Anglo African Ag PLC Update on business and corporate activities

 
TIDMAAAP 
 
5 September 2018                                        For Immediate Release 
 
                         Anglo African Agriculture plc 
                           ("AAAP" or the "Company") 
 
                 Update on business and corporate activities. 
 
Highlights: 
 
Dynamic Intertrade - 100% owned Southern African spice business update 
 
  * 3rd Quarter ending 31 July 2018 revenue in food manufacturing increases 
    year on year by 14.8% to South African Rand 11,152m (from R9.713m) 
  * Tonnage of product sold increased by 11.34% to 321 tonnes 3Q 2018 vs 3Q 
    2017. 
 
Kenya Port - Proposed loan facility, as announced on 30 August 2018 
 
  * Progress made on finalising loan to be made, subject to the raising of 
    necessary finance and fulfilment of final conditions precedent, to Comarco 
    port in Kenya. 
  * Comarco trading positively 
      +  has signed contracts with global oil and gas major ENI to provide 
        storage, handling and offshore drilling support services for 2 years 
        with annual extensions thereafter. 
      +  has secured extensions for existing supply base tenants, including 
        Marubeni Itochu, Halliburton, BGP and Exalo Drilling. 
      + Iron ore shipments have commenced. Iron ore port handling contracts now 
        in place for over 1,000,000 of iron ore movement, with further optional 
        extensions of 1,000,000 tonnes. 
      + has signed a 10 year renewable contract with a major LPG distributor to 
        provide space, mooring and throughput access. Ground is to be broken in 
        September 2018. 
 
David Lenigas, Chairman of AAAP, comments; "We are seeing a good uptrend in 
business activities from our core food manufacturing business in South Africa. 
The Company also believed it was important to update shareholders on Comarco's 
business activities in recent months. The Comarco commentary is important as, 
as announced on 30 August 2018, the Company is considering a secured loan to 
Comarco that, if closed, will be secured by a number of the port's assets. A 
strong Comarco provides a much better level of security for the proposed loan." 
 
Anglo African Agriculture plc (LSE: AAAP), the London Main Board listed company 
trading under the ticker symbol AAAP:LN, is pleased to  provide the following 
update on its 100% owned Dynamic Intertrade (Pty) Limited ("Dynamic") spices 
and seasoning manufacturing business and a general  update on the proposed loan 
facility to be provided to the Comarco port in Kenya in recent months. 
 
Update on South African food manufacturing business 
 
Dynamic has achieved a solid growth in 3rd quarter volumes and revenues for the 
quarter ending 31 July 2018. Sales for the quarter are up 14.8% in South 
African Rand terms from R9.713m (GBP0.575) to R11.152m (GBP0.641).  In 
addition, gross margins have increased due to better buying and an increase in 
efficiencies. Volumes increased from 288 tonnes to 321 tonnes. Dynamic has 
increased its sales force by 3 sales people and anticipates delivering better 
performances over the next period. Dynamic had previously announced that new 
equipment purchased would reduce the cost structure, and this is evident in the 
increased margins. With that said, the underlying ingredients of the spice 
blends manufactured and sold by Dynamic are commodities and are subject to 
price fluctuations. Dynamic is continually expanding its product range and, 
working with AAAP's 46.8% owned subsidiary, Dynamic Intertrade Agri (Pty) Ltd, 
has just sold its first 20 tonnes of sugar. 
 
Turning to management, Ronel Putter and Dave Ransom were appointed to the board 
of Dynamic Intertrade in South Africa as Financial and Sales director 
respectively. 
 
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. 
 
Update on Comarco Group 
 
As announced on 30 August 2018, the Company has entered into a Memorandum of 
Understanding whereby it is proposed, subject to funding, that AAAP will 
provide a 24 month loan to help fund the growth of the privately owned port and 
marine logistics group, Comarco Group, based in Mombasa, Kenya. All proposed 
transactions between the Comarco Group and AAAP are subject to the completion 
of due diligence, the completion of legal documentation and the production of 
such valuations and opinions as the company shall consider appropriate, in each 
case satisfactory to AAAP in its sole discretion and subject to board approval. 
This is intended to be the first step of a diversification for AAAP, which the 
Directors believe will allow the Company to significantly grow its business. 
 
During this calendar year, the Comarco Group has secured some new contracts and 
re-signed most of their existing major  port clients. In January 2018 Comarco 
signed a contract with global oil major ENI to provide storage, handling and 
offshore drilling support services for two years with annual extensions 
thereafter. It also signed extensions for existing port tenants, including 
Marubeni Itochu, Halliburton, BGP and Exalo Drilling. During the year a 
handling and export contract of 1,000,000 tonnes of iron ore was secured, with 
further optional extension of 1,000,000 tonnes, using Comarco barges for 
stevedoring the cargo to bulk vessels at anchorage. Comarco has already moved 
110,000 tonnes of iron ore to date. In June 2018 Comarco signed an additional 
contract for the handling and export of a further 200,000 tonnes of iron ore to 
be completed before December 2018. 
 
In May 2018, Comarco signed a 10 year renewable contract with a major LPG 
distributor to provide space, mooring and throughput access. Ground is to be 
broken in September 2018. 
 
Importantly, Comarco received confirmation in June 2018 of the extension of its 
stevedoring licence issued by the Kenya Government to operate the Comarco port 
on a private basis. The Comarco port is the only privately licensed facility in 
East Africa properly authorised to handle bulk, breakbulk and project cargoes. 
 
The port is also in final contract negotiations with a large multinational to 
provide storage, handling and transport services of cargoes for the UN to East 
Africa. 
 
For further information please contact: 
 
Anglo African Agriculture plc                       [phone] 
 
David Lenigas, Non-Executive Chairman 
 
Rob Scott, Executive Director                       [phone] 
 
VSA Capital Limited (Financial Adviser and          [phone] 
Corporate Broker) 
 
Andrew Raca 
 
 
 
 
END 
 

(END) Dow Jones Newswires

September 05, 2018 04:43 ET (08:43 GMT)