-11 was the first
record for Millchem’s mining chemical sales and the impact on revenue was a 2.8x increase
on prior month. At 70% capacity utilisation growth in chemical distribution has been way
ahead of GDP growth since dollarisation. The trend is most likely to continue backed by the
robust economic growth expected in Zimbabwe.
Leopard Rock: Unique tourist destination
The Leopard Rock Hotel is a four star, 58-room hotel, resort and casino set in the Vumba
Mountains in the Eastern Highlands of Zimbabwe. It is an iconic destination within Southern
Africa with a rich history. Since acquisition in 2009 by Cambria, the hotel has undergone
significant refurbishment, as well as staff upgrades, and it is now restored to its former glory
and is well up to par with current international standards. Completion of the refurbishment
has led to superior occupancy and improved room rates. In 2011 the hotel was awarded
‘Best Resort in Zimbabwe’ by the Association of Zimbabwe Travel Agents and ‘Best Resort
Hotel’, First Runner-Up by Zimbabwe Tourism Authority.
Leopard Rock constitutes about 30% of Cambria`s portfolio value in terms of gross profit.
The hotel was originally acquired by Cambria for US$8.5 million in April 2009 but as of
August 2011 the hotel was sitting at a value of $US18.5 million. Since its acquisition the
group has invested more than US$2 million for refurbishments as well as working capital to
consolidate operations. Average occupancy rates at Leopard Rock increased from 26% in
2009 to 35% in 2010 and 55% in 2011. Leopard Rock hotel does not have strong regional
competitors; in addition to that no other local hotel has the institutional backing that matches
Leopard Rock Hotel. This makes it easy for the hotel to benefit from a surge in tourist
arrivals in the Vumba area.
The renovation programme has brought the hotel back to the highest international
standards. Complementing the renovation, the hotel is planning to develop a world class
Spa. An additional plan includes the development of an additional 100 rooms at the property
ensuring that the accommodation capacity is sufficient needed to attract major golf
tournaments. Despite turbulent times the Leopard Rock Hotel now operates again as a
profitable enterprise.
The hospitality industry is expected to be one of the sectors of the economy that will recover
the fastest and the market for the Leopard Rock Hotel is demonstrably beginning to recover.
At year end the Leopard Rock Hotel was independently valued at US$18.50 million (£11.32
million) up from 2010 US$15.25 million (£9.83 million).Zimbabwe continues to register
positive growth with the highest increase in arrivals being from Malawi, Tanzania and
Angola. Despite the negative impact of the events in Japan and the global recession on
Zimbabwe tourism. Positive growth is expected from China, Korea, USA, Germany and
France. The opening up of international air access is also expected to boost 2012 arrivals
going forward.
Fig: 7 in International Arrivals in Zimbabwe Fig: 7rnational Arrivals in Zimbabwe
The hotel was originally acquired by Cambria for US$8.5 million in April
2009, as of August 2011 the hotel was
independently valued at US$18.5 million.
The renovation programme has brought
the hotel back to the highest international
standards.
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500
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Zimbabwe`s International Tourist Arrivals
Tourist Arivals` 000`
Source: Zimbabwe Tourism Authority/ Company data
Fig: 7 Growth in International Arrivals in Zimbabwe
Source: UNWTO
0
10
20
30
40
50
60
70
80
90
100
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
Revenue per Average Room
Leopard Rock RevPar (us$)
Average Regional RevPar in Zimbabwe( us$)
15 | P a g e
Cambria Africa Limited
Celsys: Building a leading position
Celsys Limited, listed on the Zimbabwe Stock Exchange, has been transformed by Cambria
from being unfocused conglomerate into arguably the country’s best equipped security and
commercial printers, both in terms of capacity and diversity. As such, it has within a short
time frame become one of the leaders in the Zimbabwe commercial printing arena.
