Cambria Africa PLC (LON: CMB) have seen their shares spike despite on going legal battles and declining second half profits.
The investment firm, which primarily operates in the African country Zimbabwe, reported lower profitability in second half operating profits.
The firm added the company failed to meet both revenue and profit estimates, and experienced a slump in trading.
The company also said an investee’s court claim in Zimbabwe was dismissed, rendering it liable to pay an unspecified amount in legal costs.
Despite both the poor performance in the market and issues outside, shares of Cambria Africa spiked 4.44% to 0.38p. 18/11/19 12:25BST.
In a time where global investment companies have faced cut throat market conditions, shareholders of Cambria Africa seem optimistic.
Georgia Capital (LON: CGEO) saw their net asset value fall back in October whilst Apax Global Alpha (LON: APAX) saw their shares rise after a positive update.
Cambria said: “Operating profits in US dollars for the second half of the 2019 fiscal year did not meet management’s worst expectations. The rapidly depreciating exchange rate has rendered operating profits negligible, however the company continues to trade profitably in Zimbabwe dollars.”
In June, the Zimbabwe government enforced a single currency legislation banning the use of all foreign currencies, and this has caused the Zimbabwe dollar to depreciate since February which has sugar coated business reports in Zimbabwe.
Cambria said the currency “depreciated from an opening exchange rate to the US dollar of ZWL2.50 in February 2019 to an interbank selling rate of over ZWL17.00”.
Cambria Africa is set to release its full year results in mid February, where shareholders will be keen to see whether progress has been made.
Cambria explained: “The company has been advised that the exception filed by BAZ has been upheld by Justice Mushore and Payserv’s lawsuit has been dismissed with Payserv liable for BAZ’s legal costs. Through its Payserv subsidiaries, the company intends to reissue summons against the BAZ and/or individual banks as guided by its senior counsels.”
Christian Beddies, the chief executive of Payserv’s Zimbabwe unit, resigned from the role but will remain a non-executive director. Samir Shasha takes over on an acting basis, he is also Cambria’s chief executive.
The company added: “The company funded its acceptance of what it believes to be an irrevocable offer by Caulicle Investments (Pvt) Ltd, a 20% shareholder of Hinshaw, to sell its entire shareholding of Hinshaw shares.
“If the award is in favour of the company, Paynet Zimbabwe will control 24.9% of Radar indirectly through Hinshaw. The company continues to believe that Radar is well positioned as a defensive investment in Zimbabwe.”
