United Capital plc has ended 2014 financial year with growth at the bottomline, despite tough operating environment bedeviling firms in African’s largest economy Nigeria.
For the year ended December 2014, United Capital profit after tax (PAT) increased by 5 percent to N1.84 billion from N1.76 billion the same period of the corresponding year (FY) 2013.
Its total assets also spiked by 20 percent to N95.29 billion in 2014, from N79.48 billion as of December 2013.
Net margins, a measure of profitability and efficiency, was strong at 39 percent.
Analysts say a single-digit growth in the firm’s earnings is impressive given the tough operating environment where most firms post negative returns on the NSE.
Another daunting challenge the company faced was huge energy costs it incurred in running head office and branches as cheaper power from the grid was unreliable, hence spiralling operating costs and suppressing profit.
“The profitability level was achieved not withstanding that the company operates predominately in the capital space where the equity market in general posted return of 16.1 percent,” the Lagos-based company said in an e-mailed statement.
Further analysis of the 2014 audited financial statement shows United Capital in growth spurt as other income increased by 42.50 percent over its 2013 value and contributed 16.2 percent to total gross earnings.
Gross earnings was N4.68 billion in 2014, up 2.3 percent from 2013. Total gross earnings were driven primarily fee and commission income (39%) and investment income (35%).
Net interest income margin, which is income generated from funds under management surged by 103.08 percent.
Shareholders’ fund as of the end of 2014 was N9.31 billion and the company’s return on average equity (ROE) was 21 percent, highlighting continued value creation for shareholders.
However, due to tough operating environment mentioned earlier, operating expenses increased by 18.60 percent to N2.4 billion in 2014, as against N2.1 billion in 2013.
United Capital is working assiduously to ensure that it uses assets at its disposal in generating higher profits and dividends.
It will also employ the latest technology in reducing costs.
“The company’s management is confident of its ability to sweat the growth in assets to achieve greater profitability in future,” said the statement.
“Management current drive is for a reduction in cost to income ratio through income growth from all businesses as well as the deployment of recently acquired IT infrastructure to drive efficiency,” said the statement.
The company continues to play a leading role across its areas of operations in Trusteeship, Investment Banking, Asset Management and Securities, and looks forward to expanding its scope of operations to comprehensively cover the entire investment life-cycle.
In the year under review, it demonstrated its patriotism and strong commitment to corporate social responsibility (CSR) through significant support to the tune of N150 million in favour of the displaced victims of insurgency in the nation.
United Capital (previously called UBA Capital plc) was incorporated in Nigeria as a public liability company on August 3, 2012, to act as the ultimate holding company for the United Capital Group.
BALA AUGIE
