Stimulus overcomes economic pressures

Private equity company Stimulus Investment Limited posted another solid year’s performance on Friday, despite a volatile year in terms of global and domestic conditions in the market.
Stimulus CEO Josephat Mwatotele reported revenues of N$22.8 million and profit for the year at N$10.1 million, in line with the company’s performance last year.
Addressing a press conference in Windhoek, Mwatotele noted a general slowdown in the Namibian economy, ongoing drought affecting the agricultural sector, and a water crisis around Windhoek as local factors which affected its asset portfolio over the past year. On a regional level, he said the recent slowdown in the Angolan economy had raised uncertainty, while volatility in the exchange rate of the Namibia dollar in relation to major world currencies further hampered its performance.
Stimulus currently counts as part of its investment portfolio 44.58% in Plastic Packaging, 12.5% in Polyoak Namibia, and 44.58% in Plaspack Investments. It also holds 26% shareholding in Nashua Namibia, 88.3% shareholding in Joe’s Beerhouse Properties, 25% in the Cymot Group, 45% in Walvis Bay Stevedoring and 50% in NEO Paints Holdings.
On 23 June 2016 the Namibia Competition Commission (NaCC) approved Stimulus’s acquisition of 50% additional shares in Namibia Media Holdings (NMH), bringing to 100% its ownership of the country’s largest diversified media group.
Commenting that Stimulus believed in forming effective partnerships, Stimulus executive management and co-founding member Rein van Veen said the current NMH ownership reflected a transitional phase.
NMH CEO Albe Botha on Friday expressed excitement over the concluded deal. “As CEO and management we are excited about the prospects of being a 100% Namibian-owned company. It shows the trust Stimulus has in the future of the company and the country,” Botha said.
“The future will include strategic growth acquisitions for NMH in an ever-changing media industry and this will create new opportunities for employees at NMH.

Reflecting on the markets
Particularly touched by difficult trading conditions in Angola, Mwatotele said, were Plastic Packaging and the Cymot Group, which when the company announced its financials last year, were both in the process of expanding further into that country.
At present, however, he said Cymot had decided to scale down operations, “with a wait-and-see approach”, while Plastic Packaging was in the process of restructuring its Angolan operations in view of economic challenges.
Another important development which eventually did not pan out was an application by Nashua South Africa to take up equity stake in Nashua Namibia. In the case of Walvis Bay Stevedoring, he announced that a long-standing labour case involving employees was resolved in favour of the company.
“In fact, that company has now renewed its focus on business growth, and stable labour relations.”
Stimulus’s total unlisted investment portfolio returned 10.06% in 2016. Its portfolio, including acquisitions, generated a return of 12.3%, something Mwatotele said suggested unlisted investments were a viable asset class, and not just a mandatory regulatory imperative.
The company on Friday completed a new capital raising exercise, announcing that it sourced new capital commitments of N$137 million to go towards future investments.

DENVER ISAACS