Trustco shares plunge 31%
Diversified financial services group Trustco’s share price has suffered a 31% reversal since the company revealed earlier this month that headline earnings per share and basic earnings per share for the financial year ended 31 March 2013 will be 50% and 60% respectively lower than the previous year.
In a trading statement released on 04 June, Trustco said it expects headline earnings per share to be at a minimum of 50% lower than the comparable period’s 20.27 cents and that basic earnings per share for the year ended 31 March 2013 will be at a minimum of 60% lower than the prior period’s 35.08 cents.
Soon after the announcement, the Trustco share price went on a free fall. On Monday 03 June, a day before the announcement, Trustco shares were trading at 108 cents per share before falling to 95 cents on the day of the announcement. On Wednesday this week, Trustco’s share price dropped to 70 cents before rallying to close the day at 75 cents.
Trustco attributed the fall in earnings to reduced revenue and profitability in its micro insurance segment in South Africa and also from the reduced revenue from its property sales.
The group said further details will be provided in its annual integrated report expected to be released this Friday 21 June.
Trustco’s woes comes at at time when the group launched a revolutionary free life cover for Shoprite Namibia customers in September before embarking on a roadshow aimed at raising N$1 billion in capital to be used in the further expansion of operations in the region and across Africa.
Interestingly, when Trustco announced a 3% drop in after tax profit for the first six months of the financial year ended 31 March 2013, the group downplayed the fall in margins saying“ historically the second half of the financial year has materially exceeded the performance of the first half, due to the cyclical nature of the business.”