CAFCA Limited is a manufacturer and supplier of more than 900 cable and related products for the transmission and distribution of electricity and information. The company was established in 1947 in Zimbabwe, and CAFCA shares are available to buy on the Zimbabwe and London stock exchanges, as well as the Johannesburg Stock Exchange (JSE) in South Africa. The company falls under its parent company CBi Electric African Cables, which is in turn owned by Reunert Limited.
Apart from manufacturing cables for sale in mainly southern and central Africa, CAFCA offers a toll manufacturing option which allows customers to access raw materials such as copper and aluminium, which are converted at the cost of value addition.
The company also recovers decommissioned cables for recycling. CAFCA’s product portfolio includes wiring cables, plat PVC cables, panel, instrument, switch gear and control gear wiring cables, flexible cords, rip cords, autowire, underground armoured cables, control cables, overhead cables, blasting wires, detonator cables and a range of transmission cables.
CAFCA is a small cap company which recorded just over US$2 million profit in 2015. The live online stocks chart shows that CAFCA share price has been impacted by a slowdown in capital projects in its areas of operation.
CAFCA Shares Growth Driver
CAFCA relies primarily on capital projects across various economic sectors in order to generate profits. With economic conditions unstable, there has been a decline in these projects, especially in CAFCA’s traditionally strong markets. To compensate for lack of local demand, the company decided to buy into strategies to barter copper for cable and increase exports. This strategy took a hit when the price of copper plunged. Exports to the northern hemisphere have also been negatively affected by the devaluation of currencies in Zambia and Malawi, whilst the drop in international commodity prices caused the Zambian and South African markets to suffer.
Most sectors of the economy in southern Africa are battling with little investment in plant or buildings being made, meaning that demand for cable is currently low. This is reflected in the company’s latest financial data, which shows a US$300 000 drop in profits. The forecast for the near future is that this demand will remain low, and CAFCA is focusing on costs and efficiencies in order to turn moderate profits. CAFCA says that once opportunities arise in the local or export markets, the company is well placed to increase tonnage from its current conservative stance of 200 tonnes per month, up to 300 tonnes.
CAFCA Group Investor Tip
In line with the tough trade conditions, CAFCA shareholders were recently warned that performance will continue to be dampened and headline earnings per share will be considerably lower than in the past.
Sales for the group have been decreasing steadily, whilst volumes and profits are also going down. Between the beginning of 2016 and midway through the year, CAFCA share price dropped by more than half. CAFCA share price will only improve once the markets strengthen, and it is uncertain when this will happen. Adventurous investors may look to buy the shares at the current low prices in anticipation of long-term growth once trade conditions improve.
CAFCA Major Shareholders
Africa Cables, Messina Investments.
How to buy CAFCA Group Shares
CAFCA : How to buy CAFCA Group Shares Online
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