UACN’s failure to take advantage of its diversified investment base has seen its third quarter financial performance dwindle, analysis of the financial statement has shown.
For the first nine months through September 2014, UACN’s profit after tax dipped by 20 percent to N4.67bn from N5.87bn the same period of the corresponding year (Q3) 2013, while sales increased slightly by 1 percent to N60.54bn.
The Company which has investments in foods, logistics and real estate services was not able to control direct costs attributable to projects as gross profit fell by 3.32 percent to N13.66bn compared with N14.13bn the preceding year.
Net margin, a measure of profitability and efficiency also reduced to 7.71 percent in the review period compared with 9.78 the preceding year.
Analysts are however optimistic that the Company will revert to growth as Nigeria’s economy is expected to grow in the areas of housing, consumer goods and real estate.
For instance, the 17 million housing deficits bedevilling the country and the new mortgage housing refinancing scheme is expected be a major driver of growth in the housing and real estate industry.
It is also expected that UACN’s food business will bolster as a recent report by McKinsey Global Institute says the food, beverages and personal health sectors are expected to rise to $1.4trn in 2030.
The Company’s total assets were down slightly by 1.84 percent to N122.69bn in Q3 2014 compared with N125bn the preceding year.
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Return on average assets ROaE was 12.76 percent in the review period while the return on average assets ROaA stood at 7.05 percent.
Operating expenses were up by 9.14 percent to N8bn in Q3 2014 compared with N7.33bn the same of the corresponding year Q3 2013, while finance costs reduced by 28 percent to N1.07bn.
In order to diversify its paints revenue, UACN acquired 51 percent stalk in Portland Paints and Product Nigeria Plc a deal analysts say will put the company on growth trajectory.
UACN subsidiaries are: UAC Restaurants, UAC Foods, UACN Property Development Company and Chemical and Allied Products (CAP Plc) and GM Motors. UAC Restaurants, manages the Quick Service Restaurant (QSR) arm of the business. UAC Foods Limited.
(UFL) is a joint venture business of UAC of Nigeria plc and Tiger Brands International wherein UACN holds 51 per cent equity stake and Tiger Brands holds 49 per cent with both parties exercising joint management control.
The company’s share price closed trading at N47 on the floor of the NSE while market capitalisation was N90.28bn.
BALA AUGIE
