Africa Prudential Registrars (APR) stellar performance amid tough operating environment and a slow economic growth has validated PEARL AWARD that the Nigerian registrar’s profit margins are the strongest among listed companies in Africa’s largest economy.
A strong profit margin puts the company in a position to pay to give back to the owners of the business in form of dividend payments.
Also, such tremendous improvement at both top and bottom lines means the value of shareholders of APR will be maximized.
For the period ended December 31, 2015, APR’s net income increased by 19.0 percent to N1.44 billion compared with N1.21 billion in 2014.
Profit before tax (PBT) followed the same growth trajectory as it jumped by 25.38 percent to N1.63 billion in the period under review as against N1.30 billion in 2014.
The company’s gross earnings were up by 15.54 percent to N2.54 billion in the period under review compared with N2.20 billion in 2014. Net investment income grew by 20 percent to N1.62 billion in 2015 as against N1.35 billion in 2014.
APR’s net margin, a measure of profitability and efficiency, increased to 56.69 percent in the period under review as against 55 percent the previous year.
The company’s ability to translate top line impressive performance to bottom line growth validates the double honour it received as it won Best Profit Margin Ratio and Best Corporate Governance awards at 20th Pearl Awards Dinner in Lagos in 2014.
Analysts had fretted that the economic doldrums hitting companies in Africa’s largest economy may hit APR’s business of keeping records of bondholders and shareholders as slow growing economy could stunt firm’s ability to issue more shares and bonds.
Companies and banks in Africa’s most populous nation have been hard hit by slow economic growth caused by a significant drop in oil price by more than 70 percent $32 a barrel. Oil accounts for two thirds of government revenue and 90 percent of foreign exchange earnings.
To further exacerbate the anaemic position of these firms is the currency restrictions imposed by the central bank which precludes then from accessing dollars at the official rate of N197-N199.
The economy has slowed to 2.84 percent in 3rd quarter 2015 down from 5.94 percent in 4rd quarter 2014 and 6.77 percent recorded in 4th quarter 2013, according to the National Bureau of Statistics (NBS).
Further analysis of the APR’s financial statement shows operating expenses increased by 7.86 percent to N856.55 million in 2015 from N923.93 million. Total assets were down by 6.74 percent to N17.69 billion in 2015 compared with N18.90 billion in 2014.
The Nigerian registrar has utilized the resources of shareholders in generating higher profit as return on equity (ROE) increased to 31.57 percent in 2015 as against 27.43 percent in 2014. Return on assets (ROA) moved to 8.19 percent in 2015 as against 6.41 percent in 2014.
APR’s share price closed at N2.71 on the floor of the exchange while market capitalization was N5.42 billion.
BALA AUGIE
