United Capital Plc maintained stronger profit and assets in the nine months ended September 30, 2021 unaudited result and accounts and may declare robust dividend in this year’s financial year.
The company which is into provision of investment banking services, portfolio management services, securities trading and trusteeship recorded impressive results in half year ended June 30, 2021 and maintained such in nine months with profits and financial assets recorded a double-digit growth.
The company in H1 2021 had recorded a after-tax profit of N3.1 billion as against N1.31billion recorded in H1 2020 to follow 2020 audited results that was impressive amid COVID-19 pandemic.
Amid increasing profit in 2020 financial year, the company had paid shareholders a dividend of 70kobo per ordinary share of 50kobo each, amounting to N4.2billion.
The dividend payout in 2020 financial year was on the heels of profit that accelerated by 57 per cent to N7.8 billion in 2020 from N4.97billion recorded in 2019.
Total Assets had closed at N320.23 billion as at June 30, 2021, a 44 per cent increase when compared to N222.75 billion as at FY 2020.
Its results for the nine months ended September 30, 2021 showed a profit before tax of N7.09 billion in nine months of 2021, compared to N4.12 billion in nine months of 2020, an increase of 72 per cent.
United Capital’s profit after tax also grew by 72 per cent to N5.97 billion in nine months of 2021, compared to N3.46 billion in nine months of 2020.
Annualized Earnings Per Share closed the nine months under review at 133 Kobo. (2020: 77kobo). This represents 72per cent growth year-on-year.
With the impressive increase in profit, the United Capital recorded improvement in profitability margin during the period under review as Profit before Tax (PBT) margin increased by 7.32 percentage points to 62.60 per cent in nine months of 2021 compared to 58.33 per cent in nine months of 2020.
Profit After Tax
Also, Profit After Tax (PAT) margin increased, gaining 7.47 percentage point to 52.65 per cent in nine months of 2021 compared to 49per cent in nine months of 2020.
The company had reported profitability margin in half year ended June 30, 2021 with PBT margin gaining 3.58 percentage points to 54.57 per cent for H1 2021 relative to 50.99 per cent for H1 2020, while PAT margin also improved, gaining 2.81 percentage points despite a higher tax charge of 16.0oper cent for H1 2021, relative to a charge of 15.62per cent during the same period in 2020.
Key drivers to United Capital’s growth in profits include double-digit growth in gross earnings and management effective management of operating expenses amid double-digit inflation rate in the country.
For the nine months under review, United Capital reported revenue of N11.33 billion in nine months of 2021, an increase of 60 per cent compared to N7.07 billion in nine months of 2020.
Increase in gross earnings was driven largely by growth in fee and commission income that gained 112 per cent year-on-year to N4.77billion in nine months of 2021 from N2.25billion in nine months of 2020 and 43 per cent increase in Investment Income to N6.29billion in nine months of 2021 from N4.39billion recorded in nine months of 2020.
From the loss & profit figures, United Capital’s operating Income rose by 64 per cent to N11.08 billion in nine months of 2021, compared to N6.76 billion in nine months of 2020.
Operating expenses was modest at 44 per cent to N4.24 billion in nine months of 2021, compared to N2.95 billion in nine months of 2020, driven by growth in “Other operating expenses” and Personnel expenses.
Other operating expenses grew by 61.13 per cent to N2.14billion in nine months of 2021 from N1.33billiion in nine months of 2020, while personnel expenses rose by 10.13 per cent to N1.31billion in nine months of 2021 from N1.19billion recorded in nine months of 2020.
The interplay in the company’s operating expenses and operating income brings about decline in cost-to-income ratio in the period.
The company continue to maintain improvement in operational efficiency as cost-to-income ratio for the period declined to 37.42 per cent in nine months of 2021 from 411.73 per cent in nine months of 2020, largely attributable to the impressive growth in revenue (+64per cent year-on-year) relative to operating expenses (+44 per cent year-on-year).
In the period under review, United Capital grew key financial ratio, driven by growth in profit & loss figures.
For instance, return on equity closed nine months at 29.58 per cent from 18.91 per cent in nine months of 2020, while return on assets dropped marginally to 1.98 per cent in nine months of 2021 from 2.07 per cent in nine months of 2020.
However, net assets close the nine months under review at 4.48 per cent from 4.07 per cent in nine months of 2020 as the Group’s Earnings Ratio closed nine months at 6.75 as against 4.33 in nine months of 2020.
boost for total assets
United capital crossed N400billion in total assets, driven by 90 per cent and 98 per cent growth in investments in financial assets and cash and cash equivalents.
The group’s total assets rose by 80 per cent to N400.75 billion as at September 30, 20221, compared to N222.75 billion as at FY 2020.
Primarily contributors to total assets are N86.15billion cash and cash equivalents as at nine months of 20221 from N43.42billion in 2020 FY as investment in financial assets moved from N145.15billion in 2020 FY to N275.96billion recorded in nine months of 2020.
United Capital‘s total liabilities rose by 89 per cent to N373.86 billion as at September 30, 2021, compared to N198.32billion as at FY 2020.
Growth in Managed funds contributed to the company’s total liabilities in the period. Managed funds rose by per cent to N289.8billion as at September 30, 2021 from N116.02billion it closed in 2020 financial year.
In addition to balance sheet size, the company’s shareholders’ Fund rose by 10 per cent to N26.89 billion, compared to N24.43 billion as at FY 2020.
Commenting on nine months results, the Group CEO, United Capital, Mr. Peter Ashade in a statement said: “I am pleased to inform our stakeholders that United Capital ended the third quarter of the year with another outstanding performance.
“We delivered an increased revenue of 60per cent year-onyear, PBT growth of 72pper cent year-on-year to N7.09b and total asset growth of 80 per cent year-to-date.
“During the period under review, United Capital successfully listed three series commercial papers worth N19.72 billion on the FMDQ Securities Exchange.
“The CPs were issued under the company’s N50 billion commercial paper issuance program. This has further positioned us as a company to provide a wider range of wholesale financing solutions to our clients and complement funding base and support for all our businesses.
“Another remarkable point to note was the Nigerian Stock Exchange’s reclassification of United Capital shares from Low Price Stock Group to Medium Price Stock Group in August 2021 driven by steady growth in the company’s share price over the past months due to our consistent impressive performance over the years.
He, however, assued shareholders of the management push to maintain stronger performance in the last quarter of the year and beyond.
According to him: “I want to assure our stakeholders that we are optimistic on sustaining this exciting performance in the last quarter of the year and beyond.
“We remain focused on our transformation agenda and to continue to provide best-in-class solutions to all client segments. We are also committed to deliver superior returns as we seek to always delight our shareholders.”
The company had secured the approval of FMDQ Securities Exchange Limited to increase the size of its existing N20 billion Commercial Paper programme to N50 billion.
The validity period of the CP Programme has also been extended to October 18, 2022, the company said in a notification.
United Capital’s in August disclosed that its Sukuk Fund has grown to over N1.5 billion after about a year when the fund was launched.
Since it was founded over 50 years ago, United Capital has cultivated and sustained a heritage of excellence in the financial services sector in Africa. Its track record of transaction execution, industry leadership and client focus are unmatched. It has achieved this by providing top-of-the-line financial services, consistently demonstrating a commitment to execution, excellent service delivery and client satisfaction.
Through the years, the Group has innovated with each season, and found smart ways to provide even more value to its clients by showing a spectacular ability to adapt to change.