United Capital Plc (NSE – UCAP) has reported an increase in both gross earnings and the profit after taxation for the first nine months of the year, for the period ended 30 September 2020. The fund managed by the UCAP also rose by 73.73%.
This is according to its Consolidated and separate financial statements for the period ended 30 September 2020 released to the Nigerian Stock Exchange and the investing public on Monday.
Nine months – January to September
According to the consolidated statement of profit or loss, the company grew its gross earnings by 32.81% to N7.069 billion in the first nine months of the year from N5.323 billion in posted in the same period in 2019.
Similarly, the profit after tax rose by 26.10% to N3.463 from N2.747 billion in 2019, with the basic earnings per share (EPS) rising to 58kobo from 46kobo. The company’s net profit margin stood at 49%.
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The main contributors to UCAP gross earnings are;
- Investment income – N4.386 billion (62.04% of the total gross earnings)
- Fees and commission income – N2.249 billion (31.82% of the total gross earnings).
- These two components of revenue contributed 93.86% of UCAP revenue for the period in review.
It is worthy to note that despite the 33% rise in revenue, UCAP’s total expenses excluding income tax expense rose by just 5.17% to N2.946 billion.
Personnel expenses accounted for N1.187 billion of the total expense.
Third Quarter – July to September 2020
In the third quarter of the year, July to September 2020, UCAP reported a rise in gross earnings to N2.622 billion from N2.083 billion posted in the same period in 2019. The company’s profit in the three months stood at N1.550 billion against N1.097 in 2019 Q3.
A review of the balance sheet showed that the total assets of the United Capital Plc grew by 40.58% to N211.525 billion as at 30 September 2020, from N150.464 billion as at 31 December 2019.
Major changes in the assets column are;
- Cash and cash equivalents – rose to N115.439 billion from N30.132 billion in 2019
- Investment in financial assets dropped to N67.278 billion from N16.473 billion in 2019
- The rights of use assets rose to N389.813 million from N312,000 in 2019.
- Trade and other receivables rose to N27.799 billion from N25.528 billion in 2019.
Similarly, the company’s total liability rose by 46.28% to N191.447 billion during the period in review from N130.879 billion it stood on 31 December 2019.
Major changes in the liability column;
- Managed fund soared by 73.73% to N125.746 billion from N72.376 billion in 2019.
- Other borrowed funds rose to N58.335 billion from N50.877 billion in 2019.
Details of the borrowed funds
- Borrowing from banks – N43.066 billion
- Bond Issuance – N11.048 billion
- Commercial papers – N4.221 billion
Loans from commercial banks represent different facilities with floating interest rates indexed to Libor for a period of sixty (60) months with a maturity from 1 month to 32 months. The loans are collateralized by a negative pledge. During the period under review, the company paid down its USD23m loans.
During the period under review, the company also issued its 1st bond of series 1 N10b and series 1 and 2 CPs. Series 1 CP matured and the company paid down during September 2020.
Total shareholders’ funds slightly rose to N20.078 billion from N19.585 billion in 2019.
UCAP generated N54.724 billion from its operating activities against N2.698 billion used in the same activities in 2019, due to the N53.367 billion increase in managed funds.
The company also generated N26.853 billion from its investing activities against N422.088 million used in the same activities in 2019 largely due to N26.896 billion generated from the “disposal of financial instrument designated at amortized cost.”
UCAP also generated N5.886 billion from its financing activities against N896.087 million used in the same activities in 2019 due to N18.720 billion proceeds from borrowings.
Cash and cash equivalents at end of the year stood at N115.440 billion as at 30 September 2020 against N30.132 billion as at 31 December 2019.
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.
On Monday UCAP closed at N3.55 per share on the floor of the Nigerian Stock Exchange (NSE). YTD the share price is up by N47.92%
UCAP stated that “these financial statements have been prepared on the going concern basis. The Group has no intention or needs to reduce substantially its business operations. The management believes that the going concern assumption is appropriate for the Group due to sufficient capital adequacy ratio and projected liquidity, based on historical experience that short term obligations will be refinanced in the normal course of business. Liquidity ratio and continuous evaluation of the current ratio of the Group are carried out by the Group to ensure that there are no going concern threats to the operation of the Group.”
By; Ifunanya Ikueze