Category Archives: Capricorn Investment Group

Rome Mostert

Bank Windhoek today released a trading statement in which the company gave guidance as to what we can expect from the FY14 financial year. Results are expected on or around the 14^th August 2014. Guidance is as follows:

BWH Guidance                  IJG Forecast

• Profit after tax                    +24% to 29%                     17.5%
• Basic EPS                            +12% to 17%
• Headline EPS                      +8% to 13%                        7.4%

Our forecast for HEPS is 0.6ppt below the lower end of the guidance range, thus implying a slight beat and a positive surprise by BWH. The 8% to 13% range suggests HEPS of between 116.6cps and 122.0cps relative to IJG’s projected HEPS of 116cps. This also compares favorably to the prospectus forecast of 115cps. The range is however a miss when compared to Bloomberg Consensus forecast that is projecting HEPS of 123.5cps.

At the risk of stating the obvious, the slower growth at earnings per share level as opposed to profit after tax is attributed to the dilution effect realized from the IPO and CUTM transaction.

At first glance we are optimistic about the guidance, as it relieves our concern that earnings were possibly exposed to the negative impact of the squeezing BoN-SARB interest rate differential.

We continue recommend a BUY on the stock.