Another tough year for Nictus

Nictus’ overall profit has nosedived from about N$28 million in 2016 to a low of nearly N$5.6 million, before recovering to the levels of N$7 million in 2019 and 2020.

03 August 2020 | Business

Most probably full recovery will take many years. – Gerard Swart, Chairman: Nictus Holdings

Jo-Maré Duddy – Locally-listed Nictus Holdings’ results for the 12 months ended 31 March 2020 reflect the impact of the ongoing recession in Namibia with the group’s retail segment suffering its fourth consecutive loss-making year, while its property segment recorded its third consecutive year in the red.

Nictus latest set of financials, released on Friday, shows a loss of about N$12.7 million of its retail segment for the 2020 book-year, some N$3 million or 32% bigger than the previous financial year. The last time this segment made a profit was in 2016, the first year Namibia’s overall economy contracted in the current cycle of recession.

“When the 2020 financial year commenced in April last year, we did not expect any major growth in the retail arena. What we did not anticipate was that we would see an even further contraction on the retail side,” the managing director of Nictus Holdings, Philippus Tromp, said in the group summarised annual financial statements.

“Pursuing our growth strategy, especially in the furniture sector, was challenging under the circumstances. This was where we experienced the biggest contraction on turnover, however we managed to maintain our market share. The Tyres and Motor divisions were also under pressure but managed to increase their market share and improved on the results of the previous year,” Tromp said.

According to Nictus Holdings’ chairman, Gerard Swart, the retail segment remains under pressure and will only be able to improve once real economic recovery is witnessed in the country.

Nictus’ property division reported a loss of around N$1.3 million for the 2020 financial year, compared to N$3.9 million in 2019.

“Properties performed better compared with the previous year mainly due to lower interest rates and effective cost management,” Tromp said.

‘Saving grace’

Nictus’ insurance and finance segment made a profit of about N$31.3 million – up some 32% from 2019 – and was the main contributor to the group’s overall profit of around N$7.36 million for 2020, an increase of nearly 2.9% year on year.

Tromp attributed the better performance to “concerted claims and cancellation management, as well as focussing on investment income to increase investment margins”.

Nictus’ overall profit has nosedived from about N$28 million in 2016 to a low of nearly N$5.6 million, before recovering to the levels of N$7 million in 2019 and 2020.

For the past financial year, Nictus’ reported overall revenue of nearly N$631.1 million, down about N$46.5 million or 7% from 2019.

Basic and diluted earnings per share (EPS) for 2020 was 14.03c against 13.64c in 2019, an increase of nearly 2.9%.

Headline and diluted headline earnings per share (HEPS) rose by about 8% from 13.06c to 14.12c.

Final dividends of 12c per ordinary share were declared for 2020.

At the end of the 2020 financial year, Nictus had nearly N$473.7 million in cash compared to N$426.5 million at the end of March 2019.

The group’s total assets increased from some N$1.7 billion in 2019 to nearly N$2.01 billion in 2020.

Outlook

“For the first time in recent history, the world economy declined in an unprecedented manner. However, we are starting to see positive signs of a slow recovery, with stock markets being the most rapid, but it is doubtful that this will be sustainable,” Swart said.

He continued: “Most probably full recovery will take many years. The Nictus Group put various initiatives in place to counter the negative effects of the current unparalleled economic decline. A lot of hard work has already been done to place the Nictus Group on a path of sustainable growth and profitability for the future.”

Tromp added: “With the current situation being unstable and uncertain, I am convinced that we were well-groomed during the past and will be prepared for the challenges that lie ahead. We enforced a learning culture that is adaptable to change and that is maturing as time goes by.”

Nictus Holdings is listed on the Local Index of the Namibian Stock Exchange (NSX). The group closed at N$1.60 per share on Friday.

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