UACN: Our Dividend Strategy Aligns with Long-term Value Creation

Kayode Tokede  

The management of UAC of Nigeria Plc has expressed that dividend payout policy is strategically aligned with its long-term value creation for shareholders, amid posting an impressive 2024 financial year performance. 

The company declared a revenue of N197 billion in 2024, about 63.4per cent increase over N120.53 billion declared in 2023, while profit before tax surged to N26 billion in 2024, representing an increase of by 107 per cent from N12.34 billion in 2023,   to underline  a clear sign of operational strength and strategic discipline. 

Adjusting for one-off gains in 2024, operating profit increased ninefold to N19 billion in 2024 as such strong performance raises investor expectations for higher cash returns. 

Amid impressive performance, the management of UAC of Nigeria proposed a dividend of 22 kobo per share – unchanged from previous years.

The Group Managing Director, UAC of Nigeria, Fola Aiyesimoju on the dividend payout stated that the move reflects a deliberate effort to balance immediate shareholder rewards with long-term growth opportunities.

“The decision to recommend 22 kobo was not made lightly.

“The management, like our shareholders, is invested in the long-term success of the company. Our incentive structure is directly tied to shareholder returns, which means we make decisions that protect value — even if those decisions may be unpopular in the short term,”Aiyesimoju said. 

The company explained that it is not holding back because it lacks confidence in the future, stressing that it sees significant investment opportunities ahead that require upfront capital. 

According to the company, preserving cash today is a move to unlock greater value tomorrow. “This thinking is grounded in Nigeria’s current economic climate. In the face of inflation, currency volatility, and unpredictable consumer demand, financial flexibility is a competitive advantage. 

“Rather than overextend or appease short-term sentiment, UACN is choosing to preserve optionality – the ability to act decisively when opportunity knocks,” the management explained.

It explained further that the numbers support this approach, stating that a margin improvements across key segments reveal disciplined execution and a clear growth path:packaged Food & Beverages: 102per cent growth across categories including snacks, dairy, and spring water and animal Feeds & Edibles: 54per cent  top-line increase and paints: 52pe cent revenue growth, aided by strategic pricing to offset rising input costs.

“These gains show that UACN is not just surviving tough conditions – it’s building resilience. The question now is how that resilience can be translated into sustainable, long-term growth?

The company’s stance on interim dividends adds another layer. 

In response to investor inquiries about the possibility of a mid-year payout, Aiyesimoju was measured: “It depends,” he said. “If executed well, we are confident that higher and more consistent dividends can be sustained over time.”

The management added that, “If the right strategic opportunities arise, capital will be deployed to capture them. If not, shareholders may see additional rewards. It’s a flexible, rational approach that prioritizes value creation over momentary satisfaction.

“Ultimately, UACN’s 22 kobo dividend is less about what’s being paid today and more about the foundation being laid for tomorrow. It may not thrill short-term investors, but for those with a long-term view, it signals a company thinking far beyond the next quarter.

“UACN’s approach has delivered solid returns for investors of recent taking into consideration share price appreciation as well as dividend distributions. 

“Between 2020 and 2024 the Company delivered total shareholder return of 323per cent, compared to 283per cent for the Nigerian stock – an outperformance of over 40per cent.”