Cafzf - Canaf Group Inc.

Discussion in 'Penny Stocks' started by Jon Alba, May 17, 2018.

  1. Jon Alba

    Jon Alba Senior Investor

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    Canaf Group Inc.(CAF.V) Q2 2018 Results. Financials + MD&A
    All information can be found at www.sedar.com

    Price: $0.11
    Common Shares: 47,426,195
    Warrants/Options: 0
    Website: www.canafgroup.com

    Financials (All In US Dollars)

    ASSETS
    Cash: $315,407
    Trade Receivables: $3,604,555
    Sales Tax Receivable: $3,091
    Inventories: $418,389
    Prepaid Expenses: $20,028
    Property, Plant & Equipment: $953,801
    Intangible: $1
    Total Assets: $5,315,272

    LIABILITIES
    Trade & Other Payables: $2,296,780
    Sales Tax Payable: $17,689
    Income Tax Payable: $129,439
    Bank Loan(Due Jan 2019): $271,611
    Total Liabilities: $2,715,519

    Asset/Debt Ratio: 1.96:1

    Six Month Performance(Q1 & Q2 2018)
    Sales: $8,698,426
    Net Income: $691,115 USD

    Net Income for 2017(Q1-Q4): $541,808 USD

    Earnings per share in 2018:
    $691,115USD X 1.31 CAD(June 29th 2018) / 47,426,195 = $0.019 cents CAD

    Earnings per share over 6 quarters:

    $1,232,923 X 1.31 CAD /47,426,195 = $0.034 cent CAD

    MD&A Highlights

    Revenues for the six months were $8,698,426 (2017 - $6,482,459) a 34% increase, and the Corporation continues to be profitable with gross profits of $703,169 (2017 - $684,905) a 2.7% increase and net income for six month period ended April 30, 2018 of $449,880 (2017 - $429,652) a $20,288, 4.7% increase. While revenues and gross margin have grown, increased cost of sales produced smaller gross margin percentages, 2018 8.1% (2017 10.6%).

    The reduction in the gross margin is mainly due to a major maintenance project during the period. The Corporation expects to continue to operate profitably into Q3 and Q4, however Revenue is expected to drop, due to a reduction in demand caused primarily by one of Southern Coals main customers’ internal coke breeze coming back online.

    The outlook and profitability of the Corporation remains strong and the Corporation expects to continue to generate positive free cash flow during the fiscal year-end 2018 and, as it accumulates cash and reduces its gearing and increases its efficiencies, will continue to look at investment in related business opportunities in South Africa and neighbouring countries.

    The Corporation’s B-BBEE transaction for the sale of 30% of Quantum’s shares in Southern Coal remains on track to be completed during the current fiscal year. Following the termination of the initial agreement announced on 20 February 2018, a new B-BBEE partner has been identified and initial terms of the agreement, which will remain much the same as the previously agreed transaction, are expected to be announced during Q3.

    Sales from the Corporation’s South African coal processing business are substantially derived from two customers and as a result, the Corporation is economically dependent on these customers. The Corporation’s exposure to credit risk is limited to the carrying value of its accounts receivable. As at April 30, 2018, trade receivables of $3,604,555 (October 31, 2017, $1,314,828) were due from these customers and were collected subsequent to period-end.

    The bank loan bears interest at 10.25% per annum, matures on January 7, 2019, and is secured by the Corporation’s furnace acquired with the proceeds from the loan. The bank loan is repayable in blended monthly payments of Rand 391,624 ($32,359.89 translated at April 30, 2018 exchange rate)). During the six month period ended April 30, 2018, the Corporation incurred interest expense totaling $19,909 (April 30, 2017 – $29,658).

    Expenses for the six months were $304,980 (2017 - $237,288) an increase of $67,692, 29%, primarily due to increased costs relating to the B-BBEE program

    General administrative and finance expenses for the six month period were $285,071 (April 30, 2017 - $207,630) an unfavourable variance of $77,441, primarily due to increased involvement in South Africa’s B-BBEE program and increased activity resulting in higher management fees and office expenses. Additional detail of general and admin expenses can be found in the table below.
     
  2. Jon Alba

    Jon Alba Senior Investor

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    Canaf Group changes name to Canaf Investments

    2018-07-03 18:11 MT - News Release


    Mr. Christopher Way reports

    CANAF GROUP INC. ANNOUNCES NAME CHANGE TO CANAF INVESTMENTS INC.

