United Capital Grows Profit by 64% to N3.14 Billion in HY 2021 Results

United Capital

United Capital Plc, (NSE: UCAP, Bloomberg: UCAP:NL, Financial Times: UCAP: LAG) announced its Unaudited Financial Statements for the period ended June 30, 2021. During the period under review, the Group showed significant growth in key indicators despite the challenging global economic climate.

Brand Spur reports that the company’s total revenue in HY 2021 soared to N6.85bn from N4.45bn in HY 2020, an increase of 65% was recorded in PBT while PAT grew by 64% year-on-year. Total Assets grew by 44% year-to-date driven by a 49.60% increase in Total Liabilities.

HIGHLIGHTS OF THE RESULT – Statement of Profit or Loss:

Year-on-Year Analysis (HY 2021 to HY 2020) reveals the following:

  • Revenue: N6.85 billion in HY 2021, compared to N4.45 billion in HY 2020 (54% growth year-on-year)
  • Operating Income: N6.81 billion in HY 2021, compared to N4.35 billion in HY 2020 (57% growth year-on-year)
  • Operating expenses: N3.11 billion in HY 2021, compared to N2.18 billion in HY 2020 (43% growth year-on-year)
  • Profit Before Tax: N3.74 billion in HY 2021, compared to N2.27 billion in HY 2020 (65% growth year-on-year)
  • Profit After Tax: N3.14 billion in HY 2021, compared to N1.91 billion in HY 2020 (64% growth year-on-year)
  • Annualized Earnings Per Share: 105 Kobo. (2020: 64kobo). This represents 64% growth year on year.

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Statement of Financial Position:

  • Total Assets: N320.23 billion, compared to N222.75 billion as at FY 2020 (44% year-to-date growth)
  • Total Liabilities: N296.68 billion, compared to N198.32billion as at FY 2020 (50% year-to-date growth)
  • Shareholders Fund: N23.55 billion, an 3.57% year-to-date decrease relative to FY 2020’s value at N24.43 billion.

Comparing HY 2021 with HY 2020, the following are worthy of note:

  • Total Revenue: United Capital’s total revenue recorded an impressive 54% growth year-on-year driven by strong growth in fee and commission income (+128% year-on-year) and Investment Income (+27% year-on-year) despite a 60% year-on-year decline in net trading income.
  • cost-to-income ratio: The cost-to-income ratio for the period declined by 3.58 percentage points largely attributable to the faster growth in revenue (+54% year-on-year) relative to operating expenses (+43%year-on-year). This indicates a continued improvement in operational efficiency during the period.
  • PBT Margin: United Capital’s Profitability margin also improved with PBT margin gaining 3.58 percentage points to 54.57% for H1 2021 relative to 50.99% for H1 2020 as PBT increased by 65% year-on-year during the period.
  • PAT Margin: PAT margin also improved, gaining 2.81 percentage points despite a higher tax charge of 16.0% for H1 2021, relative to a charge of 15.62% during the same period in 2020.
  • Total Assets: Total Assets grew by 44% year-to-date driven majorly by a significant 366% increase in cash and cash equivalents and 9% growth in trade and other receivables.
  • Total Liabilities: United Capital’s Total Liabilities grew by 49.60% year-to-date driven majorly by 82.92% year-to-date increase in manage funds.
  • Shareholders’ Fund: United Capital’s Shareholders’ funds declined 3.57% year-to-date, with retained earnings down 4.90% due to dividend payout during the period under review.
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While commenting on the group’s performance the Group CEO, Mr. Peter Ashade, had this to say:

“I am excited to inform our stakeholders that United Capital Plc recorded a very impressive half-year 2021 result following a record year performance in 2020. We ended the first half of the year on a very high note as reflected in our earnings growth and strong financial performance.

United Capital Plc is in a growth phase, and I must say that our strong financial performance is a testament to our unwavering commitment to increasing value creation for all our clients amid the harsh socio-economic environment and lingering effects of the devastating pandemic.

In the remaining half of the year, we will be focused on our transformation agenda by deepening our value propositions to underserved market segments especially mass affluent and mass market clients, while driving phased automation of our business processes.

Our bespoke affluent segment propositions including private trusts, and wealth management solutions are curated to increase, preserve, and transfer wealth for our fast-growing affluent customer base. Furthermore, our best-in-class digital platforms remain central to our purpose of transforming lives and promoting financial inclusion across Africa by providing easy access to collective investment schemes and microloans while promoting socio-economic development.

Our stakeholders can be assured of our commitment to delivering superior returns. More importantly, we will continue to work with our regulators and other capital market operators on structural reforms to deepen the capital market as the domestic economy continues the path to recovery.

Following the release of our HY 2021 result, we shall be hosting an Investors and Analysts conference call in due course to discuss our performance and the overall outlook for the next quarter of 2021. The date and further details with respect to the conference call would be circulated in due course.”