| Wed 30 May 2012, 10:00 | | TTO - Trustco Group Holdings Limited - Reviewed provisional consolidated |
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TTO
TTO
TTO - Trustco Group Holdings Limited - Reviewed provisional consolidated
condensed financial results for the 12 months ended 31 March 2012 and final
dividend declaration
TRUSTCO GROUP HOLDINGS LIMITED
Incorporated in the Republic of Namibia
(Registration number 2003/058)
JSE share code: TTO
NSX share code: TUC
ISIN Number: NA000A0RF067
("the Company" or "the Group" or "Trustco")
REVIEWED PROVISIONAL CONSOLIDATED CONDENSED FINANCIAL RESULTS FOR THE 12 MONTHS
ENDED 31 MARCH 2012 AND FINAL DIVIDEND DECLARATION
NATURE OF BUSINESS
Trustco is a high growth diversified Pan-Africa financial services group.
Operational segment profit contributors are a) micro insurance and technology,
b) microfinance and education and c) property and mortgage loans. The group`s
focus is to take financial services to underserved communities in Africa and
BRICS, through the application of high-end technology solutions.
FINANCIAL OVERVIEW FOR THE YEAR
Group revenue increased by 22% to NAD 713 million from NAD 587 million. Gross
profit increased by 22% to NAD 393 million from NAD 322 million and EBITDA
increased by 15% to NAD 300 million from NAD 262 million. Profit after tax
increased by 9% to NAD 207 million from NAD 190 million, while headline earnings
grew by 5% to NAD 139 million. These results should be viewed in the context of
a) a global negative economic outlook b) a once off recognition of a damages
award in FY 2011 and c) material revenue related to royalties due by Econet in
Zimbabwe, that have not been included, due to a legal dispute.
REVIEW OF OPERATIONS
MICRO INSURANCE AND TECHNOLOGY SOLUTIONS
As a segment, revenues increased by 10%, to NAD 464 million from NAD 420
million, with a corresponding increase in net profit after tax of 9%, to NAD 98
million from NAD 90 million.
NAMIBIA
The Namibian insurers continued their growth trajectory with revenue growth of
13% to NAD 126 million from NAD 112 million. Net profit after tax increased 26%
to NAD 63 million from NAD 50 million.
ZIMBABWE
The Zimbabwean venture concluded during February 2012. Revenues were down 36% to
NAD 29 million from NAD 45 million. Legal proceedings for outstanding royalties
and damages are on-going.
Refer to subsequent events.
SOUTH AFRICA
Revenues increased 18% to NAD 309 million from NAD 263 million and net profit
after tax decreased 31% to NAD 11 million from NAD 16 million. The business
model of this division should see change in line with the Namibian business
model focusing on owning a greater part of the value chain. Steps in this
direction have already commenced at time of reporting.
MICRO FINANCE AND EDUCATION
NAMIBIA
This segment continues to perform well annually in Namibia. Revenue for the 12
month period to 31 March increased by 25%. Net profit after tax decreased by
14%, due to an increased cost in educational courses sold. Gross educational
loans increased 18% from NAD 226 million to NAD 266 million. Non-performing
loans decreased 23% to 6.1% of total loan book.
Adequate funding mechanisms are in place for the expected growth in the loan
book for the next five years in Namibia.
PROPERTIES AND MORTGAGE LOANS
NAMIBIA
Another 92 000 square meters of industrial serviced land has been sold during
the 2012 financial year. This represents 2% of the total portfolio of sellable
land sold during 2012. Revenue in the segment increased to NAD 122 million from
NAD 64 million representing a 91% growth. Net profit after tax increased to NAD
130 million from NAD 91 million, a 43% growth.
A total of 5% of the portfolio has been sold over the past three financial
years, in line with group strategy. The current property portfolio should be
monetized within the next 10 to 15 years of which it is estimated that 40% of
the sales will be vendor financed by way of mortgage loans to approved buyers.
Transfer of the property to the new owners should be completed by Q3 2012.
PUT AND CALL OPTION
On 21 October 2011 the Group entered into an agreement with a long time
shareholder, The Renaissance Africa Master Fund ("the Fund"), to repurchase
10.5% of the issued share capital of the Company through the exercise of a put
option by the Fund or the exercise of a call option by the Company ("the share
repurchase"). All approvals were obtained at a general meeting of Trustco
shareholders during January 2012.
Shareholders are referred to the announcement released on SENS on 28 October
2011 for further information in this regard.
