WINDHOEK – Stimulus Investment Limited, recognised as a leading private equity investment company in Namibia, released its 2018 financial statements this week. Josephat Mwatotele, Chief Executive Officer, Stimulus Investment Limited stated that they were satisfied with the results achieved over the past financial year.
“The negative macro-economic environment in Namibia resulted in 2017 being economically challenging for most Namibian businesses. GDP growth was negative, consumer confidence was low, and policy uncertainty negatively impacted companies’ strategic deployment of capital. Although liquidity has improved somewhat, the Namibian economy remains in a vulnerable position and the outlook in the short- to medium term remains challenging,” said Mwatotele.
He went on to say, that given the difficult economic conditions, growth in the private sector had been constrained, and many of Stimulus’ investee companies were not immune to the downturn. Mwatotele added: “Underlying portfolio growth was flat. Significantly, the Stimulus team applied its efforts to provide strategic guidance and to ensure that each Portfolio Company is optimally positioned, both strategically and operationally, to handle this challenging environment in the best possible manner and makes them well placed to deliver accelerated results when the economy improves. Positive political developments in key neighbouring trading partners, especially Angola and South Africa, have relevance to some of the Stimulus investee companies and may result in new revenue opportunities.”
The Stimulus portfolio delivered strong dividend payments totalling N$50.833 million for the year under review. This was achieved through continued healthy dividend payments by investee companies as well as the sale of the Joe’s Beerhouse property.
Stimulus has grown from the first Namibian private equity fund to the largest due to the combination of patient capital and an experienced, long-standing management team. In 2017, Stimulus deployed additional capital of N$60 million within its portfolio as part of its approach to help investee companies grow their businesses, diversify, unlock value and support their long-term strategy. Mwatotele concluded by saying that Stimulus remained committed to achieving the best long-term outcomes for its businesses and its investors.
KEY HIGHLIGHTS FOR THE PERIOD ENDED 28 FEBRUARY 2018
Total preference share dividend increased by 57 percent to N$50.833 million (2017: N$32.299 million) due to improved operational efficiency and a disposal;
No portfolio growth in terms of independent valuations, reflective of the tough economic environment and commensurate effect on company earnings;
High dividend payments combined with negligible portfolio growth resulted in the reduction of net asset value ascribable to each preference shareholder, cum final dividend, to N$133.52 (2017: N$141.78)
Total return on SIL Portfolio a moderate 3.44 percent (2017: 10.90 percent) for the year under review;
Un-invested capital halved to 8 percent of SIL Investment Portfolio due to additional investments made. SIL now substantially fully invested; and
Strong focus on operational efficiencies without compromising sustainability of Investee companies.