Foremost independent credit rating firm in Nigeria, Agusto & Co, has upgraded Associated Discount House Limited (ADH) ratings from Bbb+ to A-.
According to a report issued by the rating agency, the upward review was due to ADH’s strong capitalisation, good liquidity profile, good asset quality, good profitability and stable management.
“The current A- rating reinforces the good financial condition of ADH, as well as its experienced and strong capacity to meet obligations on timely basis,” the report states.
The report further states that ADH’s track record of financial performance has improved consistently over the past three years with net earnings growing at a compound annual growth rate (CAGR) of 34 percent over the period, and profitability indicators trending upwards during this period. Pre-tax ROE and ROA have averaged 20 percent and 1.7 percent, respectively, over the three-year period.
During the year ended December 31, 2013, pre-tax profit increased by 38 percent to N1.8 billion and ROA improved to 2.1 percent.
Abubakar Jimoh, managing director/CEO of ADH, says the years of relentless quality service is paying off and being noticed by all, saying “this rating confirms the excellent work of the board of directors, management and staff of ADH towards repositioning the company as a foremost financial service institution in Nigeria, delivering value to its clientele and ensuring good return on investments for its shareholders.”
ADH’s consistent and strategic focus on core discount house operations sustained its strong asset quality amid the tough challenges of the discount house sub-sector.
The company’s prudent investment culture helped sustain its asset quality and balance sheet liquidity, even when the market was very volatile and experienced shocks in 2013, the company still rose above board, says Jimoh.
The discount house had maintained strong capitalisation levels in the last three years, amounting to N15.9 billion as of April 2014.
Analysts note that ADH continues to maintain its moderate approach to growing risk assets while the company’s success adds credence to the growth of the Nigerian economy.
