Despite the rising cost of construction materials, UPDC, a property investment company in Nigeria, thrived in 2024 as property sales and development drove a 120.6 percent surge in revenue growth, the highest in nine years.
According to the company’s audited financial statement for December 31, 2024, revenue more than doubled to N11.6 billion year-on-year from N5.3 billion in 2023.
The growth was driven by UPDC’s core property development and sales business, which accounted for N10.3 billion, 87 percent of total revenue. In contrast, its hospitality segment contributed just 12.4 percent, highlighting the company’s reliance on real estate to drive performance.
However, throughout 2024, the Naira was largely unstable, with fluctuations driven by limited forex supply, speculative activities, and external economic factors, resulting in higher construction expenses and limited availability of affordable housing for millions of Nigerians.
While UPDC’s revenue soared significantly, rising costs ate into the margins as Gross margin fell to 28.8 percent from 35.6 percent in 2023, indicating pressure from rising project and operational expenses.
In the report, selling and distribution expenses rose nearly 400 percent to N550 million from N111 million, while administrative expenses slightly rose to N1.97 billion from N1.6 billion.
Cost of sales, however, claimed 71.2 percent of the total revenue during the period, thereby pressuring the profitability of the real estate firm. It increased by 147 percent to N18.4 billion from N3.4 billion in 2023.
Read also: “I believe that being a CEO is a call to lead.” – Odunayo Ojo, CEO UPDC PLC
UACN Property Development Company (UPDC) is a subsidiary of Custodian Investment Plc (51% holding). It has streamlined operations around property development and sales. They are also into acquisition, development, sales, and management of high-quality, serviced, commercial, and residential properties in the luxury, premium, and classic segments of the real estate market.
The hospitality segment remains a drag on performance as it generated N1.5 billion in revenue but recorded a loss before tax of N256 million, denting group profit.
UPDC’s pre-tax profit surged 244.5 percent to N1.31 billion from the N379.9 million reported in 2023, while after-tax profit also grew by 277.8 percent to N836.9 million, signaling a major turnaround from previous years.
Further analysis shows that the company’s operating profit stood at N1.14 billion from a loss of N563 million, while its tax increased to N472 million from N158 million.
The real estate company also recorded an increase in finance income of N559.9 million from N239.5 million, while finance cost declined to N397.8 million from N423.2 million.
At the end of 2024, UPDC’s total assets rose by 56.8 percent to N30.9 billion from N19.7 billion, while total liabilities stood at N21.5 billion.
Its cash and cash equivalents during the period under review amounted to N11.5 billion, a 134.6 percent decline from N4.9 billion.
The real estate company reported a negative net cash from financing activities, which amounted to N2.03 billion from N453.5 million, while Cash from operating activities rose to N8.4 billion from N1.9 billion. Net cash used in investing activities recorded a positive N381.4 million from N214.9 million.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
