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quarterly update
TRUSTCO GROUP HOLDINGS LIMITED
Incorporated in the Republic of Namibia
(Registration number 2003/058)
NSX share code: TUC
JSE share code: TTO
ISIN Number: NA000A0RF067
("the Group")
UPDATE FOR THE THIRD QUARTER ENDED 31 DECEMBER 2013
The Board of directors of Trustco is pleased to update the Group’s
shareholders in respect of the financial quarter ending 31 December
2013.
Total Group revenue for the 9 months ended 31 December 2013 was
NAD475 million, December 2012: N$432 million, representing an
increase of 9.88%. Revenue of NAD160.6 million was generated for the
third quarter ended 31 December 2013, compared to NAD135.5 million
for the comparative 2013 period, representing an increase of 18.5%.
Gross profit margin for the quarter increased to 76.4%, compared to
63.6% for the comparative period, representing a 20% increase in
margins.
Total Net Profit after Tax for 9 months ended 31 December 2013 was
NAD96.1 million, December 2012: NAD52.6 million, representing growth
of 82.7%. The Group generated NAD31.1 million Net Profit after Tax
for the third quarter of the 2014 financial year, 2013: NAD2.2
million, this is a 14 times growth in profits when compared to the
comparative quarter in 2013.
Total Headline earnings for the 9 months ended 31 December 2013 was
NAD96.1 million, December 2012: NAD52.6 million, representing growth
of 82.7%.
Headline earnings for the quarter ended 31 December 2013 grew by NAD
28.9 million to NAD31.1 million (2013: NAD2.2 million), resulting in
headline earnings per share (“HEPS”) of 4.10 cents and basic
earnings per share (“EPS”) of 4.10 cents for the quarter. The 2013
comparative quarter generated HEPS of 0.17 cents and EPS of 0.17
cents.
SEGMENTAL COMMENTARY
MICRO INSURANCE
The insurance operations in Namibia contributed 4.81 cents per share
to HEPS, which represents a 207% growth on the comparative quarter
(2013 1.57 cents per share). The increase is attributed to a
combination of organic growth and innovative new offerings.
Insurance operations in the rest of Africa contributed a loss of
3.00 cents per share to HEPS (2013: loss of 1.82 cents per share).
The majority of the loss is due to the on-going operational cost of
the insurance business in South Africa and the cost associated in
establishing the business model in the rest of Africa. Sales of
insurance policies in South Africa are continuing at a rate expected
by management via the Group’s national branch network.
SUBSEQUENT EVENT
Arbitration on the dispute in place between Econet Wireless (Pvt)
Ltd and Trustco Mobile (Pty) Ltd, a 100% owned subsidiary, took
place during December 2013.
The outcome of the dispute was that the arbitrator found in favour
of Econet Wireless (Pvt) Ltd and held Econet not liable for any
further payments to Trustco. The arbitrator’s award was made on the
15th January 2014.
As disclosed in the Audited Financial Statements of the Group as at
31 March 2013, the carrying value of the receivable from Econet was
NAD 42.1 million. This amount will be impaired and the impairment
charge will be recognised in the fourth quarter of the 2014
financial year.
MICRO-FINANCE AND EDUCATION
The Micro finance and educational segment contributed 2.00 cents per
share to HEPS representing a growth of 2.14 cents per share on the
comparative quarter (2013 loss of 0.14 cents per share). The
education loan book has maintained its growth as a result of the
continued demand for the current educational courses offered. The
gross educational loan book grew to NAD596 million from the balance
at 31 December 2013, representing an annual growth of 94%. Non-
performing loans as a percentage of gross loans as at 31 December
2013 was 3.6% (31 December 2012: 5.3%) demonstrating a 32%
improvement in asset quality.
PROPERTIES
The properties segment contributed 0.29 cents per share to HEPS
(2013 0.57 cents per share). The profit generated in this segment
relates to the completion of sales on Phase I of the LaFrenz
‘Landbank’; a very large portion of land in Windhoek, currently
being monetised in phases by the Group. Sales of Phase II has
commenced and given the increasing demand for property and serviced
land in Windhoek the Group expects this to contribute meaningfully
to profits in the medium term.
On the 23rd January 2014, Trustco announced on SENS the acquisition
of all the shares of Elisenheim Property Development Company (Pty)
Ltd (‘EPDC’) subject to the fulfilment of conditions precedent. The
demand for serviced land in the Windhoek basin is a well discussed
topic and the soaring property prices in Namibia, contributed to by
the lack of available land, has been discussed in both local and
international publications.
At the time of reporting, one Namibian Dollar (‘NAD’) was equivalent
to one South African Rand (‘ZAR’).
The financial information on which this quarterly update is based
has not been reviewed or reported on by the Group’s auditors.
By order of the board
D J Steyn
Company Secretary
29 January 2014
Johannesburg
JSE Sponsor
Sasfin Capital
(a division of Sasfin Bank Limited)
NSX Sponsor
IJG (Pty) Limited
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