Anglo African Ag PLC 1st Quarter Update

 
TIDMAAAP 
 
31 March 2017 
 
                         Anglo African Agriculture plc 
                           ("AAAP" or the "Company") 
 
          101% GBP Revenue Growth for the Quarter ended January 2017 
                                      and 
         AAAP Completes Capacity Expansion at Food Manufacturing Plant 
 
Highlights: 
 
  * Revenue increases by 53% to South African R10.64 million in food 
    manufacturing for Q1 Y/E 2017 vs Q1 Y/E 2016 (101% on a GBP basis). 
  * Tonnage of food flavourings increased by 6% to 303 tonnes Q1 2017 vs Q1 
    2016. 
  * Production capacity now more than tripled at AAAP's South African spices 
    manufacturing facility with installation of new milling equipment. 
  * Strong customer demand continues to exceed factory output. 
  * New spice product ranges launched in 2017 gathering traction. 
 
David Lenigas, the Company's Chairman, commented: 
 
"The Company's business is growing very strongly now and we continue to see 
increasing customer demand for our specialty spices, food additives and 
seasoning. Orders continue to exceed the Company's ability to meet demand for 
Dynamic's products supplied for the mass food manufacturing sector. Going 
forward, the operation of the new machines significantly boosts our future 
manufacturing capacity and should substantially reduce our overall unit 
operating cost and boost our competitiveness as we move towards much bigger 
turnover and product range offerings. We need more stock to meet customer 
orders and we are working hard to quickly address this issue." 
 
Anglo African Agriculture plc (LSE: AAAP), the London Main Board listed food 
manufacturing company, is pleased to advise that our 100% owned Dynamic 
Intertrade (Pty) Limited ("Dynamic") spices and seasoning manufacturing 
business has achieved a solid growth in quarterly revenues with the first 
quarter of Y/E 2017 (Q1 beginning 1 November 2016 and ending 31 January 2017) 
reaching South African R10,639,486 million (GBP620,461) an increase of 53% year 
on year versus Quarter 1 Y/E 2016 and a 101% increase in GBP terms. This was 
due to an increase in South Africa Rand revenue coupled with a significant 
weakening of the GBP vs the South African Rand. Processes tonnes through the 
factory also increased by 6% year on year with Q1 2017 achieving 303 tonnes. 
 
In addition, the new milling machines designed to triple the production 
capacity of its spices manufacturing facilities in South Africa, have now been 
installed and are operational. These new manufacturing machines will 
significantly reduce operating costs going forward and add significant new 
production capacity to meet the rapidly increasing customer order book for the 
Company's bespoke spices and seasonings and food flavouring additives used in 
many sectors of the mass food manufacturing sector. 
 
Manufacturing Capacity Expansion Complete: 
 
Production capacity of AAAP's 100% wholly owned food manufacturing and 
marketing business, Dynamic, has now commissioned the new 250 tonne per month 
milling machines. These new machines require significantly less clean-out time 
between batched of different spice blends and is expected to reduce the 
electrical power consumption of the factory by an estimated 50%. 
 
Previous milling was primarily limited to a monthly capacity of only 80-90 
tonnes per month of a limited range of soft spices such as paprika and chilli. 
The new mills are well suited to the fine grinding of coarse and hard spices 
such as peppercorns, nutmeg, pimento, mustard and coriander, which will add new 
spice blends to the factory's product lines. 
 
The old production lines will be kept in a production ready state, on a full 
care and maintenance basis, to provide additional back-up support in the event 
of unscheduled downtime of the new plant and also provide overall production 
capacity up to 350 tonnes per month as the business grows. 
 
Order Book and New Product Lines: 
 
Dynamic has secured a further 60 tonne supply order for Cayenne Pepper for the 
canned fish Industry for a major canning company, adding to the substantial 300 
tonne Cayenne Pepper order for one of the largest tin fish canners announced on 
13 February 2017. 
 
2017 has seen good growth in Dynamics's 'Batch Pack' custom blended spice 
ranges for major South African processed meat manufacturers, for the 
manufacturing of sausage and mince extended products aimed primarily at the 
lower end of the mass market with February orders building to 17 tonnes. The 
new range of value added customer specific seasonings (Thundergun Grill and 
Chakalaka), launched at the end of last year, is accelerating appreciably 
through a well known South African restaurant chain. Dynamic's traditional 
Biltong Spice (for dried meat) is also growing. 
 
New product ranges now include pepper sauce seasoning for the meat pie 
industry, with first orders supplied this month, and seasonings for the tomato 
sauce and the instant noodle manufacturing sectors. 
 
About Dynamic: 
 
Dynamic is based in a modern 3,000 m² FSSC compliant facility in Cape Town, 
South Africa and is involved in the importation, milling, blending and 
packaging of food products for the food manufacturing sector with bespoke lines 
that include herbs, spices, additives and seasonings for both the domestic and 
export markets. 
 
For further information, please contact: 
 
Anglo African Agriculture plc                       [phone] 
David Lenigas, Non-Executive Chairman 
Rob Scott, Non-Executive Director 
 
VSA Capital Limited (Financial Adviser and Broker)  [phone] 
Andrew Raca 
 
 
 
 
END 
 

(END) Dow Jones Newswires

March 31, 2017 02:00 ET (06:00 GMT)