Proven Investments Reports Improved Annual Profit

• Proven Investment Limited (Proven) reported an 8.7% increase in net profit attributable to shareholders to US$12.54Mn for the 12 months ended March 31, 2022. 
• Net Operating Revenue rose 58.1% to US$36.79Mn on the back of a 67.3% increase in net interest income driven by improvement in its core pillar- the Banking and Wealth Management Division. It was also influenced by the gross revenue of US$53.69Mn recorded from its newly acquired manufacturing arm through Roberts Manufacturing Company Limited (RMCL) in Barbados. The addition of the manufacturing arm provides diversification in the company’s portfolio which was mainly concentrated in financial services. 
• In spite of the increase in revenues, operating profit fell by 44.6% due to the incurrence of direct expenses amounting to US$37.90Mn from its manufacturing arm, and a 105.1% surge in operating expenses to $42.60Mn on the back of increases in staff costs and other expenses. This led to a decline in the operating profit margin from 26.5% to 9.3%. 
• Following the decline in operating profit, the company was still able to record higher net profit because of 47.5% rise in share of profits from associates. 
• In addition to the acquisition of RMCL (51%) in the last financial year, PROVEN also acquired Fidelity Bank (Cayman) Limited (100%), and Heritage Education Funds (100%) while completing new and existing real estate projects. It is expected that the company will create value from these recent acquisitions which should improve the company’s bottom line going forward. This positive impact will be tempered by the adverse impact of sustained inflationary pressures and the high-interest rate environment on the financial sector. 
• PROVEN’s stock price has increased by 13.1% since the start of the calendar year. The stock closed Tuesday’s trading session at $ 2376 and currently trades at a P/E of 14.4x which is below the USD Stock Market Average of 16.5x.

(Sources: JSE & NCBCM Research)