United capital in growth spurt as earnings spike  

Nigerian-based financial and investment services company, United Capital plc is undoubtedly in a growth spurt as earnings spiked in the first quarter of the year, an impressive results that validates the company’s focus strategies amid a weak naira and a slump in oil price.

The company’s consistent strategy has always delivered a strong performance that’s impacted positively on the value of shareholders.

For first three months through March 2015, United Capital’s net income increased by 59.73 percent to N1.13 billion as against N707.42 million the previous year.

Little wonder the stock market reacted positively to the company’s upward trajectory as its share price rose to 12 percent, the highest since April.

Shares of United Capital Plc were up +4.97 percent to N1.87 on Monday premarket news this afternoon that the company recorded another impressive results to start 2015 financial year. Its earning has been on the upward trajectory since it changed its name from UBA Capital in 2014.

The company has +10.69 percent year to date return (YTD RETURN) and +24.48 percent one year to date (1 YR RETURN), according to data from Bloomberg.

“We continue to pursue our clear and consistent strategy, which has delivered a strong performance for shareholders, and we remain positive about our future opportunities within the Nigerian and African market, not-withstanding the challenging macro-economic environment,” Oluwatoyin Sanni Group Chief Executive Officer of the company.

The economy of Africa’s largest oil producer was challenging as a fall in oil price by 70 percent to $40 a barrel hit government revenue hard, forcing the Central Bank to devalue the naira twice and impose foreign exchange restrictions.

The capital control is hurting the profit of banks and also causing liquidity squeeze.Oil accounts for two thirds of government revenue and nearly all of foreign exchange earnings.

Economic growth has slowed to 2.80 percent, the lowest in a decade. Inflation has risen to 12.80 percent for the months of March, this compares with 11.40 previously held.

Despite the harsh operating and unpredictable macroeconomic environment, United Capital’s gross earnings were up by 42.30 percent to N1.85 billion in March 2015 from N1.30 billion in March 2014.

United Capital’s net margin, a measure of profitability and efficiency increased to 61.08 percent the period under review 54.36 percent the previous year.

The investment services company has utilised the resources of owners in generating higher profit as the return on equity (ROE) moved to 10 percent in March 2015 from 6.78 percent in March 2014.Return on assets (ROA)

“United Capital acted as Structuring Bank/Facility Agent on $250 million Pre-Export Finance for Orion Oil – one of the largest debt deals by a Pan-African investment bank in 2015. Issuing House and Trustee Services to key debt capital issues for Sub-nationals and leading corporate issuers,” said Sanni.

 

BALA AUGIE