In an interview with Eniola Olatunji of BusinessDay, Peter Ashade, group CEO, United Capital Group noted despite challenging market conditions and economic uncertainty, United Capital Group has emerged as a beacon of resilience and growth. Shareholders have particularly benefited from the company’s recent strategic moves, including interim dividends, bonus issuances, and stock price increases.
Congratulations on your 6th year as Group CEO of United Capital Group. In recent years, United Capital has been making significant strides in the investment banking and financial services industry, showcasing resilience and remarkable growth. Can you provide an overview of the company’s journey over these past years and highlight some of the key milestones that have contributed to its current standing?
Our journey at United Capital Group over the past few years has been nothing short of transformative. We have expanded our operations significantly, achieving a 75 percent growth in the number of our subsidiary businesses.
This growth has allowed us to offer a comprehensive suite of financial services, including investment banking, securities trading, asset management, trusteeship, consumer finance, wealth management, and the addition of a Microfinance Bank—a major milestone for us. This diversification has propelled our revenue growth by over 390 percent, demonstrating the strength and resilience of our business model.
Our Assets Under Management (AUM) have grown by over 1000 percent, while our balance sheet size has increased by more than 500 percent.
Beyond financial success, we have deepened our regional footprints in Nigeria and expanded into other African regions. We have also heavily invested in digital transformation and technology, which has vastly improved our operational efficiency and service delivery, ensuring our clients receive the best possible experience. We have also strengthened our risk management framework to ensure we deliver optimal financial solutions to our clients.
In addition to this, our stock performance is a clear reflection of the confidence investors have in our strategic direction. Over the past year alone, our stock price has surged by 158 percent. We have also recorded a 68 percent year-to-date return and a 65 percent increase in earnings per share (EPS) year-on-year. We are immensely humbled by the progress we have made so far and remain highly optimistic about our future.
You recently released your financial results for H1 2024, showcasing an impressive performance. Could you walk us through the growth drivers that contributed to the 65 percent increase in profit after tax and the improvements across all key financial parameters for the first half of 2024?
Multiple factors have contributed to our impressive financial performance. One major factor is the significant improvement in performance on a year-on-year basis for all our business lines, contributing majorly to our overall financial performance. They are each individually top three operators in their respective sectors and are steadily growing profitably and sustainably.
Driven by our highly motivated workforce, we have successfully expanded our clientele base, our commitment to customer service excellence and enhanced process efficiency. This has resulted in a significant increase in our AUM. Additionally, our regional penetration continues to spread, allowing us to reach new markets and extend our services to a broader audience.
This strategic expansion strengthens our market presence and positions us to better serve our clients across various regions, driving sustainable growth across all our business lines.
Our strategic adoption of digital transformation tools to enhance our operational structure and service delivery has successfully streamlined our processes and significantly improved the customer experience.
These, combined with a strong research team, prudent risk management, and strategic market positioning, have resulted in our consistent impressive financial results.
The interplay of the above factors resulted in the 65 percent year-on-year increase in our profit after tax to N7.74 billion, we also recorded over 35 percent year-to-date growth in our Assets Under Management (AUM). Our profit before tax increased by 63 percent year-on-year to N9.06 billion, our gross earnings grew by 38 percent year-on-year to N15.15 billion, and total assets grew by 27 percent to N1.19 trillion.
Read also: United Capital launches N10bn infrastructure fund for high-impact projects
In recent years, United Capital has consistently delivered strong performance and dividend payments year-on-year, even amidst challenging macroeconomic conditions. How have you managed to achieve this? Is this due to market conditions, or are there deliberate strategic management decisions at play? Additionally, how do you plan to sustain this impressive trajectory?
Certainly, the current market volatility has impacted our business, just like any other business in Nigeria, but navigating turbulent waters and thriving is part of the DNA of United Capital.
