Lagos-based share registration service provider, African Prudential Plc, saw its income from contracts with clients, soar 23 percent in the first quarter of 2019, buoyed by an upsurge in fees from corporate actions undertaken by a number of its clients ahead their dividend declaration and Annual General Meeting (AGM).
The firm’s interest income, which constituted about 69 percent of its gross earnings, hit N595.5 million in the review period, relative to N734.3 million in the previous period, driven by double-digit cut in interest earned on treasury bills (51%) and bonds (64%), coupled with lowered yields during the period.
This weighed down on gross earnings as it dip 9 percent from N957.8 million in the previous period to N869.3 million in the review period, despite revenue from contracts with clients up some 23 percent.
“We were faced with some challenges which impeded our performance this past quarter, one of which was the declining yield environment thus mildly impacting one of our income line-item – interest income”, said Obong Idiong, Managing Director of African Prudential Plc in a statement filed at the Lagos bourse.
Profit before and after taxation got their beating from dip in interest income as they declined 17 percent each. Pre-tax profit shed some N89 million from N542 million in the previous period to N453 million in first three months of 2019, and after-tax profit reduced to N381 million from N542 million realized in the first quarter of 2017.
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Profit margin in the review period shed slightly to 44 percent compared with 46 percent in the previous corresponding period, implying that the registrar firm was able to retain N440 from every thousand naira generated as revenue.
Operating margin fell some 8 percent points, return on assets dropped some 1 percent points and return on equity shed 9 percent points, indicating that the firm’s profitability performance weakened slimly in the review period.
African Prudentials significantly lowered its finance cost by 46 percent, given the fact that the firm settled outstanding bank loans which led to a cut in interest paid.
A look at the balance sheet showed total assets depreciated marginally by 4 percent to N20.4 billion, driven by 37 percent reduction in debt instruments – loan & advances and treasury bills, despite cash & cash equivalent soaring by 144 percent.
Total liabilities trimmed by 2 percent year-on-year following the repayment of over N2 billion bank loans, and shareholders’ fund was down by 7 percent to N7.9 billion.
Obong disclosed that management is keen to spur performance in the coming quarter following the launch of some strategic business units such as digital technology, Cooperative business and EasyCoop Mart.
“To complement the traditional registrar business, the benefits of the new business segments will be effect in the second quarter”, he stated, adding that the firm is unrelenting to delivering unique customer experience to clients.
Its shares traded flat at N4 after Thursday’s trading, and has returned 3.36 percent since the start of 2019.
