United Capital promises better returns as shareholders get N1.8b dividend

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The United Capital Plc Board of Directors has assured shareholders that it has put in place appropriate strategies to ensure that the company continues to make progress and deliver better returns, irrespective of the challenges in the operating environment.

Addressing shareholders at the annual general meeting in Lagos, its Chairman, Chika Mordi, said things are definitely looking up for the company, a development he attributed to deliberate implementation of actionable strategies, that have paid off.

Shareholders approved payment of N1.8 billion as cash dividend for the 2018 business year, representing a dividend per share of 30 kobo. “I am confident in our ability to deliver superior returns to you going forward,” Mordi assured.

He said the company is cognisant of the challenges in the current operating environment and it will strive to maximise value creation for its shareholders.

“Our staff remained resourceful, motivated and dedicated, and we continue to attract the best of talent to execute our short-medium and long-term strategic objectives,” Mordi said.

United Capital drew on operating efficiency and steady growth in the top-line to grow its profit to N6.22 billion in 2018. Key extracts of the audited report and accounts of the company for the year ended December 31, 2018 showed that profit before tax rose by 12 per cent from N5.55 billion in 2017 to N6.22 billion in 2018.

However with 58.8 per cent in taxes, profit after tax dipped marginally to N4.34 billion in 2018 as against N4.36 billion in 2017. Total turnover improved by four per cent to N9.26 billion compared with N8.92 billion in previous year. Operating income had grown from N7.0 billion in 2017 to N7.2 billion in 2018.

With earnings per share of 72 Kobo, the company’s board of directors  recommended N1.8 billion payment as cash dividend for the 2018 business year, representing dividend per share of 30 kobo. The dividend payout represents a dividend yield of about 9.0 per cent, which most analysts considered attractive.

The report also showed that the investment and finance group leveraged cost saving techniques to deliver a 10 per cent reduction in operating expenses.  Net trading income also grew by 43 per cent on the back of increased gains from the sales and purchases of financial instruments. Net interest margin quadrupled by 428 per cent from N143.52 million in 2017 to N757.48 million in 2018. Total assets rose to N148.70 billion in 2018 as against N136.60 billion in 2017.

Group Chief Executive Officer, United Capital Plc, Mr. Peter Ashade said the result showed modest improvement in the performance of the company despite the challenges in the operating environment.

He said the company’s continuous dedication to providing optimum satisfaction to its wide clientele base has necessitated the need for it to be creative and innovative in its operations, and this is evident in the reduction in its operating expenses.

He noted that the investment and finance group implemented the new IFRS 9-Financial Instruments, which required the reclassification of most of its financial assets.

According to him, the standard necessitated the impairment of some assets based on the expected credit loss model, leading to recognition of an impairment charge of about N3 billion, which significantly impacted the shareholders’ fund.

United Capital is the first investment bank to be listed on the Nigerian Stock Exchange (NSE). The group include subsidiaries in trusteeship, securities and asset management business.


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