Cambria has facilitated huge capital injection in state of the art machinery resulting in Celsys
being one of the best Print companies in Zimbabwe. Celsys was an ‘also ran’ within the
commercial printing arena and is by now working towards a clear first position, while it is
setting the standard in terms of pricing, quality and turn-around times. The company
invested in a full range of pre-press, press and finishing equipment and has sufficient staff
and ‘rolling power’ to operate fully meet demand during peak periods. The initial
capitalisation project has been completed with a total of $2 million injected into the company.
Recapitalisation will be an ongoing process upon bi-annual reviews by the parent company
in a bid to replace obsolete machinery, expand capacity to take market share and add
additional printing capabilities.
Celsys also provides ATM’s and POS devices on a transaction based leasing model to the
financial sector. Although the business is not core to the company transaction volumes have
been on the rise with the increase in the usage of ATMs. Celsys attained ISO 9001:2008
quality standards and was certified in February 2009. Celsys is projected to return to
profitability in FY13 and breakeven point by half year FY12.
SWOT ANALYSIS FOR CELSYS
Strengths
Existing and growing customer base
Infrastructure and upgraded machines
Ongoing need for print
Brand recognition
Strong backup generators to curb
power cuts.
Weaknesses
Power outages still a problem
hence generators expensive to run
for extended periods.
Opportunities
Increasing marketing budgets
New production technology to drive
down costs
Threats
New entrants from Zambia or South
Africa before enough scale has
been achieved / enough market
share has been gained
Celsys boasts about being the “only printing company investing in large sums of
money”.
16 | P a g e
Cambria Africa Limited
C.E.S.: Bridging the gap between IT and Business
CES Zimbabwe develops and delivers IT outsourcing for small, medium and large enterprise
companies looking to optimize their IT investment whilst simultaneously, reducing costs and
allowing management to focus on their core business.
Outsourced solutions offered include design and implementation of a company’s IT
infrastructure, day-to-day on-line monitoring and management of their networks and
establishment of robust data storage and disaster recovery solutions.
Infrastructure sourcing and support from internationally recognized providers
Highly trained consultants with experience across multiple sectors
Innovative, reliable, secure and cost effective solutions as bespoke or managed
business.
As a Dell Certified Partner, a Microsoft Gold Certified Partner, an HP Preferred Partner and
an authorised partner for CISCO networking systems, Avaya VoIP solutions, Riverbed WAN
optimization products and APC/ MGE UPS Systems, CES is the premium supplier of IT
equipment with Zimbabwe. CES Zimbabwe is a joint endeavour between Cambria and CES
Bytes & Pieces, a leading IT services provider in Zambia and Mozambique. CES is still a
very small part of Cambria, having been launched only 12 months ago.
Forget Me Not Africa (FMNA)
FMNA provides ‘message optimiser’ applications for mobile phones, turning basic GSM
phones into ‘smart phones’, providing access to e-mail, Facebook and instant messaging
services via even the most basic cellphone handset, which is an important facility for Africa.
During the year, LonZim purchased the exclusive rights for the FMNA product platform in
Africa for US$1 million (£0.61 million).FMNA’s major success has been with Econet
Zimbabwe which is now producing monthly revenues. Other networks where FMNA has
been deployed include Safaricom Kenya, Econet Lesotho, Globacom Nigeria, Warid Congo
and Yu and Essar in Kenya. FMNA now has access to over 45 million cellphone subscribers
in 6 countries and plans to expand throughout Africa as the product range is developed and
its services are synchronised to interact with individual networks.
FMNA generated US$ 776k (2011: US$ 470k) in operating losses for the half year ended 29
February 2012, an increase of 65% from the prior comparable period. This has resulted in
management writing off Cambria’s FMNA’s shareholder loans, as well any goodwill
associated with Cambria’s shareholding in FMNA.
Cambria considers FMNA non-core and anticipates that this investment will
eventually be sold.
Cambria considers FMNA
non-core and anticipates
that this investment will
eventually be sold.
