Letshego Holdings Limited, the Botswana domiciled consumer lender made its shareholders forget the events of the past few months as it put smiles on its shareholders faces with half year results that showed the group performed well in the last 12 months.
The interim results for the six months ended 31 July 2011 saw the group’s net advances to customer growing by 40 percent to P2.60 billion driven mainly by exceptional performances from Botswana, Namibia and Mozambique.
“We are quite pleased with the results,” Colm Patterson, Letshego Chief Financial Officer, said.
The profit before tax went up by 16 percent from P296.7 million in the same period last year to P343.4 million, while profit after tax increased 36 percent from P221.4 million to P302.o million.
The group’s overall assets grew by 42 percent from P2 billion to P2.9 billion with 80 percent of the balance sheet representing advances to customers.
Letshego’s borrowing, which is a suit of shareholder funds and commercial banks stood at P911 million from P531 million, but Patterson believes they have maintained stability on their debt.
The group’s operating income grew by 17 percent from P389 million to P466 million with expenses going up 32 percent as the company invested in people and branch network.
Patterson said Botswana performed well despite the public sector strike that came with no work-no-pay system that led to many civil servants defaulting on their loan commitments to the country’s financial services sector.
Botswana led with net advances to customers growing 38 percent from P1.2 billion to P1.72 billion.
Letshego Botswana’s profit before tax stood at P208.3 million which was better than P185 .5 million recording last year.
However, the local subsidiary experienced difficulties during the strike as the collection rate fell to 96 percent from the normal rate of 98 percent.
“Because of the strike, the collection went down, but it did not have an impact on operations,” Patterson said.
Namibia performed well as net advances grew from P257.9 million to P409 million and Mozambique was impressive as advances stood at P53.8 million, although operations only commenced in February 2011.
The Managing Director of Letshego Holdings, Jan Claassen, said the company will show resilience with tough times ahead that include Botswana government decision’s discontinue facilitating payments from government payroll with effect from 1 December 2011.
The move has been seen by many as end for Letshego, but the MD is bullish his outfit will weather the storm.
“In normal business there are hiccups at times,” Claassen told analysts and journalists on Thursday.
“If something comes, you must change your strategy,” he added. The company said if it is no longer able to collect the normal monthly loan repayments via its agreement with the Central Register then Letshego can collect loan repayments via electronic debit orders.
Claassen also hoped their customers will be responsible enough to honour the loan repayments without being chased.
“The last thing people want is to have court cases against them.”