1 2014 Annual Report NICO Holdings Limited 2014 ANNUAL REPORT 2 3 2014 NICO Holdings Limited Annual Report MISSION STATEMENT To create value for stakeholders VISION To be the preferred financial service provider OUR VALUES Integrity, care, ethical standards, professionalism, accountability, transparency, reliability 4 5 NICO JOINS THE NATION 1964 2014 IN CELEBRATING 2014 the 50th Anniversary of Malawi’s Independence Annual Report NICO Mozambique Vida-Companhia Seguros S.A NICO Insurance Zambia Limited NICO General Insurance Company Limited NICO Asset Managers Limited NICO Life Insurance Company Limited NICO Technologies Limited Helping Malawi develop NIKO Insurance Tanzania Limited NBS Bank Limited NICO has played a significant role in the development of Malawi. NIKO Insurance Uganda Limited In Malawi’s post-independence period, NICO has offered and continues to offer a broad range of financial services while engaging in the construction and purchase of commercial property in the country. By working with various partners and pension funds, NICO has contributed to the evolution of the urban landscape of the country. This has seen the opening of the first modern shopping malls in both Blantyre and Lilongwe. NICO is also one of the shareholders of the historic Protea Ryalls Hotel in Blantyre, considered by many to be one of the country’s premier hotels. When NICO was one year old! One of NICO’s first adverts appearing (shown left) in a business magazine in 1972 CHICHIRI MALL BLANTYRE NICO CENTRE LILONGWE PROTEA RYALLS HOTEL BLANTYRE NICO HOUSE BLANTYRE 6 7 2010 2011 2012 2013 2014 GROSS REVENUE (MK’ Million) 21,757 26,437 41,695 62,893 74,600 PROFIT BEFORE TAX (MK’ Million) 3,819 4,211 2,373 11,642 10,387 EARNINGS PER SHARE (tambala) 222 163 42 548 323 NET DIVIDEND PAID (MK’ Million)* 1,095 417 250 563 1,596 NET DIVIDEND PER SHARE (tambala) 105 40 24 54 153 TOTAL ASSETS (MK’ Million) 75,766 99,413 125,157 171,585 209,103 NET ASSETS (MK’ Million) 8,793 9,315 10,152 14,205 16,370 SHARE PRICE (tambala) 920 1,100 1,430 1,780 3,250 2014 NET ASSET VALUE PER SHARE (tambala) 843 893 973 1,362 3,116 PRICE TO BOOK VALUE (times) 1.1 1.2 1.5 1.3 1.0 FIVE YEAR HIGHLIGHTS PRICE EARNINGS RATIO (times) 4.1 6.7 34.0 3.2 10.1 MARKET CAPITALISATION (MK’ Million) 9,596 11,473 14,915 18,566 33,899 * Dividend paid out of the year’s profits Annual Report GROSS REVENUE PROFIT BEFORE TAX SHARE PRICE 65,000 (Million Kwacha) (Million Kwacha) (Tambala) 3500 70,000 12,000 65,000 11,000 3250 60,000 10,000 3000 55,000 9,000 2750 50,000 8,000 2500 45,000 7,000 2250 40,000 35,000 6,000 2000 30,000 5,000 1500 25,000 4,000 1250 20,000 3,000 1000 15,000 2,000 500 10,000 1,000 5,000 250 0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 21,757 26,437 41,695 62,893 74,600 3,819 4,211 2,373 11,642 10,387 920 1,100 1,430 1,780 3,250 TOTAL ASSETS NET ASSETS EARNINGS PER SHARE NET DIVIDEND 210,000 (Million Kwacha) 17,000 (Million Kwacha) 600 (Tambala) 160 PER SHARE 200,000 16,000 150 (Tambala) 550 190,000 15,000 180,000 140 170,000 14,000 500 130 13,000 160,000 450 120 150,000 12,000 110 140,000 11,000 400 130,000 100 10,000 120,000 350 90 110,000 9,000 300 80 100,000 8,000 70 90,000 7,000 250 80,000 6,000 60 70,000 200 50 60,000 5,000 50,000 4,000 150 40 40,000 3,000 30 30,000 100 2,000 20 20,000 50 10,000 1,000 10 0 0 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2009 2011 2012 2013 2014 2010 2011 2012 2013 2014 75,766 99,413 125,157 171,565 209,103 8,793 9,315 10,152 14,205 16,370 222 163 42 548 323 105 40 24 54 153 8 9 BOARD OF DIRECTORS AND SECRETARY 2014 SUMMARISED LIST OF SHAREHOLDERS Annual Report Alaudin Osman, Felix Mlusu Robert Scharar Chairman Managing Director Director General Public C/O NICO P.O. Box 3173 Malawi 34.24% (Malawian & Foreign) Transfer Secretaries Blantyre 19 Glyn Jones Road NICO Employees Trust C/O NICO P.O. Box 3173 Malawi 1.1% Harold Bijoux Margaret Dawes, Tertius Stears (Malawian & Foreign) Transfer Secretaries Blantyre Director Director Director 19 Glyn Jones Road International 1818 H Street N.W. Washington USA 11.65% Finance Corporation 20433 DC of America (American) Sanlam Emerging 2 Strand Road P O Box 1 South 25.10% Markets Proprietary Limited Bellville, 7532 Sanlamhof Africa (South African) 7530 AFRICAP LLC 791, Town and Suite 250 Houston USA 27.91% (American) Country Blvd TX 77024-3925 100.00% Sangwani Hara Vizenge Kumwenda Emily Makuta Director Deputy Managing Director Company Secretary 10 11 for 2014 (2013; 70 tambala per