Trustco's Time Has Come

Originally published in the Informanté newspaper on Thursday, July 2, 2015.

DISCLOSURE: The writer has beneficial financial interests in the company covered.

The 22-year old Trustco Group Holdings posted record results with sales increasing to over N$1.017 billion with a staggering net profit of N$303 million.

Its more than 3 500 local and international shareholders saw a growth of 30% in earnings and spectacular growth of 111%  in headline earnings per share. This is on top of the combined increase of shareholder's wealth since the start of the calendar year of N$ 1.35 billion in market capitalization, with a corresponding increase in share price of 65%.

Dr Quinton van Rooyen, Managing Director of Trustco Group Holdings, said the performance is even more significant considering the company is a post-independence business venture that focussed on the needs of the sectors of society that was traditionally excluded from traditional financial and legal services.

Trustco’s 2 720 Namibian shareholders can be quite proud of its accomplishments – especially since Trustco is truly a post-independence Namibian company. Trustco has grown with Namibia, to become a symbol of Namibian entrepreneurship, and a shining example of what our country is capable of.

“It is a great testimonial for Namibia’s political and investment climate since independence and confirms the growing confidence in successive governments and institutions. I am especially satisfied in the role Trustco could and will continue to play in wealth creation through entrepreneurship,” Van Rooyen pointed out.

With wealth created during the year close to N$ 600 million, Dr Van Rooyen’s team has managed to impress one and all with its performance. Of this wealth created, N$ 143 million was distributed to employees, N$ 40 million to shareholders, and N$ 62 million to government, with the remainder retained for expansion and future growth. Its N$ 158 million deferred tax liability will still further enhance government revenues over the coming years.

And all this at a time Trustco is looking to take a step in a different direction – into resources. Specifically, a diamond exploration operation, as detailed in the JSE and NSX Stock Exchange News Service last week. This acquisition is still under discussion with minority shareholders, and in a very nascent state.

But Trustco’s current operations is not. Trustco is one of the few Namibian companies that can boast a billion dollars in sales. This is as a direct result of Trustco’s expanding properties division, which has acquired not only the Elisenheim property development over the past year, but also Farm Herboths, another residential development on the outskirts of Windhoek, to address the severe shortage of serviced land in the Khomas region, and enhance its revenue pipeline in the coming years.

This has also noticeably strengthened the group’s balance sheet, now at a burgeoning N$ 3.1 billion in assets, driving growth in both investment property, as well as receivables – a specific example of the kind of synergies the group expected with its acquisition of Fides Bank Namibia Ltd (now Trustco Bank Namibia Ltd). 

But not all news is good news. Specifically, the Group’s insurance operations in South Africa has undergone a restructuring, resulting in 53 branches being closed, and the retrenchment of 122 employees. The group does note, however, that this resulted in South African operations finally reaching a cash break-even point, which bodes well for future expansion in the region.

All this gave rise to the resultant net profit after tax of N$ 303 million for the Financial Year ending 31 March 2015. In his MD’s report, Dr van Rooyen quotes Lewis Carroll: “The time has come,” The walrus said. “To talk of many things,” while he holds up his own looking glass, and uncovers Trustco Group’s path, not only during the past year, but going forward as well. But unlike the Walrus and the Carpenter, Dr van Rooyen has no taste for devouring any oysters that follow him. Alas, he’d rather show them what was, what is, and what can be, at his side – navigating the Trustco ship through rocky waters to the shiny shores just beyond the horizon.