Trustco Group Holdings Limited has recorded a consistent upsurge over the past five financial years despite global economic challenges. The company has shown annual average revenue growth of 34%, five year average headline earnings growth of 41% and five year average book value growth of 45%.
This performance impelled Quinton van Rooyen, Group Managing Director to exclaim that there is potential for value addition in Trustco. He made the statement when he released his company’s results at a Windhoek hotel auditorium packed with shareholders, stock brokers, Group directors and accounting authorities on April 31st 2012, causing some 600 000 Trustco shares to be traded on the same day. The company boasts stock liquidity of 14%.
According to Van Rooyen, “these results demonstrate the true value embedded in the company”. Trustco enjoys dual-listing on the Namibian Stock Exchange (NSX) and the Johannesburg Stock Exchange (JSE).
Trustco proudly announced that the company has already sourced adequate funding for all of its educational financing activities over the next five years. In particular Trustco hopes to benefit from the International Finance Corporation (IFC), a member of the World Bank Group, and the largest global development institution focused exclusively on the private sector in developing countries.
Van Rooyen said that Trustco will need to raise capital for its major expansion plans in Africa, targeting the 700 million working poor in Africa. He said that the ambition stretches even further to include the BRICS (Brazil, Russia, India, China and South Africa) emerging-economy group of countries, whose needs are about the same as ours in Namibia and their people seem ready to adapt our model of service provision to accommodate their citizens.
The financial services company posted impressive results for the 2012 financial year showing an 18% increase in profits before tax, 22% more revenue, 22% bigger gross profit, 14% more dividends paid and 15% increased Earnings Before Interest, Tax, Depreciation and Amortization.
This year the property portfolio came into its own. One of the contributing factors to the success of Trustco Properties was the conscious decision to enter the mortgage loan segment. A total of 92 000 square metres of serviced industrial land were sold during the financial year representing only 2% of what the company had available for sale. Revenue for the segment increased from N$64 million to N$ 122 million, while net profits after tax increased by 43% to N$130 million. Van Rooyen pointed out that “we invest in property because we know the market. Namibia is not South Africa and in this country the high property demand will continue and for the next 10 to 15 years, shareholders can look forward to uninterrupted income, demonstrating Trustco’s exceptional value.”
Micro-insurance and technology solutions brought the company net profits of N$98 million, up 9% on the previous year. Trustco’s insurance business in Namibia continued to grow with after tax net profits up 26% to N$63 million.
Despite an 18% surge in revenue, the company did not do as well in the South African market. After tax profits fell 31% from N$16 million to N$11 million. According to van Rooyen the reason for this is that many intermediaries in South Africa are putting a squeeze on the profit margins of the business. To overcome this constraint, “we will endeavour to own the whole value-chain in South Africa as is the case with Trustco’s Namibian insurance model.” Van Rooyen affirmed.