Nictus primes economic adaptation
…as firm posts positive results, remains optimistic
By Hilary Mare
PHILIPPUS Tromp, Managing Director of Nictus Holdings Limited has described Namibia’s current economic challenges at the “new normal” adding that only those companies that adapt will survive.
This was subsequent to the company posting positive results for year ended 31 March 2019.
“While settling into the current situation and adapting to the changes in our environment, which I call the `new normal´, the Nictus Group also had to align itself with the new situation. Adapting to the drastic change in our economic situation was no easy task; it came at a price and required an immense effort to adjust within a short time.
“Throughout the country, devastating traces of failing businesses reluctant to adapt and to change can be seen. With the average lifecycle of businesses getting shorter each year, one has to adjust to the changes and remain in touch with the business environment. Artificial intelligence is a driver in this whole process, and I don´t think we truly understand the impact that it will have in the years to come. During the past year the onslaught came, we accepted the challenge, we fought the war, survived and above all, still managed to progress as a Group,” Tromp said.
Tromp added that the retail segment was under immense pressure to re-establish itself within a ruthlessly declining market due to a lack of consumer spending.
“Despite the withdrawal of General Motors and getting to grips with a reconstructed tyre business, I am grateful for the results achieved under the current circumstances.
“Inefficiencies had to be addressed, and processes and systems needed to be realigned. With a drop in turnover in excess of 21% and with a growth strategy for the furniture market that still requires some investment; we managed to improve the results achieved last year, also by more than 21%. In our property segment, we focused on efficiencies and cost-saving initiatives, along with filling our vacancies - and this paid off for us. We bettered the 2018 result by 19%. Market-related rentals are under pressure and because property forms a major part of our business, we resolutely addressed this aspect. Although we did not quite reach our target, I am pleased with results attained in this segment.
“In the insurance and finance segment, turnover remained on the same level as the previous year. Even though the income from premiums declined, we managed to support the deficit with an increased income on the investment side. Profitability dwindled by 6% compared to 2018; a result which I think is quite remarkable, taking into consideration the `new normal´.
“We are therefore thankful that despite a total decline of 18.5% in our turnover, we can report a 27% increase in profit after tax from the N$5.5 million attained in the previous financial year. This result, which was not easy to achieve, is still below the required level, but is an indication that the changes we made are giving us the assurance that we are moving in the right direction,” explained Tromp.
In view of the Staff, Tromp explained that the downturn in the economy unfortunately took its toll on the Nictus staff complement.
“Retrenchments are heart-rending and never easy. I am however convinced that we managed to retain the best talent in the Group. People remain our most valuable asset and we will continue to develop the skills of our labour force.”
Looking into the future, Tromp highlighted that he does not foresee any major upswing in the near future.
“Growth lies in adapting to the environment and rooting out inefficiencies within our own businesses. Indications on some policy changes from government´s side might restore trust in the markets but will not have a major effect on consumer spending in the short term.
“I am convinced that the changes we made during the past year will become more and more effective and that the foundation is laid to deliver better results in the coming years. We keep looking for synergies within the Group, but also focus on complementing activities for the Group. I believe that we may see some new connections in the coming year,” said Tromp.