MERGERS, ACQUISITIONS AND FINANCIAL RESULTS

Zimbabwe: Celsys' Financial Performance Improves

Listed information and communication company, Celsys Limited recorded a significant improvement in the trading performance for the first quarter of the 2009/2010 financial year, with revenue increasing to US$650 000 for the three months to November30.

According to a quarterly update for the period up to this month released by the company, the increase in revenue was driven by increased sales volumes in products from its communications division.

"The Comms division has enjoyed major revenue growth through the recently introduced scratch card, airtime promotion, initiated by Celsys Marketing and launched in partnership with Coca Cola Central Africa and Spar Zimbabwe," the company said.

Furthermore, the company said the division was preparing to re-launch its C-phone mobile payphone services with the introduction of new state-of-the-art Adondo payphones from Psitek in South Africa and anticipates significant revenue contributions from these in the second quarter.

The company said the IT Division, had also enjoyed recent improvements to its trading conditions and in anticipation of changes in the market and recently signed a new ATM and POS leasing agreement with Kingdom Bank.

"The first 10 new Diebold ATMs are expected to be deployed alongside the first 200 POS devices, in January 2010 and we expect to see a meaningful contribution to revenues from this infrastructure coming through towards the end of the second quarter," Celsys said.

"The Sophos operation continues to meet its sales and renewal targets and is an important contributor to the company's margin."

Looking ahead the company said the continuing improvements to the economy are being reflected in increasing confidence by international investors, specifically LonZim, that is the majority shareholder in Celsys.

LonZim has provided lines of credit and working capital support to the company that has facilitated the company being in a strong position to rapidly gain market share as the Zimbabwe economy recovers.

"The process of "re-inventing" the company is ongoing and there are numerous initiatives in place that will be an important part of returning the business to profitability and delivering strong growth," Celsys said. LonZim recently announced that it had raised £1,170,269 million through the issue of 4,255,525 new ordinary shares of 0.01 pence each. The money will be used to recapitalise its subsidiaries including Celsys.

The Herald

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