United Capital Plc, a leading financial service group, is one of a very few firms to record consistent profit growth in a tough and unpredictable macroeconomic environment as it continues to increase value delivery to all stakeholders.
For the first six months through June 2021, United Capital’s net income spiked by 41.08 percent to N4.43 billion from N3.14 billion as at June 2021.
Drilling deep into the financial statement shows profit has been growing steadily since 2017, according to data gathered by MoneyCentral.
Gross earnings rose 33 percent year-on-year to N9.11 billion in June 2022 compared to N6.85 billion in June2021 largely attributable to growth in Fee and Commission income (+24% year-on-year), Investment Income (+9% year-on year) and net trading income (586% year-on-year).
Interestingly, the financial service firm is able to turn equity investments into profits and make more profit from shareholders’ equity.
The return on average equity rose to 33.44 percent in June 2022 from 26.68 percent the previous year.
“United Capital is in a stable growth phase amid the challenging operating terrain in 2022.
We expect to navigate the undulating business landscape in the remaining half of the year towards increasing value delivery to all stakeholders,” said Peter Ashade, Group Chief Executive Officer.
“Going into H2, we see vistas of emerging business opportunities within our operating environment and will be collaborating with diverse business leaders and stakeholders across critical economic sectors to deliver new solutions and grow all our businesses in line with our corporate strategy,” said Ashade.
United Capital manages its operations efficiently amid rising inflation and currency volatility, and analysts are sanguine that the central bank’s hawkish stance is a boon for the company who takes advantage of juicy yield to earn income.
It recorded improvement in profitability margin during the period under review as pre-tax margin grew by 2.98 percentage points to 57.56 percent in June 2022 compared to 54.57 percent in June 2021.
The company net margin also improved, gaining 2.85 percentage points to 48.69 percent in the period under review compared to 45.84 percent the previous year.
Earnings growth is faster than increases in expenses as cost to income ratio declined by 0.85 percentage points to 44.58 percent from 45.43 percent from 45.43 percent in 2021.
During the period under review, Total assets grew by 17 percent year-to-date to 531.79 billion in June 2022 compared to 453.6 billion as at December 2021 majorly driven by 318 percent growth in cash and cash equivalents.
Earnings season starts this week and a few companies that have released their results recorded strong earnings, but analysts expect the impact of shattering inflation and energy crisis to show face in their books in the third and fourth quarter.
“Our impressive H1-2022 result as witnessed in our earnings growth, among other parameters, reinforces our strong start to the year 2022. This uniquely positions the organization to increasingly deliver shared prosperity to all stakeholders,” said Ashafe.