UPDC reports N1.309bn pre-tax profit, up 244.51% as property sales drive profit

UPDC Plc has released its audited financial results for the year ended December 31, 2024, delivering a strong performance anchored by real estate sales.

The company posted a pre-tax profit of N1.309 billion, representing a 244.51 per cent increase from the N379.9 million reported in 2023.

After-tax profit also soared by 277.83 per cent to N836.9 million, signaling a major turnaround from previous years.

Revenue more than doubled to N11.787 billion, up 120.57 per cent year-on-year from N5.344 billion in 2023.

The growth was largely fueled by UPDC’s core property development and sales business, which accounted for over 87 per cent of total revenue.

In contrast, its hospitality segment contributed just 12.4 per cent, highlighting the company’s reliance on real estate to drive performance.

In a notable move, UPDC announced a final dividend of N0.01 per share, amounting to N18.6 million, representing a payout ratio of 22.18 per cent.

UPDC’s financial performance in 2024 can be attributed to strong revenue growth, fueled by strong real estate performance.

According to notes to the financial statements, Grupo Atlanta’s Sale of Property Stock contributed N5.2 billion, while other property stock sales generated N4.081 billion, bringing total real estate revenue to N9.281 billion.

This shows UPDC’s strategic focus on its core business is paying off. The company, a subsidiary of Custodian Investment Plc (51 per cent holding), has streamlined operations around property development and sales, its primary revenue driver.

The hospitality segment remains a drag on performance. It generated N1.464 billion in revenue but recorded a loss before tax of N256 million, denting group profit.

While the top line soared, rising costs ate into the margins. Gross margin fell to 28.8 per cent (from 35.6 per cent in 2023), indicating pressure from rising project and operational expenses. Selling and distribution expenses rose nearly 400 per cent to N550 million.

UPDC seems to be managing its money a bit differently. The amount it is waiting to collect from customers fell by 26 per cent to N1.51 billion, possibly because it is getting paid quicker or giving out less credit.

At the same time, the amount it owes suppliers more than tripled to N17.789 billion. In short, it is paying its bills later.

As a result, total debt, including interest-bearing liabilities, almost doubled to N20.923 billion. With equity at N9.486 billion, the gearing ratio rose to 69 per cent from 54 per cent last year, pointing to greater financial leverage. That is a bit risky if money is not coming in regularly. But so far, it is working.

UPDC brought in N8.22 billion in cash from its operating activities in 2024, over three times more than the year before. That gives it some cushion to manage its rising obligations.

UPDC’s stock has soared 76.1 per cent year-to-date, closing at N2.80 per share as of April 17, 2025, making it the 10th best-performing stock on the Nigerian Exchange this year.

But behind the rally is a tightly held stock. Only 4.89 per cent of UPDC’s shares are available for public trading, well below NGX’s requirement.

Custodian Investment holds 51per cent, while UAC of Nigeria owns 42.61 per cent, leaving little room for public investors.

The company says it is working on a plan to address the free float shortfall and will share details once finalised.