The Namibian financial services group Trustco Group Holdings managed to increase its revenue to north of R1bn in its financial year to the end of April. This achievement put a cherry on top of good financial performance that also saw the headline earnings rise by 111%.
The announcement of this milestone was made as part of the group’s annual results. It comes shortly after news that it has entered into an option agreement to acquire Huso Investments and its two subsidiaries, Northern Namibia Development Corporation and Morse Investments. The operations of Huso include a diamond mining operation and a diamond polishing factory in Namibia.
Huso is owned by the van Rooyen family which is also the majority shareholder of Trustco.
The rationale for the possible acquisition includes the argument that it would create a natural foreign exchange hedge for the company. Trustco added that the diamond market fundamentals support the proposed purchase price and indications are that demand will outstrip supply from 2019 onwards.
It said opportunities in the diamond market are scarce, especially an operation that is vertically integrated, as this is.
The group’s total revenue rose by 21% to R1.017 billion. The headline earnings per share more than doubled to 39.6c and earnings per share increased by 30% to 43.6c.
The net profit doubled to R303 million.
The bulk of Trustco’s revenue (R660 million) and net profit (R246 million) was earned by the Insurance (Investments) segment. This grew from R467 million revenue and R237 million net profit from the previous financial year.
Trustco’s share price was unchanged on Wednesday at R4.45. It has lost 5.12% in the last seven days, but gained 20.27% over the last month and 134.21% over the last year.