Karachi March 5 2023: TRG Pakistan Limited (TRG) focused to monetize its portfolio assets to maximize value and liquidity to company’s shareholders, according to company filing to the Pakistan Stock Exchange.
“We remain focused on enhancing the value of our remaining portfolio assets and then monetizing them in due course to maximize value and liquidity to shareholders of the Company” says Company Chairman Mohammedulla Khan Khaishgi.
Company portfolio company that provides Artificial Intelligence Enterprise Software (AI Software Business) has had strong H1FY23 representing a 23% revenue growth over the same period last year. EBITDA performance was transformational, going from a significantly negative Adjusted EBITDA in H1FY22 to a healthy positive margin in H1FY23. Revenue growth and margin would have been even stronger had it not been for revenue reduction with one material client in a difficult economic environment, where clients face cost pressures to offset inflation. The margins have improved tremendously since early 2022, under new leadership, as a result of much tighter cost controls while continuing to grow revenue. The business remains focused on diversification of its revenues through new logo wins as well as a portfolio of new revenue-generating products in the pipeline.
Company portfolio company Ibex Limited (Ibex) maintained its strong performance and healthy growth, with continued focus on new clients, operational efficiencies, and a change in business mix towards higher margin service delivery locations. Despite the macroeconomic headwinds and a legacy client exit, revenue growth has sustained with new logo wins, and margin has improved further, resulting in the highest Adjusted EBITDA for Ibex in its history during the six-month period ending December 31, 2022. Ibex also reached its highest ever stock price (and market capitalization) during this period.
The most significant item on our balance sheet is the value of the Company’s share in its associate The Resource Group International Limited (TRGIL), our sole operating asset. As of December 31, 2022, the value of our share in TRGIL is Rupees 73.8 billion, representing an increase of Rupees 17.1 billion compared to Rupees 56.7 billion on June 30, 2022. This increase is driven both by profit from our associate as well as exchange gain on our investment due to a weaker PKR to USD exchange rate. In addition to the Company’s stake in TRGIL, it also has other assets of Rupees 0.02 billion and liabilities of Rupees 11.8 billion (primarily relating to deferred taxes) resulting in net assets of Rupees 62 billion.
Company income statement is primarily driven by the changes in value of our share in TRGIL. Our share of the net profit in equity accounted investee (i.e. TRGIL) was Rupees 10.9 billion, before taxation, which was mainly on account of mark-to-market gain of Rupees 9.6 billion booked on IBEX shares. The Company recognized interest income of Rupees 0.6 million in its income statement, whereas it incurred expenses of Rupees 66.1 million. Deferred tax amounting to Rupees 1.6 billion was booked during the period. Overall, the Company posted net profit of Rupees 9.2 billion for the six-month period ended December 31, 2022.
The earnings per share of the Company was Rupees 16.79 per share for the six-month period ended December 31, 2022.
TRG Pakistan Limited was incorporated in Pakistan as a public limited company on December 2, 2002 under the repealed Companies Ordinance, 1984. On May 14, 2003 the Company obtained a license from the Securities and Exchange Commission of Pakistan (“SECP”) to undertake venture capital investment as a Non-Banking Finance Company in accordance with the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 (NBFC Rules). The principal activity of the Company, through its associate, The Resource Group International Limited (TRGIL) is to invest in a portfolio of investments primarily in the Technology, IT enabled services and medicare insurance sectors.