Our consistent growth is primarily the result of deliberate strategic management decisions rather than just favourable market conditions. Yes, we have a robust research team that significantly predicts market trends, identifies, and capitalizes on opportunities.
However, this alone doesn’t account for our success. At the core, we are driven by a commitment to deliver consistent value to our stakeholders.
This commitment influences every aspect of our operations, from strategically hiring dedicated professionals to ensuring that we are all laser-focused on our growth objectives. We never compromise on quality, so we are continuously innovating our product offerings and investing in cutting-edge technology to stay ahead.
So far, our shareholders have seen a 500 percent increase in dividend payments, rising from N0.30 in 2018 to N1.80 in full year 2023. We are only halfway through the year and have just declared our first-ever interim dividend payout of N0.90. We plan to sustain this impressive growth into the foreseeable future by continuing to innovate with the times—expanding our service offerings and exploring new market opportunities. We believe that by doing so, we can continue to thrive regardless of economic conditions.
On the topic of interim dividends, United Capital has announced its first-ever interim dividend payout of N0.90 per share. What prompted this decision, and how do you expect it to impact shareholder sentiment?
Earlier in the year, we disbursed annual dividends amounting to N1.80 per share, continuing our tradition from the previous year. This year, we promised our shareholders added value, and that is precisely what we set out to achieve with this interim dividend payout. It marks our first-ever interim dividend, and we are making a bold statement with N0.90 per share a landmark interim dividend.
This decision is a testament to our strong financial position and consistent performance. Moreover, we see it as a way of rewarding our shareholders for their continued support and confidence in our growth strategy. We believe this move will positively impact shareholder sentiment by reinforcing their trust in our ability to deliver exceptional value.
Our Shareholders’ Funds have increased by 33 percent year-to-date to N120.34 billion, which demonstrates our solid financial foundation and ability to generate substantial value for our investors. We have been consistent in delivering impressive results, and the market is certainly taking notice of our efforts and achievements, which is reflected in the consistent increase in our share price.
United Capital is issuing 2 bonus shares per unit. Can you explain the rationale behind this bold move and what it means for current and prospective shareholders?
United Capital Group is an investor-oriented firm, and democratizing wealth is one of our aspirations. The declaration of a bonus issuance of 2 shares for every 1 share is strongly in line with our commitment to continue to create value for our shareholders and reward their loyalty. We believe that this will create opportunities for price discovery, enhanced liquidity, attractive entry price, better capital appreciation, increased shareholdings at zero kobo, and investor’s tax efficiency.
The bonus issuance increases the equity holdings of our current shareholders, tripling their holdings, and positioning them to benefit more from our future growth and profitability.
By increasing our equity-free float, we are not only reinforcing our shareholders’ confidence in our long-term strategy but also inviting new investors to invest in our stocks as we continue our growth journey. It is noteworthy that with a 158 percent year-on-year increase in share price and N0.90 interim dividend, it is a rewarding time to be a shareholder of United Capital.
We want to ensure that our existing shareholders and prospective investors feel proud to be associated with United Capital Group, knowing that their trust and investment are consistently rewarded. Our strategy is about more than just financial gains; it’s about empowering your dreams and enabling you to be part of a thriving community where your aspirations are nurtured and supported.
With such growth and the recent strategic moves, how does United Capital plan to sustain its market dominance and accelerate this momentum in the second half of 2024? What can shareholders and investors expect from United Capital in the near future?
We have several strategic initiatives in the pipeline. We plan to deepen our presence in key growth markets, enhance our digital capabilities with our investment platforms, and expand our product portfolio to meet diverse customer needs. We are also exploring strategic partnerships to bolster our market position.
Shareholders and investors can expect continued strong performance and strategic initiatives that drive growth and profitability. Our recent interim dividend payout and bonus share issuance are just the beginning. As we move forward, we will continue to innovate, explore new opportunities, and execute our strategic vision, ensuring that United Capital Group remains a top choice for investors seeking superior returns in terms of dividends and capital appreciation.
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