Trustco makes debut on NSX
Trustco’s listing price was N$3.20 per share and at the close of the market had only edged slightly upwards to N$3.60 per share.
Despite the apparent lack of investor interest in the group’s share, Namibian Prime Minister, Nahas Angula lauded Trustco management’s entrepreneurship, which he said could free Namibians from the yoke of poverty.
Trustco is majority owned by its founder Quinton van Rooyen and the group said that its market capitalisation is around N$440 million, following the listing.
An analyst from a local securities firm felt the listing price, N$3.20 per share was too high.
The analyst said that auditors and brokers had set the price at between N$1.85 per share to N$2.20 per share.
“Our discounted free cash flow valuation indicates a fair value of 220 cents per share while earning multiple valuation amounts to 185 cents per share.
“We are comfortable with in the range 185-220 cents per share range and therefore believe the offer over values the listing,” said the local market analyst.
The mood for the firm had initially been dampened by the slow take-up of its shares when it issued its IPO.
An IPO is the first sale of a company’s common shares to public investors.
The main aim of an IPO is to raise capital to fund the company’s expansion projects.
About 50 percent of the 46 million shares floated in Trustco’s IPO, which closed on September 21 were taken up by the public. Trustco said 50 percent of the new investors are foreigners.
Through the IPO, Trustco said it had allocated 30 percent of the group’s shareholding to the public with 70 percent remaining in the hands of Rooyen, the founder of Trustco.
The firm said that it elected to go public to broaden its capital base and facilitate expansion.
The envisaged growth would be mostly in the insurance, education and finance division.
Trustco’s insurance division has over 170 000 policy-holders and the number is expected to increase by 45 percent in the coming two years.
The group’s education division, Institute of Open Learning (IOL) has a total of 8 200 students enrolled in 2006.
Trustco finances offers complete financing on all IOL courses and grew its book to N$22.2 million in 2006 from N$4.1 million in 2005.
Prior to listing, Trustco said that of the N$144 million, the group expected to raise through listing, N$20 million would be directed to Legal Shield for new product marketing and reserves, N$30 million to IOL and another N$30 million to Lafrenz, a property development arm.
The group said it would use some of the proceeds from the listing to retire the Free Press Printers debt.