Transnational Corporation Plc (Transcorp) is Nigeria’s largest listed conglomerate. Transcorp, which has nearly 300,000 shareholders recently held its 17th Annual General Meeting (AGM) where it got shareholders’ approval to pay a dividend of 5kobo per share, a 150 percent increase over the previous year’s dividend. The share price of Transcorp had reached a 52-week high of N3.24kobo on increased demand by investors as against a 52-week low of 0.98kobo. It traded at N1.78 per share as at Monday, May 8.
Recently in its analysts’ presentation for first-quarter (Q1) of 2023, Transcorp said “Our overall strategic objective is to fully optimise our existing assets to ensure we consistently deliver value and high returns to our stakeholders. In 2023, our key priority is to achieve our set targets for the year across the various operating segments. As a Group, we will remain resolute as we execute our strategic priorities in 2023”.
Snapshot of 2022 financial performance
Transcorp’s portfolio comprises strategic investments in the power, hospitality, and oil and gas sectors. Its businesses include Transcorp Hilton Abuja, Transcorp Hotels Calabar, Aura by Transcorp Hotels, Transcorp Power, Transafam Power, and Transcorp Energy. The Company’s power business increased its available and generated capacity from 598MW and 373MW to 720MW and 426MW, respectively, following significant investment and rehabilitation of its generating assets.
The Group’s gross earnings increased to N134.721 billion in 2022, from N111.219 billion in 2021, up by 21.13 percent. Gross profit increased to N66.421 billion in 2023, from N54.779 billion in 2021, up by 21.25 percent. Profit Before Tax (PBT) was also up by 8.14 percent, to N30.276 billion from N27.998 billion in 2021. Though, Profit After Tax printed lower by 29.34 percent to N16.839 billion, from a high of N23.831 billion in 2021. Transcorp continued to deliver on its year-on-year growth strategy, with a 6.4 percent increase in the Group’s total assets, growing to N442.7 billion in 2022.
The Group’s total equity went up by 1.2 percent to N157 billion. The Group which has 33 percent female board representation intends to continue to be innovative and leverage technology to improve customer experience in its hospitality business.
Key drivers of the conglomerate’s growth
On innovation and digitalisation, Transcorp management told analysts during the group’s Q1 presentation that the group will continue being a focal point for improving its customer experience. “We will continue to leverage innovation and digitalisation to generate demand, and improve guest engagement and loyalty,”
On leveraging digital platforms to accelerate growth, they said, “To remain competitive and in response to emerging trends and customer preferences, we have upgraded and relaunched our hospitality tech platform– “Aura by TranscorpHotels”. Through Aura by Transcorp Hotels we will continue to leverage the power of technology to fast track growth of the accommodation and leisure segments of our business”.
Speaking on cost optimisation, the management of Transcorp said, “This would continue to be a top priority, taking advantage of our robust financial management processes and procedures whilst still focused on delivering superior services to our customers,”
On asset optimisation, Transcorp noted that it will continuously identify opportunities to fully optimise its existing assets “via expansion into new business area and upgrade of existing facilities to improve customer experience to ensure we deliver superior returns to our stakeholders.”
Transcorp hospitality business demonstrated its growth trajectory in 2022
After achieving a record average occupancy rate of 79percent in 2022, Transcorp’s hospitality business demonstrated its growth trajectory with profit increasing by 172percent to N4.5 billion in 2022, from N1.7 billion in the previous year, while revenue grew by 47percent to N31.4 billion, from N21.4 billion in 2021. Profit after tax for the Group declined from N23.8 billion to N16.8 billion, as a result of the provision of N7 billion for deferred tax and exceptional income of N4.5 billion recognised in 2021, derived from the consolidation of Transafam Power Limited.
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What the stakeholders said
Tony O. Elumelu, group chairman, Transcorp said, “2022 proved to be another strong year for Transcorp, we continued to optimise and expand our portfolio of investments, amidst a challenging operating and economic environment. The impact of our long-term investment approach is beginning to be appreciated by the market, with a growth in share price from N0.96 in January 2022 to N2.50 as at the close of market yesterday, April 25, 2023. And we continue to deliver to investors, with a dividend of N2 billion being paid to shareholders, representing a 150 percent increase over the 2021 payment.”
The year 2022 became the 5th consecutive year of unbroken dividends payment by Transcorp since the Elumelu-led team assumed leadership of the conglomerate. Prior to the change in ownership and management in 2011, Transcorp had operated since inception without dividends to its shareholders.
Owen Omogiafo, president of Transcorp Group stated that the Group’s success is attributable to its focus on key sectors of the economy, its commitment to investment and its ability to drive execution. “We are strategically positioned and committed to enhanced performance, providing value-adding returns for all stakeholders, and making a positive societal impact. As we move forward, we remain fully dedicated and focused on realising this vision. With the relentless efforts of our team, we are poised to achieve remarkable growth and success for years to come,” she said.
Shareholders at the annual general meeting lauded the company’s professionalism and commitment to growing value for shareholders, stressing that the fully virtual AGM was one of the many firsts Transcorp has achieved.
Transcorp’s commitment to social responsibility was also highlighted at the AGM. The Group has continued to contribute to Nigeria’s sustainable development, particularly in the areas of education, community development, and environmental sustainability.
As a responsible corporate citizen, Transcorp embraces Environmental, Social, and Governance (ESG) criteria in all aspects of its business dealings and investment decisions. Transcorp said it remains unwavering in its commitment to sustainable growth, ensuring consistency and an efficient organisation driven by a mission to deliver long-term value.
Shareholders are impressed
“We are very happy with the Board and Management of Transcorp. They promised us that as the Company grows, value for shareholders will grow. Today we have seen our dividend, which has increased by 500 percent under the Elumelu leadership and our share price has also appreciated. We also want to commend the professionalism of the Board for deciding to hold the AGM virtually, making it easier for us to join and make all of us be more informed,” said Faruk Umar of the Advancement of Shareholder Rights Association.
