Africa-Press – Namibia. FAMILY-OWNED Trustco Holdings Limited, a group of over 50 companies, has made an average loss of N$44,8 million every month in the 29 months, up to the end of August 2021.
This adds up to N$1,3 billion, and these losses are no small change and for external investors, this means there would be no dividend for the year. The 29 months involve two financial periods combined: N$938 million for 2021 (11 months) and N$343 million for 2020 (18 months).
The company is not in a very good shape – the share price at the end of January was only N$1,15, and sales earned amounted to only N$312 million. On top of this, the Johannesburg Stock Exchange is still breathing down its neck regarding accounting errors.
Quinton van Rooyen owns 63,9% of the company and draws an income derived from management fees, amongst other line fees paid to Next Investments. Next Investments remunerates him and two close associates, including his son, Quinton van Rooyen Jnr.
For the 2021 financial year, Next Investments’ fees were at N$24,4 million, while for the 2020 financial year the amount was a massive N$124 million. In 2020, however, Next Investments wrote off a N$1 billion loan extended to Trustco, and the net was over N$825 million.
Released financial statements this week show that sales for the 11 months ending August last year, were at only N$312 million. For the year after sales stood at N$618 million.
The companies under Trustco’s fold operate in three segments – insurance and investments, banking and finance, and resources. Sales per segment were at N$305,5 million for insurance and investments, N$79,5 million for banking, and only N$12,3 million for resources (diamond sales).
Matched to the assets under the employ of each segment, the sales turnover are 12%, 7% and 0,8%, respectively. The company’s total assets is at N$4,9 billion, down from N$5,6 billion recorded in 2020.
The decrease in the asset base was due to a deep drop from the loan book, reducing it by over N$400 million. At the end of August, the company was also running an overdraft of N$7,5 million, despite having a cash balance of N$23,4 million.
The cash resource has slumped massively from over N$144 million recorded for the 2020 financial year. This is because all three segments of cash flow reported outflows – investing, operations and financing.
The company’s biggest asset is investment property at N$2,2 billion, mainly made up of land. Its flagship Elisenheim development and the Lafrenz investments are worth N$1,8 billion altogether.
Farm Herboths outside Windhoek is valued at N$343 million. This amount was held as an asset for sale in 2020, but has now been slotted under investment property. Commenting on the financial statements, Van Rooyen sees the losses as records broken.
“Trustco managed to break a few records this year. For the first time, Trustco posted losses in two consecutive financial years, totalling N$1,3 billion,” he says.
Since April 2019, Trustco’s staff complement has been reduced by 269 employees due to restructuring within its investee companies – another record. By the end of the reporting period, it had been five years since Trustco last made a major corporate acquisition. Van Rooyen says in the upcoming year the group will reach even more records.
“For the first time the group plans to monetise one of its major foreign investments, maintaining only a minority interest in its mining activities in Sierra Leone. The value of that transaction, amounting to US$150 million, will be more than the group’s current market capitalisation – another record,” he says.
The company blames Covid-19 and the rough local economy for its poor performance. Trustco has also applied to the South African High Court for leave to appeal against the decision by the Financial Services Tribunal, which has asked the company to reverse transactions which have reportedly misled investors. Trustco’s financial statements are available on the company’s website.
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