17 | P a g e
Cambria Africa Limited
Discontinued Operations
Aldeamento Turistico de Macuti SARL (Mozambique)
On 4 October 2011, Cambria announced that it had completed an agreement with Lonrho
Hotels (Holdings) Limited to dispose of its 80% holding in Aldeamento Turistico de Macuti
SARL for US$5.1 million (£3.1 million), a company with a long lease on a prospective
coastal development site in Beira, Mozambique, as part of Cambria’s growing focus on the
economic opportunities within Zimbabwe.
Aviation
As of the 31st of August Cambria held assets to the value of £2,111,000 for sale. This was
made up of 2 aircraft which are still being actively marketed and the Company would hope to
find buyers within the FY12. The Group used to lease two aircraft to 540 (Uganda) Limited, a
Lonrho Plc subsidiary, for US$52k (£34k) per month. One of the leases was cancelled at the
end of February 2011. The total lease income for the year to 31 August 2011 amounted to
US$485k (£296k). As at 31 August 2011, US$518k (£317k) was due from 540 (Uganda)
Limited to the Company. Fly 540 Aviation, a Lonrho Plc subsidiary, is acting as an agent in
the recovery of the insurance money relating to the LonZim Air (BVI) Limited aircraft written
off. As at 31 August 2011, US$100k (£61k) is payable from LonZim Air to Fly 540.
18 | P a g e
Cambria Africa Limited
Financials
Summary Financial Performance
Since its incorporation in 2007 Cambria has made significant recapitalisations and capital
injections to support and grow its subsidiaries. For example, this is evidenced by the
refurbishment of the Leopard Rock Hotel to an international standard venue that is now
attracting conferences and guests from around the world, and the purchase of world class
printing machines for Celsys, to fully equip it.
Cambria’s subsidiaries are coming to the end of their redevelopment phase with a strong
indicator being the positive EBIT achieved by Payserv, Millchem, Celsys and CES between
them over the six months ending Feb-2012 . Moreover, each business has achieved market
leadership in their respective (sub) segments within their markets.
To date the company has invested a total of $9.6 million throughout the subsidiaries.
Recapitalisation of Cambria`s subsidiaries
Celsys $4.5 million
Payserve $0.5 million
Leopard Rock $3.0 million
Millchem $1.5 million
CES $0.15 million
Total $9.65 million
For the six months ended 29 February 2012 revenues and gross profit of Cambria grew to
US$ 6.4 million (2011 US $4.8 million) and US$ 3.6 million (2011 US $ 2.5 million)
respectively, representing corresponding growth of 32% and 42% to the equivalent prior
period. Combined gross profit of Cambria’s five core companies was US$ 3.5 million during
the period under review, compared to US$ 2.1 million last year, representing an increase of
64%. Operating loss, prior to accelerated write-offs of intangibles and goodwill for the period
under review was US$ 4.2 million. Adjusted for costs associated with (i) Forget Me Not
Africa (US$ 776K); (ii) the Lonrho Management Agreement; Non-Compete Agreement and
various related charges (US$ 1.8 million); (iii) ZSE Listing Preparation Fees (US$ 350K);
and, (iv) ‘one-off’ charges associated with the transition away from Lonrho (US$ 439K); as
well as, (v) a one off gain on divestment (US$ 575K), this operating loss becomes US$ 1.4
million. As at February 29th, 2012, the Company had net assets of US$ 36.2 million (2011
US$ 52.1 million) and a market capitalization of US$ 16.4 million. Cambria’s assets,
following the various write-offs undertaken during the period under review, are almost
entirely tangible (US$ 40.3 million or 94%). On 16 September 2011 the Company raised
US$ 1.4 million gross by way of a placing with institutions of 3,988,439 new ordinary shares
of £0.0001 each at 23p per share.
To date Cambria has
invested a total of $9.6
million throughout its
subsidiaries.