The Group has accounted for the transaction through the recognition of Treasury
shares in equity and a concurrent liability for the settlement. At time of
reporting neither party has exercised any of their rights in terms of the
agreement.
SUBSEQUENT EVENTS AND CONTINGENT LIABILITIES
ECONET MATTER:
The contract with Econet in Zimbabwe expired during February 2012. The Group has
recognized revenue as per the limited data provided by Econet while the legal
process to recover damages and outstanding royalties continues. No liability was
raised in respect of the insurance premiums for the period 1 June 2011 to 17
February 2012 as the group believe that they do not have a constructive
obligation. In addition, no asset was raised as a result of the loss of income
for the remainder of the contract period, subsequent to 30 September 2011.
Shareholders are referred to the various SENS announcements published for
additional information.
DIVIDENDS PAID
For the year under review an interim dividend of 1.75 cents per share was paid
on 10 February 2012.
The Directors of Trustco ("the Board") are pleased to announce that the Board
has passed a resolution on the 29 May 2012 to pay a final dividend of 2.25 cents
per share for the financial period ended 31 March 2012. This represents a 14%
growth from the total dividend declared for the 2011 financial year.
The following information is provided to shareholders in respect of the new
applicable Dividend Tax:
- The dividend has been declared from income reserves;
- The company has no secondary tax on companies` credits available;
- The dividend withholding tax rate for South Africa is 15% resulting in a
net dividend of 1.9125 cents per share; and
- Trustco Group Holdings Limited`s Namibian Income Tax Reference Number is
3356338011.
The salient dates for the payment of this dividend are set out below:
Last day to trade cum-dividend Friday,29 June 2012.
Trading ex dividend commences Monday,2 July 2012.
Record Date Friday,6 July 2012.
Payment Date Friday,20 July 2012.
Share certificates may not be dematerialised or rematerialised between Monday,
2 July 2012 and Friday, 6 July 2012 both days included. The dividend is declared
in Namibia Dollars and payable in the currencies of the Republics of South
Africa and Namibia which is pegged 1:1. Shareholders are further advised that
Namibian non-resident shareholders` tax of 15% on the declared dividend will be
applicable to all shareholders with addresses outside Namibia.
FUTURE OUTLOOK
The transactions already announced on SENS should be implemented during 2012.
Greater emphasis will be placed on implementing the successful product offering
in Namibia in other jurisdictions of current operation. Expansion into Africa
and BRICS remains a priority of management despite global economic negativity.
Basis for preparation and presentation of reviewed condensed consolidated annual
financial statements
BASIS OF PREPARATION
The provisional condensed consolidated financial statements are prepared in
thousands of Namibian Dollar ("NAD `000"). The Group`s functional and
presentation currency is Namibian Dollar. At 31 March 2012, NAD 1 was equal to
ZAR 1.
The accounting policies applied in the preparation of these reviewed provisional
condensed consolidated results ("results"), which are based on reasonable
judgments and estimates, are in accordance with International Financial
Reporting Standards ("IFRS"). The accounting policies adopted are consistent
with those of the annual financial statements for the year ended 31 March 2011.
These results, as set out in this report, have been prepared in accordance with
the framework concepts and the measurement and recognition requirements of IFRS
and the AC500 standards as issued by the Accounting Practices Board, the
Listings Requirements of JSE Limited ("JSE Listings Requirements") and the NSX
Listing Requirements and contain the information as required by IAS 34 - Interim
Financial Reporting.
The company`s auditors, BDO Namibia and BDO South Africa Inc., have reviewed the
provisional condensed consolidated financial statements for the year ended 31
March 2012. The unmodified review report is available for inspection at the
registered office of the Company.
APPRECIATION
With the consistent success enjoyed by the Group during the year, the Board
extends its gratitude for the tremendous effort from all group staff in order to
achieve these results. The Board would also like to express its thanks to the
service providers and clients, without whom these results would not have been
possible.
By order of the Board
Adv. Raymond Heathcote
(Chairman)
Mr Q van Rooyen
(Managing Director)
Windhoek, 30 May 2012
Directorate and Administration
Directors:
Directors: Adv. Raymond Heathcote (Chairman), Mr Winton J. Geyser (Non-
Executive), Mrs Veronica C. de Klerk (Non-Executive), Mr Floors J. Abrahams
(Financial Director), Mr Quinton van Rooyen (Managing Director), Mr Adrian L.
