By Hilary Mare
THE Stimulus Investments board has approved the acquisition of an additional 7.5 percent interest in Polyoak Namibia, in a bid to grow its portfolio, Executive Director Josephat Mwatotele has said.
Polyoak, a Namibian plastic bottle manufacturer, in which Stimulus currently owns 12.5 percent, is not the only growth opportunity identified by Stimulus, as it has also acquired 67.7 percent of Solar Saver, a company that provides rooftop solar systems to commercial clients with no initial capital outlay, and which enjoys first-mover advantage in the Namibian market.
According to its annual financial results for the year ended 28 February 2017, Stimulus Investments reported a stable portfolio growth of 11.16 percent, compared to 10.06 percent recorded during the previous year.
Key narratives of the financial results included the 161 percent growth in the Stimulus (preference) dividend, which translated into a dividend of N$6.93 per preference share, as well as share acquisitions of N$87.5 million in the Khomas Solar Saver and additional investments in Namibia Media Holdings.
There was also a strengthened balance sheet, as Stimulus raised additional capital of N$121.9 million, which brought the total assets under its management to an aggregate of N$503 million.
“This is attributable to stable investment performance in a tough economic environment, driven by sectoral diversity and resilience of investments and key members of management, which also provides an opportunity to further streamline operational efficiencies,” Mwatotele said.
The private equity investment company also highlighted that it would explore opportunities to divest shares in Joe’s Beerhouse Properties.
Meanwhile, the firm said while its portfolio remains robust and continues to deliver returns, it expects market conditions to become increasingly challenging over the next 12 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.
“The focus for the year ahead will continue to be on the reduction of unlisted cash, as Stimulus has a strong balance sheet, and is well-positioned to make additional investments within the portfolio, as well as seek new, high quality opportunities,” Mwatotele said.
While highlighting key macroeconomic challenges for the reporting period, including a downturn in the Namibian economy, contraction in key sectors, for example construction and agriculture, the continued weakness of the Angolan economy and the continued volatility in exchange rates, in relation to major currencies, the company also confirmed that it had experienced a magnitude of operational challenges.
These relate to reduced earnings and dividends from portfolio companies, a lack of quality investment prospects (long deal cycles), the appointment of new independent valuators and increased competition in the Namibian private equity space.
Stimulus has acquired interests in a number of quality local businesses, including Plastic Packaging (44.58 percent), Nashua Namibia (26 percent), Namibia Media Holdings (80 to 100 percent), the Cymot Group (25 percent), Joe’s Beerhouse (88.3 percent), Plaspack Investments (44.58 percent), NEO Paints Holdings (47 percent), Solar Saver (67.7percent), Walvis Bay Stevedoring (45 percent) and Polyoak Namibia (12.5 percent).
Confidente. Lifting the Lid. Copyright © 2015