Capricorn profits shoot to N$983 million
By Hilary Mare
CAPRICORN Group Limited has showed tremendous resilience with profit after tax increasing by 14.8 percent to N$983.0 million, the group’s annual financial results for the year ended June 30 2021 show.
The results also note that net interest income and interest margins were under pressure following unprecedented interest rate cuts of 250 basis points in Namibia and 100 basis points in Botswana between March 2020 and September 2020. Notwithstanding this, the group’s net interest income before impairment charges increased by 3.3 percent to N$2.26 billion.
Since the start of the Covid-19 pandemic in March 2020, the group has provided payment holidays on loans freeing up N$343 million in cash flow to its clients as well as committed and spent N$17.1 million in cash towards Covid-19 and other social relief measures.
“I am pleased with the commendable performance of the group against all the odds. I wish to thank each employee in Namibia, Botswana and South Africa and celebrate the way that they have persevered and adapted to new and uncertain conditions whilst maintaining customer service levels and delivering on our strategic choices.
“All our subsidiaries performed above expectations and have managed to grow or maintain market share during the financial year, giving the group a strong foundation to continue growing and expanding its leadership in the various markets. We have a dynamic business model to create and preserve value while remaining true to our group’s purpose. The group has a real competitive strength in local decision-making, especially in the way it affects customers. This is our main driver for growing market share”, said Thinus Prinsloo, group CEO.
Non-interest income of the Group increased by 3.6 percent to N$1.48 billion (2020: N$1.42 billion), significantly supported by diversified income streams from asset management and life assurance businesses. Bank Windhoek and Bank Gaborone increased non-interest income by 4.3 percent and 28.8 percent respectively, mainly from increased transaction volumes.
“The financial results of Capricorn Group in the current economic environment are a remarkable achievement and evidence of the dedication, personal commitment and resilience of our employees. Our results demonstrate how Capricorn Group used our advantage of being local, nimble, and responsive. We were able to preserve and grow value for our stakeholders even though Namibia’s economy was in a recession before the Covid-19 pandemic and had to deal with the economic and social shock brought about by Covid-19. During the year, we also disposed of our loss-making Zambian operations.” said Jaco Esterhuyse, group financial director.
The diversification strategy of the group continues to deliver good results with a significant increase of 62.6 percent in income from associates compared to the prior year. This growth was mainly due to a N$29.7 million increase in the contribution from Paratus. The contribution from associates to the group profit after tax increased from 6.3 percent in the prior year to 10.1 percent.
Capricorn declared a final dividend of 38 cents per ordinary share. Considering the interim dividend of 22 cents per ordinary share, this represents a total dividend of 60 cents per ordinary share (2020: 50 cents per ordinary share). The group believes that the total dividend balances prudency in preserving its capital and liquid asset position.