Bock (Executive, South African)
Registered office:
Namibia
2 Keller Street,
PO Box 11363, Windhoek
South Africa
Old Trafford 1,
Isle of Houghton,
11 Boundary Road,
Houghton Estate, 2198
Website: http://www.tgi.na
Registration No. 2003/058
JSE Symbol: TTO, NSX Symbol: TUC
Transfer secretary (Namibia):
Transfer Secretaries (Pty) Ltd
4 Robert Mugabe Avenue, Windhoek
PO Box 2401, Windhoek, Namibia
Registration No. 93/713
Telephone: +264 61 22 76 47
Facsimile: +264 61 24 85 31
Transfer Secretaries (South Africa):
Computershare Investor Services (Pty) Ltd
Registration number 2004/003647/07
Ground Floor, 70 Marshall Street
Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Telephone: +27 11 370 7700
Facsimile: +27 11 688 7716
Auditors:
Namibia
BDO Namibia
Registered Accountants and Auditors
Chartered Accountants (Namibia)
61 Bismarck Street, Windhoek, Namibia
South Africa
BDO South Africa Inc.
Registered Auditors
Riverwalk Office Park, Building C, 3rd Floor,
41 Matroosberg Road, Ashlea Gardens,
Pretoria, South Africa
Sponsors:
Namibia
IJG Securities (Pty) Ltd
Member of the NSX
100 Robert Mugabe Avenue
PO Box 186, Windhoek, Namibia
Registration No. 95/505
South Africa
Sasfin Capital
(a division of Sasfin Bank Limited)
29 Scott Street, Waverley, Johannesburg, 2090
PO Box 95104, Grand Park, 2051
Registration No. 1951/002280/06
REVIEWED PROVISIONAL CONSOLIDATED CONDENSED FINANCIAL INFORMATION FOR THE YEAR
ENDED 31 MARCH 2012
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
% Reviewed Audited
31 March 31 March
2012 2011
Change N$ `000 N$ `000
Insurance premium revenue 13% 126 302 111 520
Revenue 23% 587 002 475 498
Total revenue 22% 713 304 587 018
Cost of sales (21%) ( 320 368) ( 265
144)
Gross profit 22% 392 936 321 874
Investment income (16%) 24 509 29 306
Fair value gains and losses 53% 97 101 63 514
Other income (93%) 4 823 65 144
Insurance benefits and claims 12% ( 18 872) ( 21 405)
Transfer to policyholder liabilities 30% ( 2 377) ( 3 408)
Change in unearned premium provision 22% ( 492) ( 629)
Administrative expenses 3% ( 202 743) ( 208
303)
Finance costs (36%) ( 30 092) ( 22 139)
Profit before taxation 18% 264 793 223 954
Taxation (70%) ( 58 079) ( 34 183)
Profit for the period 9% 206 714 189 771
Other comprehensive income, net of <(100%) ( 1 813) ( 684)
tax
Revaluation of property, plant and <(100%) ( 2 747) ( 1 036)
equipment
Deferred taxation on revaluation of >100% 934 352
property, plant and equipment
Total comprehensive income for the 8% 204 901 189 087
period
Earnings per shares:
Basic earnings per share (cents) 8% 30.24 28.02
Diluted earnings per share (cents) 8% 30.03 27.82
Wheighted number of ordinary shares 1% 683 622 677 240
(`000)in issue
Total number of ordinary shares - 707 142 707 142
(`000)in issue
Contingently issuable shares as a - 4 789 4 789
result of business acquisition (`000)
Weighted number of ordinary shares 1% 688 411 682 029
for diluted earnings per share (`000)
RECONCILIATION OF HEADLINE EARNINGS TO EARNINGS ATTRIBUTABLE TO EQUITY HOLDERS
OF THE PARENT COMPANY
% Reviewed Audited
31 March 31 March
2012 2011
Change N$ `000 N$ `000
Profit attributable to ordinary 9% 206 714 189 771
shareholders
Adjustments net of taxation: (18)% (68 175) (57 831)
(Profit)/Loss on disposal of <(100)% (103) 353
property, plant & equipment
Fair value adjustments on investment (60%) (64 087) (40 079)
properties
Impairment of intangible assets (100)% - 381
Profit on disposal of investment (100)% (4 447) -
property
Impairment of property, plant & 100% 462 -
equipment
Gain on bargain purchase as a result 100% - (18 486)
of business acquistion
Headline earnings 5% 138 539 131 940
Basic earnings per share (cents) 8% 30.24 28.02
Diluted earnings per share (cents) 8% 30.03 27.82
Headline earnings per share (cents) 4% 20.27 19.48