    Canaf Group Inc. will be changing its corporate name to Canaf Investments Inc., effective July 5, 2018. At the opening of trading on July 5, 2018, the common shares of the company will commence trading on the TSX Venture Exchange under the new name and Cusip No. 13682P102, and will continue trading under the same symbol CAF.

    Shareholders holding share certificates in the name of Canaf Group can request replacement certificates with the new corporate name, but new certificates are not required and will not be automatically issued. There will be no consolidation of capital in connection with the change of name.

    The change of name has been implemented to better represent the corporation and further meets the requirements of the corporation's new jurisdiction of British Columbia, which was approved in the last annual general meeting.

    About Canaf Group Inc.

    Canaf is a public company listed on the TSX Venture Exchange. Canaf's head office is in Vancouver, Canada, with subsidiary offices in the United Kingdom and South Africa. Canaf owns 100 per cent of Quantum Screening and Crushing Pty. Ltd., a South African-based company that owns 100 per cent of Southern Coal Pty. Ltd., a company that produces a high-carbon, devolatized anthracite.

    We seek Safe Harbor.

    © 2018 Canjex Publishing Ltd. All rights reserved.
     
  3. Chartman

    Chartman Senior Investor

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    Still one the brave I think but the idea looks good - problem is that, like many people, I have been burned with small company shares in the past. If the story pans out then the shares should go a lot higher and while markets are not usually wrong with share prices reflecting the "real" prospects for a company, sometimes small companies can be ignored completely, especially if the are not actively traded.

    Surely the company would be a target for a larger group if everything fell into place? Must still be trading at a discount to assets and discounted future/owed royalty payments?
     
  4. Jon Alba

    Jon Alba Senior Investor

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    I think that because it's summer, all the good news from Q2 results to recent name change and this black empowerment deal being announced will all fall on deaf ears until the fall. So many times in the past that I've seen stocks go up 30-50% between end of August and end of September, just catch from positive announcements and events before the summer.
     
  5. Jon Alba

    Jon Alba Senior Investor

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    This came out today, didn't get a chance to post it:


    Canaf Group to sell 30% of unit for $1.7M

    2018-07-06 10:44 MT - News Release

    Mr. Christopher Way reports

    CANAF ANNOUNCES B-BBEE TRANSACTION FOR SOUTH AFRICAN SUBSIDIARY

    Canaf Investments Inc., formerly known as Canaf Group Inc., has provided the terms of its new broad-based black economic empowerment (B-BBEE) transaction for its South African subsidiary, Southern Coal (Pty.) Ltd.

    As part of Southern Coal's continuing B-BBEE transformation program, Amandla Amakhulu (Pty) Ltd. (AAM), a 100-per-cent black, privately owned company incorporated in South Africa, has agreed to acquire 30 per cent of the issued shares of Southern Coal, from Canaf's wholly owned subsidiary, Quantum Screening and Crushing Pty. Ltd., for the value of 18 million South African rand (approximately $1.7-million (Canadian)).

    Quantum will in return receive cumulative, redeemable preference shares in AAM in the amount of the purchase price, 18 million rand (approximately $1.7-million (Canadian)). These preference shares shall provide preferential dividends, until redeemed by AAM. These dividends will be secured by an irrevocable direction from AAM to Southern Coal to pay Quantum such dividends from any distribution to AAM. The transaction will close by Aug. 31, 2018.

    Christopher Way, chief executive officer of Canaf, states: "The signing of this important agreement to sell 30 per cent of Quantum's shares in Southern Coal, confirms our intention to ensure that Southern Coal achieves the required B-BBEE level for the current financial year. We remain focused on securing new long-term contracts for the existing business and also continue to look at diversification opportunities in South Africa and its neighbours."

    In addition to this transaction, Southern Coal can confirm that it remains on track in ensuring that all other areas of its B-BBEE transformation plan, including its enterprise, socio-economic, skills, and supplier and development programs, are fully invested in, so to ensure that the company reaches its desired level.

    About Canaf Group Inc.

    Canaf's head office is in Vancouver, Canada, with subsidiary offices in the United Kingdom and South Africa. Canaf owns 100 per cent of Quantum Screening and Crushing Pty. Ltd., a South African-based company that owns 100 per cent of Southern Coal Pty. Ltd., a company that produces a high carbon, devolatized anthracite. As of July 3, 2018, Quantum agrees to sell 30 per cent of its shares in Southern Coal for the net consideration of 18 million rand; the transaction will close by Aug. 31, 2018.