share). The total Mr. Hendri Nigrini who joined the Board in 2012 dividend paid to shareholders out of 2014 profits as an SEM nominee left the Board in the year (including the dividend proposal of 50 tambala following his retirement from SEM. He played per share to be tabled at the forthcoming general a key role in the Board Technical committee on meeting) will therefore be MK1.33 per share (2013; General Insurance business; the Board will always MK1.00 per share). be grateful for the expertise, guidance and insights he provided when serving on this committee. The company’s share price has registered an At this point, let me welcome Mr. Tertius Stears 83% increase from MK 17.80 per share as at 31st who replaced Mr. Nigrini on the Board. Mr. Stears 2014 December 2013 to MK32.50 per share at 31st brings to the Board a wealth of experience in the December 2014. insurance industry having worked with the Sanlam CHAIRMAN’S REPORT Group for over fifteen years. Corporate governance continues to be a pillar for the Group. Risk management and internal audit The prospects for the Group in 2015 and beyond Annual Report functions were strengthened further this year by look good. The additional capital injection that has splitting them into two independent departments, taken place in our companies in Tanzania (US$5 each headed by a senior executive who reports million) Uganda (US$2 million) and Mozambique to separate Board committees – the Head of Risk (US$1.6 million) is testimony of our confidence in I am pleased to present to you my annual report for 2014. This year, reports to the Group Risk committee and the the business prospects of the Group. The focus of NICO Holdings was preoccupied with strengthening the operations Head of Audit reports to the Finance and Audit the Group will be on strategies that aim at enabling of its subsidiary companies and investments in Malawi, Zambia, committee. us achieve significant growth in revenues across all Tanzania, Uganda and Mozambique. Our partnership with Sanlam businesses in all the countries in which we operate. Emerging Markets Proprietary Limited (SEM) has proved invaluable All four Board committees were active during in this regard as is highlighted by the Managing Director in his the year. The work of the committees was In closing, I extend my highest appreciation to report. He has highlighted capital injections that have taken place complemented by Board ad hoc technical our clients across the Group for the trust and committees that are constituted on a need basis. confidence in the NICO brand. Your continued in the Group and the responsibility taken on by SEM to lead in In 2014 we had a Board Technical committee support and patronage of our services is not taken managing the General and Life Insurance businesses. for General Insurance business and another for for granted. Let me also thank my fellow Directors, Alaudin Osman The currency volatility and high bank lending rates in Malawi continued for the the Life Insurance business. The Board adopted management and staff at large for standing up Chairman third year running. Commercial bank lending rates were in the range of 37% to a Board Charter that will guide the Board as it to the challenges of 2014; I look forward to your 39% per annum for most of the year. Economies of our other countries displayed discharges its responsibilities in line with modern continued dedication and commitment in 2015 similar trends although to a lesser degree. Despite the continued turbulences, internationally accepted corporate governance and beyond. 2014 was still a good year for the Group. principles. The review was also extended to several of our Group policies. This is an ongoing process I wish to make special mention of NBS Bank, which continued to turn around. aimed at ensuring that our policies remain current The bank registered a profit before tax of MK4.1 billion compared to the MK2.9 and relevant. billion it registered in 2013, representing a 41% growth. The bank also met the Alaudin Osman Chairman Basel II compliance requirements. The highlights of performance for 2014 are as follows; total revenues for the Group grew by 19% from MK63.2 billion to MK75.5 billion. Profit before tax declined from MK11.6 billion to MK10.4 billion. Excluding MK2 billion exceptional Two upcoming business profit made on sale of investments in 2013, profit before tax for 2014 at MK10.4 journalists from Malawi’s Times billion is 11% higher than the profit for 2013 (MK9.4 billion).