Cambria’s assets, following the various write-offs undertaken
during the period under review, are almost
entirely tangible (US$ 40.3 million or 94%)
19 | P a g e
Cambria Africa Limited
Historical and forecast financial performance
Our estimates show group revenues rising by 98% to £11.7m [approx. US$ 16m] this year,
then a further 50% to £17m in FY13.Costs are estimated to increase in the FY12 as a result
of maintaining discontinued operations and accelerated write offs but however in anticipation
that the operations up for disposal will be rid of in FY12 as well going forward costs will
decline gradually. Interest receivable is expected to reduce as cash is used to support
growing operations. The majority of the increase in cost-base occurred during FY10, and the
company is already through with its investment phase, going ahead all of its initiatives would
augment overall improvement in the quality of its earnings and profitability.
CAMBRIA HISTORICAL AND FORECAST FINANCIAL PERFOMANCE
In March 2012, Cambria acquired a total of US$ 3.0m in secured debt at a cost of 15% p.a.
of which US$ 1.0m will mature after one year and US$ 2.0m will mature in two years. The
lenders have the option to convert all or a portion of amounts due and owing into convertible
debt on terms similar to any convertible debt which may or may not be raised by the
company from third parties. In the event of default, the lenders have the option to convert all,
or any portion of the outstanding indebtedness into shares in Cambria at a 15% discount to
the share price at the date of the agreement. We expect the group to continue posting
negative earnings until FY13. We anticipate improved profitability from FY 14 with EBITDA
margins reaching 19%. The strong profitability should be supported by solid performances
from Paynet, Tradanet, Leopard Rock and Millchem. Furthermore we believe that the
disposal of loss making investments and the recent restructuring provides a platform for
stronger earnings performance in future years.
31 Aug(£ ‘000’)
2008 2009 2010 2011 2012F 2013F 2014F 2015F 2016F
Income Statement
Turnover 188 2607 4900 5926 11727 17236 20906 24 599 28465
Gross Profit 122 1035 2166 3366 6932 10188 12355 14540 16826
EBITDA -1935 -924 -3738 -3960 -7607 2290 3170 4896 6699
PBT -1090 1087 6611 -6611 -9790 376 2030 3674 5388
Attributable income -1232 913 -5134 -6569 -9207 667 1471 2663 3906
Balance Sheet
ASSETS
Total Non Current Assets 14 030 30 549 29 052 28 973 27435 27614 28694 29828 31019
Total Current Assets 21 793 6 835 7 210 6 094 10765 15097 19879 23717 27659
Total Assets 35 823 37 384 36 262 35 067 38199 42710 48573 53545 58679
LIABILITIES
Total Current Liabilities 1 221 2 516 2791 2 746 4686 7437 11712 14623 17493
Total non-current liabilities 866 1 394 1561 1443 1883 2548 3506 4677 6202
EQUITY
Issued share capital 4 3 4 5 5 5 5 5 5
Total Equity 32 832 32 579 31 670 31 171 30555 30869 31161 31535 32026
Minority Interests 904 895 240 (293) (217) (40) 274 736 736
Total Equity and Liabilities 35 823 37 384 36 262 35 067 38199 42710 48573 53545 58679
20 | P a g e
Cambria Africa Limited
Key Valuation
In our opinion a Sum of The Parts (SoTP) valuation and a Discounted Cash flow (DCF)
valuation are the most comprehensive and proper measures to value Cambria given the
conglomerate nature of the company. The early-stage situation, as well as the current
repositioning and transformation of Cambria`s various operations, makes it less meaningful
to use PE and EV/EBITDA multiples for the valuation. The majority of Cambria`s operating
companies are expected to become cash flow positive by the end of calendar year 2012.
Dividend pay-outs are still zero.
We assigned equal weighting to the two valuation methods, the Discounted Cash flow
method yielded a fair price of 29.52p, the Sum of the Parts valuation yielded a fair price of
35.98p to give a weighted average price of 32.75p, converted to USD it represents 49.12
cents and 92.64% upside potential
The upside in our view is the real option value in, and central view of the Cambria`s
equity story. The valuation is not necessarily a realisable break-up value of the
company considering how depressed the local market for Zimbabwean assets is.
