Africa Prudential Plc Records A 23% Increase Year-On-Year in Contract Revenue

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Africa Prudential Plc announced its Unaudited Financial Statements for the period ended March 31, 2019, With a Gross Earnings of N0.87 Billion and Profit Before Tax of N0.45 Billion. The Company delivered an annualized Earnings Per Share of 76 Kobo.

(NSE Ticker: AFRIPRUD, Bloomberg Ticker: AFRIPRUD NL, Financial Times Ticker: AFRIPRUD LAG)

Commenting on the result, The Managing Director/CEO of Africa Prudential, Mr Obong Idiong, had this to say; “While 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. On the other hand, we saw a 23% increase in our revenue from contracts with customers which was as a result of the several corporate actions undertaken by many of our clients in view of their full-year Annual General Meetings, dividend declaration etc. The management is however committed to improving upon our performance in the coming quarters following the launch of our strategic business units (SBUs), namely; Digital Technology, EasyCoop Mart and Cooperative business.”

“To complement the traditional Registrar business, the benefits of the new business segments are expected to be felt from Q2 2019 going forward”.

Mr. Obong Idiong MD/CEO further reiterated that; “The various strategic steps we have been taking is towards establishing us as the registrar of choice, while making foray into new ventures with high growth prospect, to do this we would be leveraging on technology, research & development as well as capacity building to ensure we achieve the aforesaid goals”.

“We would continue to bring to bear, our doggedness whilst taking pragmatic steps towards tackling the arrays of issues plaguing us and our industry for a long time now. Going into the second quarter of 2019, we would not be resting on our oars as we would ensure we keep to our promise of delivering unique customer experience to our wide clientele base”.

COMPANY UPDATE:

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Africa Prudential Plc (NSE: Afriprud); At the company’s 6th Annual General Meeting held on the 26th of March, 2019 in Lagos, shareholders approved the payment of the 50 kobo dividend per share amidst challenging macro-economic environment.

Notice of Q1 2019 Conference Call:

Sequel to the release of our Q1 2019 result, we would be hosting a conference call for Investors and Analysts, Further information would be circulated to all in due course.

RESULT HIGHLIGHT:

Income Statement:

  • Revenue from contracts with customers: N0.27 Billion, compared to N0.22 Billion in Q1 2018 (23% YoY growth);
  • Interest Income: N0.60 Billion, compared to N0.73 Billion in Q1 2018 (18% YoY Decline)
  • Gross Earnings: N0.87 Billion, compared to N0.96 Billion in Q1 2018 (9% YoY Decline);
  • Profit Before Tax: N0.45 Billion, compared to N0.54 Billion in Q1 2018 (17% YoY Decline);
  • Profit After Tax: N0.38 Billion, compared to N0.46 Billion in Q1 2018 (17% YoY Decline);
  • Earnings Per Share (Annualized): 76 Kobo
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Balance Sheet:

  • Total Assets: N20.38 Billion, compared to N21.27 Billion as at FY 2018 (4% YTD decline);
  • Total Liabilities: N12.41 Billion, compared to N12.68 Billion as at FY 2018 (2% YTD decline);
  • Shareholders’ Funds: N7.97 Billion, declined by 7% YTD.

Comparing Q1 2019 to Q1 2018, we observed the following key items of note:

  • Revenue from contracts with customers: This saw a 23% increase y/y largely due to the 127% increase in Fees from corporate actions whose performance usually are satisfied over-time and payment due upon the completion of the specific action to which it relates (Dividend declaration, AGM completion etc.,).
  • Interest Income: This fell by 19% y/y as a result of the reduction in debt instrument coupled with a decline in yield environment during the quarter under review as such, we saw the Interest on T-Bills and Bonds dip 51% and 64% respectively.
  • Finance Cost: This experienced a noticeable decline of 46% within the quarter under review following the full settlement of the outstanding bank loans which led to a reduction in interest paid within the quarter compared to the same period last year.
  • Total Assets: This dipped 4% y/y as a result of the 37% reduction in debt instruments at amortized cost, the latter which was the result of the reduction in debt instruments such as Treasury bills and Loans & Advances by 67% and 28% respectively. Within the review period cash and cash equivalent appreciated by 144% largely due to the increase in current account balance with banks. Property and Equipment inched up mildly as Deferred tax assets and inventories remained unchanged.
  • Total Liabilities: The company’s liabilities fell by 2% y/y majorly due to the complete servicing of the bank loans of over N2 Billion. Deposit from our clients appreciated by 16% as a result of the increment in Dividend for ordinary shares. Creditors and accruals balance increased in the first quarter strictly due to the increase in accrued expenses.
  • Operating Expenses – This grew by 25% y/y owing to the growth experienced in personnel expenses and other operating expenses, both line items appreciated as a result of the formal establishment of some of the strategic business units (SBUs), that we planned on launching this year with a view to ensuring efficiency in operation while obtaining superior returns from our operations.
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