Odu’a group: Riding on corporate governance to drive growth

When Odu’a Investment Company Limited held its 40th Annual General Meeting (AGM) recently, its payment of cash dividend of N418.4million to its shareholders (the six southwest states), was a 15 percent increase over the previous year. More notably perhaps, is that this payment was only the eight consecutive one to be done by the 45-year-old company. Its history has been one of a stormy past, laden with governance issues that in recent years appear to be getting laid to rest.

If ‘government has no business running any business’ were to have a real life anecdote, Odu’a group could be a poster child for it, at least until a few years ago when KPMG was brought in to review the business and kick-start its corporate governance journey. The strategy document emanating from this has in subsequent years seen incremental growth in a company, which even though would have existed for 46 years this October; its roots can be found in the Western Nigeria Development Corporation that predates Nigeria’s 1960 independence.

In the company’s 2021 financial results, Profit Before Tax was N9.37 billion, growing by 149.8 percent from N3.75 billion recorded in 2020, described by Segun Aina the group chairman, to have been driven by the increased focus on the different areas of the business and gains in investment properties.

Adewale Raji, the group managing director/CEO, had also noted that PBT for 2021 included revaluation gains of N7.11 billion from the company’s investment properties portfolio which was N2.63 billion in 2020.

Following the recent results, Aina had assured shareholders that the Board had put in place; various best practice and governance policies in the year under review that will ensure the company’s investments create sustainable impact in the ensuing years.

The delivery of the Company’s 5-Year Strategic Thrust, “SRC-2025” (Sweat, Revive and Create 2025), as he explained, has driven growth in the last two years and will guarantee growth is sustained in the remaining three years (and beyond).

“I am pleased to report that we continued to build momentum in our efforts to institute the right governance structures for the Group and its subsidiaries,” said Aina. “Our goal is to ensure that the Group and Subsidiaries’ Boards are effective and diversified, and we have put in place board selection, evaluation and training structures to deliver on these objectives.”

Quote: The Board believes that robust governance must be in place for it to meet the high standards of public trust expected from shareholders and stakeholders

The Board and management, as he explained, had worked towards instituting best practice governance policies. A Code of Business Ethics and Conduct Policy (CoBEC) was put in place to ensure the company promoted a culture of compliance, ethical behaviour and business conduct. It also approved a Conflict of Interests Policy (CoI) that documents the Group’s position on the levels of professional judgement it expects from all internal stakeholders in relation to protecting the best interests of the company.

Whistle Blowing Policies and mechanisms were also launched across the group, to facilitate transparency by encouraging stakeholders to report any illegal or unethical conduct through a process that protects the anonymity of such persons. The Investment Framework and Policy were approved to facilitate the efficient identification, evaluation and selection of investments or investment options for the business.

“To ensure that our investments create sustainable impact, we also started the journey towards Economic and Social Governance compliance with the development of a Policy framework for this,” said Aina. “Some of these policies have been rolled out across the Group, and we will drive the adoption of all these polices by the subsidiaries over time.” He further explained that the Board believes that robust governance must be in place for it to meet the high standards of public trust expected from shareholders and stakeholders, and this will continue to be a focal point.

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In accordance with the established principle of rotation of the position of Chairman among shareholder States every four years as enshrined in the Shareholders Agreement, the tenure of Segun Aina came to an end at the AGM, with the Board and Shareholders approving that Bimbo Ashiru, a current member of the board takes over as Chairman.

As a member of the board that conceptualised and approved the company’s ongoing 5-year strategy, he is expected to maintain the trajectory, and commit to ensuring there is no deviation from the established objectives.

Raji, the CEO, while giving updates on key growth initiatives and operations, touched on all the business units under the group and how they have fared in the year under review.

Hospitality business: In 2020, the hospitality sector was one of the worst hit by the impact of Covid-19 pandemic, but as Raji explained the group’s hotels have begun to see some recovery as it continues to make minimal improvements to facilities and intensify business development activities.

“The Board and Management are happy to inform you that investors are beginning to show interest in the redevelopment of our hotels to global standard and world class leisure, entertainment, conferencing and banqueting destinations on a joint venture basis,” he said.

Real estate: In spite of the substantial increase in the prices of construction materials, the group’s property development in conjunction with joint venture partners continued to progress steadily, noted Raji. Westlink Clinton’s Court, a 16-unit 4-Bedroom Terrace medium-density estate, next to the Oyo State Magistrate Court at Iyaganku GRA, Ibadan is expected to be completed in 2022.

Also, the company’s largest ongoing property development project, the Westlink Iconic Villa, a multi-billion Naira real estate JV development with Chapter 4 Estates Ltd next to Nigerian Breweries at Alakia, Ibadan made steady progress. The Phase 1 made up of 67 residential units of 3-bedroom apartments, 4-bedroom duplexes and 5-bedroom duplexes will be commissioned this year having experienced one year delay due to Covid-19.

“We however believe that the challenges experienced in the Phase 1 of the project have been comprehensively addressed and we expect Phase 2 to be delivered on time,” Raji said. Remarkable progress is also being made in other JV real estate projects in Lagos including those being executed by Wemabod Limited. Notable among these is the Ikoyi Crescent JV development between Wemabod and The Address Homes Ltd, which consists of 18 units of high-end luxury apartments.

Agriculture and agribusiness: SWAGCO Ltd (South West Agricultural Company Limited), the company’s wholly owned and now fully operational subsidiary has begun to make significant efforts towards identifying viable investment opportunities that will drive capacity development for a new generation of commercial farmers and entrepreneurs in and around the region. A large portion of the group’s land bank has been committed towards these efforts focusing on Cassava, Maize, Paddy Rice and Dairy and the company is positive of seeing some significant results in 2022 and 2023.

There is no relenting in efforts towards transforming the agricultural sector of the South West geopolitical zone, which the company represents as a business concern, said the CEO.

ICT/digital: The group’s recently incorporated subsidiary in the ICT sector, the South West Innovation and Technology Limited (SWIT), entered into a joint venture agreement with Software Business Solutions Consulting (SBSC). This joint venture is aimed at leveraging the company’s resources and SBSC’s capabilities to deliver technology solutions to a broad range of clients.

In 2022, SBSC opened its maiden TechHub at the Ogun State TechHub, located at Kobape, Abeokuta where it will train software engineers and create unique technology solutions for the local market.

Oil and gas: Following a successful participation in the Federal Government’s bid round for BITA Marginal Field located in OML 95 within the territorial waters of Ondo State, the Bita Exploration & Production Ltd (BEPL) has been incorporated with a Field Partner – Pioneer Global Energy Resources Ltd.

OICL’s holding in BEPL is 48.76 percent of which ABUAD Management Services Company owns one-third. “We are poised to work closely with Chevron Nigeria to achieve our target oil and gas production volumes as soon as possible based on enhanced Competent Persons Report (CPR) and Field Development Plan (FDP) documents that BEPL will be commissioning,” said Raji.

Going into the future, the business outlook for the company, according to its management, is to transit to a lean non-operating holding company that will focus on driving the growth and expansion of its subsidiaries and associate companies, ensuring investment excellence across its portfolio of assets and seeking for new partnerships for growth in its 8 sectors as captured in its SRC 2025 Strategic Plan, which are agriculture, real estate, hospitality, financial services, energy, healthcare, ICT/digital and logistics/e-commerce.

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