TN Holdings to demerge Bank

Presenting the group’s financial results for the year to December 31 2011, TN Holdings CEO Tawanda Nyambirai told analysts that the time was  ripe for the separate listing of TN Bank. This  follows the conclusion of a major transaction that would result in the injection of US$20 million in new capital into the bank.
“This transaction will position TN Bank in the top four banks in Zimbabwe by capitalisation,” Nyambirai said.

He said the bank would have a new board  with an international outlook, adding the market would welcome a bank without Nyambirai as CEO. 

Consistent with the need to grow its non -funded income streams, the bank went into a strategic partnership with Econet to distribute the mobile network’s Ecocash product. He said  the bank saw increased activity  as a result of Ecocash, adding that  he was confident  this product would spur future growth .

“It is our intention to consolidate Pelhams and TN Harlequin Luxaire and we will probably demerge the furniture business as well,” he said.

TN Holdings recently concluded the acquisition of 56% of Pelhams  Ltd’s issued share capital, a transaction that Nyambirai said consolidated the group’s market position in the furniture business in line with the company’s strategy  of acquiring under-utilised distribution channels and reconfiguring them to maximise revenue per square metre.

“We will be doing the same with the properties that we have leased from Rufaro marketing’,”  he added.

Presenting the group’s key performance highlights, Group Chief Finance Officer George Nyashanu, told analysts  that consolidated group revenues went up 186% from US$23,3 million in 2010  to US$66,99 million in 2011. This was on the back of an aggressive 272% growth in retail and manufacturing, which contributed a gross income of US$50,3 million from the prior year’s US$13,5 million, whilst TN Bank accounted for US$15,3 million in 2011, 68% from US$9,1 million in the previous year.  

 

Sales from the furniture and retail division rose 195% to US$34,98 million, from US$13,53 million in 2010, whilst the bank delivered gross interest income of US$29,92 million, 314% up from last year’s figure of US$7,22 million. Interest expense weighed in heavily at US$16,97 million, a massive 428% growth from US$3,21 million in 2010.

 

Gross profit outturn for 2011 was US$18,94 million compared to US$5,75 million for 2010 . Overall profit after tax improved significantly to US$3,58 million from a previous year loss of US$1,72 million. Earnings per share rose from a loss of 0,23 US cents in 2010 to 0,48 US cents in 2011.

TNH’s minor subsidiaries did not contribute meaningfully to revenue but operations remained stable. TN Asset Mmanagement delivered a US$14 000 profit whilst TN Medical and the Zambian operations were reported to be very promising.

 

The group expanded its product offering by launching a retail brand, TN Mart and a fast food chain, TN Grill, which it envisages will offer increased customer convenience whilst lowering occupancy costs per unit, in line with TNHs core strategy.

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