United Capital Plc, (NSE: UCAP, Bloomberg: UCAP: NL, Financial Times: UCAP: LAG) announced its Audited Financial Statements for the year ended December 31, 2020.
The Group reported impressive growth across key indicators during the year under review despite the challenging global climate. Total Revenue in FY 2020 grew 50% to N12.87bn from N8.59bn in FY 2019, Profits before tax recorded a significant growth of 61%, while PAT was up 57% year-on-year.
An increase of 48% was recorded in Total Assets, being well-financed by a 52% increase in Liabilities, while Shareholders Fund grew 25% on the back of a strong 29% growth in retained earnings.
United Capital’s total revenue increased by an impressive 50% YoY on the back of strong growth in Fee and Commission income (+77% YoY), Investment Income (+42% YoY), and net trading income which was up 453% YoY.
HIGHLIGHTS OF THE RESULT
Statement of Profit or Loss:
Year-on-Year Analysis (FY 2020 to FY 2019) reveals the following;
- Gross Earnings: N12.87 billion in 2020, compared to N8.59 billion in 2019 (50% growth year-on-year)
- Net Operating Income: N12.49 billion in 2020, compared to N7.90 billion in 2019 (58% growth year-on-year)
- Operating expenses: N4.93 billion in 2020, compared to N3.64 billion in 2019 (35% growth year-on-year)
- Profit Before Tax: N7.95 billion in 2020, compared to N4.95 billion in 2019 (61% growth year-on-year)
- Profit After Tax: N7.81 billion in 2020, compared to N4.97 billion in 2019 (57% growth year-on-year)
- Earnings Per Share: 130 kobo. (2019: 83 kobo)
Statement of Financial Position:
- Total Assets: N224.75 billion, compared to N150.46 billion as of December 31 2019 (48% growth year-on-year)
- Total Liabilities: N198.32 billion, compared to N130.88 billion as of December 31 2019 (52% growth year-on-year)
- Shareholders Fund: N24.43 billion, a 25% increase year-on-year relative to N19.59 billion as of December 31 2019.
United Capital Plc Grows PAT By 57% To ₦7.81Billion In 2020
Comparing FY 2020 with FY 2019, the following are worthy of note:
- Total Revenue: United Capital’s total revenue increased by an impressive 50% YoY on the back of strong growth in Fee and Commission income (+77% YoY), Investment Income (+42% YoY), and net trading income which was up 453% YoY.
- cost-to-income ratio: There was improved operational efficiency during the period as the cost-to-income ratio declined by 4.13 percentage points, largely attributable to the faster growth in revenue (+50% YoY) relative to operating expenses (+35%YoY). Of note, however, there was a sharp 513% increase in impairment allowance as a result of a notable 54% year-on-year increase in financial assets.
- PBT Margin: United Capital’s Profitability margin also improved with PBT margin gaining 4.13 percentage points to 62% for FY 2020 relative to 58% for FY 2019 as PBT expanded by 61% during the period.
- PAT Margin: PAT margin also improved, up 2.79 percentage points to 61%, despite a tax charge of 2% for 2020 relative to a tax credit of N23.7 million in 2019.
- Total Assets: Total Assets grew by 48% YoY largely on account of a significant 54% YoY increase in investment in financial assets and a 44% growth in the cash and cash equivalents line.
- Total Liabilities: A 60% growth in managed funds and a 43% increase in other borrowed funds saw total liabilities rise by 52% YoY.
- Shareholders’ Fund: Shareholder’s wealth improved during the period, up 25% YoY driven by the strong 29% growth in retained earnings.
- Proposed Dividend: The Directors proposed a dividend of 70k per share, amounting to a total of an N4.2billion dividend to be paid to shareholders upon approval of members at the AGM. The dividend is payable to shareholders whose names appear on the Register of Members at the close of business on March 5, 2021.
While commenting on the group’s performance the Group CEO, Mr. Peter Ashade, had this to say:
“I am pleased to inform all stakeholders that United Capital Plc delivered impressive returns amid the unprecedented environment worsened by the pandemic during the 2020 financial year with remarkable double-digit growth in Revenue, PBT and PAT and solid performance across key business parameters.
This empowers us to adopt a more positive outlook for the year 2021 as we navigate the tough terrain compounded by a second wave of the COVID-19 pandemic among other severe economic challenges.”
Discussing the result further he stressed that;
“Despite the tough operating environment, all stakeholder groups can be assured of our commitment to providing best-in-class solutions to diverse client segments and delivering superior returns to shareholders even as we work with regulatory authorities to strengthen the broader financial system as the domestic economy continues on the path to recovery in the year 2021.”