United Capital Plc (NGX: UCAP) has posted an impressive financial results for the 9 months period ended 30th September, 2022.
The financial services company reported a 28.40% increase in gross earnings year-on-year, from N11.32bn to N14.54b. It also reported a 29.34% growth in profit after tax, going from N5.96bn to N7.71bn.
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Commenting on the unaudited financial results, the Group Chief Executive Officer, Mr. Peter Ashade, had this to say:
“I am pleased to inform our stakeholders that United Capital achieved another outstanding performance in the third quarter of the year. This is a fulfilment of our commitment to our stakeholders to keep delivering enhanced returns and driving
sustainable growth across all our business lines.In the fourth quarter of the year 2022, we expect global financial conditions to remain tight, presenting growth challenges for emerging economies. We remain committed to facilitating capital flows to critical sectors that drive growth and national
development in our domestic economy while striving to create and preserve wealth for our clients, investors, and stakeholders amid the tough operating environment.”
Analysis of Statement of Profit or Loss and Other Comprehensive Income
- Gross earnings: From N11.32bn it reported in the 9 months (9M) period in 2021, UCAP grew this earning to N14.54bn, a 28.40% increase. All major components of the company’s gross earnings; Investment Income, Fee and commission income and Net trading income recorded year-on-year growths. Investment income grew by 5.09% to N6.61bn from the N6.29bn reported in the preceding year. For its Investment income, UCAP earned N25.98bn as income from managed funds, and expanded N25.12bn as expense on managed funds and other borrowings. Fee and commission income grew by 31.40% from N4.77bn in 9M 2021 to N6.26bn. Of the fee and commission income, UCAP earned N1.86bn in financial advisory fees (9M 2021: N862.44mn). The Net trading income component saw the biggest rise, as it went up by 3,834.49%, rising from N15.55mn in 9M 2021 to N611.91mn.
- Personnel expenses: The company spent N1.74bn on personnel, a 33.41% increase from the N1.30bn it spent in 9M 2021.
- Profit before tax: UCAP posted a 28.65% growth in profit before tax; N9.12bn in 9M 2022, against N7.09bn in 9M 2021. The company went on to pay a total of N1.40bn in taxation (9M 2021: N1.12bn). N1.14bn was paid as income tax (9M 2021: N915.56mn), N176.13mn was paid as education tax (9M 2021: N140.85mn) and N88.06mn was paid as information technology tax (9M 2021: N70.42mn).
- Profit after tax: The profit after tax grew from N5.96bn in 9M 2021 to N7.71bn in 9M 2022.
- Earnings per share: UCAP posted an Earnings per Share of N1.71 in the 9 months period under review.
Analysis of Statement of Financial Position
- Cash and cash equivalents: The cash and cash equivalent held by UCAP as at 30 September 2022 shut-up tremendously when compared with what it had as at 31st December 2021. It went up by 326.24% to N228.72bn from N53.66bn. N204.23bn of the cash and cash equivalent is held in money market placements according to the report (In Dec. 2021, this was only N51.72bn). The cash and balances with banks stood at N24.49bn.
- Total Assets: The company’s assets went up by 31.39%, from N453.59bn as at 31st Dec. 2021 to N595.96bn as at 30th September 2022. N228.72bn of the assets is in cash and cash equivalents, while N324.08bn is n held in Investment securities (31 Dec. 2021: N363.64bn). An analysis of the investment securities shows that N83.42bn is in long term placement (31 Dec. 2021: N85.23bn), N32.52bn is loans to customer (31 Dec. 2021: N28.75bn), N10.59bn is on Treasury bills (31 Dec. 2021: N8.84bn), N15.25bn is on Federal government bonds (31 Dec. 2021: N8.05bn), N22.58bn is on State government bonds (31 Dec. 2021: N24.80bn) and N32.48bn on corporate bonds (31 Dec. 2021: N15.15bn).
- Total Liabilities: The total liabilities rose by 33.87% to N566.34bn, from the N423.05bn liabilities on its books as at 31 Dec. 2021. The bulk of the liabilities are managed funds; 423.92bn as at 30 Sept. 2022(31 Dec. 2021: N327.24bn). N255.65bn of the managed funds are short term investments. UCAP also holds N85.35bn borrowed funds (31 Dec. 2021: N79.69bn). Of its borrowings, N66.60bn (31 Dec. 2021: N53.08bn) was borrowed from banks and other financial institutions, while N18.75bn (31 Dec. 2021: N7.61bn) was issued debt in form of bonds, a left over from 5 year N10bn bond instrument it sold in 2020.
- Shareholder’s fund: The shareholder’s fund decreased marginally, dropping by 3.03% from N30.54bn to N29.62bn as at 30 September 2022.
- Retained earnings: The retained earnings also dropped, shedding 4.48% to N27.37bn as at 30 Sept. 2022, from N28.66bn held as at 31 Dec. 2021. The drop in retained earnings was as a result of the dividend payout for the 2021 financial year.
Analysis of Statement of Cash Flow
- Operating activities: UCAP generated a net cash of N139.01bn from is operating activities.
- Investing activities: N49.23mn was generated from investing activities.
- Financing activities: N13.79bn was used in financing activities.
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 2021, only one shareholder held more than 5% interest in shares of the company; West Coast Equity Limited with 26% of the shares.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
