United Capital Plc announced its Unaudited Financial Statements for the period ended March 31, 2021. The Group reported impressive growth across key indicators during the period under review despite the challenging global climate.
Total Revenue in Q1 2021 grew 62.57% to N3.12 bn from N1.92 bn in Q1 2020, Profits before tax recorded a significant growth of 67.85%, while PAT was up 67.82% year-on-year. An increase of 21.23% was recorded in Total Assets, and a 25.23% increase in Liabilities, while Shareholders Fund declined 11.25%.
Year-on-Year Analysis (Q1 2021 to Q1 2020) reveals the following;
- Gross Earnings: N3.12 billion in Q1 2021, compared to N1.92 billion in Q1 2020 (63% growth year-on-year)
- Net Operating Income: N3.10 billion in Q1 2021, compared to N1.89 billion in Q1 2020 (64% growth year-on-year)
- Operating expenses: N1.15 billion in Q1 2021, compared to N0.74 billion in Q1 2020 (54%
- Profit Before Tax: N1.97 billion in Q1 2021, compared to N1.18 billion in Q1 2020 (68% growth year-on-year)
- Profit After Tax: N1.66 billion in Q1 2021, compared to N0.99 billion in Q1 2020 (67% growth year-on-year)
- Annualized Earnings Per Share: 111 kobo. (Q1 2020: 66 kobo)
Statement of Financial Position:
- Total Assets: N270.04 billion, compared to N222.75 billion as at FY 2020 (21% year-to-date growth)
- Total Liabilities: N248.36 billion, compared to N198.32 billion as at FY 2020 (25% year-to-date growth)
- Shareholders Fund: N21.68 billion, an 11% year-to-date decrease relative to FY 2020âs value at N24.43 billion.
Comparing Q1 2021 with Q1 2020, the following are worthy of note:
- Total Revenue: United Capitalâs total revenue recorded an impressive 63% growth year-on-year on the back of strong growth in Fee and Commission income (+133% year-on-year), Investment Income (+28% year-on-year), and net trading income which was up 137% year-on-year.
- Cost-to-income ratio: Continued improvement in operational efficiency was seen during the period as the cost-to-income ratio declined by 2.0 percentage points, largely attributable to the faster growth in revenue (+63% year-on-year) relative to operating expenses (+54%yearon-year).
- However, there was a sharp increase in impairment allowance due to the IFRS 9 requirement that some financial assets be measured at amortized costs.
- PBT Margin: United Capitalâs Profitability margin also improved with PBT margin gaining 2.0 percentage points to 63% for Q1 2021 relative to 61% for Q1 2020 as PBT increased by 68% year-on-year during the period.
- PAT Margin: PAT margin also improved, gaining 1.5 percentage points despite a higher tax charge of 16.0% for Q1 2021, relative to a charge of 15.7% during the same period in 2020.
- Total Assets: Total Assets grew by 21.23% year-to-date driven by a significant 241% increase in cash and cash equivalents and an 11% growth in trade and other receivables.
- Total Liabilities: This increased by 25.23% owing to the growth in short term investment by 58.45% and trust funds by 19.53%. In aggregate, the Groupâs managed funds grew by 40.05%.
- Shareholdersâ Fund: shareholdersâ funds declined 11.25% YTD, with retained earnings down 11.76% due to the impact of N4.2b dividend payout during the period under review.
While commenting on the Groupâs performance the Group CEO, Mr. Peter Ashade, had this to say:
âI am pleased to inform all stakeholders that United Capital Plc commenced the first quarter of the year from a stable position with remarkable earnings growth and strong performance across key financial parameters even as we continued to navigate the tough terrain which at the moment points to a recovery in the domestic economy amid other improving global macroeconomic developmentsâ.
With our well-articulated plans and solid risk management framework, we were able to deliver an increased revenue of over 63%, increased PBT of 68% and PAT increase of 67%.
âThis performance empowers us to adopt a positive outlook on the remaining part of the year 2021 as the operating environment improves, supported by fiscal stimulus programmes, easing of restrictions on business operations, reopening of international and domestic travels, resumption of wholesale and retail trading activities as well as the rebound in oil pricesâ.
We have continued to drive our strategy as we push further our market diversification and cost-optimization initiatives, as well as implement, phased automation of our business processes whilst upholding our commitment to ensuring a significant improvement in our value delivery to all our stakeholders.
Discussing the result further he stressed that;
âGoing into the remaining quarters, we remain diligently committed to delivering greater value to our stakeholders and providing best-in-class solutions to diverse client segments by constantly reviewing our strategy in the light of global and domestic developments even as we work with regulatory authorities to strengthen the broader financial system as the domestic economy continues on the path to recovery.â