    About Southern Coal

    Southern Coal produces calcined anthracite, a product used primarily as a substitute to coke in sintering processes. Southern Coal produces calcined anthracite by feeding washed anthracite coal through a rotary kiln, at temperatures between 900 and 1,100 C; the volatiles are driven off and the effective carbon content increased.

    Southern Coal's two largest clients are African leaders in steel and ferromanganese production. Southern Coal operates near Newcastle, KwaZulu-Natal, where Quantum's three kilns operate; the majority of Southern Coal's feedstock anthracite is supplied from local anthracite mines in KwaZulu-Natal.

    We seek Safe Harbor.

    © 2018 Canjex Publishing Ltd. All rights reserved.
     
  6. Jon Alba

    Jon Alba Senior Investor

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    https://simplywall.st/stocks/ca/materials/tsxv-caf/canaf-investments-shares/news/what-you-must-know-about-canaf-investments-incs-cvecaf-financial-strength/

    What You Must Know About Canaf Investments Inc’s (CVE:CAF) Financial Strength
    Armando Maloney July 13, 2018
    Canaf Investments Inc (CVE:CAF) is a small-cap stock with a market capitalization of US$4.98m. While investors primarily focus on the growth potential and competitive landscape of the small-cap companies, they end up ignoring a key aspect, which could be the biggest threat to its existence: its financial health. Why is it important? Evaluating financial health as part of your investment thesis is crucial, as mismanagement of capital can lead to bankruptcies, which occur at a higher rate for small-caps. I believe these basic checks tell most of the story you need to know. Nevertheless, this commentary is still very high-level, so I recommend you dig deeper yourself into CAF here.


    Does CAF produce enough cash relative to debt?
    CAF’s debt levels have fallen from US$566.85k to US$271.61k over the last 12 months , which comprises of short- and long-term debt. With this debt payback, the current cash and short-term investment levels stands at US$315.41k , ready to deploy into the business. Moreover, CAF has generated cash from operations of US$536.73k during the same period of time, leading to an operating cash to total debt ratio of 197.61%, indicating that CAF’s debt is appropriately covered by operating cash. This ratio can also be a sign of operational efficiency as an alternative to return on assets. In CAF’s case, it is able to generate 1.98x cash from its debt capital.

    Does CAF’s liquid assets cover its short-term commitments?
    At the current liabilities level of US$2.72m liabilities, the company has been able to meet these obligations given the level of current assets of US$4.36m, with a current ratio of 1.61x. Usually, for Metals and Mining companies, this is a suitable ratio since there is a bit of a cash buffer without leaving too much capital in a low-return environment.

    [​IMG]
    TSXV:CAF Historical Debt July 12th 18

    Is CAF’s debt level acceptable?
    CAF’s level of debt is appropriate relative to its total equity, at 10.45%. CAF is not taking on too much debt commitment, which can be restrictive and risky for equity-holders. We can check to see whether CAF is able to meet its debt obligations by looking at the net interest coverage ratio. A company generating earnings before interest and tax (EBIT) at least three times its net interest payments is considered financially sound. In CAF’s, case, the ratio of 32.89x suggests that interest is comfortably covered, which means that lenders may be inclined to lend more money to the company, as it is seen as safe in terms of payback.
     
  7. Jon Alba

    Jon Alba Senior Investor

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    Canaf Group appoints Williams to board, as CFO

    2018-07-19 07:57 MT - News Release


    Mr. Christopher Way reports

    CANAF ANNOUNCES APPOINTMENT OF DIRECTOR AND CFO

    Canaf Investments Inc., formerly known as Canaf Group Inc., has appointed Rebecca Williams as a director and chief financial officer effective today.

    Rebecca, based in the UK, qualified with the Chartered Institute of Management Accounting in 2009 following a first class honours degree in Accounting and Finance from the University of Warwick, United Kingdom. Having spent 8 years progressing her accounting career with the rail industry, Rebecca diversified into corporate transformation having led divestment programmes and functional restructuring.

    Rebecca joins Canaf at a time where the Corporation is looking to diversify and expand; her locality to the rest of the board, coupled with her ambition, enthusiasm and expertise will benefit the Corporation and its future plans.

