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Massive increase in Trustco’s basic earnings and net asset value – Company report

Massive increase in Trustco’s basic earnings and net asset value – Company report

For the 12 months ended 31 August 2022, Trustco Group Holdings Limited reported an increase in basic earnings of 276% to N$1,437 million in earnings compared to the basic loss of N$815 million in the prior year.

This demonstrates significant growth and progress towards profitability as the group also achieved a compounded annual growth rate of 74.6% in capital and reserves since its inception, and 22.8% since its first public listing on the NSX in 2006, a statement from Trustco revealed.

Along with its 30th consecutive unmodified audit report, the group’s net asset value also increased by 362% to N$1,834 million, and profit after tax increased by 257% to a profit of N$1,437 million, while basic earnings per share increased by 268% to 145.89 cents compared to a loss per share of 86.66 cents as per the restated results.

Meanwhile, the Company in the statement also highlighted that despite the reinstatement of the N$1.5 billion loan in favour of Next Capital, the investment vehicle of the van Rooyen family, Trustco reported an increase in basic earnings.

“The restatements include reversing shares issued to Next and its associates with a current market value of N$258 million in the 2020 reporting period in terms of the earnout mechanism of the Huso Transaction, the reinstatement of loans of N$1.5 billion in favour of Next, and Next’s entitlement to a payment of N$2.9 billion if the earnout targets of the Huso transaction are met before 2028,” read the statement from Trustco.

The statement continued that the restatements relate to financial reporting periods before the current period and affect the financial position and associated financial performance for the periods ending 31 March 2019, 30 September 2020, and 31 August 2021.

Trustco’s board has petitioned the Supreme Court of Appeal today and may revisit the issues should they succeed on appeal,”, Adv Raymond Heathcote, noted. “The act of a regulator instructing an independent board to restate its financials in a way that results in an increase in the company’s liability on its balance sheet by N$1.5 billion is unfair and unjust. No regulatory authority should have complete autonomy to make such decisions without proper checks and balances in place.”

According to Board Chairman, Raymond Heathcote, Trustco’s board has petitioned the Supreme Court of Appeal today and may revisit the issues should they succeed on appeal.

“The act of a regulator instructing an independent board to restate its financials in a way that results in an increase in the company’s liability on its balance sheet by N$1.5 billion is unfair and unjust,” Heathcote pointed out.

He added that no regulatory authority should have complete autonomy to make such decisions without proper checks and balances set up.

Moreover, Group MD, Dr Quinton van Rooyen, noted that the Company completed its first year of reporting as an investment entity under IFRS 10, providing its co-investors with transparency into the fair value of its underlying investments.

“Over its 30-year existence, Trustco’s current 90 institutional co-investors, including more than 20 local Namibian institutions, and it is more than 3,700 individual Namibians and nearly 1,400 individual international co-investors have shared in our growth. Trustco remains committed to providing all of our co-investors with the information and insights they need to understand our investment philosophy and the markets in which we operate. I’m particularly optimistic about growth prospects in Namibia. South Africa, not as much,” van Rooyen stated.

Board Chairman, Advocate Raymond Heathcote (left) in discusssion with Trustco Group Holdings Managing Director, Dr Quinton van Rooyen.


 

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