Diluted headline earnings per share 4% 20.12 19.35
(cents)
Dividends per share (cents) >100% 3.75 1.50
CONSOLIDATED SEGMENTAL ANALYSIS
% Reviewed Audited
31 March 31 March
2012 2011
Change N$ `000 N$ `000
Revenue 22% 713 304 587 018
Micro insurance and technology
solutions
Namibia 13% 126 302 111 520
Segment revenue - - -
Insurance income 13% 126 302 111 520
Inter segment revenue - - -
Zimbabwe (36)% 29 076 45 317
Segment revenue (36)% 29 076 45 317
Inter segment revenue - - -
South Africa 18% 309 229 263 123
Segment revenue 18% 309 229 263 123
Inter segment revenue - - -
Micro finance and education
Namibia 25% 114 566 91 293
Segment revenue 20% 114 566 95 793
Inter segment revenue (100)% - (4 500 )
Property and Mortgage loans
Namibia 97% 118 217 59 949
Segment revenue 91% 122 471 64 118
Inter segment revenue 2% (4 254) (4 169)
South Africa >100% 425 174
Segment revenue >100% 425 174
Inter segment revenue - - -
Head office and support business (1)% 15 489 15 642
Segment revenue (10)% 89 043 98 677
Inter segment revenue (11)% (73 554) (83 035)
Net profit after tax 9% 206 714 189 771
Micro insurance and technology
solutions
Namibia 27% 63 391 49 762
Segment result 92% 49 366 25 764
Inter segment revenue (42)% 14 025 23 998
Zimbabwe (5)% 22 819 23 910
Segment result (5)% 22 819 23 910
Inter segment revenue - - -
South Africa (29)% 11 482 16 284
Segment result (30)% 11 482 16 342
Inter segment revenue (100)% - (58)
Micro finance and education
Namibia (14)% 29 536 34 203
Segment result (41)% 6 681 11 324
Inter segment revenue - 22 855 22 879
Property
Namibia 43% 130 400 90 904
Segment result 40% 132 954 94 858
Inter segment revenue (35)% (2 554) (3 954)
South Africa <(100)% (3 054) 985
Segment result (2)% (4 450) (4 527)
Inter segment revenue (75)% 1 396 5 512
Head office and support business 82% (47 860) (26 277)
Segment result 75% 57 268 32 772
Inter segment revenue 78% (105 128) (59 049)
Segment Assets
Micro insurance and technology - -
solutions
Namibia 50% 89 279 59 631
South Africa 16% 252 474 216 843
Zimbabwe >100% 32 449 15 167
Micro finance and education
Namibia 23% 271 964 220 824
Property
Namibia >100% 637 232 169 163
South Africa (15)% 11 233 13 275
Head office and support business (57)% 225 458 527 444
Segment liabilities
Micro insurance and technology
solutions
Namibia 27% 38 784 30 638
South Africa (8)% 118 020 128 804
Zimbabwe - - -
Micro finance and education
Namibia 27% 133 971 105 566
Property
Namibia 45% 91 463 63 028
South Africa (7)% 6 749 7 219
Head office and support business 45% 311 147 214 552
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
% Reviewed Audited
31 March 31 March
2012 2011
Change N$ `000 N$ `000
ASSETS
Non-current assets
Property, plant and equipment 24% 160 502 129 697
Investment property 37% 317 990 232 829
Intangible assets 9% 261 478 240 922
Deferred income tax assets 18% 73 136 62 096
Educational micro loans advanced 25% 150 115 120 266
Other loans advanced 2% 24 566 24 164
Finance lease receivable (100%) - 457
Total non-current assets 22% 987 787 810 431
Current assets
Assets at fair value through profit (100%) - 25 699
and loss
Short-term portion of educational 14% 99 804 87 473
micro loans advanced
Short-term portion of other loans (3%) 804 833
advanced
Short-term portion of finance lease 9% 457 419
receivable
Inventories (24%) 12 623 16 541
Trade and other receivables 61% 317 425 197 500
Current income tax assets (75%) 189 766
Cash and cash equivalents 22% 101 000 82 685
Total current assets 29% 532 302 411 916
Total assets 24% 1 520 089 1 222 347
EQUITY AND LIABILITIES
Capital and reserves
Share capital - 162 645 162 645
Treasury shares (100%) ( 52 832) -
Deemed treasury shares 79% ( 3 840) ( 18 731)
Vendor shares - 14 976 14 976
Contingency reserve 26% 2 970 2 361