Cambria comes to list on the Zimbabwean Stock Exchange at a time that investors are being
urged to pick stocks that are successfully working towards recapitalisation, as well as
businesses with strong management teams, solid cash flows and healthy levels of debt.
Cambria possesses the three golden attributes as they are very essential for survival and
generation of profits going forward. Cambria`s subsidiaries have synergistic qualities to
position the company at a better stage, due to the dominant market shares in their
respective business units. We recommend investors to BUY the stock based on the
attractive valuation [TP, $0.50]
Cambria comes to list on the Zimbabwean Stock Exchange at a time that investors are being
urged to pick stocks that are successfully working towards recapitalisation, as well as
businesses with strong management teams, solid cash flows and healthy levels of debt.
Cambria possesses all three golden attributes which are very essential for survival and
generation of profits going forward. Cambria`s subsidiaries have synergistic qualities to
position the company at a better stage, due to the dominant market shares in their
respective business units.
Methodology Weight Assigned
Fair Price Weighted average fair
price
DCF 50% 29.52 14.76 Sum of Parts 50% 35.98 17.99 Weighted Average Fair Price (GBP) 32.75 GBP/USD 1.54 Weighted Average Fair Price (USD) 50.4
Current Price (USD) $0.26 Upside/(Downside) % from current price 93%
Cambria is listing on the Zimbabwean Stock Exchange at a time that investors are being urged to pick stocks that are successfully working towards
recapitalisation, as well as businesses with strong
management teams
21 | P a g e
Cambria Africa Limited
Cambria Plc DCF Valuation
*The hotel was valued by independent valuers
Valuation Inputs
Terminal Growth Rate[*LT stable growth for Zimbabwe] 5.0%
Cost of Capital Calculation
Risk Free Rate [*SSA average proxy [Nigeria, Kenya, Zambia]] 9.0%
Risk Premium 16.2%
Beta 1.12
Cost of Equity 27.1%
Average cost of borrowed funds 12.0%
Marginal Tax Rate 30.0%
Post Tax Cost of Funds Borrowed 8.4%
Market Value of Equity (GBP '000) 9 308
Market Value of Debt 4 000
WACC 21.51%
CAMBRIA PLC SUM OF THE PARTS VALUATION
GBP '000 2012 E 2013 E 2014 E 2015 E 2016 E NOPLAT (9 790) 376 2 030 3 674 5 388 Add: Depreciation & Amortization
2 310 1 460 641 673 707
Less: Changes in working capital
2 731 1 581 508 927 1 072
Less: Capex 980 1 029 1 080 1 134 1 191 Free Cash Flow to Firm (FCFF)
(11 190) (774) 1 083 2 285 3 832
Year Fraction 0.31 1.31 2.31 3.31 4.31 PV of FCFE (10 914) (696) 899 1 750 2 706 Terminal Cash Flow 24 369 PV of Terminal Cash Flow 24 369 DCF Valuation PV of future cash flows (6 256) PV of terminal value 24 369 Enterprise Value 18 114 Less: Net debt 670 Equity Value 17 444 Outstanding Shares (Million)
59.1
Fair Value per share (GBP) 29.52
Division Valuation Synopsis Estimated Valuation
USD Celsys ZSE Market capitalisation 1.10m Millchem 20% Discount to regional peer
EV/EBITDA of 15x 1.65m
Leopard Rock *Valuation of property, game reserve, conference facility and recently acquired castle.
18.50m
Paynet and Tradanet Business valuation based on revenue guidance, highly cash generative business.