    The Corporation also confirms the resignation of Derick Sinclair as Chief Financial Officer and director. Christopher Way, CEO stated, "Derick leaves his position on the board, and as CFO, after having acted as Canaf's interim CFO, following the sudden passing of Zeny Manalo earlier in the year. In the short time Derick has been with Canaf, he has delivered some positive changes, and we are pleased to know that he will remain available to the Corporation as a consultant when required."

    About Canaf

    Canaf is a public company listed on the TSX-V Exchange. Canaf's head office is in Vancouver, Canada, with subsidiary offices in the United Kingdom and South Africa. Canaf owns 100% of Quantum Screening and Crushing (Pty) Ltd., ("Quantum"), a South African based company that owns 100% of Southern Coal (Pty) Ltd., ("Southern Coal"), a company that produces a high carbon, de-volatised anthracite. As of 03 July 2018, Quantum agrees to sell 30% of its shares in Southern Coal for the net consideration of R18million; the transaction will close by 31 August 2018.

    We seek Safe Harbor.

    © 2018 Canjex Publishing Ltd. All rights reserved.
     
  8. Jon Alba

    Jon Alba Senior Investor

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    China to invest $15 billion in South African economy

    https://www.rt.com/business/434184-china-billions-investments-south-africa/

    China to invest $15 billion in South African economy
    Published time: 25 Jul, 2018 07:38
    Get short URL
    China to invest $15 billion in South African economy
    © Thomas White / Reuters
    10321
    Beijing has pledged to bankroll $14.7 billion in South Africa and provide the country’s power utility and logistics corporation with loans. The South African rand firmed by more than one percent on news of the investment.
    The announcement followed a meeting between the two countries’ leaders President Cyril Ramaphosa and Chinese President Xi Jinping in Pretoria. Xi’s state visit took place ahead of the 10th BRICS summit, scheduled for July 25-27. South Africa's biggest city of Johannesburg is set to welcome the heads of Brazil, Russia, India, and China.

    “China is ready to invest and work with South Africa in various sectors, such as infrastructure development, ocean economy, green economy, science and technology, agriculture, environment and finance,” Ramaphosa told journalists following the meeting.


    RT

    @RT_com
    Chinese producers complained that flood of cheaper products damaging the local industry https://on.rt.com/9avb

    11:00 PM - Jul 23, 2018

    China launches dumping probe into steel imports from Indonesia, EU, Japan, and South Korea — RT...
    China’s Commerce Ministry launched an anti-dumping investigation on Monday into stainless steel imports from four countries. Domestic producers have complained that a flood of cheaper products has...

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    “We also recognized that, although trade figures have grown steadily over the past few years, bilateral trade has not reached its potential. We have thus explored avenues for increasing trade, identifying sectors for future investment and promoting tourism.”

    The parties reportedly signed three major agreements aimed at strengthening mutual trade and identifying sectors for future investment. The presidents also announced plans to relax travel restrictions and loosen visa requirements.
    The rand grew 1.04 percent to 13.3200 per dollar at 11:45 GMT, its firmest since Thursday.

    “The rand is firming because our president is making it rain,” Wichard Cilliers, a trader at Pretoria-based Treasuryone told Bloomberg. “He has just secured another big investment, this time from China. That means new FDI inflows.”

    For more stories on economy & finance visit RT's business section
     
  9. Jon Alba

    Jon Alba Senior Investor

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    https://energy.economictimes.indiat...etallurgical-complex-in-south-africa/65165471


    Chinese investors plan $10-billion metallurgical complex in South Africa
    South Africa's President Cyril Ramaphosa said at a joint news conference with Xi on Tuesday that China had committed to invest $14.7 billion in the South African economy, but neither leader mentioned the $10-billion complexREUTERS | July 27, 2018, 17:31 IST



    NewsletterA A








    inShare



    [​IMG]JOHANNESBURG: Chinese investors signed agreements to build a $10-billion metallurgical complex in South Africa during President Xi Jinping's state visit this week and hope to start construction next year, an executive involved in the project and a provincial official told Reuters.

    South Africa's President Cyril Ramaphosa said at a joint news conference with Xi on Tuesday that China had committed to invest $14.7 billion in the South African economy, but neither leader mentioned the $10 billion complex.

    Ramaphosa is on a mission to kickstart economic growth after a decade of stagnation and is targeting $100 billion in new investment over five years.

    The complex, which is still in the planning stage and envisages building a stainless steel plant, a ferrochrome plant and a silicomanganese plant, is a much-needed vote of confidence in the sputtering South African economy.