Revaluation reserves (12%) 13 601 15 414
Distributable reserves 38% 682 435 495 875
Attributable to equity holders of the 22% 819 955 672 540
parent
Non-current liabilities
Long term liabilities 40% 211 931 151 435
Other liabilities (23%) 257 334
Deferred income tax liabilities 42% 124 498 87 833
Policy holders` liability under 29% 10 684 8 307
insurance contracts
Total non-current liabilities 40% 347 370 247 909
Current liabilities
Current portion of long-term 38% 34 117 55 288
liabilities
Current portion of other liabilities (16%) 2 622 3 127
Trade and other payables 53% 256 323 167 262
Technical provisions (3%) 17 917 18 428
Current income tax liabilities >100% 28 603 7 778
Amounts due to related parties (84%) 1 413 8 826
Bank overdraft (71%) 11 769 41 189
Total current liabilities 17% 352 764 301 898
Total equity and liabilities 24% 1 520 089 1 222 347
CONSOLIDATED STATEMENT OF CASH FLOWS
% Reviewed Audited31
31 March March
2012 2011
Change N$ `000 N$ `000
Cash flow from operating activities
Cash generated by operations before (4%) 178 114 185 378
working capital changes
Changes in working capital 53% ( 78 977) ( 169
343)
Interest received (16%) 24 509 29 306
Finance costs (36%) ( 30 092) ( 22 139)
Net educational loans advanced (43%) ( 42 180) ( 29 436)
Taxation paid <(100%) ( 12 848) ( 5 517)
Net cash flow from operating >100% 38 526 ( 11 751)
activities
Cash flow from investing activities
Additions to property, plant and 8% ( 12 095) ( 13 128)
equipment
Additions to investment properties 75% ( 1 604) ( 6 411)
Additions to intangible assets 39% ( 24 081) ( 39 700)
Acquisition of subsidiary, net of 100% - ( 7 254)
cash acquired
Additions to assets at fair value 43% ( 4 223) ( 7 425)
through profit and loss
Acquisition of business, net of cash 100% - ( 3 315)
acquired
Proceeds on sale of assets at fair 100% 32 300 -
value through profit and loss
Proceeds on sale of property, plant 30% 1 160 895
and equipment
Proceeds on sale of investment 100% 17 400 -
properties
Net cash flow from investing >100% 8 857 ( 76 338)
activities
Cash flow from financing activities
Proceeds on the sale of deemed 100% 21 172 -
treasury shares
Proceeds from long term liabilities (87%) 10 625 80 266
Repayment of other liabilities 56% ( 582) ( 1 334)
Repayment of related party loans 38% ( 7 413) ( 12 008)
Dividends paid <(100)% ( 25 827) ( 10 168)
Decrease in policy holder under (30%) 2 377 3 408
insurance contracts
Net cash flow from financing (99%) 352 60 164
activities
Net change in cash and cash >100% 47 735 ( 27 925)
equivalents
Cash and cash equivalents at (40%) 41 496 69 421
beginning of period
Cash and cash equivalents at end of >100% 89 231 41 496
period
CONSOLIDATED STATEMENTS OF MOVEMENTS IN EQUITY
% Reviewed Audited
31 March 31 March
2012 2011
Change N$ `000 N$ `000
Balance at beginning of period 41% 672 540 478 645
Profit for the period per the income 9% 206 714 189 771
statement
Revaluation of property, plant and >100% (1 813) (684)
equipment
Sale of deemed treasury shares by 100% 14 891 -
Trustco Staff Share Incentive Scheme
Trust
Profit on sale of deemed treasury 100% 6 282 -
shares
Vendor shares movement (100)% - 14 976
Put option issued (100)% (52 832) -
Dividends paid >100% (25 827) (10 168)
Balance at end of period 22% 819 955 672 540
Comprising:
Share capital 0% 162 645 162 645
Deemed Treasury Shares (79)% (3 840) (18 731)
Distributable reserves 38% 682 435 495 875
Contingency Reserve 26% 2 970 2 361
Revaluation Reserve (12)% 13 601 15 414
Vendor shares 0% 14 976 14 976
Put options (100)% (52 832) -
22% 819 955 672 540
Johannesburg
30 May 2012
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Date: 30/05/2012 10:00:03 Produced by the JSE SENS Department.
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