Custodian Investment Plc, an investment company with significant holding in companies and brands saw its profit decline to a three-year low in 2018 after losses and increased expenses soaked up.
According to the company’s financial statement released on the Nigerian stock exchange (NSE) market on Wednesday, profit after tax declined by 2.78 percent to N7.11 billion, as against N7.31 billion recorded in 2017.
Our analysis revealed that despite growth by 17 percent in revenue during the period under review, losses on financial assets, fixed assets and overhead expenses eroded income by about 40 percent.
This saw growth in Custodian’s profit before tax (PBT) slow down by 6 percent to N9.5 billion in 2018, compared to a 21 percent, 29 percent and 12 percent growth in PBT in 2017, 2016 and 2015 respectively.
Total losses incurred during the period amounted to N216.6 million as loss incurred on fair value adjustments of its quoted investments which amounted to N173.12 million accounted for about 80 percent of total loss value in 2018.
Also, investment in the equity of Interstate Securities Limited, a stock broking firm and a dealing member of the NSE in line with its strategy to further diversify its financial service offerings, delivered a loss of N33.24 million which accounted for 15 percent of total loss during the period.
Meanwhile, net realised losses on investment properties amounted to N10.25 million accounting for 5 percent of total loss value during the period.
Management expenses increased by about 10 percent in 2018 with a surge by 43 percent in staff cost during the period consisting of salaries, defined contribution pension and other staff allowances which amounted to N2.33 billion, against N1.63 billion in 2017.
Custodian Investment share price dipped 3.17 percent to N6.10 on Wednesday as market value stood at N35.87 billion with outstanding shares of 5.88 billion.
Year to date analysis shows that stock was up 7.96 percent as at the close of market on Wednesday, outperforming the all share index which is down 1.91 percent.
One year analysis also revealed that the stock was up 47.27 percent as at Wednesday outperforming the market which is down by 20.89 percent in the last one year.
Custodian Investment currently trades at a P/E ratio of 4.82x and EPS of 1.26 with a price to book of 0.93 as stock is on its way to recording highest price in the last 5 years.
David Ibidapo
