Finance group targets EL lender
THE Namibia-based unsecured lender‚ micro-insurance and financial services group Trustco has acquired operations of local unsecured lender Real People.
Trustco said in its results on Wednesday that on June 3 it had acquired the rights to various leased premises and staff from Real People. “The business, which forms a set of integrated branch outlets and skilled workforce across South Africa, was acquired to increase the presence of the group in South Africa‚ and facilitate sales of Trustco products through direct outlets‚” Trustco’s directors said.
Real People was started in East London in 2001 as a provider of unsecured lending and over the years has included cellphone contracts in its service offering.
It had 650 service points at building and warehouse outlets.
The Daily Dispatch reported in March that 260 out of 2 200 Real People employees could lose their jobs as the company prepared to phase out its unsecured lending operations‚ and up to 60 branches were planned to be closed across South Africa‚ while there were plans to sell the cellular phone division. Trustco said on Wednesday it would settle the transaction with two equal payments of R4.1-million and a third and final payment‚ which would be determined based on the transfer date value of all the agreed assets and obligations‚ less the difference between R9-million and the monthly operating expenses for this month and next month.
Trustco’s diluted headline earnings plunged 77% to 4.62c per share in the year to March 31 and no final dividend was declared.
The company’s revenue fell 16.6% to N$595.2-million ($58.7million). The cost of sales was lower by a quarter to N$240.2million. Pretax profit fell 83.5% to N$43‚7-million from N$264.8-million. A sharply lower tax bill at N$4.3-million from N$25-million at the same time last year only partially alleviated the effect of lower profitability‚ and taxed profit was a meagre N$39.4-million compared with N$239.8-million last year. A fair value gain of R26.3-million was 72% lower than the R97.1-million gain reflected in the last results. Insurance claims and benefits paid increased 41.6% to R26.7-million from R18.9-million. Investment income was 84.3% lower at R3.8-million from R24.5-million. The first tranche of a domestic medium-term note programme worth R1-billion had not been issued as at March 31.
The value of Trustco’s other borrowings at year-end was N$329.5-million‚ 33% higher than N$246-million at the end of the previous financial year. Its share price was unchanged at 77c per share on the JSE on Wednesday. — BDLive