Lagos, 23 October 2020: United Capital Plc, announced its Unaudited Financial Statements for the period ended September 30, 2020. During the period under review, the Group showed significant growth in key indicators despite the challenging global economic climate.
United Capital’s total revenue in Q3 2020 soared to N7.07bn from N5.32bn in Q3 2019, an increase of 26% was recorded in PBT, and PAT also grew by 26% year-on-year. Total Assets grew by 41%, being well-financed by a 46% increase in Liabilities and a slight increase in Shareholders Fund by 2.5%.
HIGHLIGHTS OF THE RESULT
Statement of Profit or Loss:
Year-on-Year Analysis (Q3 2020 to Q3 2019) reveals the following:
- Gross Earnings: N7.07 billion in Q3 2020, compared to N5.32 billion in Q3 2019 (33% YoY Increase)
- Net Operating Income: N6.76 billion in Q3 2020, compared to N4.29 billion in Q3 2019 (58% YoY Increase)
- Operating expenses: N2.95 billion in Q3 2020, compared to N2.05 billion in Q3 2019 (44% YoY Increase).
- Profit Before Tax: N4.12 billion in Q3 2020, compared to N3.27 billion in Q3 2019 (26% YoY Increase)
- Profit After Tax: N3.46 billion in Q3 2020, compared to N2.75 billion in Q3 2019 (26% YoY Increase)
- Earnings Per Share: 58 kobo. (2019: 46 kobo)
Statement of Financial Position:
- Total Assets: N211.53 billion, compared to N150.46 billion as at FY 2019 (41% YTD growth)
- Total Liabilities: N191.45 billion, compared to N130.88billion as at FY 2019 (46% YTD growth)
- Shareholders Fund: N20.08 billion, increasing by 2.5% YTD compared to FY 2019’s value at N19.59 billion.
Comparing Q3 2020 with Q3 2019, the following are worthy of note:
- Total Revenue: The total revenue of United Capital Plc surged 33% in Q3 2020 compared to its revenue of Q3 2019. This significant increase is on the back of a strong year-on-year increase of 55% in investment income, 62% increase in fees and commission income, and a 61% growth in net trading income.
- cost-to-income ratio: The cost-to-income ratio rose by 3.11 percentage points due to the sharp 270% increase in impairment allowance. This increased cost complies with IFRS 9 that requires financial assets to be tested for impairment and using the expected credit loss model.
- PBT Margin: During the period under review, United Capital’s PBT margin declined by 3.11 percentage points, although PBT increased by 26% during the same period. The decline in PBT margin is because of the increase in operating expenses arising from a significant increase in impairment charges during the period under review due to the impact of Covid-19.
- PAT Margin: Due to the same reasons as the PBT margin, the PAT margin declined by 2.61 percentage points year-on-year on the back of rising in operating cost due to significant increase in impairment charge during the period under review arising from Covid-19, although the PAT significantly increased by 26% during the same period.
- Total Assets: Total Assets grew by 41% year-to-date, significantly on account of a high 283% increase in cash and cash equivalent as well as an 8.9% increase in trade and other receivables.
- Total Liabilities: This increased by 46% owing to the growth in managed funds by 74%, and 15% growth in other borrowed funds.
- Shareholders’ Fund: The shareholder’s wealth increased slightly by 2.5% year-to-date due to a 3% growth in retained earnings.
While commenting on the group’s performance the United Capital CEO, Mr. Peter Ashade, had this to say:
Our operating environment remains tough amid the lingering COVID-19 situation and negative macroeconomic impacts as seen in the continued depreciation of the exchange rate, a consistent uptick in headline inflation rate among other macroeconomic indicators. As stated during the release of our H1-2020 results, our business has not been immune to these challenges.
Notwithstanding, the Group has remained nimble. We continued to implement our business growth and continuity plans premised on a solid risk assessment framework to ensure we remained focused on providing best-in-class solutions to all client segments. These contributed to the impressive growth across our businesses leading to 33% growth in revenue and a 26% increase in both PBT and PAT during the nine-month period.
“In Q2, United Capital successfully issued N10 billion Series 1 Bond under the N30 billion MediumTerm Debt Program – the first to be issued by an investment banking firm in Nigeria – which was oversubscribed by about 24%. We have begun yielding the fruit of that strategic decision.”
“Going into the last quarter of the year, we are encouraged by the increasing market confidence in our brand even in the wake of the most globally devastating pandemic of the last century. We know the operating environment is turbulent, but we are committed to delivering superior returns to our shareholders, as we drive growth and profitability across all our businesses.”
Discussing the result further he stressed that:
In line with our initial strategy for the 2020 business year, we shall continue to push further our market diversification and cost-optimization initiatives as well as implement phased automation of our business processes whilst upholding our commitment to ensuring a significant improvement in our value delivery to all our stakeholders.”