    Trade and Industry Minister Rob Davies said on Tuesday that China was considering a metallurgical project in a special economic zone (SEZ), but he did not reveal the scale of the project or timeframe.

    The executive involved in the project, who did not wish to be named because he was not authorised to speak to the media, said memoranda on the complex were signed before Xi and Ramaphosa gave news conference on Tuesday.

    "The investors for the SEZ project were in the room when Ramaphosa and Xi spoke to the press," the executive said.

    Richard Zitha, a project executive at the Musina-Makhado SEZ where the complex will be based, said the project was being led by Chinese state-owned companies, but he declined to name them.

    He said the Chinese investors would look for Black Economic Empowerment partners to comply with South African rules designed to address racial disparities more than two decades after the end of apartheid.

    The investors were open to investors from other countries joining at a later stage, he said.

    "The investors have been in South Africa for around a week and have visited mines to look for inputs for the project," Zitha said.

    The Musina-Makhado SEZ is in Limpopo province close to South Africa's borders with Mozambique, Zimbabwe and Botswana.

    The SEZ plans to house plants with a capacity of 3 million tonnes per annum of stainless steel, 3 million tonnes per annum of ferrochrome and 500,000 tonnes per annum of silicomanganese. Those capacity targets are subject to change and will be finalised by the end of the year, the executive said.

    A coal-fired power plant, coking plant and coal washery will be built alongside the metallurgical plants, a presentation prepared for investors showed.

    Some of the steel output for the complex has been earmarked for export to China, while other products would be sold to countries in southern Africa, the executive said.

    South Africa is already a major exporter of metal alloys to China.

    Investors are hoping to receive the necessary environmental approvals by the end of March and would then start construction, Zitha said.
     
  10. Jon Alba

    Jon Alba Senior Investor

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    Canaf finalizes subsidiary Southern Coal B-BBEE deal

    2018-08-15 11:12 MT - News Release


    Mr. Christopher Way reports

    CANAF ANNOUNCES FINALISATION OF B-BBEE TRANSACTION FOR ITS SOUTH AFRICAN SUBSIDIARY

    Canaf Investments Inc., formerly known as Canaf Group Inc., has finalized its new Broad-Based Black Economic Empowerment transaction for its South African subsidiary, Southern Coal Pty. Ltd.

    Further to the announcement dated July 6, 2018, the corporation can confirm that Amandla Amakhulu (RF) Pty. Ltd., a 100% black, privately owned ringfenced company incorporated in South Africa, has acquired 30% of the issued shares of Southern Coal, from Canaf's wholly owned subsidiary, Quantum Screening and Crushing (Pty) Ltd., ("Quantum"), for the value of R18million (C$1.7m approx), with effective date 03 July 2018.

    Quantum has in return received cumulative, redeemable preference shares in AAM in the amount of the purchase price, R18million (C$1.7million approx). These preference shares shall provide preferential dividends, until all preference shares have been redeemed by AAM. These dividends are subject to terms and conditions requiring AAM to pay Quantum such dividends from any distribution received from Southern Coal and is also subject to further protective conditions to the benefit of Quantum.

    Christopher Way, Chief Executive Officer of Canaf, states, "the finalisation of the transaction with Amandla Amakhulu marks a significant milestone in a strategic plan to bring Southern Coal's B-BBEE rating in line with our customers requirements. It is with great pleasure to deliver what we have promised to our customers."

    About Canaf

    Canaf is a public company listed on the TSX-V Exchange. Canaf's head office is in Vancouver, Canada, with subsidiary offices in the United Kingdom and South Africa. Canaf owns 100% of Quantum Screening and Crushing Pty. Ltd., a South African based company that owns 70% of Southern Coal (Pty) Ltd., ("Southern Coal"), a company that produces a high carbon, de-volatised anthracite.

    About Southern Coal

    Southern Coal produces calcined anthracite, a product used primarily as a substitute to coke in sintering processes. Southern Coal produces calcined anthracite by feeding washed anthracite coal through rotary kilns, at temperatures between 900 and 1100 degrees centigrade; the volatiles are driven off and the effective carbon content increased.

    Southern Coal's two largest clients are African leaders in steel and ferromanganese production. Southern Coal operates near Newcastle, KwaZulu-Natal, where Quantum's three kilns operate; the majority of Southern Coal's feedstock anthracite is supplied from local anthracite mines in KwaZulu-Natal.

    We seek Safe Harbor.

    © 2018 Canjex Publishing Ltd. All rights reserved.​
     

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