United Capital reports 57% growth in PAT, proposes 70k dividend

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By Kayode Tokede

United Capital Plc has reported 57 per cent increase its in profit after tax for year ended December 31, 2020.

The company on the Nigerian Stock Exchange (NSE) on Monday reported N7.81billion PAT in 2020, compared to N4.97 billion in 2019. Also, Profit Before Tax gained 61 per cent to N7.95billion in 2020 as against N4.95 billion reported in 2019.

With increase in profits, the management of United Capital proposed a dividend of 70k per share, amounting to a total of N4.2billion dividend to be paid to shareholders upon approval of members at the AGM. The dividend is payable to shareholders whose names appear on the Register of Members at the close of business on March 5, 2021.

From the financial statement, the company reported 50 per cent growth in gross earnings to N12.87 billion in 2020, compared to N8.59 billion in 2019.

The company explained that total revenue increased by an impressive 50 per cent YoY on the back of a strong growth in Fee and Commission income (+77per cent YoY), Investment Income (+42 per cent YoY), and net trading income which was up 453 per cent YoY.

As net operating Income grew by 58 per cent to N12.49 billion in 2020, compared to N7.90 billion in 2019, Operating expenses rose by 35 per cent to N4.93 billion in 2020, compared to N3.64 billion in 2019.

The Group CEO, United Capital , Mr. Peter Ashade, in a statement said,  “I am pleased to inform all stakeholders that United Capital delivered impressive returns amid the unprecedented environment worsened by the pandemic during the 2020 financial year with remarkable double-digit growth in Revenue, PBT and PAT and solid performance across key business parameters.

“This empowers us to adopt a more positive outlook for the year 2021 as we navigate the tough terrain compounded by a second wave of the COVID-19 pandemic among other severe economic challenges.”

Discussing the result further he stressed that, “Despite the tough operating environment, all stakeholder groups can be assured of our commitment to providing best-in-class solutions to diverse client segments and delivering superior returns to shareholders even as we work with regulatory authorities to strengthen the broader financial system as the domestic economy continues on the path to recovery in the year 2021.”

Statement of financial position showed that total assets gained 48 per cent to N224.75 billion, compared to N150.46 billion as at December 31 2019.

The financial and investment services company reported total liabilities of N198.32 billion, compared to N130.88 billion as at December 31 2019 (52 per cent growth year-on-year)

In addition, shareholders fund grew by 25 per cent to N24.43 billion, as against N19.59 billion reported in December 31, 2019.

Cost-to-Income ratio: There was improved operational efficiency during the period as cost-to-income ratio declined by 4.13 percentage points, largely attributable to the faster growth in revenue (+50 per cent YoY) relative to operating expenses (+35 per cent  YoY).

Of note however, there was a sharp 513 per cent increase in impairment allowance as a result of a notable 54 per cent yearon-year increase in financial assets.