9M 2023 Financial results: United Capital Plc posts 20.3% YoY growth in Gross Earnings

United Capital Plc (NGX: UCAP) has posted a 20.3% year-on-year growth in its gross earnings for the nine months period ended 30 September, 2023.

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The financial services company announced its quarter 3/9 months financial statements earlier in the week.

Gross Earnings rose by 20.34% year-on-year to N17.50billion, PBT increased by 6.51% year-on-year to N9.71billion, PAT grew by 9.76% year-on-year to N8.46billion and total assets grew by 21.69% year-to-date to N732.50billion.

Commenting on the unaudited financial results, the Group Chief Executive Officer, Mr. Peter Ashade, had this to say:

“United Capital’s third quarter performance reflects our strong ability to deliver sustainable earnings despite the challenging operating business environment. This is on the back of a reinforced risk management system and solid execution capabilities.

“While we are focused on our strategic objective of improving our services and financial offerings to our clients, we remain committed to our promise of delivering superior value to our shareholders. This is evident in our performance as we grew gross earnings by 20% year-on-year to N17.51billion, total assets by 22% year-to-date to N732.50billion and Shareholders’ funds by 86% year-to-date to N61.21billion during the period.

“As we proceed into the fourth quarter of the year, we are positive about the emerging opportunities in our operating environment and we are confident that all our businesses are well positioned to optimise their capabilities in the current dispensation.”

Analysis of Statement of Profit or Loss and Other Comprehensive Income

Gross Earnings: N17.51billion in 9M 2023, compared to N14.55billion in 9M 2022 (20.34% growth year-on-year).
Net Operating Income: N15.01billion in 9M 2023, compared to N13.49billion in 9M 2022 (11% growth year-on-year). Investment income and Fee and commission income were the major contributors to the operating income, with N8.94bn and N5.744bn respectively. Most of the investment income; N12.84bn came from interest from placements and bonds.
Other Income: N1.97billion in 9M 2023, compared to N1.12billion in 9M 2022 (74.82% growth year-on-year). N1.18bn of the other income came from exchange gains (9M 2022: N0.70bn).
Operating expenses: N8.26billion in 9M 2023, compared to N5.74billion in 9M 2022 (44% growth year-on-year). While N2.15bn was spent on personnel, N4.86bn was booked as other operating expenses, and a further N1.00bn recorded as impairment charges.
Profit Before Tax: N9.72billion in 9M 2023, compared to N N9.12billion in 9M 2022 (6.51% growth year-on-year)
Profit After Tax: N8.47billion in 9M 2023, compared to N7.72billion in 9M 2022 (9.76% growth year-on-year)
Annualized Earnings Per Share: 188 kobo. (9M 2022: 171 kobo)

Analysis of Statement of Financial Position:

Total Assets: N732.50billion, compared to N601.92billion as at December 2022 (21.69% year-to-date growth). Investment securities and cash & cash balances with central banks were the highest component of the company’s asset with N243.17bn (9M 2022: N149.86bn) and N418.57bn (9M 2022: N386.54bn) respectively.
Total Liabilities: N671.29billion, compared to N568.93billion as at December 2022 (17.99% year-to-date growth). Managed funds with N450.96bn (9M 2022: N413.69bn) and borrowed funds with N139.89bn (9M 2022: N100.45bn) were the biggest components of the company’s liability.
Shareholders Fund: N61.21billion, compared to N32.99billion as at December 2022 (85.56% year-to-date growth). The jump in the shareholders fund came from N28.74bn of fair value reserves. The company stated that this arose from fair valuation on items that will not be subsequently reclassified to profit or loss. N27.58bn out of the N28.74bn came from net fair value gain on investments in quoted equity instruments measured at FVTOCI.

Analysis of Statement of Cash Flow

Operating activities: UCAP generated a net cash of N61.36bn from is operating activities (31 Dec. 2022: N109.62bn was generated).
Investing activities: N21.82bn was generated from investing activities (31 Dec. 2022: N20.08bn was used).
Financing activities: N6.61bn was generated from financing activities (31 Dec. 2022: N8.03bn was generated).
As at 30 Sept. 2023, United Capital Plc had a cash and cash equivalents of N240.13bn (31 Dec. 2022: N149.67bn).

Following the release of our 9M 2023 result, UCAP shall be hosting an Investors and Analysts conference call in due course to discuss its performance and overall outlook for the rest of 2023. The date and further details with respect to the conference call would be circulated in due course.

About the Company

United Capital Plc (previously called UBA Capital Plc) was incorporated in Nigeria, as a Public liability company, on 3 August, 2012, to act as the ultimate holding company for the United Capital Group.

The company was listed on the Nigerian Stock exchange on 17 January, 2013. The Company changed its name to United Capital Plc following the approval of the resolution by shareholders on the 16th December, 2014.

The principal activities of the Group are mainly the provision of investment banking services, portfolio management services, securities trading and trusteeship.

UCAP has 6,000,000,000 outstanding shares, with a market capitalization of N68.1 billion.

As at 31 December 2022, only one shareholder held more than 5% interest in shares of the company; West Coast Equity Limited with 26% of the shares.