The earnings of United Capital Plc, an investment company in Nigeria, rose to the highest in at least eight years, according to data compiled by BusinessDay.
The firm’s latest financial statement shows its after-tax profit rose by 65.2 percent to N7.73 billion in the first half of 2024 from N4.68 billion in the same period of the previous year.
Further analysis shows that investment income fell to N4.6 billion in the first six months from N4.96 billion in the corresponding period of 2023.
The drop was on the back of high interest expense on managed funds and other borrowings which rose to N37.7 billion from N19.7 billion indicating that the firm is incurring significant costs due to interest payments on money it has borrowed.
The company’s borrowers fund during the period rose to N180.9 billion from N120 billion.
The Central Bank of Nigeria commenced a series of hikes in its benchmark interest rate also known as Monetary Policy Rate in May 2022, raising it from 11.5 percent to 26.25 percent in May 2024.
Further findings from the statement showed the firm’s pre-tax profit rose by N9.05 billion from N5.54 billion. Total revenue during the period rose to N15.1 billion and N11 billion while total expenses rose to N6.66 billion from N5.7 billion as the cost of doing business rocketed in the face of Nigeria’s inflation.
According to the National Bureau of Statistics, Inflation rose to 34.19 percent in June 2024 from 33.95 percent in May 2024,
United Capital’s total comprehensive income for the period soared to N34.8 billion, driven by N27.7 billion in other comprehensive income from fair value gains on equity and debt instruments.
Fees and commission income increased to N6.3 billion from N3.6 billion, other income rose to N1.9 billion from N1.1 billion.
This was significantly riven by exchange gains of N1.8 billion in the period under review from N906 million.
The investment company’s total assets rose to N1.18 trillion in the first six months from N805 billion in the same period of 2023 while total liabilities rose to N1.06 trillion from N757 billion.
Its shareholders’ fund during the reviewed period also rose to N120 billion from N48 billion, this was driven by the fair value reserves of N87 billion from N19 billion thereby indicating that the assets or investments held by the company have increased in value according to their market value or fair value assessment.
Read also: United Capital launches N10bn infrastructure fund for high-impact projects
Net cash generated by/(used in) operating activities amounted to N242 billion from N171 billion, the rise in its cash from its core business activities implies that the company is generating more money from its daily operations which in turn impacts its working capital positively.
Net cash generated by/(used in) investing activities amounted to N150 billion, and Net cash used in financing activities amounted to a negative N29 billion.
Cash and cash equivalents at the end of the period amounted to N488 billion from N214 billion.
United Capital has for the half-year period ended June 30, 2024, proposed interim dividend and bonus share.
The company proposed a dividend of 90kobo per 50 kobo ordinary share, subject to appropriate withholding tax and approval which will be paid to shareholders whose names appear in the Register of Members as at the close of business on July 31, 2024.
The register of the company’s shareholders will be closed from August 1, 2024, to August 7, 2024 (both dates inclusive).
On August 9, 2024, dividends will be paid electronically to shareholders whose names appear on the Register of Members as of July 31, 2024, and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their bank accounts.
The company also proposed a bonus issue of two new shares for one held by shareholders. The company will hold an Extra-Ordinary General Meeting on August 21, 2024.