18.60m
Total 39.85m Others @ 10% of divisions 3.90m Total 43.80m Net Debt 1.00m 20% Holding company discount 10.90m Equity holders value 31 .90m Shares in issue 59 .1m Intrinsic value per share (USD) 0.5397 GBP pence 0.3598
22 | P a g e
Cambria Africa Limited
All of Cambria`s subsidiaries are now operating at above 70% capacity utilization with
Celsys being exceptional at 100% capacity utilization. Celsys is well positioned to meet
demand with the recent acquisition of state of the art machinery. Millchem has been rated as
one of the most consistent suppliers in the country and it sees even bigger opportunities in
the Zambian markets where it can take advantage of economies of scale. Payserve is well
positioned to be operating efficiently and has the capacity to be exploiting more markets like
the Zambian and the Tanzanian market. Leopard Rock is now at par with international
standards and thereby able to attract more clientele
Key risks to our valuation
Slower than projected rate of economic recovery
Cambria`s success is underpinned by the rapid economic recovery of Zimbabwe, however
as noted earlier that there is considerable divergence of opinion regarding future economic
growth rates. The uncertainty arises from the current political environment which is not very
clear in terms of when elections will be held. Zimbabwe`s current prospects are largely
underpinned by political developments and key reforms which might later result in partial
debt forgiveness and a general improvement of the business climate. The IMF notes that
economic growth in Zimbabwe is dependent on the implementation of policies which are
supportive of foreign investment in order to prevent a decline in inwards investment. Clearly
these policies are also directly supportive of Cambria which also needs to be able to secure
its investment in Zimbabwean assets and to repatriate proceeds from investments so it can
pay dividends at an appropriate point.
23 | P a g e
Cambria Africa Limited
Directors and Senior Management
The Board of Cambria currently consists of seven (7) Directors of whom, two (2) are
Executive Directors. The full names, addresses and occupations and brief profiles of the
Company’s current directors are shown below.
Ian Perkins, Non Executive Director and Chairman
Ian Perkins has over 40 years' London City experience. Until 1991 he was at James Capel &
Co. where he was a Director and Head of Fixed Income. Between 1991 and 1996, Ian was
Director and later Chief Executive Officer (CEO) of listed bank King & Shaxson Holdings plc.
When Gerrard Group acquired King & Shaxson in 1996, Ian became a Director of Gerrard
Group plc and Chairman of the Gerrard & King bank. Following Gerrard Group’s takeover by
the Old Mutual Group in 2000, he became a Director of Old Mutual Financial Services plc,
and the CEO and later Chairman of GNI Limited until 2003. Thereafter until 2010, Ian was
Chairman of fixed income and inter-dealer broking firm King & Shaxson Limited.
Paul Turner, Non Executive Director, Vice Chairman
Paul Turner is a Past President of the Institute of Chartered Accountants of Zimbabwe. He is
a highly respected and knowledgeable member of the Zimbabwean business community.
Paul was previously a Senior Partner at Ernst & Young in Harare, Zimbabwe for over thirty
years and brings an unparalleled level of experience in the structure and operation of
businesses in Zimbabwe. Paul is a qualified Chartered Accountant, registered both in
Zimbabwe and South Africa.
Edzo Wisman, Director and Chief Executive Officer
Prior to joining Cambria in 2010, Edzo Wisman was Managing Director of Stuart Lammert &
Co., a Toronto and New York based corporate advisory firm that he founded in 2003. Prior,
Edzo was a Vice President; Investment Banking with Toronto based CCFL Advisory
Services. Previously, he was with Wilshire Associates; first with the consultancy practice in
Amsterdam, servicing some of Europe's largest institutional investors; and then with the
Private Markets Group at Wilshire’s Santa Monica, California headquarters, seeking
opportunities in the leveraged buyout markets. Prior he was with the investment department
of KLM Royal Dutch Airline. Edzo holds a Doctorandus degree in Finance from the
University of Groningen.
Tania Sanders, Director and Chief Financial Officer
Tania Sanders previously held increasingly senior roles within finance and IT with Anheuser-
Busch Europe Ltd., culminating in her role as European IS Manager. Previously, Tania was
a Senior Audit Manager with Deloitte (South Africa) in Cape Town, focusing on large
multinational listed clients in the automotive, maritime, mining and leisure sectors. Tania is a
Chartered Accountant and holds a Bachelor of Commerce (Accounting) from University of
Cape Town and a Post Graduate Diploma in Accounting from the University of South Africa.
