UPDC Plc Posts 23% Drop in Revenue Amid Pandemic Pressure

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The UACN Property Development Company PLC (UPDC), a subsidiary of Custodian Investment PLC today reported fourth quarter and full-year 2020 results, including sequential improvement in volume trends. The company also provided an update on its strategic transformation initiatives.

GROUP PERFORMANCE AND FINANCIAL REVIEW: FY 2020

  • Revenue in FY 2020 declined by 23% due to a slowdown in real estate demand in the wake of the Covid-19 pandemic. The Nigerian real estate GDP contracted by -3.6%, equally evident in UPDC’s 2020 performance.
  • Operating Loss: The implementation of the Group’s cost optimisation strategy continues to yield positive results as operating losses declined significantly (44%) despite lower revenue in FY 2020.
  • Net Finance Costs for FY 2020 reduced by nearly 43% to N1.5 billion (vs N2.6 billion in FY 2019). UPDC repaid a large portion of its interest-bearing loans.
  • Net Cash Position for FY 2020 improved significantly from N1.3 billion in FY 2019 to N2.9 billion (134% increase).
  • Overall Performance: UPDC recorded a loss of N0.6 billion vs the N15.9 billion loss recorded in 2019.

Financial Results for the fourth quarter and year ended 31 December 2020 – Balance sheet deleveraging to reposition UPDC for long term growth.

UPDC Plc Posts 23% Drop in Revenue Amid Pandemic Pressure Brandspurng

0VERVIEW OF FY 2020 CORPORATE ACTIONS

SALE OF 51% STAKE

UPDC became a subsidiary of Custodian Investment PLC (with 51% stake) and an associate of UAC of Nigeria Plc on Nov. 17th 2020.

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UNBUNDLING OF UPDC REIT UNITS

An initiative embarked on to maximize returns to UPDC’s shareholders by providing direct access to UPDC’s REIT dividend distributions.

UPDC Undergoing a Restructuring of Its Facility Management Division

RECAPITALIZATION

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Strengthened capital structure following the completion of the c.N16bn rights issue, with an 80% reduction in the Company’s debt from c.N21bn to c.N6bn.

2021 OUTLOOK

Focus on core competency (property development and facility management of real estate assets) while divesting from non-core business lines is expected to drive growth in 2021 through the emphasis on the following key strategies;

  • PROJECT DEVELOPMENT: Execution of residential real estate projects delivered to time, cost and quality, and targeted at the middle-income market
  • OPERATIONAL EFFICIENCY: UPDC will continue to build on its optimization strategy to ensure an organization-wide approach towards cost savings and operational efficiency.
  • STRATEGIC PARTNERSHIP: UPDC will continue to foster strategic relationships and associations across the real estate value chain to maximize returns to its shareholders.
Read Also:  UACN And UPDC Announce Recapitalization And Restructuring Plans

UPDC PLC is an institutional property company, founded in 1997, and listed on the NSE in 1998. UPDC has a solid track record in the acquisition, development, sale and management of a diverse mix of commercial, residential, hospitality and retail assets across Nigeria.

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UPDC Plc Posts 23% Drop in Revenue Amid Pandemic Pressure - Brand SpurUPDC Plc Posts 23% Drop in Revenue Amid Pandemic Pressure - Brand Spur

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UPDC Plc Posts 23% Drop in Revenue Amid Pandemic Pressure - Brand SpurUPDC Plc Posts 23% Drop in Revenue Amid Pandemic Pressure - Brand Spur

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