In the Nigerian Exchange (NGX) in 2024, a few stocks have posted triple-digit gains, one of which is Veritas Kapital Assurance (VERITASKAP), which has gained 338 percent year-to-date. The stock started 2024 with a share price of N0.37 and traded at a share price of N1.62 as of October 7, 2024.
Apart from Veritas Kapital Assurance.
Just like Oando, VERITASKAP’s surge in the second half of 2024 has beaten the NGX growth trend. So far in H2, the stock has appreciated by 76 percent, despite the NGX declining by 2 percent during the same period.
Between May and July 2024, VERITASKAP appreciated by over 100 percent, moving from N0.57 as of May 20 to N1.21 as of July 8. During the same period, there was immense buy pressure on VERITASKAP shares, which surprised market observers.
In the Nigerian insurance space, the name ‘Veritas Kapital Assurance’ may not ring bells, but the company has leveraged low penetration in Nigeria to sell its products. It has also strengthened its foothold on the retail end of the market to beat headwinds.
However, due to 2024’s surge, the firm has now hit a market capitalisation of N22.5 billion, making it one of the most capitalised insurance stocks in the NGX.
Brief overview of VERITASKAP
VERITASKAP, which is majorly owned by Thomas Etuh, was formerly UnityKapital Assurance. However, in 2007, there was a name change which followed a merger with two other insurance companies. The company owns Veritas Glanvills Pensions Limited, Veritas HealthCare Limited, and a majority stake in Goldlink Insurance.
Since listing on the NGX in 2007, Veritas Kapital stayed at the 50 kobo share price level until 2018, when the stock fell to the N0.20 share price level. Veritas continued its decline to the least possible share price of N0.20, as the group was on a run of losses, from 2017 to 2018.
From 2018 till late 2023, VERITASKAP’s share price stayed within the 20 kobo levels, until investor attention was drawn to the stock and it began its resurgence in 2024. However, the surge in 2024 can be linked to the business’ performance during the financial year.
After a run of losses, VERITASKAP turned around its fortune in 2019, with consistent profit making. This year, Veritas Kapital Assurance has grown its business to become one of the highest profit-generating insurance companies in Nigeria. This turnaround has been reflected in the company’s NGX performance, with investors positioning for anticipated return to shareholders in the coming months.
Read also: Veritas Kapital Assurance’s earnings surge more than fourfold in H1
H1 2024 financial performance
In H1 2024, Veritas Kapital Assurance posted a profit after tax of N5.2 billion, reflecting a 376 percent year-on-year growth from the N1.1 billion posted in H1 2023. This reflects an earnings per share of N0.75. With the stock’s share price closing at N0.92 as of H1 2024 end, Veritas recorded a price-to-earnings (P/E) ratio of 1.22, much lower than its AIICO’s 2.77 and AXA Mansard’s 2.04 recorded at the same time, a signification of an undervaluation among its insurance peers.
Essentially, a major force behind Veritas’ surge in the NGX has been its financial performance in 2024. Although not the top claims payer, VERITASKAP as of the first half of 2024 posted the highest growth in claims payment among Nigerian insurance firms. The firm paid about N1.4 billion as claims during the six-month period, which was a 172 percent increase from the N527 million paid in H1 2023.
Also, in the first half of 2024, VERITASKAP received N11.9 billion as premium payments, representing a 233 percent increase from the N3.6 billion received in H1 2023. Amongst its peers, VERITASKAP recorded the highest increase in premium payments. The company’s total assets also grew by 41 percent to N34.8 billion during the half-year, from N24.6 billion at the end of 2023. All of these figures are a representation of an expanding business, a phenomenon that has boosted shareholder confidence in the company.
As of the H1 2024 end, VERITASKAP had a price-to-book ratio of about 0.6, which has now grown to 1.04, indicative of strong optimism from investors. It is expected that this positive sentiment received by the company from shareholders will be matched with adequate returns to shareholders at the end of the financial year.
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