Paul Heber, Non Executive Director
Paul Heber is an investment manager and stockbroker with more than 20 years’ experience
in global stock markets, following 3 years in the oil industry. Formerly with SGHambros,
NatWest and WI Carr, he is now with bespoke boutique Savoy Investment Management.
Savoy has in excess of GBP 1.2 billion of private and institutional funds under management
and is regulated by both the FSA in London and the FSB in Johannesburg.
24 | P a g e
Cambria Africa Limited
Fred Jones, Non Executive Director
Fred Jones is the Chairman of Jutland Group; a private Hong Kong based investment
management and commodity firm which he founded in 2006 to manage portfolios of foreign
exchange, precious metals and international debt. Fred also founded Jaramcor International,
a commodity supply-chain manager and supplier of pulp/paper, chemicals and agricultural
products. He was previously Vice President, Private Client Services, at Bear Stearns Global
Wealth Management. Fred was also with the International Private Client Group of Merrill
Lynch. He holds a BSc in Accountancy and an MBA in Finance from Florida A&M University.
Itai Mazaiwana, Non Executive Director
Itai Mazaiwana started his career in research and education at the Institute of Mining
Research at the University of Zimbabwe as an Analytical Geochemist. Itai holds a BSc in
Chemistry and Geology and an MSc in Analytical Chemistry, both from the University of
Zimbabwe. He has published a number of papers on low level detection of gold.
Roy Meiring, Chief Executive Officer (Hotel Division)
Roy Meiring has over 35 years of experience in the hotel industry in Zimbabwe and the
region. He undertook his initial hotel management training program at The Carlton Hotel in
Johannesburg with Western International. In 1977, Roy joined Meikles Southern Sun Hotels
and was General Manager of Troutbeck Inn. After five years with Meikles Southern Sun
Hotels, he joined T.A. Holdings as Group Managing Director, managing Cresta Hotels and
Safaris, with a presence in Zimbabwe, Botswana and the Region. Between 1992 and 2011,
Roy was Chief Executive Officer of the Meikles Hotel Division (Meikles Ltd), which included
The Meikles Hotel in Harare (Zimbabwe), Cape Grace in Cape Town (South Africa) and The
Victoria Falls Hotel Partnership. The three hotels are members of the Leading Hotels of this
World Group. Roy is a Fellow of the Hotel Catering and Institutional Management U.K.
(“FHCIMA”).
Nyaradzo Mudzamiri, Strategy and Corporate Development
Prior to joining Cambria, Nyaradzo Mudzamiri was with KPMG Corporate Finance in
Johannesburg (South Africa) and Harare (Zimbabwe), focusing on Mergers & Acquisitions,
Valuations and Restructuring. She has gained valuable experience across multiple sectors,
working for local and international clients with operations in Zimbabwe, Zambia, Namibia,
Malawi and South Africa. Nyaradzo holds a Bachelor of Science Honours degree in
Economics from the University of Zimbabwe and a banking diploma awarded by the Institute
of Bankers (Zimbabwe).
Shareholding Structure: Top 5 shareholders
Lonrho Plc 23%
Consolium Emerging market Absolute Return Master Fund 22%
Jutland Capital 17%
Contrarion Capital Management 8%
Barclays Wealth 3%
25 | P a g e
Cambria Africa Limited
Contact information
Research
Ritesh Anand [email protected]
Simbiso Musa [email protected]
Trading Langton Nyatsanza
Tinashe Magodora [email protected]
© 2012 Invictus. All rights reserved.
The analysts of the Invictus Securities Research Department hereby certify that the opinions expressed in this
research report reflect their personal views and that no part of their compensation was, is, or will be related to the
views or recommendations contained in this report in any way. The research professionals principally responsible for
the preparation of this research report have received or will receive compensation based upon various factors,
including quality of research, investor client feedback, and investment banking revenues.
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