Windhoek-Stimulus Investments Limited’s latest annual financial results for the year ended February 28, 2017, which were released last week, indicate a strengthened balance sheet.
The company raised additional capital of close to N$122 million, bringing total assets under management to an aggregate of N$503 million, compared to N$382 million in 2016.
Despite a volatile domestic and global economic climate, Stimulus also recorded an improvement in portfolio growth of 11.16 percent for the year under review, compared to 10.6 percent in 2016.
According to Stimulus, in which First Lady Monica Geingos is a director and holds an effective 10 percent shareholding, the stable portfolio growth is reflective of a prudent approach in selecting high quality investments which deliver positive results, despite prolonged economic headwinds.
“During the reporting period, two transactions were implemented. We are pleased to have cemented our relationship with another local unlisted investment manager in one of our investment as it demonstrates the deepening of private equity as an asset class as well as the opportunity presented by an increase in Namibian private equity firms (unlisted investment managers),” said Josephat Mwatotele, executive director at Stimulus.
He added that the continued stability of Stimulus’ investment performance reflects both the sectoral diversity of the investment portfolio and the management depth of the respective investee companies. According to Mwatotele the substantial increase in dividends earned from investee companies testifies to an increased focus on operational efficiencies as well as cost and risk control.
“Whilst the portfolio remains robust and continues to deliver stable returns, we expect market conditions to become increasingly challenging over the next twelve months. In this regard, we also expect a delayed impact of the general slowdown in economic activity on some of the portfolio companies’ operations over the short- to medium term,” said Mwatotele.
While advising cautious optimism, Mwatotele added: “The challenging trading conditions our investee companies find themselves in has resulted in Stimulus further increasing its strategic involvement and assisting our investee companies to focus on maximising their operational efficiencies in their core areas. This allows our management teams to dedicate their energy on enhancing the quality of their products and services while controlling their risks.”
The focus for the year ahead for Stimulus will continue to be the reduction of un-invested cash, as the company has a strong balance sheet and is well positioned to make additional investments within the portfolio as well as to seek new, high quality investment opportunities. The company will also continue to work closely with the respective management teams to improve the overall performance of the existing portfolio of companies. An additional focus will be the continued strategic direction in implementing a pragmatic and responsible transformation agenda throughout the portfolio.