United Capital announces 72% increase in profit to N7.09bn
By Kayode Tokede
United Capital Plc records 72 per cent profit growth to N7.09 billion at the end of the third quarter of 2021 financial year from N4.12 billion in the comparable period in 2020.
Summary of the scorecard shows that total revenue grew by 60 per cent year-on-year to N11.33 billion, resulting in pretax profit increased 72% year-on-year to N7.09 billion, whilst total assets grew by 80% year-to-date to N400.75 billion.
The company’s revenue was driven largely by 112 per cent year on year growth in fee and commission income and a 43 per cent increase in Investment Income amidst low-interest rate environment that pressures yield on fixed income instruments.
In its year on year analysis, the company said revenue hits N11.33 billion in 9M 2021, compared to N7.07 billion in 9M 2020, rising by 60% amidst the tough operating environment.
Operating Income however settled at N11.08 billion in 9M 2021, compared to N6.76 billion in 9M 2020, represents an uptick of 64% in the period.
On the other hand, United Capital’s operating expenses printed at N4.24 billion in 9M 2021, representing an uptick of 44% when compared to N2.95 billion in 9M 2020 amidst a steep inflation rate in the country.
Its earnings position was however stronger as the company’s pretax profit closed the period at N7.09 billion, rising by 72% compared to N4.12 billion in 9M 2020.
Offsetting its tax provision, profit after tax printed at N5.97 billion in 9M 2021, compared to N3.46 billion in 9M 2020. This resulted in annualized earnings per share of133 Kobo as against 77 kobo in the comparable period in 2020.
Total assets grew 80 per cent to N400.75 billion from N222.75 billion as of 2020 driven by 89 per cent jump in the company’s total liabilities which settled at N373.86 billion, compared to N198.32billion as at 2020
The company’s shareholders’ fund was N26.89 billion at the end of the period, compared to N24.43 billion as at financial year2020, recording 10 per cent year-to-date growth.
Looking at the proportion of cost-to-income, United Capital said the company continue to maintain improvement in operational efficiency.
The cost-to-income ratio for the period declined by 10.25 percentage points largely attributable to the impressive 64% growth in revenue relative to a 44% uptick in operating expenses.
In terms of profit margin, United Capital also recorded an improvement. PBT margin increased by 7.32 percentage points to 62.60 per cent in 9M 2021 compared to 58.33 per cent in 9M 2020 as PBT grew by 72 per cent year-on-year during the period under review.
PAT margin also increased, gaining 7.47 percentage points to 52.65 per cent in 9M 2021 compared to 49 per cent in 9M 2020 as PAT increased by 72 per cent year-on-year during the period.
United Capital said the company’s total liabilities increased by 89 per cent year-to-date majorly due to a 150 per cent year-to-date increase in manage funds. Shareholders’ funds increased by 10 per cent year-to-date driven by eight per cent growth in retained earnings despite 4.20 billion dividends payout during the period under review
Commenting on the Group’s performance the Group CEO, Mr. Peter Ashade, had this to say: I am pleased to inform our stakeholders that United Capital ended the third quarter of the year with another outstanding performance.
“We delivered increased revenue of 60 per cent year-on-year, PBT growth of 72 per 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 of 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 the 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.
“I want to assure our stakeholders that we are optimistic about sustaining this exciting performance in the last quarter of the year and beyond. We remain focused on our transformation agenda and continue to provide best-in-class solutions to all client segments. We are also committed to delivering superior returns as we seek to always delight our shareholders.”
