Stimulus in battle to survive
The local private equity firm is finding the going tough and is reeling from the Covid-19 lockdown.
Andrew Rowles, CFO for Ashburton Namibia: “We expect that the Namibian recession will deepen even further, with the short- to medium-term outlook remaining very challenging.”
Augetto Graig
Namibian private equity firm Stimulus Investments is in a “battle to survive”, according to Andrew Rowles, chief financial officer for Ashburton Investments Namibia. Ashburton Investments provides private equity investment management through its portfolio known as Stimulus Investments Limited (SIL), recognised as a forerunner in private equity space in Namibia.
“Stimulus has grown from being the first Namibian private equity fund to one of the largest due to the combination of patient capital and an experienced, longstanding management team,” says Rowles.
He explains that the tough economic environment is reflected through no portfolio growth in terms of independent valuations. Stimulus assets under management were reduced by -2,7% over the period until the end of February 2020. The previous year saw a -0,9% drop. The internal rate of return of 7.48% for preference shareholders as at 29 February 2020, was down from 7.56% the previous year, and dividends per preference share dropped by 7.6% to N$3.24 from N$3.51 at the end of the 2019 financial year.
The Stimulus Investment Portfolio is valued at N$682 million and includes investments in Cymot, Plastic Packaging, Polyoak, Nashua, Namibia Media Holdings, Walvis Bay Stevedoring, Neo Paints, Khomas Solar Saver and cash available for investment of N$50 million, according to their website. More recent financial results have been printed in this publication and Rowles has released a statement adding context.
“Following the financial year-end, the Stimulus portfolio endured significant financial headwinds due to the Covid-19 lockdown period. We expect that the Namibian recession will deepen even further, with the short- to medium-term outlook remaining very challenging,” he said.
“Investors are cautioned that the effects of the Covid-19 pandemic and the accompanying economic uncertainties were not fully encapsulated in investee companies’ budgets or in the discount rates applied in conducting the independent valuations. Investors are therefore cautioned that the valuations performed as at 29 February 2020 may in some instances be materially impacted by the subsequent events,” he said.
According to Rowles the Namibian economy remains in a vulnerable position and the outlook in the short- to medium-term remains very challenging. “Given the difficult economic conditions, growth in the private sector has been constrained, and many of Stimulus' investee companies have not been immune to the downturn,” he said.
The Stimulus portfolio delivered dividend payments totalling N$15.1 million for the year under review, which decreased by 7.6% from 2019. This was as a result of reduced dividend receipts from investee companies, which continued to experience subdued trading and electing to retain capital to fund operations and future expansion, according to the investor. Stimulus deployed additional capital of N$7.5 million within its portfolio, as part of its approach to assist an investee company to grow its business and support its long-term strategy.
[email protected]
Augetto Graig
Namibian private equity firm Stimulus Investments is in a “battle to survive”, according to Andrew Rowles, chief financial officer for Ashburton Investments Namibia. Ashburton Investments provides private equity investment management through its portfolio known as Stimulus Investments Limited (SIL), recognised as a forerunner in private equity space in Namibia.
“Stimulus has grown from being the first Namibian private equity fund to one of the largest due to the combination of patient capital and an experienced, longstanding management team,” says Rowles.
He explains that the tough economic environment is reflected through no portfolio growth in terms of independent valuations. Stimulus assets under management were reduced by -2,7% over the period until the end of February 2020. The previous year saw a -0,9% drop. The internal rate of return of 7.48% for preference shareholders as at 29 February 2020, was down from 7.56% the previous year, and dividends per preference share dropped by 7.6% to N$3.24 from N$3.51 at the end of the 2019 financial year.
The Stimulus Investment Portfolio is valued at N$682 million and includes investments in Cymot, Plastic Packaging, Polyoak, Nashua, Namibia Media Holdings, Walvis Bay Stevedoring, Neo Paints, Khomas Solar Saver and cash available for investment of N$50 million, according to their website. More recent financial results have been printed in this publication and Rowles has released a statement adding context.
“Following the financial year-end, the Stimulus portfolio endured significant financial headwinds due to the Covid-19 lockdown period. We expect that the Namibian recession will deepen even further, with the short- to medium-term outlook remaining very challenging,” he said.
“Investors are cautioned that the effects of the Covid-19 pandemic and the accompanying economic uncertainties were not fully encapsulated in investee companies’ budgets or in the discount rates applied in conducting the independent valuations. Investors are therefore cautioned that the valuations performed as at 29 February 2020 may in some instances be materially impacted by the subsequent events,” he said.
According to Rowles the Namibian economy remains in a vulnerable position and the outlook in the short- to medium-term remains very challenging. “Given the difficult economic conditions, growth in the private sector has been constrained, and many of Stimulus' investee companies have not been immune to the downturn,” he said.
The Stimulus portfolio delivered dividend payments totalling N$15.1 million for the year under review, which decreased by 7.6% from 2019. This was as a result of reduced dividend receipts from investee companies, which continued to experience subdued trading and electing to retain capital to fund operations and future expansion, according to the investor. Stimulus deployed additional capital of N$7.5 million within its portfolio, as part of its approach to assist an investee company to grow its business and support its long-term strategy.
[email protected]
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