|2 December 2016|
Anglo African Agriculture plc
("AAA" or the "Company")
Trading and Operational Update
Excellent business growth seen in past two months
Anglo African Agriculture plc (LSE: AAAP), the London Main board listed food manufacturing company today announces an update on trading ahead of the results for the year ended 31 October 2016 ("the Period"), which AAA will publish in early January 2016.
For the Period, AAA expects to report sales in Dynamic Intertrade Ltd ("Dynamic"), the Company's 100% owned specialist spice manufacturing business in Cape Town, of over ZAR 34 million (147% of the ZAR 23.6 million in the previous year).
We are pleased to report that we are experiencing a strong turnaround in operational performance from our food manufacturing operations in Cape Town, together with increased sales beyond seasonal norms. Historically, as we enter the summer holiday period in southern Africa, sales have traditionally been seasonally low. However, in November 2016, the first month of the current financial year, gross revenues have increased to ZAR 4.4 million (c.£260,000) compared to ZAR 3.8 million (c£176,000) in November of the previous financial year. Tonnage output also climbed to 150 tonnes for the month, up from the average 90 tonnes per month sold over the Period.
This turnaround is supported by a strong forward order book at Dynamic, which is being driven largely by substantially bigger orders from customers for our prime spice ranges and an increasing demand for the Company's new blended spice lines. We expect this significant trend to be sustainable and grow further from here.
The Company has contracted to acquire, subject to shareholder approval, a 46.8% shareholding in Dynamic Intertrade Agri (Pty) Ltd ("DIA"). A General Meeting has been convened on 9 December 2016 to approve this acquisition. DIA is also performing positively with turnover of ZAR 2.3 million (c.£130,000) achieved in November 2016 compared to ZAR 1.307 million (c£64,000) in the same month of the previous year. In addition, DIA have also recently secured a significant order, on top of its normal business, for 1,000 tonnes of fertilizer for December 2016 delivery for ZAR 5.75 million (c.£325,000) as a precursor to a full 10,000 tonne fertilizer order for delivery over the 2017 calendar year.
The Company is also pleased to report that a draft prospectus has been submitted to the UK Listing Authority for review. This prospectus will be in connection with the issue of new ordinary shares in April and in September 2016, and the proposed issue of new ordinary shares in respect of the acquisition of DIA.
David Lenigas, the Company's Chairman, commented;
"The turnaround in the Company's operating businesses over the past few months has been outstanding. With the growth in orders, and for the first time, we are working at close to full current capacity. We are looking to meet this increasing demand through the expansion inititiatves that are underway to initially increase production capacity to 250 tonnes per month as previously announced on 4 October 2016.
We have now taken the business through critical mass and with new processing equipment and additional packing lines currently being installed, combined with the accelerated purchase of key component ingredients to boost stock levels, we are now pushing hard to grow this business very nicely over the coming years.
We are well placed to increase sales in the coming year and are confident of reporting further growth."
For further information, please contact:
|Anglo African Agriculture plc||+44 (0) 20 7440 0640|
|David Lenigas, Non-Executive Chairman|
Rob Scott, Non-Executive Director
|VSA Capital Limited (Financial Adviser and Broker)||+44 (0) 20 3005 5000|
|Andrew Raca / James Asensio|